- Okay. - Thank you.
- Alright.
- [Director] Three, two, one.
- Welcome to the fourth season of Bootstrapped,
a Dingman Center Podcast.
I'm Elana Fine.
- [Joe] And I'm Joe Bailey
- And as our listeners know, each
episode of Bootstrapped features
a funder or founder from the Dingman
and University of Maryland community.
And today we are thrilled to welcome
Melissa Bradley who is the managing
director of Project 500 and a faculty
member at our friends over at Georgetown.
Welcome Melissa.
- Thank you, great to be here.
- So Melissa, you've worn a lot of
different hats in your career, but all
in the investing entrepreneurship and impact space.
Can you give us a little bit of your background
and how your career has been around that ecosystem?
- Sure, so I had the privilege to grow up
in a family where my mom told me I could do anything.
Which I realized was not the norm once I got to school.
Elementary school, middle school and high school.
And I also came up in a time where my mom
had lived through the Great Depression
in a very tight knit family, and I would
hear about all the bad things that were happening.
And being born in 1968, it didn't really
get much better for a long time.
And so while I became very fascinated
with money, finance and business,
I realized there had to be a way that
instead of them being two very separate things
of the social sector and the private sector,
was there a way for them to actually work together?
I did a lot of round policy.
Was not interested in government
but recognized that intersection.
And so I had the privilege to go to
Georgetown University undergrad and major in finance.
Went on to do the typical investment banking stuff.
Realized that that's not what I really wanted to do,
and set out to start a business.
And realized how hard that was
as a woman and a person of color,
but gained some success.
Had an exit and was very happy about that.
And realized that it was important
that when we recognized what was happening
in the 90's and the 2000's and that
job that was gonna last forever no longer existed,
entrepreneurship really needed to be
a viable opportunity for as many people as possible.
And based on some not so great experiences
in the banking world and with the SPA and others,
I said, "Now I have the chance to actually give back."
I became an angel investor, then became
a venture capitalist and then went
back to being an angel investor.
And there's still a little entrepreneur still living inside.
(laughter)
- So you just covered I don't know how many years
in a very impressive and succinct way.
Which I'm very jealous, 'cause
I'm not succinct in any way.
- I've gotta imagine though Melissa,
because you're seeing this from
so many different perspectives,
it's almost like it's unfair.
You've got the other team's playbook,
and you can help people understand
where they're all coming from and help
people make sure that they're checking all the boxes.
- And that was important, because I realized
when I first started, there were no Dingman Centers.
There were no centers of entrepreneurship at any
of the schools that I attended, undergrad or graduate.
And so you really were lost.
It was like a scavenger hunt with no end.
And not even all the pieces there.
That's actually been something that I really enjoy.
That when someone comes in, I understand they're nervous.
I understand their house may be on the line.
I understand their parents have probably
told them they're absolutely, positively crazy.
Go get a job.
- [Joe] Unlike your mom, who was completely supportive.
- Well, no, she still doesn't exactly
understand what I do for a living.
(laughter)
But she knows I can afford to pay my bills.
(laughter)
The bar is low, the bar is low.
But I think that that's important,
and I think that it has allowed
me to cultivate a lot of relationships
that are irrespective of funding
and just give really good advice.
And then say to people, "Look, if you
"want me to consider you for investment,
"that's a different conversation."
But I think it's most important
that you even understand what I'm thinking about,
because it's not very often that people tell you.
It's like when you go to the principal's office,
they could be thinking, "How long is
"this meeting gonna take?"
And you're thinking, "He's about the expel me."
You've gotta be able to get into somebody's mind
so that you don't waste the three minutes you have to give
your pitch on stuff that they don't really care about.
- So talk to us about what you see as the definition
of impact space and social entrepreneurship.
Because we've had a number of social entrepreneurs
in studio, and I think that people have
a lot of different definitions of what that space is.
So from your perspective, what is that space?
- As I teach impact investing and
social entrepreneurship, from the first five
minutes of class, I always say,
"Social entrepreneurship does not equal non-profit."
To me, social entrepreneurship is a way of being.
It is a means to an end.
It is a recognition that business can do well and do good.
Sounds very cliche, but we see
a lot of big companies, like Unilever,
like Ben and Jerry's, who have done really well
financially, but also have been thoughtful,
not in an overly aggressive way,
but how do I use paper?
How do I maximize carbon offset?
Or those kind of things that have
not had a negative impact on their bottom line.
To me, this concept of social entrepreneurship
is really just being cognizant of the wholistic consumer
who actually cares about what are they using,
what's the impact on them and their family,
and now actually, care what's
the impact on the community or the environment?
- Alright, so with that definition then,
is every entrepreneur at least potentially
then going to be an impact kind of social entrepreneur?
- I think so.
