Advice Line: "Strategy Sessions"

Introduction to Episode

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Guy Raz Introduction

2:09Hello, and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we try and help solve your business challenges. And every week, I'm joined by a legendary founder, a former guest on the show who will attempt with me to help you. And this week, our episode is a bit of a mashup, three callers and three different former guests. By the way, if you're building something and you need advice, give us a call. You might just be the next guest on the show and reach all of our listeners. Our number is 1-800-433-1298. Leave us a one minute message that tells us a

2:45little bit about your business and the issues or questions that you'd like help with.

Jeffrey Hollander Introduction

2:49All right, let's get to it. Our first return guest today is Jeffrey Hollander. He's the co-founder of Seventh Generation. That's the company that specializes in plant based household cleaning, paper and personal care products. Jeffrey first came on the show back in 2021 with his co-founder, Alan Newman. It was an amazing and intimate conversation about the challenges in being one of the very first green household brands hit the market back in the early 90s. If you want to hear the whole story, we'll put a link to that episode in the show notes. Anyway, here on the

Tony DeRosa Call

3:20advice line, Jeffrey and I talked to callers through the best way to bring on new business partners. Hi, Jeffrey and Guy. My name is Tony DeRosa. I'm calling in today from Ann Arbor, Michigan, where I'm the owner of Hearsay Brewing and Theater, which is a two-in-one company with a microbrewery offering a full menu of beer, wine, and spirits, and then an adjacent comedy theater that primarily focuses on improv comedy. Cool. Thanks for calling in, Tony. So it's a brewery and theater, but they're in different rooms?

3:50Yeah, they're kind of adjacent spaces. So the theater is in this contained space sort of within a larger kind of a picture, a big, long, rectangular brewery. And then in kind of the middle of that, there's a black box theater where we do improv and some stand-up comedy, roughly 40 events a month, actually. I got it. Okay. So you're brewing beer, you've got comedy, and do you serve food too? We do. So we own and operate a food truck, but a big update is we're actually going to be renting the food truck to another party who's well-known in Ann Arbor, which should help me to kind of

4:23alleviate some of the many balls I have in the air at any given time. But we currently do operate that food truck and focus on Smashburgers. So this is a complex business. Before we dive in, tell me a little bit about the sales. How are you guys doing financially? Yeah. So last year was our first full year in business. We did $667,000 in revenue, and that's pretty evenly split across the bar and the theater within food being another kind of 100K in that equation. We're growing so far in 2026, about 25%. So we're really getting some good

4:55feedback from the community. And I'm working on planning a really large improv comedy festival at the Michigan Theater downtown, which we expect to bring in another $300,000 to $400,000 over the summer. So I'm projecting us to exceed a million dollars in our second full year, just based on some of those major growth opportunities. Okay. And are you profitable? We took a small loss last year. I expect us to be profitable this year. Great. Okay. Tell us your question, and then we'll dive in further.

5:25Yeah. So it can be really hard to break out of the pattern of wearing too many hats as a solo founder. How would you evaluate staying the course as the sole owner of all these different business units versus bringing in partners that might have some skin in the game to lead one or more of those business units?

Jeffrey Hollander Advice

5:41Got it. All right. Jeffrey Hollander, I want to bring you in. Complex business, a brewery, there's food, there's theater. Is there anything else we're missing, by the way, Tony? A big part of my business and actually a huge growth opportunity is workshops for the corporate world. So I worked at Google before moving. We were in California and I was doing workshops for teams because I think improv is so helpful for communication and trust with any kind of small group. So I still do a lot of that. And that's even another area where I'm often kind of dividing my time beyond the other things I've already mentioned. But yeah, that would be the only other

6:16major business unit. Okay. So you've got classes, you've got shows, and you've got hospitality. Okay. Jeffrey, I want to bring you in here. Thoughts or questions before we tackle Tony's question? Well, I'll jump right into your question. I mean, I think bringing on partners is a challenging thing to do. It's hard to find the right person and partnering with the wrong person can be very dangerous to your business. I would think about what are the things that you do best,

6:47better than anyone else can do. And think about how you can focus on where you add the most value to your business. Then hire people that can do the other things that are critical, but not where you can do it better. Do you need capital? Is that why you want a partner? What's the purpose of having a partner? It would certainly help. Yeah. And I've felt burned a couple of times by bringing in people as employees, kind of key employees that didn't pan out exactly as I hoped. I think I've felt that

