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00:00

Hey guys is me your friend and host Ted. Welcome back to the business show. On today’s episode, we have growing impactful companies with Looney libous. Now Looney is a serial entrepreneur who is also the Founder and Managing Director of a startup accelerator that focuses on socially conscious mission driven for profit companies. Today, flash runs in multiple cities around the world, inviting in teams from anywhere doing almost anything that makes the world a better place. On today’s episode, loading the only shares about how he grows impactful companies, but also his work on flash and Africa ease which is formed by the graduates of the flash program, and why storytelling is such an important skill for any entrepreneur. So guys, if you’d like to support the show in the best we can do this is to subscribe, leave a review and to share with somebody who find it useful as well. Now it’s a way to say thank you to you guys. If you actually do subscribe and leave a review on Apple podcasts by the end of September, you stand a chance to win $50 worth of gift vouchers from Amazon. one lucky winner will be chosen at random. And now let’s dive right in. Hey, Looney, thank you so much for joining us today. Such a pleasure to have you here.

 

01:02

Well, thanks for having me.

 

01:03

Now, Louis. Let’s start with the icebreaker so we can get to know you a bit better. Who is Looney Libous where he is not working

 

01:10

when it’s not working? Oh man. That’s not very often. I I gotta say I self identify as a serial entrepreneur. The only other thing I do in life is raise kids. So I have four kids, they age and range from 21 to two, eight. So I’ve been parenting for a long time. And when I’m not working, there’s usually a kid around that’s that

 

01:36

needs. So your oldest kid is in college right now.

 

01:39

I got two in college high school are in second grade, third grade. Ah,

 

01:42

interesting. Now Looney you started as a serial entrepreneur and you have founded over six different companies over the years. It’s eight

 

01:49

actually make it eight. Okay, I don’t know if you lose count after one.

 

01:54

Too many to count. Okay, so we were founded about eight companies. But today, you’re an impact investor, and you’re running multiple accelerators for startups. And the most prominent one is called flash, which is a global network of conscious company accelerators. Now, before we speak a little bit more about that, please share with us your journey. How did you get to where you are today?

 

02:12

It’s been a long, long and interesting journey. What started me off was an article on the front page of byte magazine in February of 1991. Whoa, that was the that was the ultimate starting point. That I was still in college. I was a senior in college when that came out, bite magazines gone. But it was one of the premier magazines for covering computers back when they were a new thing. And what they showed on the cover that month was then thing that would come after desktop computers would be notebooks. So Jupyter Notebooks just been invented. Nobody had one yet. But this front page article said, the next thing is tablets. And that seemed exciting. And that seemed like an opportunity. And so I got a job out of college, did not enjoy it, and instead quit the job and started my first company in 1992. So took a year. And that first company was writing software for the very first tablet computers. In fact, the tablets were they were due out in early 1992. I don’t think they shipped until the end of 92. And nobody bought them until 2010. Yeah, it was really ahead of its time. Like Yeah, we were a little ahead of our time. But that’s what started me off. I did that company, I originally funded it myself. Then I got an angel from Singapore, I read a gigantic check. And then nobody bought the machines like we had the right idea. We were in the wrong decade. That was the right idea for 2010. It was the wrong idea for 9092 9394 95. And then, rather than just go and give up and go get a job. A month after we shut down the company, I co founded another company. That one was a.com story. Of course, we were going public when the.com bubble burst, and it lasted another year. And then the next day after I got laid off, I got an A job in another startup. Week One, they asked me to write their business plan for them. They didn’t really have one. So I did that actually wrote three, because I didn’t know exactly what was gonna happen, worked there for a while and then went off and started two more software companies one after the other. And then finally, in 20 2011 jumped off the tech path and the venture backed software path and dove into this conscious company mission driven for profit. Do good do well back.

 

04:40

Oh, so you did a complete 180 instead of running accelerators in 2011. So now let’s talk a little bit about that. So fetch is a global network of conscious company salary. Just what does this mean? What is the conscious company is salary to and could you speak about what is Fletcher’s mission?

 

04:56

Okay, so, again back in 2011, the big change was Was I, I was no longer a techie, my, my tech company left town on me. And I was free to do anything I wanted. And when I took my time to figure out what I want to do for the next 20 years of my life, and realize that I really liked to starting companies, right. And it was pretty obvious. I’d started five by then wrote the business plan for one and started four wrote about a dozen business plans by then, but but only five of them turned into companies. And the question was, what do I know? So I must know something that isn’t normal, because most people don’t do that. For these companies were still running, still selling their products. And that’s really rare. And so I must know something but didn’t actually know what I knew. So the answer was, how do I make a career out of helping others start their companies? Instead of me just doing one more at a time? How do I do 10 at a time, and 22,006 was when TechStars got started. And Y Combinator there, like six months difference in age, there was a TechStars. In Seattle, there were only four tech stars in existence in 2011. One happened to be in Seattle, where I’m based. So I went over there and met the people who ran it started being a mentor over there. And like how it worked. But they were working with tech companies. It’s in the Britain’s in the name, right and Y Combinator, still a multi tech accelerator. And the question was, could we take the model that they were using, and use it for companies that are solving real problems? There’s lots of ways to talk about this. We can say conscious companies, that’s the word I use back back in 2012. We can use the words mission driven for profit. So it feels like a nonprofit, but they’re out to make profits and grow. Or we can just say companies that do good companies that solve real problems. So fledge is a copycat of tech stars. That’s how it started. Except we don’t care about tech, we care about solving poverty and hunger and climate and social justice. With a for profit model. We don’t work with nonprofits. And we changed a few other few other things. But if you if you went to both programs, you would you would see similarities between them. And so that’s what floods is. And it started here in Seattle, and it was just Seattle for four years. And then other people in the world started to see what we were doing. And they started reaching out and they said, Hey, can we copy what you do? And the answer was Sure, let’s figure out how to do that together. And so we have, I don’t know, 10, licensees, we’ve run the program, and it’s eight or nine cities by now, when there’s been 17 programs, and I haven’t run most of them. It’s lovely. So we’ve built a network of others, that have this same mission of helping these these companies, whatever you want to call them.

 

07:53

Now, loony Could you share with us? What are the kinds of companies you have invested in and are working with so far, the kind

 

07:59

of companies I work with, their impact is embedded in their product or service. The easiest way for Americans and global north people to understand this is Whole Foods. So Whole Foods is a mission driven company. It started in 92. And their mission was to bring organic and healthy food to the populace. And they succeeded wildly. Right. So they went public. They got purchased by Amazon after they were public. But the key part of their business model was You didn’t have to care about their mission. You just had to want to buy healthy food. And if you walked in their front door and you bought food at Whole Foods, you fulfilled their mission. And so they didn’t have to sit there in the boardroom worrying about how do we do the mission while we’re trying to make money. They just embedded it together and then ran it as a business. So all the companies that that fledge invites into the program, and all the companies that I invest in, all have that same same structure to them. So really simple, will pick GRC in rural Uganda, it’s a fish farm. And so the fishery in Lake Victoria has been completely over fished it’s now illegal to fish and Lake Victoria. So we’re doing fish farming instead of fish hunting. And we are bringing protein to a part of the world that is lacking now because the the the wild version of their protein sources gone. So we don’t we don’t talk about malnutrition and we don’t talk about hunger. We just make fish and that is solving the problem.

 

09:35

Yes, I read about jossi I understand that you’re helping fishermen who are no longer able to catch fish in Lake Victoria become fish farmers itself actually this only helps to provide them with a form of employment but it’s also helping solve the malnutrition issue around the era as

 

09:49

well. Yeah, but a million and a half people were part of the fishing industry. Well this huge and they pretty much all lost their jobs over the last decade. And and a lot of them are in jail for for fishing, dang. In addition to that one, we’d say in a million and a half, this wasn’t just the fishermen, this were the women who were selling the fish in the markets. And literally the stories that my founder tells is that they wound up on the street selling themselves. And it’s heartbreaking. And so when he, when he started this company, rather than just starting it, like a big, you know, a big giant multinational would would run. Instead, he actually gets the fish to these women. And youth youth in Africa is not married yet. So it could be as old as 30. Put the younger people there, his Salesforce, so he didn’t hire a bunch of old men to be the Salesforce, he actually grabbed the women off the street and gave them fish to sell. And he employs hundreds and hundreds of these women’s I got, and I got to meet them when I went out to Uganda to meet the company.

 

10:56

Now Looney I know that Josie says you’re part of the Africa eats program. And I know that Africa is is formed by graduates of the flash program, apart from jossi, could you share with us some of the other companies that are involved with Africa eats and what are they working on so far?