I think we had Clara Mellafro-Houston
run FP Hair And say, "Every investment
"is an impact investment."
Which is somewhat true.
It has an impact.
It's not always a positive impact, but it has an impact.
And I think there are people just like others
who are very conservative and narrowly focused
and would say, "No, every business can't be."
I believe that we operate in a spectrum.
Everybody and everything is a work in progress.
- But that means it must be incredibly busy for you,
because any entrepreneur who's coming to you,
your students in class or people who are
looking to get your advice and help.
You're not saying, "Nope, this is not what we do.
"Social entrepreneurship or impact entrepreneur is this.
"And you're not that."
- No, I'm trying to help them understand
first of all, why they think it's social,
'cause sometimes it's not exactly.
But I think I'm saying, "Look, if you're
"gonna start a business, and you wanna
"have a social impact, let's understand
"first, what is the problem you're solving?"
I don't care whether you're social or not.
If nobody's gonna buy, it's not a business.
Second, I say, "What's your sustainability plan?"
Because we've certainly seen some social
entrepreneurs have to change course,
because that is not a sustainable business model.
So those are our first things: profit and sustainability.
Then, we have the conversation in the middle.
Once we bookend that you've got that idea,
then we can talk about how do we reverse
engineer or proactively move forward
with some kind of social concerns?
And there are some we say, "You shouldn't do it right now."
There's a restaurant that's opened now,
I'm happier to say, in the Navy Yard,
and they wanted to be all in.
And I was like, "This is the restaurant business.
"Margins are low.
"Let's just get the business going first,
"and then you can talk about all the paper products.
"And then you can talk about giving away money.
"But you gotta have a business first."
- And so, as you have these bookends,
there's lots of pivot points that
entrepreneurs experience as they go.
Are you helping them navigate and pivot
in ways that are embracing the social entrepreneurship?
- If it makes sense, right?
- [Joe] And sometimes it may not make sense,
and you'll actually coach them - That's right.
- [Joe] and say, "Now's not the time."
Or "That's not the right way to go?"
- But in the parking lot. - [Joe] Is that right?
- 'Cause I believe that it's important
that you are a business first.
Otherwise, it's your hobby or it's a not-for-profit.
And I will say that I have a bias
that the not-for-profit sector is not always
the highest functioning sector, because you're
beholden to stakeholders who don't
always have the same mission alignment as you do.
And most entrepreneurs want autonomy.
They wanna be able to control their destiny.
Well, you can't do that if you can't pay your bills.
I look at it kind of a stair step.
The foundation of that step is that
you've solved a problem and you're sustainable.
Then, let's talk about the environment.
Then, let's talk about government.
Then, let's talk about social.
'Cause each of those has a different cost point.
Each of those as a different time duration in terms of
when you're even gonna see the impact.
And I also wanna be clear, if you really are gonna
dig in then you better be able to measure it.
And that's actually the hardest part,
because people say I'm gonna do all these things
but they're telling me at outputs,
not outcomes and not impact.
And those are all very different things.
- I love the paradigm that you've just
put forward in thinking, "Think about the business first."
But you have a lot of interest in
social impact, social action, social justice.
A lot of things that draw those
students and entrepreneurs to the Dingman Center
to Georgetown, other places, and they
have a passion for solving a problem,
but the business is very elusive.
So then the default is, "I guess I'll start a non-profit."
- Or think about something else.
It could be a partnership.
I also think that sometimes people
who wanna solve social problems, let's flip it.
I have a problem a wanna solve that's socially oriented.
Then I say, "Okay, what is that
"gonna take to get that done?
"Is there anybody else doing it?
Same thing, what's the competitive landscape look like?
And then again, instead of saying,
"I'm gonna be a for profit, or I'm gonna be a B-corp,
"or I'm gonna be a L3C," let function drive form.
I think too often people say, "I'm gonna be this."
And then realize, can you afford it?
Is it the right structure?
Is it gonna even allow you to have impact?
So then we say, "Okay, so that's what you wanna do.
"Is there a gap in the market to do that?
"And who else is doing that?"
Because sometimes, you're an additive.
You have a nice thing that could be
tacked on to something else.
And so think about a strategic partnership.
You could be a campaign.
You don't necessarily need to be something
that's constantly in the business of raising money,
which we all know, once you start raising money,
you lose focus on the business.
We really spend a lot of time,
is this something that has longevity?
Is this something where you have a competitive advantage?
Because fundraising is no different from
philanthropy than venture capitalists.
I would argue, probably even harder.
I really wanna make sure people understand
what does the duration of this solution look like?
- All the things that we teach in our class
about product market fit and understanding
the problem falling, all that still pertains,
but now you've got this extra component
where you have another kind of objective function.