7:17being a first-time founder, that dynamic of there's just a different feel when somebody is kind of working for a paycheck versus, hey, I've got a significant amount of either stock options to vest, or I've put in capital. I remember from your interview, you talked about kind of having more silent partner investors, and that could probably be an option for our business as well. But it's been largely driven by some of the feedback I've just had working with employees so far at times. I love the idea of having skin in the game and giving your employees a way to participate in your

7:50success. I think you don't want to have them controlling the business, but having them be small owners in the business will be hugely motivational. And I think they'll be very different as owners than they would be as employees. Yeah. Or profit sharing. I mean,

Guy Raz Advice

8:07there's ESOPs. Profit sharing is a great way to start. I think that's a great idea because once someone has skin in the game, they show up very differently. But you've got three different businesses, right? You've got hospitality because you're doing the food and the tap and the beer, and then you've got an entertainment business, which is the shows. And it sounds like you've got a whole nother sort of educational classes kind of business, right? And so finding like mini CEOs for each unit, like somebody who runs the hospitality, that's their portfolio. Somebody whose portfolio is

8:44like ticketing and programming, and then the other person is education. So I agree with Jeffrey that finding partners who will then be equity partners is it's tricky because that's permanent. It's expensive to give away equity and it's permanent. And I wonder whether you might want to think about finding or experimenting. I don't find the perfect person, but experimenting with people who could kind of own those different units as paid employees, maybe who gain a little bit of ownership over time when they hit

9:17milestones, but something like that before you bring in full equity partners.

Tony DeRosa Response

9:22Yeah, I love that idea. I think it actually riffs on something that I've identified as maybe a weakness for myself at times. I think I occasionally just get really excited and tend to see the bright side of people versus maybe having a sharper eye of is this person the perfect fit? Are they really checking all the boxes that we need? And so I've kind of looked at that as I'm bringing in some of these key folks just getting extra help, because I have had to really figure things out on the fly with, you know, food. Sometimes it's like you're the owner of the company and you're flipping burgers one night because, hey, somebody called out and you've just got to, you know, you got to make it

9:52happen and get it done. And I'm looking for people to come in and help me. I wouldn't do the interviews alone by having other people with me. They see different things than I see. You might see just the good, but someone else might see challenges that you're not paying attention to. So I never like to have one person make the decision about a new employee. I always think it's good to have more than one person interact with them. That's great advice. Also took a look at your website and, you know, you open with high there, but I think your message

10:28of crafting community through joy and laughter is a more powerful place to start the communication than just high there. Appreciate that. Yeah. I think that, yeah, we could get our mission more front and center because we are operating at a time when, you know, craft beer is actually declining. There's quite a few breweries that are closing and sales across the border are down. So for us to open a brewery at this time, it was really important to us that we're appealing to people that, you know, drink only non-alcoholic beverages and that community building with just the number of

11:00partnerships and events we do was a really important part of our founding. So we could make that more front and center. I like that. What part of the, it's a, I think in having a diversified revenue stream is really critical in, in, in this business and it's same happening with wine. Which of these three businesses are you seeing the most growth potential right now? And then which one right now is the most profitable? You know, there, there are much better margins selling classes and workshops, obviously, because you're not dealing with cost of food, cost of, you know, the, a lot of the labor I'm providing in that, you know, we've run

11:33them for large companies, small companies, a lot of university teams that is both growing and the most profitable. So it's just kind of the same part. I would say it's the, it's the workshops and we've started to get bigger leads. I did some competitive analysis and learned I was way underpricing my workshops compared to competitors like second city, which has a lot of gravitas and name recognition in the comedy world. So I am, I am cognizant of that, but I felt that when I looked at what we were charging, I actually got feedback from a client. So just so you know,

12:03your bid was 20% of what second city had quoted us. And I was like, okay, it's time to really evaluate that. And I, you know, I'm looking at that as probably where I could even be spending more of my time to, you know, benefit companies, kind of tell that story of how improv can be a really powerful tool for business. And, uh, and as you said, have kind of these mini CEOs running some of the more hospitality driven business units. You know, you said something, Tony, about improv and I agree with you. I mean, I remember interviewing Jason Sudeikis and he talked about doing improv in

12:34high school. There were programs that he was part of and, uh, improv is so, it's such a great skill for people to gain confidence and presence. And it's a wonderful, so I love that, that you're doing that and you bring in a partner and Jeffrey, I mean, correct me if I'm wrong here, but I think you bring in a, a, a partner when they can bring something, you know, uh, that you can't bring alone like capital or, or network or real expertise and, and somebody who's really aligned with the long-term vision here, who's going to bring real value. That's when you bring in the partner.