 

11:09

Sure. So fledge is invested in companies in something like 30 countries, I get I lost count, you tend to lose count when you when the numbers get big. It’s over 100 graduates from from dozens of countries, all over the world on every continent, but Australia just haven’t picked one from there yet. We’ve gotten applications from over 100 countries. And we were looking at patterns of these companies over the years. And when we got to 2018 2019, we noticed that the not the majority, but a large number of the companies we had in the portfolio, were African companies working in food and ag. And it wasn’t that we ever set out to be a food and ag accelerator. We never ran a food and ag accelerator. What happened was we get all these choices of all these companies doing all sorts of interesting things all over the world. And we pick the ones we think are the most promising. And agriculture is the biggest industry in Africa. By far, nearly everybody in Africa, who lives in Africa is a farmer or a child of a farmer or a spouse of a farmer. And everybody eats every day. And therefore when you try and analyze startups, you have to worry about, like how many customers can have what what’s the, what’s this, what’s the size of their customer base, when we’re talking about food, it’s everyone, but unless you’re doing specialty food, but when you’re just talking about an everyday normal food, it’s everyone. And so we tend to pick over the years, a lot of companies that were doing Food and Ag. And there just weren’t a lot of other accelerators in Africa. So we got some really good applicants from Africa. And then 2020 rolled around. And of course, there was a pandemic, as everyone knows now. And the big worry was how is that pandemic gonna, gonna blow through Africa, right and India, but we didn’t have a lot of companies in India, and Southeast Asia. And we don’t have a lot of companies in Southeast Asia. But we had a whole bunch in Africa. And we knew, even back in March of 2020, we knew a vaccine someday would be the saving grace. But it wasn’t going to be show up in Africa first, right after he gets everything last. So we said all right, what can we do? What can we do given? Its 26 Food and Ag companies, given 26 companies? What can we do to help them make it through this upcoming pandemic make it so that you know, whatever disturbance has happened in the Food and Ag supply chain, we can try and fill some of those gaps. And what can we do to help make sure these companies are running through the pandemic? Because if they don’t, people go hungry? And so we took we had this plan that we were working on, we call it Africa eats we take our graduates of fledge so everybody’s already been vetted by flight and they’ve already been trained by fledge. We we know them really well. We ever relationship through the accelerator, not all from one city from five different cities in like eight or nine different sessions, five years of programming or six years of programming. We took them all, and we wrapped them in a brand new investment holding company. And that’s called Africa eats limited. And then we raised money into that new entity. And that entity now owns a minority stake in all these companies. It adds growth capital to them. It fills in gaps that they have in finance, and it’s doing really well so far. So we’re about a year and year and a few months into it. And those companies are growing like 60% per year.

 

14:51

Looney is with a heavy hand and I’m reading this story. I know from attributor, you wrote recently that one of the founders that you were helping along the way HD pass We recently and I understand her company’s called Kalahari. Honey, would you like to take this opportunity to maybe share about her work and what the company’s doing right now, I understand that Kalahari honey is involved. So with helping farms and protecting elephants as well,

 

15:17

yeah, this is Mavis in ducek. We lost her COVID-19 Yeah, I met Mavis years and years ago, she applied to fledge, she had a different business model back then she applied to fled with this model for animal feed. She’s from the country of Botswana. It’s a highly stable country in the southern part of Africa, if you if you pull up the map, it’s it’s got two main exports. One is gold or diamonds or something like that. And the other one is animals is cattle. It’s a source of beef up to up to Europe. It’s, it’s a country, it’s one of the rare countries in Sub Saharan Africa that makes a profit from export, trade export trade surplus. So, but they don’t have animal feed, they don’t make animal feed. And so she applied to fledged saying, We need a domestic animal feed business. And she kept coming really close to getting in you, we only accept seven at a time, and she would be eighth or 10th. Or it’s happened over and over again that she was she was working our way up is like 15th, and then 12th. And then at one point, she was eighth out of seven, which is just terrible to have to write a rejection letter, which we have to do all over and over again to somebody who, who we really want to bring in we just don’t have the resources to help more than seven. And so finally, in 2018, a partner came along and started a program in Africa called the land accelerator. The partner was World Resources Institute. It’s a big non NGO out of DC. We were in a program in Africa for restorative agriculture. And animal feed isn’t restorative but I twisted their arm and said, Can we please bring in this one company? I, I feel terrible. I keep rejecting them. I just want to meet her in person. And then I can I can invite her to Seattle next time.

 

17:08

So they said yes. So what happened up to date,

 

17:10

and that was November of 2018. And in October 2018, right after we we told her to come to Nairobi. She wrote me an email and she said, Hey, I got an order for honey. And I said, I didn’t know you did honey. And so what this is a highly indicative of what happens over in Africa. The government had this bright idea that honey could bring incomes to farmers. And so they handed out like 200 beehives to farmers. And they didn’t provide them a market for the honey. They didn’t provide them enough training. And nothing happened by the beehives are just sitting around Mavis got word of this. She does. She did a whole lot of other things. Besides being an entrepreneur, she had this little nonprofit thing she ran on the side, it helped women in Botswana. And she got word of these beehives and ask permission if she could repurpose them. And she did. And so she trained a whole bunch of women, you know, 100 women, and how to be beekeepers, and gave them the 200 beehives. But she also collected all the honey that they produced, packaged it up under her brand. And we’re selling it in in her own little shop and a couple other little stores. But in 2018, she got an order from from a pharmacy honey is considered a medicine in southern Africa. And it’s good. It’s actually it’s well known as a medicine. It’s not like a folk remedy or anything. And so she got this order and she said What should I do? And my advice was fill it, fill the order, make some money and we talked about okay, but it takes money to make money and all that and, and so she managed to fill that first order. And then we invited her to fledge in Seattle the following spring. And we gave her $20,000 in the we actually gave her like 35 normally would be 20. But we increased it because she had more orders that started coming in. And we worked on her story while she was here and she already knew it. That was the the story isn’t actually about incomes in for women in Botswana, which is necessary the these are subsistence farmers, most of the population in Botswana is living on a few dollars a day. So yes, that’s useful. But the other story is much more interesting, which is Botswana has the largest concentration of elephants of any country in the world. And the norm in Africa for Elephants is either they live on the national parks, but they don’t know where the boundaries are because there’s no fences, they leave when they leave the national parks, they discover these little plots of food and they’re happy to like eat that food. Well we call those farms and the farmers don’t like it when the elephants come by. So the solution in every country in Africa except Botswana until recently was shoot the LM shoot Doom right when it’s a wins the fight between Farmers and elephants the farmers win. Cuz we have guns in the elephants. But in Botswana at the time, they didn’t want to do that. And so Mavis got word that elephants don’t like bees. And there had been some studies and she saw this. And so if you put beehives on a farm, the elephants stay away from that farm. They really, really don’t like bees. And so that’s the story that she told on stage. And then helped her get some more funding. And that helped her win a whole lot of content. She won every contest she ever she ever went into. just telling that story of bees and bees and an elephants. Anyway, so the problem that this company then had subsequent to fledge, was they just kept getting more and more orders? And so you’re gonna say, how’s that a problem? Well, here’s the problem that that company faces in nearly every other company that sells our real product faces in the world. When you get an order from a supermarket, or pharmacy or any or distributor, any big, big organization, they pay you 30 days after you bring them the credit to them. And sometimes 45 Yeah, 60 or 90, but usually the terms are 30 days later, we call that net 30. So how is this yourself? Well, you can’t tell the farmer that I’m going to pay you in 45 days, you know, I’ll take your honey now, and I’ll pay you in 45, that doesn’t work for someone who’s earning a few dollars a day, you have to pay them when you pick up the product. And doesn’t matter if it’s honey, or chickens or potatoes or corn or rice or beans or whatever, you got to pay the farmers, these are poor people. So you pay the farmers. Same thing when it comes to the bottles, like literally got to put honey in a bottle, you got to buy the bottles from China, usually,

 

21:43

you know, maybe through another country. But ultimately, like everything else, you get the bottles from China, yet they want to be paid when you order the bottles like they want to be paid before before you get the bottle, they want to be paid when you order the bottles. And then they show up, you know, 30 days later. So you have expenses as a company in order to get the product into a bottle and then into a box and then over to the customer. And then you also have to pay the trucker, right, the trucker doesn’t want to be paid 30 days later, even if it’s your truck, like you gotta pay the driver, you got to pay the fuel. And so every time you get an order, your need for capital goes up. And so this company just kept getting order after order after order after order. And when you sum it up, it’s like a million dollars worth of orders in year two and a half, like from nothing to a million dollars in two years. And the problem is that we’ve had to you keep writing checks to, to pay for the pay for the honey. And so the company has been doing great. And we’re getting it back on track. Now that Mavis is gone, the whole team got COVID-19. So the company was kind of shut down for a month. But we’re getting the company back up and running. We’re figuring out where the orders are and, and going back to filling them. So we promised to make this a big company for Mavis.