- [Melissa] Absolutely, and I think those underlying
elements become even more important,
because if you think about the low
house market and any of lots of consumer
groups who are very eco focused
or social justice focused, let's be clear,
they have a very narrow lens in terms of
how they're evaluating you.
So it's extremely important that you nail that stuff,
because it takes time to get the impact metrics right.
- What happens though for the entrepreneur,
and I know Elana and I meet with
entrepreneurs all the time who say,
"Look, we need to bake in in the DNA
"from day one of my start up, even before
"we have our first customer, that we're
"gonna have a social mission.
"It's gonna allow us to attract the right talent,
"it's gonna get us the right investors,
"and yes, it may be a restaurant business,
"where maybe we should be worrying this
"five years from now, but if we don't
"do it from day one, we're not gonna go ahead
"and get that right product market fit."
- As a parent of six kids, it can be baked into your DNA,
but it may not manifest until their five.
- [Elana] I like that analogy.
- You can have the intentionality,
but you've gotta make sure the conditions
are right to have that manifest.
And let's be clear, when you start
talking about social impact, there's
a core group of investors who love it.
And there's another group of investors
who have no clue what you're talking about.
So why shoot yourself in the foot
before you actually can get the underlying
vehicle by which social impact will be created,
which is getting the business up and running.
So we don't tell people, "Don't do it."
We just make sure it's the right time,
and it actually is contributing to the
business, not a hindrance to the business.
- I'm glad you mentioned that,
because we have our Dingman Center Angels
investor network, we have a social
entrepreneurship initiative at the Dingman Center.
We want those things to tie together,
so we want more social entrepreneurs
to come in to present to our angel network.
And I think over time, I'd say over
the last two years, our investors have
become more open minded, but the initial
reaction was, "Well, that business isn't gonna make money.
"I do other things philanthropically,
"but when I'm here sitting in this room,
"I'm looking for things that will make money."
I think what you're saying is that
social entrepreneurs need to focus on
the business first, and then layer
in the ways that you can have that impact.
- [Melissa] No doubt.
- The next, in thinking about for those
listening who are interested in this space,
where do you see the biggest market
in social entrepreneurship and impact entrepreneurship?
Where do you see those opportunities
that work for the business?
We talked about clean water, clean air, work force training.
Where do you see the business opportunities?
- I think they mirror where the world is, right?
I think food has become a huge issue
as we as a developed country are beginning
to see food deserts much more prevalent.
I think some innovations around companies like Foodini.
Union Kitchen has been a great savior for folks,
but Foodini takes immigrants and employs them as chefs
and is now paying them a living wage.
It started as a project in a social
entrepreneurship class and now it's
making over a quarter of a million dollars.
So I think that food is one.
I think media is one.
I think anything in the environment,
particularly because the capital markets
have now opened, and things like solar
and clean tech are there.
- Where they need big infrastructure and investments.
- And a lot of money, right?
Green bonds.
Now they're starting to mimic muni bonds,
so there's a lot more opportunity around that.
But that's also a relatively large scale business.
I also think if people have an idea,
it can be social just by itself, right?
I think if you wanted to start
a podcast village.
- [Elana] (laughter) Who would wanna do that?
- It can be about just providing living wages.
Which is not the norm.
I think it doesn't have to be this huge leap
as if I'm going to the Olympics
and offsetting 5,000 carbon units.
It's about what is currently not existing
that is impeding people's progress.
Economic insecurity is huge.
Living wage jobs are critical.
Heck, jobs that are actually more flexible,
because people have families.
The world has changed.
Jobs that allow people to partly own the company,
and ESOP is creating social impact
because you're creating wealth.
I think you have to really widen
the aperture on your lens of what is social impact.
I think too often it's been something
that is highly tangible, extremely scalable.
But then the reality is, you haven't
solved some of the core social problems
that we've been living with since the beginning of time.
- It strikes me that you really
have the ability to go ahead and help
entrepreneurs widen that lens, widen
the aperture on the lens, and think about everything.
When they do that, do they find it overwhelming?
Do they find it liberating?
Do they say, "Melissa, that sounds fantastic.
"Now there's all these sources of funding."
Or do they go, "Ah, I can't even deal
"with my small number of customers I have now."
What's the reaction?
- I think it is overwhelming.
I think it's exciting, and I think
we have to make a distinction though
that even though there's impact investor market,
being a part of that, we are no more liberal
than the venture capital market.
And I would say that because the impact space, the carve
out, is typically much smaller than venture capital.
One thing I say is, "This is gonna be great
"to start at home, but you will have
"to go off to the big boys and big girls.
"And you better be able to make that transition."
When it comes to money, I think it's always
gonna be overwhelming, but the importance
is getting the story right at the beginning.
- So an investor of dollars is gonna
wanna see multiple of return on their investment.