13:06Yep. I agree.

Sarah LaFleur Introduction

13:08Yeah. Uh, the, the company is called Here Say Brewing and Theater in Ann Arbor, Michigan. Uh, Tony DeRosa, thanks so much for calling in. Good luck. Thank you guys so much. Appreciate it. Um, you know, Jeffrey, it's, uh, I mean, one of the things I love about the thing I love about doing this is just the variety of categories and, and brands and ideas that we get. And, uh, and there, but there's always the same core challenges, no matter, no matter what there's, it, it, you know, it just puts it all into perspective. It's hard to start a business, but it is the lifeblood of our country, the lifeblood of new jobs.

13:43And I think that we need to give these people more support than they get. It's hard to find capital. It's hard to grow a company. And, uh, because it's such an important part of our economy, I would love to see more support given to those startups so that we can have more of them. We're going to take a quick break, but when we come back, Sarah LaFleur, founder of the women's clothing brand, MM LaFleur joins me. Stay with us. You're listening to a special mashup episode of the advice line right here on how I built this lab.

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21:15Hey, welcome back to the advice line on how I built this lab.

Monica Soni Call

21:18I'm Guy Raz, and my next guest is Sarah LaFleur, founder of M.M. LaFleur. Sarah was first on the show back in 2020 and told us her incredible journey. She was building a career in finance when she realized that just peeking out her outfit every day had become completely exhausting. And even though she had no background in clothing or design, she set out to create her own fashion brand for women. We'll put a link to her episode on the show notes. Anyway, when Sarah joined me on the advice line, we helped a caller figure out the best way to build a lifestyle around her brand.

21:53Hi, Guy and Sarah. My name is Monica Soni, calling in from London, and I'm the founder and creative director of Tress London. We are a British-made, quiet luxury kids wear brand with design-led intentional pieces for the cool modern family. Awesome. Welcome to the show, Monica. So Tress London, not Trey London. Yes. Yes, I get that a lot, actually. And this is a clothing brand for kids aged what? Aged six months to eight years. Okay. And what, I mean, you know, some people might think of like Gymboree or I don't know.

22:24But we're talking about this is a premium brand of clothing that you're making. Yes. So we design very sort of modern, minimalist pieces that, similar to kind of what Sarah has been able to build with M.M. LeFleur, intentional design-led. I come from a luxury women's wear background. So my, you know, I went to Parsons and what I was finding in the kids wear industry when I first had my son back in 2019 was it was very surprising that I couldn't find kids wear brands that spoke to my design aesthetic, which was sort of this modern, minimalist, curated wardrobe.

23:03Yeah. So you are, so you, you, you're a designer, you've designed this line of clothing and, um, and I see that they're made in the UK. Yes. Which means that that's, that's more expensive than making it in a factory in China. Absolutely. That was a huge part of the mission for me because when, when I first began to conceive the brand back in 2020, uh, the British industry, the manufacturing industry in England was, you know, having a really hard time with Brexit, with COVID. It was all but diminished.

23:34And so part of my mission was obviously I want to be able to be right there to see the product, to be able to have quality control on the ground all the time. And to be able to then also support incredible British craftsmanship at the same time, it sort of worked hand in hand. Where are you selling the clothing right now? At the moment, we're just D to C. Okay. So not in boutiques or anything yet? Not in boutiques just yet. Okay. And, and give me a sense of how you're doing with sales. Like how did you do last year? So we are a very much a limited edition brand.

24:07So everything we make is small, small batch. So we are around the, the low, uh, five figure mark at this point, which I was very happy with because it really gave us proof of concept to say there is clearly a market here. All right. Before we dive in further, what is your question? So for a premium niche brand like ours, how would you build real brand heat and word of mouth excitement with a niche audience of style conscious parents that can drive real sales without a marketing budget?