 

23:02

And I’m sure that you get there eventually. Now guys is Looney has shared, having a big order can actually cause problems. And this is quite universal, because this is issue of credit terms. Now sometimes when you receive orders from a company, especially the larger ones, they may actually only be able to pay you with a 30 day to 90 day credit term timeline. So here’s the problem, even though you have to start incurring your costs to actually create the production for the materials and the delivery of the product itself. Even upon the delivery of the product, you may have to wait maybe 30 days, 45 days or even up to 90 days to get paid eventually. And during this gap in time before you actually paid guess what you still have to pay your employees you have to pay your rent. And that’s where credit crunch comes in. Now loony one of the things that I realized about Africa is is that one of the impacts that is creating is actually providing employment and empowering women along the way. I read that this has helped to reduce incidents of domestic abuse and violence as well. Could you share your views in this?

 

23:57

Yeah, so we buy food from 10s of 1000s of smallholder farmers. And that’s the term they use over that smallholder farmers like an acre or two, three acres will be a really big smallholder farmer. But yeah, and three acres planted by hand, harvested by hand, like maybe with an ox, but no machinery. The smaller farmers tend to earn a few dollars a day on average and trade, they’re not earning a few dollars in any given day. But when you sum up their total, total incomes for the for an entire year, and you divide by 365. it winds up being two or three. So it’s not a lot of money. And then on top of that you find cultural issues in most African countries, such as the women are expected to work on their husband’s farm, but it’s their husband’s farm and he gets the income. In some countries, you find cultural issues like the husband can have his many wives as you can afford, and they’ll have as many kids as the wives will bear, but it’s the wives that then have to pay for the school fees for the kids. And school fees. If you don’t understand what what that is, it’s not a, it’s not, it’s not like a private school fee, like we pay in the States. It’s just the cost of feeding the kids and running the building. Like and literally the most of that is just feeding the kids lunches served that the schools and the schools don’t have the money for that, then the government’s don’t have money for food. And so that’s what school fees are, and the uniform and your books and other stuff. And the school fees are like $1, you know, they come out to be like 150 or $200 a year. So we’re talking about, you know, about $1 a day or a little less than $1 a day. And if you’re a subsistence farmer, you don’t have it, because you’re only earning a few dollars a day, and you probably have three or four or five kids. And so there are all sorts of issues that pop up, that can be solved by bringing a market to the farmers. So ultimately, what we do, whether it’s honey, or again, we do this with with maize, and soybeans and, and rice and beans and all sorts of other products, is we find farmers that will sell us everything they grow or everything they grow that crop, they always have a farm, they always have a garden on the side for other foods. But the main crop will buy everything they make. And we will then go and collect it, do whatever processing that might just be sorting or putting it in a box. And then distribution is in finding retail customers and, and restaurants and then having the trucks to deliver to them. And simply doing that increases the incomes of the farmers, minimum 40%. If it’s just the honey, which is a side product, the second product, if it’s a main product, we could increase their incomes by two or three or five. And so when you do that, you wind up making middle class people. So you’re making farmers who now have twice or three times the median income in the country, that puts them in the middle class, they can now afford school fees, they can afford medicine, they can afford shoes for all their kids, which isn’t always something that kids get. They can serve two meals a day, everybody, sometimes three meals a day to everybody, they can afford to actually light up their homes at night, they might actually be able to, to invest in a solar panel so that they can have electric lights instead of kerosene lanterns, which killed people from the smoke inhalation or better stove so that they don’t have to breed the smoke from the fire every day. It puts them on a path where they they have a much better, better quality of life. And we’re hoping to do this for hundreds of 1000s of farmers. But as I said before with calamari, honey, the problem is we can’t fill every order we get. And it just takes more money than then even we have. But we’re getting there. Again. They’re growing at more than 50% per year. And so every two years, it’s doubled every other year, it’s doubled.

 

28:07

Now loony. Let’s take a step back and speak a little bit about the fetch program. What can an applicant hope to receive in terms of mentorship and funding? I know one of the key features of pledge is that he teaches the founders how to present themselves in your stories behind a business like a TED talk. Could you elaborate about this a bit more?

 

28:23

Yeah, the key word you said there was hope. So we get so many applications. It’s it’s getting to be disheartening, I need I need more partners who want to run more of these programs. Because last time I ran the program in Seattle, we had 845 applications from 85 countries. And we only had enough resources for seven. And when we just ran the land accelerator Africa. For the third time, we had over 1300 applications. And the fine, there’s 15 finalists. So what I tell entrepreneurs Yeah, hope is the key word because it’s easier to get into Harvard Business School and to get into Fletch. And it’s not easy to get into Harvard Business School. Alright, so the only way in, though, is filling out an application. It’s online, and we have an annotated version that a lot of people just can’t do somehow they don’t find it, even though we put the link all over the place that tells you what we’re looking for in the answers. So do that whether you’re applying to our program or any other program, we have an annotated application that tells you what, what, how to answer the questions. Okay, what we look for in terms of the companies that we pick our team impact and odds of success. So it’s gotta have a great team. If you’re all alone, you can apply if you want, you’re not going to get in. You have to have a team. You have to do something that’s fixing a real problem of the world. That’s what we mean by impact. And given all our choices, we tend to pick the companies that have at least national if not regional scale of impact. If it’s global impact, it’s even better. And then odds of success are all the normal things you look for in investing in early stage business, then we accept seven, and what we do with them for seven or eight weeks straight. So, pre pandemic, we invited everyone to one city. And we hope to do that again someday. So one of the cities will fly them into the city. And we work with them five days a week, all day, every day for five. For all these weeks, we do three main things while they’re here. The first one is they get a class and entrepreneurship, not because they need it, because not because they’re not entrepreneurs, but because entrepreneurs need to know how to do a lot of different things. And most entrepreneurs have some weaknesses, so we teach them to fill in their gaps. I taught MBAs for almost a decade, this is my class for MBAs, we just do it really quickly. Second thing that we learned from TechStars is that we flood them with mentors. We like our teams to meet not one or two or three coaches, but 10 or 15, mentors, one on one, have conversations about whatever whatever they want. And these mentors are, are just business professionals that know lots, we know one thing really well, usually, sometimes their founders, but usually they’re just a marketer, or a or a CFO, or, you know, operations guy,

 

31:22

but becoming the expertise here.

 

31:24

And then yeah, and then the third thing we do is teach them how to tell a story. So when I talked about Davis’s story about bees are our goal is Ted Talks. But the real the real TED Talks, the ones in Vancouver, not the TEDx talks. So that’s our bar that we have. But the problem is that a really good TED talk will take three months minimum to prepare for. And so they look like they look really one reason they just look so easy, right? It’s like the Steve Jobs presentations, right? Steve Jobs, those are three months of effort in order to get them to be that that quality. And we don’t have three months, because the whole program is seven or eight weeks, which is two months, right or less. So we spend every day for for three weeks working on storytelling. And we do this some tricks we all share. No slides, we just sit around and tell a story day one is bring a story, not a pitch, bring a story about what what you do and why you do it. And we’ll have someone in the audience who’s never heard these before, and will give feedback. And we’ll say okay, and take the feedback and rewrite the story for tomorrow. And we do it again tomorrow. And again, we’ll have somebody new, who’s never seen it in the audience. And we’ll get feedback. And often by the time we get to the third or fourth day, we’re like, okay, maybe this is working. Maybe there’s another story, I’ll try something completely different tomorrow, come up, just come up with something different. Sometimes it’s tell the story in a different order. Sometimes it’s just that’s try something new. We’ll get feedback on that. And we’ll just keep iterating, day after day after day after day. And after we get through about a week or so of this. We start to hone down the stories and get them get them good. And then we worry about like how do you actually present it? How do you? How do you? Where do you pause? Where do you where you stress, you’re picking out the specific words on this. And then finally, a few days before Demo Day, we make some slides to put behind them. And so this is one reason why they come out so good. A lot of them come out, a lot of them just wind up being really good pitches. It matters where the entrepreneur starts if they are completely staged, fraught, which happens a lot. We’re happy if they can do something on stage. And they’re happy if they can do something on stage. So our bar for them is a little lower. And if they’re some people just aren’t great storytellers. for them. We’re happy if it’s a really good investor pitch. But our bar for what we’re trying to get everyone to is a TED talk. And then we’re we literally have like, we have a mentor who is a director for stage performances. And she there was one, one talk we did where I was on stage with the entrepreneur, and we thought that was how to do it. And she just said, No, no, you do all you’re doing it all wrong. And then she told us what to do. And that’s what we did. And it came on Great. So we also have a singing teacher that we bring in to help help people with their, their intonation and their accents. We do worry about accents will pick out because we do such an international program will often have a word that that’s in that’s in the talk and nobody knows what they’re saying. And we’ll have to pick a different word for them to use. I remember there was a chicken company that came through and in his accent the word poultry just didn’t sound like like poultry. And nobody knew what he was saying. And so he went home for the weekend and he just kept saying the word poultry all weekend and came back and it sounded fine. Because he really wanted to use that word instead of chicken. But the singing teacher helped with that anyway, so the the actual trick on how you tell a great story is iteration just over and over and just rewriting it over and over again, with as new as as many novel people as you can grab and grab to hear it for the first time. Because you can’t get the same feedback for the second time. It’s once you’ve heard it, you loses some of its magic. And, and the second one in terms of telling great stories that, that sell that sell anything is, don’t do the slides first, don’t do slides, and then try and figure out what you’re going to say to the slides, put together a great story, and then make slides that fit behind the story,