It doesn't matter what space they're gonna be in,
even if they do get the warm fuzzies
when they're making that investment.
- Right, and they're willing to make
some concessions when you think about philanthropy, right?
There's been a huge move thanks to change in Orissa,
and the fact that pension funds can now
focus also on sustainability and issues
that concern the stakeholder and not
just maximum shareholder value.
The reality is is that's still hard to do,
and it's not about giving it away.
The tremendous increase in the use of
program related investments, which are
essentially low interest loans that foundations give,
signals that one, we don't have enough money
to even solve the sustainable development goals,
so it really becomes a tri-sector thing.
Two, really to change systemic
challenges we've had for a hundred years,
it takes a lot of money.
You've got to get all the markets to play together.
- Is there public funds that are available
to solve some of these problems?
Especially, are entrepreneurs able to get grants?
Non-delusion funds?
- There are tons of programs that I would say
are government or quasi-government.
One, for example in Buffalo, is part of
Andrew Cuomo's billion dollar initiative.
They actually run a pitch competition
every year where they pick eight winners.
Top one gets 600,000.
Next one gets 500.
And then a whole bunch of 250's.
That is public money that is leveraged
by the private sector and the incubator
that creates an equity stake non-delutive.
But it gives them money they never
would have access to and resources
and supply chain opportunities to the government.
And New York's not a small place,
but they wouldn't have happened before.
I think nowadays, what I will say is,
entrepreneurs are smart in recognizing
it's really not about the money.
It's about the leverage opportunity.
It's about the social capital.
It's about the intellectual capital.
It's about being in the right place at the right time.
I always say, and people don't get it,
I think there's a lot of money out there.
It's just getting to the point where you're able
to attract and retain those dollars based on
understanding the investor's orientation.
- On the intro we talked about
your role as the managing director of Project 500.
Can you talk to us about what that is?
And your involvement?
- Sure, so Project 500 started as
a student project, in 2015 actually.
Students decided to put on an entrepreneurial
event East of the river here in Washington, DC,
where there's not the same amount of resources
as we see in other parts of the neighborhood.
And we had 147 people show up over two days.
That in and of itself was astonishing,
'cause people said, "They're not gonna come.
"It's a Saturday."
And what happened was, when that was over,
they said, "So when are you guys coming back?"
(laughter)
This was a service project. - This was an initiative.
- It's a service project.
But realized that despite all of
the efforts that we see in the city
to really foster entrepreneurship
and business development, there wasn't
a lot of practical tools, particularly for people of color.
We spent time talking to the city,
specifically Deputy Mayor Snowden,
who had been a former student of mine,
and realized universities are doing
an amazing job at startups.
There's enough incubators and stuff that are happening,
but for the folks that showed up for our meeting,
probably 30 to 55 years old, probably
gonna feel really awkward walking into
an accelerator, even walking into a co-working space.
And probably lacking programming
in terms of how to help them scale.
They have been lifestyle businesses,
they were making a little bit of money to get by,
but how do you get to scale?
And so we decided there was a gap
in the market around helping entrepreneurs, any
entrepreneur, particularly entrepreneurs of color, scale.
How do you get from 100,000 to a million?
How do you get from a million to five million?
And what we found is that, even folks
in the city are surprised to know,
there are several hundred, just in a year and a half,
that we found African American Latino millionaires.
But they're not tech focused.
They're professional services.
They're construction.
So we really have the chance to change the narrative of
what does a successful entrepreneur look like?
They don't have to be a college student.
They don't have to be a tech company.
They do have to have a good idea.
They do have to solve a problem.
And they have to be scalable.
And that's the gap that we're filling.
- How are they hearing about you?
What would be the interaction that you would have over,
is it over a year, is it over two years?
- The programs vary.
Once you come in, you can be a member forever.
So we have people that joined in 2016 and have remained.
Most of it has been through social media.
Lots of word of mouth now.
Our goal was to have 500 entrepreneurs
signed up in three years.
- You just got my next question, what's 500? (laughter)
- So that was the goal.
The idea was were there really 500 businesses, right?
That if you look at the CBE certification,
which is a generic certification for the city,
but try to parse out, people would just
be happy if they could see 500.
A year and half later, we have 488 businesses.
And they have been referred to us by the city.
They've come from universities.
It's been social media.
Now it's thrilling when people say,
"Hey, my friend was in your program."
- [Elana] All within just DC?
- All within the DMV area. - The DMV, okay.
- We started just in DC, and then at the end of last year
people said, "Well, I'm in Maryland.
"Can I come?"
And so what we say is as long as
you're doing business in DC, and that's really arbitrary.
We just really wanted to start
where we knew there were no resources.
The program supports emerging entrepreneurs.
250,000 dollars or less.
12 week program.