24:37Okay. That's, uh, that's a challenge. And really, I mean, I love this. Like you probably right up your alley, Sarah, I mean, looking at these designs with, you know, with sort of how you think about, uh, design aesthetic. Like, for sure. And I mean, I, I'm speaking both as like a fellow fashion founder. So Monica, so, so nice to meet you and, um, welcome, welcome to this business. I, you know, I know you've been in it for a long time as a designer and it is not for the faint of heart. Um, but I, the world needs, needs beautiful things that are, uh, you know, ethically manufactured.

25:13And so I really commend you for, for, for, for starting this. And, um, I'm on your website. I mean, the aesthetic looks beautiful and really, I think reflects a lot of the training that you've been through. So, um, and now I'm speaking as a mom, I think, you know, one, one challenge that I definitely feel as a parent, when I'm shopping for kids clothes is like, wow, like I really want to buy my kids beautiful, well-made things. And I also know they're going to get tomato sauce all over it and go out, grow out of it in six months.

25:45And I'm curious how you've thought about that tension. And, you know, what, what do you say to parents who, who have that question? Yeah, that's, that's a great question. And that's definitely been a point of tension. And I think what I tend to usually say to customers, number one, there is always a way to get out of stain. Once you understand a couple of different ways that most of these sort of simple, basic ones can be taken out, you really are kind of, you're stain free. You, because I put my kids in, in white and all these beautiful cream colors and a little bit of vinegar and water can go a long way.

26:23And I know that ends up being a little bit more work, but when you have a process in place, then being able to buy something that you actually can use for more than say those three, four washes that you'll get out of a, you know, fast fashion brand, because these products really last two, three years, even with your child growing, because we, we build in the sizing. They are naturally oversized for the look, but also so that they age with the child and you get at least two years out of them.

26:54Then it becomes an investment piece that's worth having, even for your kid. Monica, when you, when people wear these art, these items, right? I noticed that you've got some, you know, like the sleeves are really interesting. You notice the, the sort of the cut and it reminds me a little, I just saw a documentary on Tom Brown and you know what a Tom Brown item is because it's got that red, white, and blue tag or somewhere on it. And I wonder whether, like, if I saw your pieces on a playground, how would I know it's Trace London?

27:29Like, do you, have you thought about, you know, even like a label or something that can be sewn on the outside or something that makes it instantly recognizable? That's a great question. We are actually in development right now for a very simple design for a little chrysanthemum flower that is actually based off of, my mom was named Florangel when she was alive. And she's a huge inspiration for me for this brand as well. And what she represents as of sort of this beautiful being in, in my life, but also the, when we are kids, I don't know if you guys ever did this as a kid, but we used to always doodle chrysanthemums.

28:12And I thought it was a great parallel to, to look at the beauty of a flower and the, and, and also what it means. And then this sort of creativity in childhood and be able to use that as a mark in, in little sort of hidden places. I feel like Monica, you were really selling a lifestyle just even in, when you were talking about how you should care for the garment and that's like a, a slower lifestyle movement, right? That I think a lot of parents are very curious about.

28:44I think even like, you know, busy working moms like myself, like we're kind of horrified by the amount of toxins that we use to clean our kids' clothes. And, and vinegar is like a, a much more environmentally friendly and healthy way to, to take care of our clothing. But I think the point you're also trying to make is like, your kid doesn't need a hundred clothes, a hundred pieces of clothing. Like you only, you only really need, you know, a top and a bottom and, and how many of those do you actually need? And, and so where my head went to is like, I think, I think this is, it's a capsule collection for kids.

29:19Yeah. Monica, I have a quick question for you and also related to marketing. Have you, have you tried influencer marketing? I have in, in very small strategic ways. And, and success or not, not much or? It's been, I would say it's been mixed. I think we've had a lot of sort of traffic come to us from a couple of, of great influencers, but in terms of conversion, it has, it has been mixed. And I think part of that is really being able to find that really, really find that niche that understands the brand.

29:54I, I'm not surprised that influencer marketing hasn't really panned out because I'm not convinced that your customer necessarily follows influencers for kids, for kids wear, let's say. Right. I think that they're probably noticing like the woman in Notting Hill who at school drop-off, who's so elegant, you know, or like a creative director type of person. Right. And I, I would say, instead of paying influencers, I would try to identify people like that. People that you probably already kind of know or know of, or have some kind of connection with, and just say, and do whatever you can to get it on their kids.