 

35:37

guys is lunia shared storytelling is so important for every entrepreneur. And it is why ludie himself is placing such a big emphasis on making sure that the companies that he’s grooming the fish programs are able to tell the stories effectively as well. Now take some time to think about your own company’s story. Do you have a good way to communicate this basis to somebody who you just met for the first time, if you don’t, it’s definitely important for you to take some time to think about how you can deliver this pitch to someone effectively and concisely. Now, Looney one tips that you provided was to actually only prepare the slides towards the end of the preparation process. My guess is this is so that the presentation is not reliant on the slides itself. And the emphasis is on the storytelling process itself. Am I right?

 

36:17

Yeah, there’s actually a rule that we put in, I don’t remember where I took it from somewhere. And I don’t remember where it might have been tech stars. But we don’t give a clicker to the person on this on the stage. So they have no control over what the slides are behind them. Instead, we either have their partner if they have one, or we just have my assistant, run the slides. And so again, they’ve practiced a story for two and a half weeks. And then when they go on stage, they just tell that story. And the pictures that are behind them are just complementing the story that the audience doesn’t need those and we put as few words as possible on them. Because we don’t want the audience reading what’s on the screen, we want them hearing what the person is saying. So the the things that we would put in the slides are mostly just pictures. But if we’re talking about numbers, you know, I’ve done a million dollars worth of business, we’ll put a million the word the number 1 million in 120 point 150 point font on the screen. Again, just like Steve Jobs would do, right? That he’s also one of our inspirations. And I got to talk to the person who made all his slides. And I did get to confirm all of my beliefs and how those were put together. And, and yeah, really, he really did take three months to put them together.

 

37:34

Now loonie, we all know the great stories draw customers. But could you explain in your own words why you think this is the case?

 

37:41

We’ve all been taught it was so it would not been taught. We’ve all been been told stories since before we could read. We tell stories to our kids. We tell stories to each other stories that are compelling stories are one of the unique aspects of being a human being. And human beings have been telling stories for probably 100,000 years, maybe more we don’t know when people started speaking, right? So it could be a million years. We convey when you tell a story. You trigger all the mirror neurons in the audience, they all start to feel what what you’re what you’re talking about. Yeah. Oh, emotions, yeah, you get emotions out of it. As opposed to the first drafts we get when we tell someone to tell a story. More often than not, we get an essay. And then there’s no emotion in an essay. And so literally we’ll start off with there are 44 million people who live in Uganda 38% of you know, sorry, 68% of them are smallholder farmers. That is this number. And there’s no that doesn’t nobody cares. Like that doesn’t make for that doesn’t make the audience want to listen and hear more. So when you tell us when you put it in the form of a story, when you go to the the YouTube video of Kurt Vonnegut explaining the structure of stories, it winds up being man in whole Kurt Vonnegut actually has this great talk. It’s it’s been recorded. It’s on YouTube, there’s only three forms of stories. Man in whole boy meets girl and Cinderella is not quite true. There are some other forms. But nearly every movie and TV show you’ve ever seen is one of those three structure. And so the stories that we tell are all man in hole, here’s a problem. And if you set it up correctly, and you have an actual character that they care about, then when that person emerges from the hole, the the audience feels good. And they want to help and they want to they want they want to do something for the for the speaker or for the person who is in the hall but but they’ll they’ll be nice enough to help the speaker because that person isn’t the person in the hall isn’t in the room. And so it gets it gets the audience much more engaged.

 

40:00

In the context of your business, your audience would be your customers. So the more engaged they are with your company and your brand, the better it would be. Looney, you wrote a series of books called the next step, and you also have a podcast of the same name. Could you share with us a little bit about these resources? And what do you hope to achieve with them?

 

40:16

Yeah, so I was asked to teach entrepreneurship at a business school at the end of 2011. I was given no notice, it was like five weeks before class started. And I said, Alright, I’ll just grab the book. Like, I’ll just teach from the book because I have no time to prep. And I couldn’t find a book. Literally, my library had no books on entrepreneurship, except dummies, there was a dummies guide entrepreneurship, the Seattle Public Library, it was city of 4 million people had no books on entrepreneurship, except dummies. Amazon, I went on Amazon, I had a million books back in 2011. And they didn’t have a book on entrepreneurship. And specifically, they had the lean startup, right. And they had the The Art of the Start, and a bunch of others like that. But there was nothing that would guide people from I have an idea, what do I do next. And then what I do next, what I do next, so literally, in December of 2011, I sat down and wrote the next step. And it is a guidebook that takes you step by step, there’s like 60 something steps. And it walks you through a whole bunch of questions. And at the end of that you have a business plan. You don’t have the structure of a business plan, you have all the answers that would be in a business plan. And I used that as my as my textbook when I taught MBAs. And then the rest of the books all go off in different directions and go down different, different areas that needed more detail, like sales and marketing. Like how to build a pitch deck. How does, some of them go down little rabbit holes, like how to split the equity in your amongst your founders. Because that’s a, that’s something that hangs up a lot of founders. And then there’s one the latest one was on how to do investing the way we do it fled, which is revenue based instead of exit based. And there’s actually one that teaches people how to teach entrepreneurs. I dumped that information into a book. So the next step series is mostly for entrepreneurs to help them not make the mistakes that I and others have made before them. The podcast is just another version of that. Now, loonie,

 

42:19

where do you see opportunities now moving forward? And what are you looking to achieve in the future or someone’s always accomplishers to

 

42:25

you, I’m looking forward to being in the room with human beings again. So we can do some more startup accelerators. Definitely, we do run them virtually here and there, I they just don’t work as well. So I’m looking forward to being in person with people again. I’m also teaching angels now we run the angel accelerator programs around the world. So that we need more angels. And so we’re teaching them Africa eats we’re looking forward to that getting much bigger, and we expect some copycats of that either. Some of my team members guess splitting off to go do the next thing like it, or just people out there like they did it floods calling up and saying hey, I like what you do. How do we replicate it? And so those are the three the three big areas, which are all related. They’re all about funding and growing. Great startups

 

43:14

don’t loony if the listeners only remember one thing today, what would you

 

43:17

like it to be one thing I got? It’s complicated. If there’s one thing out there, that startup life is really exciting, but it’s also really complicated. Now loony?

 

43:28

How can Oh, this is getting contact with you. best ways

 

43:31

to come to my my website. It’s lunar mo biscuit.com. Which tetto put in the in the in the comments so that we don’t have to spell it. If you just search for Looney Liu and I on Google, it will find me there aren’t too many loonies out there. If you’re looking for flags, it’s fledged.co. Somebody’s been squatting on the.com forever. If you’re looking for Africa eats it’s Africa eats calm. We did get that calm. And the angel accelerator is the angel accelerator calm.

 

44:02

Looney, thank you so much for joining us today and sharing all your amazing stories and advice. Thanks for listening. guys. Thank you so much for joining me Looney today for episode on how we can grow impactful companies. One thing I really took away is the importance of storytelling because it’s how we can get our customers engaged with our business and brand. So guys, if you enjoyed today’s episode, and you’d like to show your support, and don’t forget to subscribe, leave a review and share this with somebody who will find it useful as well. And as a way to say thank you to you guys. you subscribe and leave a review on Apple podcasts by the end of September, then you may stand a chance to win $50 worth of gift vouchers from Amazon. one lucky winner will be chosen at the end of the month. That’s all for me today. I’ll see you next time.