High growth entrepreneurs done at Georgetown University.
Eight week program.
And then we actually have a program,
a seven module online program for non-profits,
because we realized in these communities
that typically lack resources, it is the
local non-profit organization doing workforce
development, doing youth development,
doing crime management that actually
helps our business owner stay in business.
We wanted to provide support for them
to be able to be sustainable over time.
- If it's Project 500, you've got 488,
my math tells me that's about 12 slots left?
- That's about right.
- If a listener is out there thinking,
"I wanna be part of this," they've gotta hurry up, right?
- Come on down.
- Come on down?
- That was a number that we picked arbitrarily.
We've decided that we are gonna continue
to go for at least another two years.
We first said three years.
We'll go full five years.
That lines up with one of the economic
development plans in the city,
and we're pretty confident we're gonna tap the 500.
- Oh, I have no doubt that you're gonna exceed 500.
But then is the idea to graduate
some of the companies that you're
working with right now as they realize their scale?
- We have.
For the high growth program, once you go through
the program for eight weeks, then we keep
you on a regular rotation.
We subsidize your accounting, your tax,
your tech, your branding and your legal help.
And then we graduate, and then six months later
our goal is you've actually achieved your financial goal.
For some, it was, "I'm at a million.
"I wanna get over a million."
And so we have a whole network of larger
businesses and contracting opportunities
and access to markets we focus on.
For some, it was around employing people,
so we track increase in investment,
increase in job creation and increase in revenue.
Since we've started, we've increased revenue
for our folks by an average of 65 percent.
We've increased employment by about 15 percent.
Access to investment is challenging,
'cause we don't have a big pool here.
That's been around 10 to 15 percent.
- You're not taking an equity position in these companies
- [Melissa] We are not. - are you? I mean this is...
- It is completely free of charge.
We are fully subsidized by two financial institutions,
and one large foundation.
That's it.
- It sounds like, that's very impressive by the way.
(laughter) But it sounds like what you're doing
is you're providing a lot of the infrastructure
and network and expertise that a tech
or high growth company might get
if they take venture capital at that stage
without requiring to take that investment.
- [Melissa] Exactly. - In a different sector.
Because it sounds like what you're saying,
and we see this pretty often, too,
is that people get to a certain stage
with their business and they might not want
to go down that path, and then they
don't have the right network of people
and support system to help them grow the company.
They end up just stagnating.
And you're saying, "You don't just
"have to have venture capital to be a high growth company."
- That's right, we make a similar
investment that a venture capital would
in the non-financial assets.
A portfolio management, access to infrastructure,
access to technical support.
And then we have some people that do
go on to get venture capital.
We have some people that go on to get loans.
We have some people who wanna say,
"This has made me decide I don't want any investors.
"I'm gonna do it myself."
We have some that have gone on to say,
"I really want this business now to be a family business,"
when that was no where in their purview before.
- The show is called Bootstrapped.
Do you recommend bootstrapping whatever possible
to allow revenue generation to fuel growth?
- I do.
And I think it doesn't mean that you don't
have to take venture capital, but the reality is,
having been one, I don't think we're vultures.
Let me clear that up.
But we have an economic incentive and motivation.
We have excessive downward pressure
to make sure we generate a certain multiple.
And most of us aren't making that multiple.
We're gonna have pretty rigid guidelines
that we need to have happen in a business
in order to return the money to our investors.
I think if you are ready to go there
and you really believe you're a high growth business,
I would even say irrespective of sector,
and you're willing to work your butt off to do that.
And you wanna share in that opportunity,
then venture capital is for you.
I've come to realize over time,
having gone down that path, it really
is about the person and what they want.
It should never be an imperative
that you have to have venture capital.
It is one of many options, and I think,
too often, we've not talked about the bootstrapped option.
People get money too soon.
They get kicked out of their business,
and it's all those horror stories.
And it wasn't that the venture capital was bad.
Probably just not a good fit.
They got married before they dated long enough.
- [Joe] I've got to imagine, if I'm sitting there
and I'm looking at 488 companies,
and I'm thinking about the risk profile,
I've got to imagine every one of them
you're trying to go ahead and help mitigate
some of the risk associated with them.
But you can't eliminate risk
completely, - No.
- [Joe] and that means, that some of these companies
or partners that you have, participants,
unfortunately, they're gonna fail.
- And we tell them to.
- You tell them to. - [Melissa] We say that
we are your mirror, not your pillow.
If it's a hobby, and you don't want a hobby business,
then you're either gonna change or you're not.
For our high growth companies, we say,
"You're here, because you want to
"have a business this large, but guess what?
"You can't keep doing what you're
"doing to get your business to scale."
We encourage many of them to look at tech transfer,
out of the Federal government, to diversify their holdings.