30:32Say, can I, can I give you a piece? Because that's really where you're going to find, I think, at least initially, more traction. Yeah. I, I, I, that makes a lot of sense. Yeah. I, I, I'm with Guy, actually, when I, when you first posed your problem, like where my head went to was actually like trunk shows. And I don't know if you've had some, a few of those. Yes. I, I think it starts with a neighborhood and not on social media. And so, I, I, you know, Monica, we're, we're able to, you know, see your face and talk to you here.

31:08Like, you're clearly like a very elegant person and, and you have great taste and sensibility. Like, people will want to emulate you and your style and, I think, buy from you. And I think you're, you're as much a part of the story as, as your product. Um, so, trunk shows. Yeah. Trunk shows, a great idea. Or pop-ups in, I mean, I, I, I imagine, you know, London has so many beautiful boutiques and, and awesome spaces. And, and, you know, a, a pop-up or maybe a collaboration with a boutique somewhere where people can see, see these articles and touch them.

31:46Because I think, and, and it really is the kind of thing that the kind of person going to that boutique is going to be interested in. And that becomes the flywheel. That's where people like, wow, what did, look at what that little girl is wearing on the slide. It's just a beautiful cardigan or, or, you know, jumper or whatever it is. Yeah, absolutely. I mean, we have had, most of our sales have actually come from our pop-ups because they have been instantly converting when people come and touch and feel the fabrics or, you know, you can see the, the, the value.

32:18I, I'm reminded of, of your episode, Sarah, when you mentioned, um, about when, you know, you were able to have the trunk shows and people came and were able to touch and feel the, you know, little black dress. And realize, okay, this is why there's a difference between, you know, why I'm paying $198 for a dress. So, yeah. And, and Monica, make sure to capture those emails when they buy and, and, and contact. So you can, you know, you've got a newsletter, you can do a newsletter, maybe, I don't know if you do one, you may want to do, okay, great.

32:49And, um, that you just want to make sure that you, that purchase results in a relationship, long-term relationship. How would you recommend reaching back out and really capturing them again? Because sometimes I feel like emails go, you know, just get lost, even when they were very excited about the first purchase. Sarah, thoughts? Yeah. Email, first of all, I think is just, um, a declining, uh, channel. And that's like just the, the hard truth.

33:19It's, it's not that people don't read emails anymore, but it's, it's, people get so many of them every single day that it's, it's impossible to keep in track. Uh, I, I go back to the lifestyle thing, because I think, Monica, you're presenting a, a unique point of view and you have a perspective. And I think for MM, a huge, uh, differentiator for us as a brand was, um, our blog. It was called the M dash and it's a weekly newsletter. And we actually launched the M dash even before we had the products ready. And it started out as weekly interviews of professional women that I admired.

33:53And, uh, you know, now it's become a sub stack and it's still one of our, uh, most opened, uh, types of emails. And I think to be able to engage her in content, not just, uh, in product promotion. Yes. I think, I think that's the way to really hook her in. I also think, you know, if you're able to build this like small community, like WhatsApp is a channel that we've actually used with, with our customers. And, um, you know, it has to be genuinely, uh, it, it has to feel, um, beneficial to her.

34:27You can't just, you know, be like saying like 50% off, you know, you know, every week, like that, or, or, you know, new launch every, every other day. Like that's, it's not really the goal of the WhatsApp, but I think because this is a lifestyle brand at its heart and there's community that you're trying to build around it and a consciousness that you're trying to build around it. Um, I think it's, it's ripe for that kind of communication. Yeah. Agreed. 100%. Uh, the brand is called Trace London. Monica Sony, thanks so much for calling in. Good luck. Thank you so much. It was an honor to speak with you guys.

34:58We're going to take another quick break, but when we come back, another caller with another question for a former guest.

Shazi Visram Introduction

35:04Stay with us.

Shazi Visram Introduction

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37:23Rules and restrictions may apply. Hey, welcome back to The Advice Line on How I Built This Lab. I'm Guy Raz. So our last return guest this week is Shazi Visram, founder of Happy Family Brands. Shazi was first on the show back in 2020 to tell us the story of building an organic baby food company from scratch and knowing nothing about the industry. And then, after her son was diagnosed with autism, Shazi launched Healthy Baby, a non-toxic baby care brand that she now runs.