[This transcript has been automatically generated by a digital software and will therefore  contain errors and typos. Please kindly take note of this and only rely on the digital transcript for reference.]

00:00

Hey guys is me your friend and host Ted. Welcome back to the business show. On today’s episode, we have growing impactful companies with Looney libous. Now Looney is a serial entrepreneur who is also the Founder and Managing Director of a startup accelerator that focuses on socially conscious mission driven for profit companies. Today, flash runs in multiple cities around the world, inviting in teams from anywhere doing almost anything that makes the world a better place. On today’s episode, loading the only shares about how he grows impactful companies, but also his work on flash and Africa ease which is formed by the graduates of the flash program, and why storytelling is such an important skill for any entrepreneur. So guys, if you’d like to support the show in the best we can do this is to subscribe, leave a review and to share with somebody who find it useful as well. Now it’s a way to say thank you to you guys. If you actually do subscribe and leave a review on Apple podcasts by the end of September, you stand a chance to win $50 worth of gift vouchers from Amazon. one lucky winner will be chosen at random. And now let’s dive right in. Hey, Looney, thank you so much for joining us today. Such a pleasure to have you here.

 

01:02

Well, thanks for having me.

 

01:03

Now, Louis. Let’s start with the icebreaker so we can get to know you a bit better. Who is Looney Libous where he is not working

 

01:10

when it’s not working? Oh man. That’s not very often. I I gotta say I self identify as a serial entrepreneur. The only other thing I do in life is raise kids. So I have four kids, they age and range from 21 to two, eight. So I’ve been parenting for a long time. And when I’m not working, there’s usually a kid around that’s that

 

01:36

needs. So your oldest kid is in college right now.

 

01:39

I got two in college high school are in second grade, third grade. Ah,

 

01:42

interesting. Now Looney you started as a serial entrepreneur and you have founded over six different companies over the years. It’s eight

 

01:49

actually make it eight. Okay, I don’t know if you lose count after one.

 

01:54

Too many to count. Okay, so we were founded about eight companies. But today, you’re an impact investor, and you’re running multiple accelerators for startups. And the most prominent one is called flash, which is a global network of conscious company accelerators. Now, before we speak a little bit more about that, please share with us your journey. How did you get to where you are today?

 

02:12

It’s been a long, long and interesting journey. What started me off was an article on the front page of byte magazine in February of 1991. Whoa, that was the that was the ultimate starting point. That I was still in college. I was a senior in college when that came out, bite magazines gone. But it was one of the premier magazines for covering computers back when they were a new thing. And what they showed on the cover that month was then thing that would come after desktop computers would be notebooks. So Jupyter Notebooks just been invented. Nobody had one yet. But this front page article said, the next thing is tablets. And that seemed exciting. And that seemed like an opportunity. And so I got a job out of college, did not enjoy it, and instead quit the job and started my first company in 1992. So took a year. And that first company was writing software for the very first tablet computers. In fact, the tablets were they were due out in early 1992. I don’t think they shipped until the end of 92. And nobody bought them until 2010. Yeah, it was really ahead of its time. Like Yeah, we were a little ahead of our time. But that’s what started me off. I did that company, I originally funded it myself. Then I got an angel from Singapore, I read a gigantic check. And then nobody bought the machines like we had the right idea. We were in the wrong decade. That was the right idea for 2010. It was the wrong idea for 9092 9394 95. And then, rather than just go and give up and go get a job. A month after we shut down the company, I co founded another company. That one was a.com story. Of course, we were going public when the.com bubble burst, and it lasted another year. And then the next day after I got laid off, I got an A job in another startup. Week One, they asked me to write their business plan for them. They didn’t really have one. So I did that actually wrote three, because I didn’t know exactly what was gonna happen, worked there for a while and then went off and started two more software companies one after the other. And then finally, in 20 2011 jumped off the tech path and the venture backed software path and dove into this conscious company mission driven for profit. Do good do well back.

 

04:40

Oh, so you did a complete 180 instead of running accelerators in 2011. So now let’s talk a little bit about that. So fetch is a global network of conscious company salary. Just what does this mean? What is the conscious company is salary to and could you speak about what is Fletcher’s mission?

 

04:56

Okay, so, again back in 2011, the big change was Was I, I was no longer a techie, my, my tech company left town on me. And I was free to do anything I wanted. And when I took my time to figure out what I want to do for the next 20 years of my life, and realize that I really liked to starting companies, right. And it was pretty obvious. I’d started five by then wrote the business plan for one and started four wrote about a dozen business plans by then, but but only five of them turned into companies. And the question was, what do I know? So I must know something that isn’t normal, because most people don’t do that. For these companies were still running, still selling their products. And that’s really rare. And so I must know something but didn’t actually know what I knew. So the answer was, how do I make a career out of helping others start their companies? Instead of me just doing one more at a time? How do I do 10 at a time, and 22,006 was when TechStars got started. And Y Combinator there, like six months difference in age, there was a TechStars. In Seattle, there were only four tech stars in existence in 2011. One happened to be in Seattle, where I’m based. So I went over there and met the people who ran it started being a mentor over there. And like how it worked. But they were working with tech companies. It’s in the Britain’s in the name, right and Y Combinator, still a multi tech accelerator. And the question was, could we take the model that they were using, and use it for companies that are solving real problems? There’s lots of ways to talk about this. We can say conscious companies, that’s the word I use back back in 2012. We can use the words mission driven for profit. So it feels like a nonprofit, but they’re out to make profits and grow. Or we can just say companies that do good companies that solve real problems. So fledge is a copycat of tech stars. That’s how it started. Except we don’t care about tech, we care about solving poverty and hunger and climate and social justice. With a for profit model. We don’t work with nonprofits. And we changed a few other few other things. But if you if you went to both programs, you would you would see similarities between them. And so that’s what floods is. And it started here in Seattle, and it was just Seattle for four years. And then other people in the world started to see what we were doing. And they started reaching out and they said, Hey, can we copy what you do? And the answer was Sure, let’s figure out how to do that together. And so we have, I don’t know, 10, licensees, we’ve run the program, and it’s eight or nine cities by now, when there’s been 17 programs, and I haven’t run most of them. It’s lovely. So we’ve built a network of others, that have this same mission of helping these these companies, whatever you want to call them.

 

07:53

Now, loony Could you share with us? What are the kinds of companies you have invested in and are working with so far, the kind

 

07:59

of companies I work with, their impact is embedded in their product or service. The easiest way for Americans and global north people to understand this is Whole Foods. So Whole Foods is a mission driven company. It started in 92. And their mission was to bring organic and healthy food to the populace. And they succeeded wildly. Right. So they went public. They got purchased by Amazon after they were public. But the key part of their business model was You didn’t have to care about their mission. You just had to want to buy healthy food. And if you walked in their front door and you bought food at Whole Foods, you fulfilled their mission. And so they didn’t have to sit there in the boardroom worrying about how do we do the mission while we’re trying to make money. They just embedded it together and then ran it as a business. So all the companies that that fledge invites into the program, and all the companies that I invest in, all have that same same structure to them. So really simple, will pick GRC in rural Uganda, it’s a fish farm. And so the fishery in Lake Victoria has been completely over fished it’s now illegal to fish and Lake Victoria. So we’re doing fish farming instead of fish hunting. And we are bringing protein to a part of the world that is lacking now because the the the wild version of their protein sources gone. So we don’t we don’t talk about malnutrition and we don’t talk about hunger. We just make fish and that is solving the problem.

 

09:35

Yes, I read about jossi I understand that you’re helping fishermen who are no longer able to catch fish in Lake Victoria become fish farmers itself actually this only helps to provide them with a form of employment but it’s also helping solve the malnutrition issue around the era as

 

09:49

well. Yeah, but a million and a half people were part of the fishing industry. Well this huge and they pretty much all lost their jobs over the last decade. And and a lot of them are in jail for for fishing, dang. In addition to that one, we’d say in a million and a half, this wasn’t just the fishermen, this were the women who were selling the fish in the markets. And literally the stories that my founder tells is that they wound up on the street selling themselves. And it’s heartbreaking. And so when he, when he started this company, rather than just starting it, like a big, you know, a big giant multinational would would run. Instead, he actually gets the fish to these women. And youth youth in Africa is not married yet. So it could be as old as 30. Put the younger people there, his Salesforce, so he didn’t hire a bunch of old men to be the Salesforce, he actually grabbed the women off the street and gave them fish to sell. And he employs hundreds and hundreds of these women’s I got, and I got to meet them when I went out to Uganda to meet the company.

 

10:56

Now Looney I know that Josie says you’re part of the Africa eats program. And I know that Africa is is formed by graduates of the flash program, apart from jossi, could you share with us some of the other companies that are involved with Africa eats and what are they working on so far?