If you're in construction, how do you look at IOT?
How do you look at tech transfer?
Changes the multiple on your numbers.
You're upselling, increased wallet share.
Greater audience, not just relying
on the subsidies of a construction company.
It's not that hard.
- And you had mentioned the financial
institutions that are backing Project 500.
What's in it for them?
- TRA.
- For some of them, - Okay.
- it's community - Alright, this is
- reinvestment act. - apparently a theme
- It is. - of our episodes.
- We had Jon Chapman from Everfi
on a previous episode and he mentioned very similar
- It's a great policy lever. - Motivation.
- So I think for one of the banks,
they are very clear that we are serving
a population they haven't been able to reach.
Unfortunately, where they live East of the river,
there is one bank, and it's not a deposit institution.
It's an ATM, but it still gets counted as a bank.
That's a problem, so we are really
helping to extend the dollars that
they have committed and required
to a community in a series of census tracts.
For the other financial institution,
it's part of their larger national
program called Small Business Forward.
Really looking at how do we reenergize
entrepreneurship in general when we look at the statistics?
But certainly, when we think about
the demographic changes in America, how do
we really support new majority entrepreneurs
who, let's be clear, African Americans
are the fastest growing entrepreneur
set right now according to all the studies.
Not a lot of programs out there for them.
They're not on lots of websites and those kind of things.
So they're investment, for us, was focused
on the fact that we were already serving
entrepreneurs that they were trying to reach in this region.
- You talk a lot about this region.
I know you're involved with Halcyon Incubator,
and we partnered with them to do
the Social Entrepreneurship Ecosystem Report
and DC was number three. - Great report.
- Oh, thanks, I'll tell Sara Herald you said that.
(laughter) And David Kirsch.
(laughter) And all our great students.
DC ranked number three, which is great ranking.
What, as a region for social entrepreneurship
and all the different definitions,
what do you see as an addition
of people like you, what do you
see as the makings and the ingredients
that we have here in our ecosystem that make us
such a hot spot for social entrepreneurs right now?
- Honestly, I think the reason we ranked,
and I've been in DC since 1985,
is because the universities are cranking out entrepreneurs.
I think that the city itself I think
is trying to become entrepreneurial,
but that's almost the oxymoron for government.
I hate to say it.
So I think that the environment has been created,
though where there was a time where things have been
rezoned and it's a lot more friendlier
to start businesses in certain places.
I think that there has been a rise
in questionable, but what we call affordable housing.
- [Elana] It's all relative.
- It's all relative.
And then I think the increase in the
capacity and skillset of the local universities, right?
If you think about all the universities
in the region, they've all made some
kind of commitment at varying levels on entrepreneurship.
They've all been smart enough to go out
and get real entrepreneurs and not have
a bunch of professors teach them.
And so I think that has really
created an enabling environment to say
this is not just an academic exercise, this is real.
I do think we've benefited from the
267 route, and people moving to the city
as that didn't develop fast enough
and people did not want to be so far away
out in Virginia, respectfully.
I think there's just been a perfect storm
in terms of the region benefiting
from some ancillary opportunities.
I'm optimistic that the city itself
will get more engaged as opportunities
come along, from both a policy perspective
as well as an investment perspective.
- You see things improving even,
they're great already, but they're getting better.
What are some of the challenges
that you see entrepreneurs facing?
- I think there's a lot of policy challenges.
I do think the housing report was very clear.
One of the reasons we're probably not number one
is because it's not getting any cheaper to live here.
I think, too, the city and the various agencies
and there's some new leadership coming,
so we're optimistic, but there's not a lot
of programs for entrepreneurs.
There are certification programs,
but for example, we don't have a fund.
Maryland has a fund.
Virginia has a fund.
We don't have a fund.
That's a huge deal, because
- [Joe] Is that your next venture by the way? (laughter)
- Well, I am a member of the mayor's tech counsel,
and we have proposed it, so we'll see
if it manifests now or during reelection.
But I think that's a challenge,
because what happens is, when people graduate,
we probably get them for eight to 12 months in DC,
because that's where they were already living.
And then they go, "Where's the money?"
- Pick up their laptop, - Exactly.
- and all of a sudden - [Melissa] Exactly.
- They're in Virginia or Maryland.
- And I have former students at Maryland Venture Fund.
A friend runs Tedco.
I think they're doing amazing things.
I used to work at CIT.
The Gap Fund is doing amazing things.
But I also think that those regions
have created a personality.
Biotech out there at CIT.
Looking at the corridor.
Supply chain, aerodynamics, high-tech stuff.
We haven't figured that out yet,
and I think maybe they'll be something that comes,
whether Amazon comes or not, but I think
those kind of exercises make me optimistic.
Because it forces you to move beyond
just policy and what you can give away.