37:58We'll put a link to her episode on the show notes. Anyway, Shazi joined me on The Advice Line to help a founder consider different pricing strategies to attract a new type of customer.

Sandy Dineger Call

38:10Hello, my name is Sandy Dineger. I'm calling from Boulder, Colorado, and I started Brain Buffs, which is an adaptive learning platform that unifies standardized test prep with real-time misconception diagnosing. So teachers, principals, and districts are able to kind of understand not just what students are missing, but the underlying misconceptions on why they're missing it. Okay, Sandy, welcome to the show. So you've got this test prep. This is for the SAT or other tests? Yes, so it is from the SAT, and it's more about the underlying proficiencies of math and reading.

38:44So our goal is to kind of expand it to math and reading in general from the SAT. Okay, so you basically explain how it works. You go on as a student, and I've got a junior in high school who's done with testing, thank God, but we went through this. You go online, you take a practice test. Like, how does it work? Yes, so I just graduated college last week, actually, so we started kind of in college, thank you. And looking back, we were amazed how separated the SAT is from school when it matters so much to the students, and we wanted to integrate it back into the school day.

39:19So on the student side, they take a diagnostic test. We're able to identify what they're missing, why they're missing it based on what wrong answers they're choosing and things like that. And then on the teacher side, we aggregate that at a class level and can give recommendations like, hey, overall, maybe it was not even supposed to be taught this year, but your students are missing this. It might be good to go over this again. And then at a district level, they can look overall at their curriculum and say, hey, look, it seems we have a large gap in this thing that we think we're hitting.

39:50We need to look at why we're not hitting that. Got it. Okay, so you get a diagnostic, and you do a diagnostic test, and then it tells you where you need help, but it also trains you, it gives you exercises? Yes, so it is like an adaptive learning that goes along with you and updates your predicted score as you go as a student. Okay, and your customers are not individual students or parents, it's schools? Schools and school districts, yes. Okay, and so right now, how many schools are you guys in, or school districts? So we are in six school districts aiming this year, obviously it's very cyclical, we're aiming for about 12 this coming year with our current talks, and that'll be about 6,000 students last year, we're aiming for around 20,000 students this year across those districts.

40:31Okay, and right now, what were your sales looking like last year? So last year was 120,000. Okay, and so you've got these, through these six school districts, and they're basically paying, they pay per student, is that how it works, their cost? Okay, and then the teacher can use this in the classroom for, I don't know, sophomores and juniors, and seniors as well, if they want, okay. All right, so you've got this going on, and tell me how, you just graduated from college, and you started this while you were a student at the University of Colorado?

41:02Yes, so we all started together, just me and a couple of my friends in college, and it started actually literally just as SAT tutoring, and then from there, we were like, we want to know exactly what the students are missing, and it just kind of stacked on top of each other until we got to where we're at today. All right, before we dive in further, tell us what your question is for us. So, my question is, obviously, we're aiming for district contracts, which can take six months to a year or two years, especially with piloting programs, but the more students that use our platform, the better we can make it.

41:33And our goal is to create a direct-to-teacher model that we've seen worked in a lot of ed tech companies, where it is very affordable for a teacher to try it for their class, and we want to make it really cheap and affordable for teacher growth nationwide with not anchoring out our sales of district sales. All right, I want to bring in Shazi in a sec, but just to clarify, the model you're talking about is that you can make it available to teachers at a lower price, so that the teachers would basically use their own money to buy this?

42:06Yes. Okay. And sometimes, like, a math department might have a small budget as well that they use for this. Got it. All right. I want to bring Shazi in. I know a little bit about this from a kids' company that I have called Tinkercast. We make kids' podcasts and science toys, and we have made an ed tech platform, and we've tried to sell that. It's tricky, but I'll get into that in a sec. Shazi, I want to bring you in. First of all, questions or ideas or thoughts for Sandy. Well, I love what you're doing. I think it's really meaningful because it sounds like you're democratizing something that has been a challenge for most people to get that additional support.

42:43I also have a child with special needs, and he has an IEP, so I'm familiar with the way the schools work and the challenge in even just getting him approved for a certain ATEC device, which is an adaptive tech device to help him communicate. It literally took me, like, a year of PPT meetings, and so I love what you're doing. I don't know what the competitive landscape is like. Are there a number of products like yours or similar, and why is yours better?