 

11:09

Sure. So fledge is invested in companies in something like 30 countries, I get I lost count, you tend to lose count when you when the numbers get big. It’s over 100 graduates from from dozens of countries, all over the world on every continent, but Australia just haven’t picked one from there yet. We’ve gotten applications from over 100 countries. And we were looking at patterns of these companies over the years. And when we got to 2018 2019, we noticed that the not the majority, but a large number of the companies we had in the portfolio, were African companies working in food and ag. And it wasn’t that we ever set out to be a food and ag accelerator. We never ran a food and ag accelerator. What happened was we get all these choices of all these companies doing all sorts of interesting things all over the world. And we pick the ones we think are the most promising. And agriculture is the biggest industry in Africa. By far, nearly everybody in Africa, who lives in Africa is a farmer or a child of a farmer or a spouse of a farmer. And everybody eats every day. And therefore when you try and analyze startups, you have to worry about, like how many customers can have what what’s the, what’s this, what’s the size of their customer base, when we’re talking about food, it’s everyone, but unless you’re doing specialty food, but when you’re just talking about an everyday normal food, it’s everyone. And so we tend to pick over the years, a lot of companies that were doing Food and Ag. And there just weren’t a lot of other accelerators in Africa. So we got some really good applicants from Africa. And then 2020 rolled around. And of course, there was a pandemic, as everyone knows now. And the big worry was how is that pandemic gonna, gonna blow through Africa, right and India, but we didn’t have a lot of companies in India, and Southeast Asia. And we don’t have a lot of companies in Southeast Asia. But we had a whole bunch in Africa. And we knew, even back in March of 2020, we knew a vaccine someday would be the saving grace. But it wasn’t going to be show up in Africa first, right after he gets everything last. So we said all right, what can we do? What can we do given? Its 26 Food and Ag companies, given 26 companies? What can we do to help them make it through this upcoming pandemic make it so that you know, whatever disturbance has happened in the Food and Ag supply chain, we can try and fill some of those gaps. And what can we do to help make sure these companies are running through the pandemic? Because if they don’t, people go hungry? And so we took we had this plan that we were working on, we call it Africa eats we take our graduates of fledge so everybody’s already been vetted by flight and they’ve already been trained by fledge. We we know them really well. We ever relationship through the accelerator, not all from one city from five different cities in like eight or nine different sessions, five years of programming or six years of programming. We took them all, and we wrapped them in a brand new investment holding company. And that’s called Africa eats limited. And then we raised money into that new entity. And that entity now owns a minority stake in all these companies. It adds growth capital to them. It fills in gaps that they have in finance, and it’s doing really well so far. So we’re about a year and year and a few months into it. And those companies are growing like 60% per year.

 

14:51

Looney is with a heavy hand and I’m reading this story. I know from attributor, you wrote recently that one of the founders that you were helping along the way HD pass We recently and I understand her company’s called Kalahari. Honey, would you like to take this opportunity to maybe share about her work and what the company’s doing right now, I understand that Kalahari honey is involved. So with helping farms and protecting elephants as well,

 

15:17

yeah, this is Mavis in ducek. We lost her COVID-19 Yeah, I met Mavis years and years ago, she applied to fledge, she had a different business model back then she applied to fled with this model for animal feed. She’s from the country of Botswana. It’s a highly stable country in the southern part of Africa, if you if you pull up the map, it’s it’s got two main exports. One is gold or diamonds or something like that. And the other one is animals is cattle. It’s a source of beef up to up to Europe. It’s, it’s a country, it’s one of the rare countries in Sub Saharan Africa that makes a profit from export, trade export trade surplus. So, but they don’t have animal feed, they don’t make animal feed. And so she applied to fledged saying, We need a domestic animal feed business. And she kept coming really close to getting in you, we only accept seven at a time, and she would be eighth or 10th. Or it’s happened over and over again that she was she was working our way up is like 15th, and then 12th. And then at one point, she was eighth out of seven, which is just terrible to have to write a rejection letter, which we have to do all over and over again to somebody who, who we really want to bring in we just don’t have the resources to help more than seven. And so finally, in 2018, a partner came along and started a program in Africa called the land accelerator. The partner was World Resources Institute. It’s a big non NGO out of DC. We were in a program in Africa for restorative agriculture. And animal feed isn’t restorative but I twisted their arm and said, Can we please bring in this one company? I, I feel terrible. I keep rejecting them. I just want to meet her in person. And then I can I can invite her to Seattle next time.

 

17:08

So they said yes. So what happened up to date,

 

17:10

and that was November of 2018. And in October 2018, right after we we told her to come to Nairobi. She wrote me an email and she said, Hey, I got an order for honey. And I said, I didn’t know you did honey. And so what this is a highly indicative of what happens over in Africa. The government had this bright idea that honey could bring incomes to farmers. And so they handed out like 200 beehives to farmers. And they didn’t provide them a market for the honey. They didn’t provide them enough training. And nothing happened by the beehives are just sitting around Mavis got word of this. She does. She did a whole lot of other things. Besides being an entrepreneur, she had this little nonprofit thing she ran on the side, it helped women in Botswana. And she got word of these beehives and ask permission if she could repurpose them. And she did. And so she trained a whole bunch of women, you know, 100 women, and how to be beekeepers, and gave them the 200 beehives. But she also collected all the honey that they produced, packaged it up under her brand. And we’re selling it in in her own little shop and a couple other little stores. But in 2018, she got an order from from a pharmacy honey is considered a medicine in southern Africa. And it’s good. It’s actually it’s well known as a medicine. It’s not like a folk remedy or anything. And so she got this order and she said What should I do? And my advice was fill it, fill the order, make some money and we talked about okay, but it takes money to make money and all that and, and so she managed to fill that first order. And then we invited her to fledge in Seattle the following spring. And we gave her $20,000 in the we actually gave her like 35 normally would be 20. But we increased it because she had more orders that started coming in. And we worked on her story while she was here and she already knew it. That was the the story isn’t actually about incomes in for women in Botswana, which is necessary the these are subsistence farmers, most of the population in Botswana is living on a few dollars a day. So yes, that’s useful. But the other story is much more interesting, which is Botswana has the largest concentration of elephants of any country in the world. And the norm in Africa for Elephants is either they live on the national parks, but they don’t know where the boundaries are because there’s no fences, they leave when they leave the national parks, they discover these little plots of food and they’re happy to like eat that food. Well we call those farms and the farmers don’t like it when the elephants come by. So the solution in every country in Africa except Botswana until recently was shoot the LM shoot Doom right when it’s a wins the fight between Farmers and elephants the farmers win. Cuz we have guns in the elephants. But in Botswana at the time, they didn’t want to do that. And so Mavis got word that elephants don’t like bees. And there had been some studies and she saw this. And so if you put beehives on a farm, the elephants stay away from that farm. They really, really don’t like bees. And so that’s the story that she told on stage. And then helped her get some more funding. And that helped her win a whole lot of content. She won every contest she ever she ever went into. just telling that story of bees and bees and an elephants. Anyway, so the problem that this company then had subsequent to fledge, was they just kept getting more and more orders? And so you’re gonna say, how’s that a problem? Well, here’s the problem that that company faces in nearly every other company that sells our real product faces in the world. When you get an order from a supermarket, or pharmacy or any or distributor, any big, big organization, they pay you 30 days after you bring them the credit to them. And sometimes 45 Yeah, 60 or 90, but usually the terms are 30 days later, we call that net 30. So how is this yourself? Well, you can’t tell the farmer that I’m going to pay you in 45 days, you know, I’ll take your honey now, and I’ll pay you in 45, that doesn’t work for someone who’s earning a few dollars a day, you have to pay them when you pick up the product. And doesn’t matter if it’s honey, or chickens or potatoes or corn or rice or beans or whatever, you got to pay the farmers, these are poor people. So you pay the farmers. Same thing when it comes to the bottles, like literally got to put honey in a bottle, you got to buy the bottles from China, usually,

 

21:43

you know, maybe through another country. But ultimately, like everything else, you get the bottles from China, yet they want to be paid when you order the bottles like they want to be paid before before you get the bottle, they want to be paid when you order the bottles. And then they show up, you know, 30 days later. So you have expenses as a company in order to get the product into a bottle and then into a box and then over to the customer. And then you also have to pay the trucker, right, the trucker doesn’t want to be paid 30 days later, even if it’s your truck, like you gotta pay the driver, you got to pay the fuel. And so every time you get an order, your need for capital goes up. And so this company just kept getting order after order after order after order. And when you sum it up, it’s like a million dollars worth of orders in year two and a half, like from nothing to a million dollars in two years. And the problem is that we’ve had to you keep writing checks to, to pay for the pay for the honey. And so the company has been doing great. And we’re getting it back on track. Now that Mavis is gone, the whole team got COVID-19. So the company was kind of shut down for a month. But we’re getting the company back up and running. We’re figuring out where the orders are and, and going back to filling them. So we promised to make this a big company for Mavis.