And it actually makes you become an entrepreneur
and think about, "What is the ecosystem I can create
"that would invite this large company here?"
I'm hoping there'll be some
multiplier effect for smaller businesses.
- I wanna ask you that.
What's harder, to basically do
an organic growth of entrepreneurship
within DC or to attract somebody
who's outside DC and have them move here?
- I think it's a little bit of both.
I think it's harder to have organic
talent stay, because we're not number one.
I'll just be honest.
We don't have all the things needed.
We're still a government town, so when you're
trying to do private sector and sell to
Fortune 500, we're still not the first place you think of.
- Why is that a bug?
That's a feature it seems like.
Especially when you're talking about
social entrepreneurship, partnerships,
public private partnerships.
Shouldn't DC be the place to?
- It should be if it was easier
to do those public - Oh, I got it.
- private partnerships. - Got it.
- Part of it is, probably five to seven
years ago, I could think of 10 public private partnerships.
I think the reality is that the new model,
in all fairness and full disclosure, I sit on the
FACA for Commerce, so we advise Secretary Ross.
The new model is not partnership.
The new model is how can we outsource?
And that's for pure economic reasons.
I think that that's changing the dynamics
of again, leverage, right?
If I have to do it, then it becomes a much
more competitive process as opposed to how do I leverage.
I think some of that will change
once we get through some of the current
political tides of taxes, etcetera.
And we begin to have a moment to step back and say,
"What are some of the other issues to address?"
I do think there's some awesome things happening
in cyber security where there's outsourced
or even quasi acquisitions through
the government sponsored venture funds.
Looking at cyber security, tech.
I think NASA's doing a really good job.
Now we just have to get a little more to the mainstream.
- Last question for you.
You have, and just sitting in studio with you,
and for people who know you and now our listeners,
you have so many of the makings of really successful
entrepreneurs, many of the makings
of a successful entrepreneur.
The passion, the knowledge, the credentials.
What are the things that you feel like have
in your career have really impacted you
and helped you bring together all these
skills and talents to be able to
take Project 500 to where it's gone
in such a short amount of time, or the other
organizations that you've been part of?
What is your secret to your success in that way?
- I don't know if there's a secret, but I would say
it did start when I was young, and my mom literally
saying I could do anything and be anything.
I think just having that risk tolerance at such a young age.
That I was gonna make mistakes, but it was gonna be okay.
I think that's huge, because I think so many kids are
don't fall, don't do that,
don't hurt yourself, don't play football.
Changes their perception in the long run.
I think that's huge.
I don't wanna over promote it, but I went to Georgetown.
I got a great undergraduate education
as a finance major, so that gave me the technical skills.
So I'd say, my mom gave me the vision.
Georgetown gave me the technical skills.
And enough of the wrong people told me no.
(laughter) But I was just pure resilience
and arrogance to say, "I'm gonna beat you."
- We love that.
Well Melissa thank you so much - [Melissa] Thank you.
- For being on Bootstrapped and good luck with Project 500.
I'm sure by the time this airs,
you probably are gonna be at 500 companies.
- [Melissa] Thank you.
- Thank you.
- [Melissa] Thanks guys, that was cool.
- That was great, thank you.
- [Melissa] That was cool.
Those weren't all the questions in
the letter though.
- Yeah, we (laughter)
- [Melissa] I was like, "Wait a minute."
That was not (laughter)
- We had to - [Melissa] I was like,
oh, I'm following you.
And then I was like, oh wait, she took a turn.
(laughter) She took a turn.
- [Joe] We cull some levels. - Yes, we said that, sorry.
- [Melissa] I saw that.
- I actually think you're the first person
who's actually read our email, so that's (laughter)
- [Melissa] Well, I was sitting in the doctor's office
and I had time, and I was like let me be prepared.
- [Director] You guys killed again, as usual.
- [Elana] That was fun. - [Director] Thank you.
A quick picture?
- [Joe] Well it was a really good letter.
- [Melissa] Oh sure.
Thank you, that was awesome.
(quiet murmuring)
(laughter)
(laughter)
- [Elana] Bring it home.
- [Joe] Alright, this is - [Elana] Bring it home.
This is where we lose it.
- [Joe] Oscar would coach us and say,
- [Elana] Alright, Oscar coach us up
- [Joe] This is it.
- [Elana] This is it, bring it home.
- [Joe] Come on, energy level back up
a little bit to finish. - [Elana] Okay.
Alright, let's not say, let's
start it with a different way of like...
Not that we don't love them.
Yeah, that's good.
I like that.
Smart woman.
Yeah, she did give us a lot to think about.
I like that.
- [Joe] Okay.
- There you go.
- [Joe] We'll go with that. - Okay, go with that.
Now you start it. (laughter)
No one cares. - We're recording right?