43:14Um, so there are, like, very tangential products, but how our product works with, like, talking to the teacher in their way, and we've, like, very much focused on making it simple. Like, the number one thing you hear from teachers, like, I don't want another thing to deal with. So we have really focused on making it, like, extremely easy. There's, like, one or two clicks a teacher would have to make to do anything, essentially, on our site. And making it really easy for them to navigate and just, like, how we talk to them in their language has been our biggest moat in terms of why it's been different.

43:46Do you have data that shows that students who take, who collectively, let's say, in a classroom are taking the program perform better? Yes, yes. Not this past year, as we're still waiting for the SAT data. Our first cohorts were the year before, and the average student increased 148 points, and that's about, like, 0.75 standard deviations above their expected growth for our engaged students. Wow. So what is the, I mean, I'm curious about, you know, there are free SAT prep resources, right?

44:17The College Board has one, their own, the Khan Academy, and they have their own stats and seem to suggest that their prep really does help improve outcomes. What is the sort of the value prop here? What do you say in response? Yes. So that is, like, that is what almost everyone is using. And the main thing is that is really talking to the student. Our goal is, like, a ton of teachers are annoyed with standardized tests because they don't feel like it tests what they're teaching.

44:48So one of our biggest things is essentially speaking to the teacher where we can aggregate this data, but it's not, like, in relation to an SAT question. It's in relation to a misconception that their students are having, which the teachers that we work with have found, like, a ton of benefit in. And I've spent so much time just driving around to all of our schools and talking to teachers. And although there is so many options, we've never had anyone that isn't frustrated with, like, the disconnection between it and their normal curriculum. I see. So basically, this really, what you're selling is a data set, right?

45:22You are saying to the schools, hey, you can have this data that can then enable you and your teachers to adjust how and what they're teaching. Yes, exactly. Got it. Okay. Now, my question is, I mean, you're in six school districts, but I'm imagining they're pretty small school districts, right? We actually have some of the biggest ones in Colorado. In Colorado. Okay. Yes. All right. It's tough to get into school districts, as you know. But if you can do it, it's great because that can scale, right? Like, if you've got a contract at the New York City schools or the Los Angeles school district, the two biggest in the country, you're good to go.

45:57Very hard to do. You know, there's the RFP process in these big school districts is challenging. So, I guess my question is, in addition to trying to reach out to the public school districts, what about independent schools or consortiums of independent schools, which might be a little bit easier to deal with? And also, independent schools sometimes are more incentivized to say, hey, we have the average SAT score of our graduating seniors is, you know, 1450 or something, right? It's another way for them to say, come to our school.

46:30Yeah. A couple parts. So, first, we totally agree on that. It is something we're really considering. But we've had great results in our districts. And although they're very hard to get into, it's a very close-knit community. So, we've had referrals from one district to another, which has helped us get in that way. But we are looking, and partially also with our direct-to-teacher one, into those private schools where they have more autonomy and can move faster. Yeah. I'm looking at your dashboard here that you offer.

47:02You've got a sample of what it looks like for the school district with a teacher, which is really impressive, right? You can get really granular here, like nonlinear functions or quadratic equations and how it sort of maps out on student outcomes. I mean, to me, that is like an interesting approach, right? Which is to say, hey, you can – and you may have used this in your pitch. But it's like not only can we help you improve outcomes, but this is – imagine being the school district with the highest average SAT scores in Colorado, right?

47:38Imagine being able to show that as a metric. And I wonder – because your question is how do you price this, right? And you've got to price it in a way that is competitive but also is – reflects the premium nature of this product. But I wonder whether you try to kind of split this into it just to say, you know, in year one, we really want to show you. We believe that this will improve outcomes. Like when we will put – you know, we're putting our reputations and our money behind this.

48:11So we will actually give it to you for, you know, a third the price in year one. I mean, it's a risk, but it's a – but if you really believe that this product is transformational, it might be a risk worth taking. Yes. And that is kind of the angle we're going. And I guess like one teacher, right, they could have 120 students. Yeah. So you're not licensing them per student. So it would be like remarkably affordable for the teacher. And I guess our concern with that is like how do you give them a really good product without it not making sense for a district to be able to buy this in the future?