 

23:02

And I’m sure that you get there eventually. Now guys is Looney has shared, having a big order can actually cause problems. And this is quite universal, because this is issue of credit terms. Now sometimes when you receive orders from a company, especially the larger ones, they may actually only be able to pay you with a 30 day to 90 day credit term timeline. So here’s the problem, even though you have to start incurring your costs to actually create the production for the materials and the delivery of the product itself. Even upon the delivery of the product, you may have to wait maybe 30 days, 45 days or even up to 90 days to get paid eventually. And during this gap in time before you actually paid guess what you still have to pay your employees you have to pay your rent. And that’s where credit crunch comes in. Now loony one of the things that I realized about Africa is is that one of the impacts that is creating is actually providing employment and empowering women along the way. I read that this has helped to reduce incidents of domestic abuse and violence as well. Could you share your views in this?

 

23:57

Yeah, so we buy food from 10s of 1000s of smallholder farmers. And that’s the term they use over that smallholder farmers like an acre or two, three acres will be a really big smallholder farmer. But yeah, and three acres planted by hand, harvested by hand, like maybe with an ox, but no machinery. The smaller farmers tend to earn a few dollars a day on average and trade, they’re not earning a few dollars in any given day. But when you sum up their total, total incomes for the for an entire year, and you divide by 365. it winds up being two or three. So it’s not a lot of money. And then on top of that you find cultural issues in most African countries, such as the women are expected to work on their husband’s farm, but it’s their husband’s farm and he gets the income. In some countries, you find cultural issues like the husband can have his many wives as you can afford, and they’ll have as many kids as the wives will bear, but it’s the wives that then have to pay for the school fees for the kids. And school fees. If you don’t understand what what that is, it’s not a, it’s not, it’s not like a private school fee, like we pay in the States. It’s just the cost of feeding the kids and running the building. Like and literally the most of that is just feeding the kids lunches served that the schools and the schools don’t have the money for that, then the government’s don’t have money for food. And so that’s what school fees are, and the uniform and your books and other stuff. And the school fees are like $1, you know, they come out to be like 150 or $200 a year. So we’re talking about, you know, about $1 a day or a little less than $1 a day. And if you’re a subsistence farmer, you don’t have it, because you’re only earning a few dollars a day, and you probably have three or four or five kids. And so there are all sorts of issues that pop up, that can be solved by bringing a market to the farmers. So ultimately, what we do, whether it’s honey, or again, we do this with with maize, and soybeans and, and rice and beans and all sorts of other products, is we find farmers that will sell us everything they grow or everything they grow that crop, they always have a farm, they always have a garden on the side for other foods. But the main crop will buy everything they make. And we will then go and collect it, do whatever processing that might just be sorting or putting it in a box. And then distribution is in finding retail customers and, and restaurants and then having the trucks to deliver to them. And simply doing that increases the incomes of the farmers, minimum 40%. If it’s just the honey, which is a side product, the second product, if it’s a main product, we could increase their incomes by two or three or five. And so when you do that, you wind up making middle class people. So you’re making farmers who now have twice or three times the median income in the country, that puts them in the middle class, they can now afford school fees, they can afford medicine, they can afford shoes for all their kids, which isn’t always something that kids get. They can serve two meals a day, everybody, sometimes three meals a day to everybody, they can afford to actually light up their homes at night, they might actually be able to, to invest in a solar panel so that they can have electric lights instead of kerosene lanterns, which killed people from the smoke inhalation or better stove so that they don’t have to breed the smoke from the fire every day. It puts them on a path where they they have a much better, better quality of life. And we’re hoping to do this for hundreds of 1000s of farmers. But as I said before with calamari, honey, the problem is we can’t fill every order we get. And it just takes more money than then even we have. But we’re getting there. Again. They’re growing at more than 50% per year. And so every two years, it’s doubled every other year, it’s doubled.

 

28:07

Now loony. Let’s take a step back and speak a little bit about the fetch program. What can an applicant hope to receive in terms of mentorship and funding? I know one of the key features of pledge is that he teaches the founders how to present themselves in your stories behind a business like a TED talk. Could you elaborate about this a bit more?

 

28:23

Yeah, the key word you said there was hope. So we get so many applications. It’s it’s getting to be disheartening, I need I need more partners who want to run more of these programs. Because last time I ran the program in Seattle, we had 845 applications from 85 countries. And we only had enough resources for seven. And when we just ran the land accelerator Africa. For the third time, we had over 1300 applications. And the fine, there’s 15 finalists. So what I tell entrepreneurs Yeah, hope is the key word because it’s easier to get into Harvard Business School and to get into Fletch. And it’s not easy to get into Harvard Business School. Alright, so the only way in, though, is filling out an application. It’s online, and we have an annotated version that a lot of people just can’t do somehow they don’t find it, even though we put the link all over the place that tells you what we’re looking for in the answers. So do that whether you’re applying to our program or any other program, we have an annotated application that tells you what, what, how to answer the questions. Okay, what we look for in terms of the companies that we pick our team impact and odds of success. So it’s gotta have a great team. If you’re all alone, you can apply if you want, you’re not going to get in. You have to have a team. You have to do something that’s fixing a real problem of the world. That’s what we mean by impact. And given all our choices, we tend to pick the companies that have at least national if not regional scale of impact. If it’s global impact, it’s even better. And then odds of success are all the normal things you look for in investing in early stage business, then we accept seven, and what we do with them for seven or eight weeks straight. So, pre pandemic, we invited everyone to one city. And we hope to do that again someday. So one of the cities will fly them into the city. And we work with them five days a week, all day, every day for five. For all these weeks, we do three main things while they’re here. The first one is they get a class and entrepreneurship, not because they need it, because not because they’re not entrepreneurs, but because entrepreneurs need to know how to do a lot of different things. And most entrepreneurs have some weaknesses, so we teach them to fill in their gaps. I taught MBAs for almost a decade, this is my class for MBAs, we just do it really quickly. Second thing that we learned from TechStars is that we flood them with mentors. We like our teams to meet not one or two or three coaches, but 10 or 15, mentors, one on one, have conversations about whatever whatever they want. And these mentors are, are just business professionals that know lots, we know one thing really well, usually, sometimes their founders, but usually they’re just a marketer, or a or a CFO, or, you know, operations guy,

 

31:22

but becoming the expertise here.

 

31:24

And then yeah, and then the third thing we do is teach them how to tell a story. So when I talked about Davis’s story about bees are our goal is Ted Talks. But the real the real TED Talks, the ones in Vancouver, not the TEDx talks. So that’s our bar that we have. But the problem is that a really good TED talk will take three months minimum to prepare for. And so they look like they look really one reason they just look so easy, right? It’s like the Steve Jobs presentations, right? Steve Jobs, those are three months of effort in order to get them to be that that quality. And we don’t have three months, because the whole program is seven or eight weeks, which is two months, right or less. So we spend every day for for three weeks working on storytelling. And we do this some tricks we all share. No slides, we just sit around and tell a story day one is bring a story, not a pitch, bring a story about what what you do and why you do it. And we’ll have someone in the audience who’s never heard these before, and will give feedback. And we’ll say okay, and take the feedback and rewrite the story for tomorrow. And we do it again tomorrow. And again, we’ll have somebody new, who’s never seen it in the audience. And we’ll get feedback. And often by the time we get to the third or fourth day, we’re like, okay, maybe this is working. Maybe there’s another story, I’ll try something completely different tomorrow, come up, just come up with something different. Sometimes it’s tell the story in a different order. Sometimes it’s just that’s try something new. We’ll get feedback on that. And we’ll just keep iterating, day after day after day after day. And after we get through about a week or so of this. We start to hone down the stories and get them get them good. And then we worry about like how do you actually present it? How do you? How do you? Where do you pause? Where do you where you stress, you’re picking out the specific words on this. And then finally, a few days before Demo Day, we make some slides to put behind them. And so this is one reason why they come out so good. A lot of them come out, a lot of them just wind up being really good pitches. It matters where the entrepreneur starts if they are completely staged, fraught, which happens a lot. We’re happy if they can do something on stage. And they’re happy if they can do something on stage. So our bar for them is a little lower. And if they’re some people just aren’t great storytellers. for them. We’re happy if it’s a really good investor pitch. But our bar for what we’re trying to get everyone to is a TED talk. And then we’re we literally have like, we have a mentor who is a director for stage performances. And she there was one, one talk we did where I was on stage with the entrepreneur, and we thought that was how to do it. And she just said, No, no, you do all you’re doing it all wrong. And then she told us what to do. And that’s what we did. And it came on Great. So we also have a singing teacher that we bring in to help help people with their, their intonation and their accents. We do worry about accents will pick out because we do such an international program will often have a word that that’s in that’s in the talk and nobody knows what they’re saying. And we’ll have to pick a different word for them to use. I remember there was a chicken company that came through and in his accent the word poultry just didn’t sound like like poultry. And nobody knew what he was saying. And so he went home for the weekend and he just kept saying the word poultry all weekend and came back and it sounded fine. Because he really wanted to use that word instead of chicken. But the singing teacher helped with that anyway, so the the actual trick on how you tell a great story is iteration just over and over and just rewriting it over and over again, with as new as as many novel people as you can grab and grab to hear it for the first time. Because you can’t get the same feedback for the second time. It’s once you’ve heard it, you loses some of its magic. And, and the second one in terms of telling great stories that, that sell that sell anything is, don’t do the slides first, don’t do slides, and then try and figure out what you’re going to say to the slides, put together a great story, and then make slides that fit behind the story,