- [Elana] No one cares in there.
- We can start?
- [Videographer] Yes, you are still rolling.
(murmuring) Who's headphones?
Oh her?
- Melissa's?
Okay.
Elana, Melissa gave us so much...
- [Elana] Oh yay.
I wasn't worried for a second.
(laughter) Then I'd be worried.
- Elana, Melissa gave us so much to think about
and talk about here as we debrief.
- Yeah, I really liked her approach,
first of all, she's very smart.
Really understands, not just social entrepreneurship
and impact, but also investing and venture capital.
So she brings a lot to the table.
But I think the fact that she emphasized
the importance of social entrepreneurs
first understanding the fundamentals of creating a business
and then layering on whatever
social impact that they wanna have.
I think that that is one, easier said than done,
because of the background of a lot
of social entrepreneurs we see.
They don't come, often, from the business background,
so that is a challenge.
But I think very important as we look for
more investors to invest in companies in the impact space.
- For me, I think Melissa was bringing
this systemic perspective of all
those different perspectives, and really hit home,
especially in the first part of our discussion with her,
about the fact that if you have a social mission,
that's great, but if you can't take care
of your venture and have that product market fit,
and all the other things that we talk about
with people who do startups that may not be
focused on social entrepreneurship, you're not
gonna have any business to go
ahead and actually thrive and succeed.
You've gotta do that at least.
I think what she said, which is really important,
not just for social entrepreneurs,
but for any entrepreneur, timing matters.
What are you focused on now?
What do you have to execute on?
'Cause there is this Maslow's Hierarchy of Needs,
and if you can't pay the bills, doesn't matter
how many people that you're helping.
You're not gonna be around to go
ahead and keep sustaining.
- As we switched over to talking about Project 500
in the episode, I thought it was stunning
how many millionaires she mentioned
of the new majority that are within the DMV.
And really had me thinking about us
in the entrepreneurship space and providing
services and support to entrepreneurs,
that we do have this bias towards
technology companies, and we do get
maybe over excited about the companies that are in AI
and AR and VR and the newest, shiniest object.
But it's such a small percent of the companies
and businesses that are out there.
And I think she just reminded me that it's
important to think about all these businesses
as entrepreneurs and all these businesses
as having a chance for a significant upside.
Not just those that are only tech enabled.
- I'll be the first one to admit that
I get to work with entrepreneurs
who want to start lifestyle businesses,
and I must admit, I don't get as excited about that.
Because I think about some investors
who get really excited about the idea
of getting a hundred x, whatever their investment is,
and if someone says, "I wanna start a lifestyle business,"
I'm doing them a disservice by introducing
them to somebody who's just in it for the money.
But that said, there are a lot of people
who are interested, not in necessarily
the financial world although that might be part of it.
They're willing to go ahead and make
a little bit less of a multiple
to go ahead and make an impact
and really be a great partner.
And I think we've seen this time and time again
through our guests in Bootstrapped.
Entrepreneurs who really are passionate
about what they wanna do and are in it
for much more than just the money.
- But also, what she talked about, I think that
when she talked about talking to a construction company,
maybe they have a million dollars in revenue,
but that all of a sudden they could think about
how could they use augmented reality to
provide better services to their customer?
Or save time and money in how
they might spec a new property?
I'm using language I don't really know about,
but I think spec is a word in the real estate world.
- Let's just go with it Elana. - But anyway,
think about how you can tech enable
rather than just creating tech companies
how you can then reverse and apply
some of the newer technologies to older
economy and more traditional businesses.
I thought that was a surprising part
of what we learned today, but one of my biggest takeaways.
- Elana, I've been in the room when you've given
people advice who are starting companies and say,
"Look, a startup is not like a big company that
"you shrink down with all the different business units."
It's a very different entity.
And what Melissa is doing is saying to these people
who have started incredible businesses,
provide tremendous value, is they probably
don't have the right structure to scale
in ways to make a big difference.
So technology is one way to do it.
Funding is another way.
Think of ways in which you can have
work practices to manage your talent
and human resources and your capital.
To get them to see it, and as she said,
zoom out, change the aperture on your lens,
I think it's amazing what she does.
She brings such a wealth of knowledge
and she's such, anyway.
It was tremendous fun for me.
- Well, that wraps up another great episode
of Bootstrapped, a Dingman Center Podcast.
Thanks for joining us.
You can always follow me on Twitter at Elana Fine
or through the Dingman Center at UMD underscore Dingman.
- And I'm Joe Bailey.
You can follow me on Twitter at Joseph P Bailey.
Thank you very much to Melissa today
for being with us and learning much
more about social entrepreneurship.
We hope that our listeners who wanna
be social entrepreneurs reach out to Melissa
and others who wanna help you bootstrap your next venture.
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