48:47You're saying that you've created something really premium. You want to capture the premium price point, which is the district level, and that's more like an enterprise pricing? And then you're kind of considering the teachers as individual licensees? Yes, exactly. And for the districts, it's student licensing. But for teachers that are not in our districts, our goal is for someone to just be able to log in and that day, be able to have their students on it for something that a teacher just wouldn't bat an eye on.

49:22Typically, it's hard to sell the same exact thing for two different prices. Is there a way to differentiate sort of like a channel strategy? Like in retail, let's say we were selling, I don't know, 10-pack of pouches maybe at Target. It's on sale for a certain price point. And then at Walmart, you might have a 20-pack that hits a similar price point so that there's parity. Do you have like a way that you can tweak the product offering so that it's better for – one way is better for teachers and one way is actually, you know, hits the needs of the district and those managers who are reporting back?

49:59That is probably the best way to do it and make it like a parity of two products. I mean, or a freemium model. I mean, I think that you need to really collect that data and use that data as evidence to show the benefits of this platform. The challenge with teachers is that they just don't have the money. I mean, I think they're – and they're not – you know, it's hard to ask a teacher to out of pocket, you know, spend $100 or $500 or whatever a month on this product.

50:32I mean, the one way to maybe do it is to identify three to five really influential teachers in math, let's say, for example, in Colorado. And you give them the opportunity to use this for a year and you have access to the data. And then you can go to those districts and say, you know, here's what this teacher – here's what happened the year before. Here's what happened the year after. And, you know, but that's also a risk because you're going to have to, I think, give it away to try that in exchange for data.

51:06So that sounds – yeah. So, like, are you saying that, like, you would find teachers obviously that are really, like, interested in actually engaging? And then you choose a small subset. Three to five or maybe more if you can afford it and you give it to them and you say, in exchange, we're going to – you know, we want to see – we want to get a sense of overall test scores from last year. If we can get them, if you can get an average math SATs test score, let's say, and then you can compare it. So I think you need to find a really respected group of teachers, well-known in the district, and see if you can experiment and say, hey, we want to give you this or we want to measure what happens to your students.

51:46Yeah. Okay. Yeah, I know. And I think I could build kind of, like, a small community even within those teachers and be able to, like – you can obviously talk to them directly and stuff a lot more, which is good. Yep. I like freemium, too. That's a good one, Guy. Because you don't want to cheapen your product by offering deep discounts. It's nicer, actually, to say, I stand behind it so much, I'll give it to you for a year for free. Yeah. It's not cheapening it. And, you know, you're going to consistently, I'm sure, improve the UX and the product itself. So – and, yeah, I like the idea of having influencers, teacher influencers.

52:19And there are ways to really grow this, right? Like, you can focus on, of course, the ACT and the AP exams. But I think where schools are really – and this is tricky because for many years, schools were teaching two tests, which also created problems. But districts in some states, they get rewarded if standardized tests are higher, right? If the math and reading scores of, you know, eighth and ninth graders improve. And that could also be interesting to see if, you know, over time, you also have sort of the state and national standardized tests that schools and states take.

52:56Sandy Dininger, brain buffs. Good luck, man. Congrats. Awesome. Thank you, guys. Good luck. Hey, thanks so much for listening to this special mashup edition of The Advice Line. And special thanks to Jeffrey Hollander, co-founder of Seventh Generation, Sarah LaFleur, founder of M.M. LaFleur, and Shazi Visrum, founder of Happy Family and Healthy Baby. And, again, if you haven't heard their original episodes or their full episodes of The Advice Line, you'll definitely want to check them out. We will have links to them in the show notes.

53:26This episode was produced by Kerry Thompson with music composed by Ramtina Rablui. It was edited by John Isabella, and our audio engineer was Jimmy Keeley. Our production staff also includes Casey Herman, Carla Estevez, JC Howard, Sam Paulson, Catherine Seifer, Chris Messini, Alex Chung, Neva Grant, and Elaine Coates. I'm Guy Raz, and you've been listening to The Advice Line right here on How I Build This Lab.

53:52Thanks again to Engine for their support. If your business is growing and your team is traveling, Engine makes it simple and saves you money doing it. 33,000 businesses have joined. Now, it's your turn. Engine.com slash built.