 

35:37

guys is lunia shared storytelling is so important for every entrepreneur. And it is why ludie himself is placing such a big emphasis on making sure that the companies that he’s grooming the fish programs are able to tell the stories effectively as well. Now take some time to think about your own company’s story. Do you have a good way to communicate this basis to somebody who you just met for the first time, if you don’t, it’s definitely important for you to take some time to think about how you can deliver this pitch to someone effectively and concisely. Now, Looney one tips that you provided was to actually only prepare the slides towards the end of the preparation process. My guess is this is so that the presentation is not reliant on the slides itself. And the emphasis is on the storytelling process itself. Am I right?

 

36:17

Yeah, there’s actually a rule that we put in, I don’t remember where I took it from somewhere. And I don’t remember where it might have been tech stars. But we don’t give a clicker to the person on this on the stage. So they have no control over what the slides are behind them. Instead, we either have their partner if they have one, or we just have my assistant, run the slides. And so again, they’ve practiced a story for two and a half weeks. And then when they go on stage, they just tell that story. And the pictures that are behind them are just complementing the story that the audience doesn’t need those and we put as few words as possible on them. Because we don’t want the audience reading what’s on the screen, we want them hearing what the person is saying. So the the things that we would put in the slides are mostly just pictures. But if we’re talking about numbers, you know, I’ve done a million dollars worth of business, we’ll put a million the word the number 1 million in 120 point 150 point font on the screen. Again, just like Steve Jobs would do, right? That he’s also one of our inspirations. And I got to talk to the person who made all his slides. And I did get to confirm all of my beliefs and how those were put together. And, and yeah, really, he really did take three months to put them together.

 

37:34

Now loonie, we all know the great stories draw customers. But could you explain in your own words why you think this is the case?

 

37:41

We’ve all been taught it was so it would not been taught. We’ve all been been told stories since before we could read. We tell stories to our kids. We tell stories to each other stories that are compelling stories are one of the unique aspects of being a human being. And human beings have been telling stories for probably 100,000 years, maybe more we don’t know when people started speaking, right? So it could be a million years. We convey when you tell a story. You trigger all the mirror neurons in the audience, they all start to feel what what you’re what you’re talking about. Yeah. Oh, emotions, yeah, you get emotions out of it. As opposed to the first drafts we get when we tell someone to tell a story. More often than not, we get an essay. And then there’s no emotion in an essay. And so literally we’ll start off with there are 44 million people who live in Uganda 38% of you know, sorry, 68% of them are smallholder farmers. That is this number. And there’s no that doesn’t nobody cares. Like that doesn’t make for that doesn’t make the audience want to listen and hear more. So when you tell us when you put it in the form of a story, when you go to the the YouTube video of Kurt Vonnegut explaining the structure of stories, it winds up being man in whole Kurt Vonnegut actually has this great talk. It’s it’s been recorded. It’s on YouTube, there’s only three forms of stories. Man in whole boy meets girl and Cinderella is not quite true. There are some other forms. But nearly every movie and TV show you’ve ever seen is one of those three structure. And so the stories that we tell are all man in hole, here’s a problem. And if you set it up correctly, and you have an actual character that they care about, then when that person emerges from the hole, the the audience feels good. And they want to help and they want to they want they want to do something for the for the speaker or for the person who is in the hall but but they’ll they’ll be nice enough to help the speaker because that person isn’t the person in the hall isn’t in the room. And so it gets it gets the audience much more engaged.

 

40:00

In the context of your business, your audience would be your customers. So the more engaged they are with your company and your brand, the better it would be. Looney, you wrote a series of books called the next step, and you also have a podcast of the same name. Could you share with us a little bit about these resources? And what do you hope to achieve with them?

 

40:16

Yeah, so I was asked to teach entrepreneurship at a business school at the end of 2011. I was given no notice, it was like five weeks before class started. And I said, Alright, I’ll just grab the book. Like, I’ll just teach from the book because I have no time to prep. And I couldn’t find a book. Literally, my library had no books on entrepreneurship, except dummies, there was a dummies guide entrepreneurship, the Seattle Public Library, it was city of 4 million people had no books on entrepreneurship, except dummies. Amazon, I went on Amazon, I had a million books back in 2011. And they didn’t have a book on entrepreneurship. And specifically, they had the lean startup, right. And they had the The Art of the Start, and a bunch of others like that. But there was nothing that would guide people from I have an idea, what do I do next. And then what I do next, what I do next, so literally, in December of 2011, I sat down and wrote the next step. And it is a guidebook that takes you step by step, there’s like 60 something steps. And it walks you through a whole bunch of questions. And at the end of that you have a business plan. You don’t have the structure of a business plan, you have all the answers that would be in a business plan. And I used that as my as my textbook when I taught MBAs. And then the rest of the books all go off in different directions and go down different, different areas that needed more detail, like sales and marketing. Like how to build a pitch deck. How does, some of them go down little rabbit holes, like how to split the equity in your amongst your founders. Because that’s a, that’s something that hangs up a lot of founders. And then there’s one the latest one was on how to do investing the way we do it fled, which is revenue based instead of exit based. And there’s actually one that teaches people how to teach entrepreneurs. I dumped that information into a book. So the next step series is mostly for entrepreneurs to help them not make the mistakes that I and others have made before them. The podcast is just another version of that. Now, loonie,

 

42:19

where do you see opportunities now moving forward? And what are you looking to achieve in the future or someone’s always accomplishers to

 

42:25

you, I’m looking forward to being in the room with human beings again. So we can do some more startup accelerators. Definitely, we do run them virtually here and there, I they just don’t work as well. So I’m looking forward to being in person with people again. I’m also teaching angels now we run the angel accelerator programs around the world. So that we need more angels. And so we’re teaching them Africa eats we’re looking forward to that getting much bigger, and we expect some copycats of that either. Some of my team members guess splitting off to go do the next thing like it, or just people out there like they did it floods calling up and saying hey, I like what you do. How do we replicate it? And so those are the three the three big areas, which are all related. They’re all about funding and growing. Great startups

 

43:14

don’t loony if the listeners only remember one thing today, what would you

 

43:17

like it to be one thing I got? It’s complicated. If there’s one thing out there, that startup life is really exciting, but it’s also really complicated. Now loony?

 

43:28

How can Oh, this is getting contact with you. best ways

 

43:31

to come to my my website. It’s lunar mo biscuit.com. Which tetto put in the in the in the comments so that we don’t have to spell it. If you just search for Looney Liu and I on Google, it will find me there aren’t too many loonies out there. If you’re looking for flags, it’s fledged.co. Somebody’s been squatting on the.com forever. If you’re looking for Africa eats it’s Africa eats calm. We did get that calm. And the angel accelerator is the angel accelerator calm.

 

44:02

Looney, thank you so much for joining us today and sharing all your amazing stories and advice. Thanks for listening. guys. Thank you so much for joining me Looney today for episode on how we can grow impactful companies. One thing I really took away is the importance of storytelling because it’s how we can get our customers engaged with our business and brand. So guys, if you enjoyed today’s episode, and you’d like to show your support, and don’t forget to subscribe, leave a review and share this with somebody who will find it useful as well. And as a way to say thank you to you guys. you subscribe and leave a review on Apple podcasts by the end of September, then you may stand a chance to win $50 worth of gift vouchers from Amazon. one lucky winner will be chosen at the end of the month. That’s all for me today. I’ll see you next time.