MintzEdge Entrepreneur Perspective: Mintz Awards Winners Share Strategies for Success

Speaker A: Foreign. Welcome to the Mint's Edge podcast. I'm Jason Miller, a corporate, uh, securities associate in the San Diego office of Mintz. Mintz is a proud sponsor of the Mintz Awards, an annual award ceremony co hosted by the San Diego State University's Laban Entrepreneurship center and Design innovation platform, or zip launchpad. I'm pleased to be joined today by two recipients of the Mintz Awards, Margaret Yu, founder and CEO of ReliaCare, and Andrew Bledoux, founder and CEO of uh, Plethis. Good to meet you both.

Speaker B: Nice to meet you as well.

Speaker C: Thank you for having us, Jason.

Speaker A: Well, thanks for joining. So if you can't tell from that intro, I'm, um, not a professional podcaster. I'm a lawyer. So to prepare today, I thought I'd do what good lawyers do and check precedence. So I took a different business podcasts and I thought, okay, well there's two approaches to these. Generally I could be like Guy Raz from M How I built this an NPR and prepare really intensely and hit with hard hitting questions. Or I could be like Larry King and not prepare at all and learn about you as the audience does.

Speaker B: Both.

Speaker C: Fantastic.

Speaker A: I thought the latter approach would be a good excuse for us to have a fun kind of casual conversation about entrepreneurship.

Speaker B: I liked your podcasting voice. Right off the bat I was like, oh, it's very soothing.

Speaker A: All right, well, let's see how we do. So let's start with some intros. Then if I could just ask each of you to tell me and the listeners a little bit about you and your company. Margaret, would you like to start?

Speaker B: Sure. I am a Master's of engineering student at San Diego State. I'm, um, a bit non traditional where I studied undergrad at UCSD for bioengineering over 10 years ago and then I worked in the biotech and medical device industry for over 10 years and I decided I might as well try going back to school. And so that's how I ended up at San Diego State. And during one of the courses, the idea was, um, come up with an idea for a medical device. And when I presented it, the professor said, this seems like an actual idea you should pursue. And I found the zip launch pad at San Diego State and that's how Reliacare was born.

Speaker A: That's excellent new, Andrew.

Speaker C: Uh, yes. So, um, I'm in my final year in the MBA program at San Diego State. Similar to Margaret, I also work in the biotech med device space. However, I'm a supply chain ops individual. So with that territory, it means I lack visionary skills typically, um, I'm much more analytical, focused on scalability. And so throughout my time wanting to be an entrepreneur, I took a couple classes at San Diego State that challenged the way I think, um, and able to assess real world problems in a much more meaningful way. And that helped me stumble across a problem that I'm quite passionate about, which is addressing a critical issue with smartwatch technology. And, um, from there I worked with the Zip launch pad to help bring, bring my idea to life.

Speaker A: That's excellent. So let's, let's hear a little bit about the problem that your companies are solving. Andrew, do you want to kick that one out?

Speaker C: Sure. So with smartwatch technology, there's an issue that is often buried, uh, in the fine print of accuracy disclaimers, and that's smartwatch sensors do not work well with individuals that have tattoos, excessive body hair, dark skin tone and even obesity. And for me personally, I'm an individual that has their fair share of tattoos. I was an early smartwatch adopter. In 2014, I purchased the Fitbit product. And over time I have fallen prey to various marketing campaigns, particularly, let's say, Apple, where I believe that their new technology coming out would offer a better sensor. I would continue to dump money into this technology to see if I could start to track my sleep and my heart rate in meaningful ways to keep up with my health goals. And I come to find out that the technology that these devices are leveraging, it was discovered in the 1930s and has not been expanded upon since. And after consulting with industry experts, there is no belief that the technology is going to improve anytime soon over the next 10 to 20 years. So, uh, that really perked me up. I want to have the technology for myself. I do triathlons, uh, running and cycling races where tracking biometric data is important. And the problem, it's just profound. Throughout your daily life, um, you might have a rest or recovery day where, you know getting a full eight hours of sleep is important. And your device will make recommendations to you the following day as to what type of exercise load you can take on if you're becoming at risk for illness, your stress levels are high. Well, if you have a bad day of rest, um, your watch is going to tell you to take it easy, don't do anything, um, it will suggest strange workouts or tell you not to work out at all. And I find that very problematic, um, especially when these devices are used with things like gamification to encourage you to live a healthier lifestyle. For me in particular, I Would go to sleep, get a full nights of rest and it would tell me I slept four hours and that I was up wide awake from 1am to 5am Even though I had no steps. And uh, it would throw everything off for me. And it became very, very frustrating, especially when I got into my longer distance workouts. It would shortchange me. So, um, it would tell you, hey, and you stopped running, you know, one mile into a ten mile run, um, or you didn't expel that much energy and so, you know, you didn't burn as many calories, you didn't hit your target. And to me this became just a big prohibitor into my goal achievements. And then over time, through doing races and things like that, I noticed that the problem was a bit more profound and getting to the point of ridiculousness. I saw a triathlete with their watch on their ankle, um, as that was the only area that they could get a reliable signal. And just thinking at a high level, um, it's not a great fashion statement to have a watch on your leg. And uh, I also started to dig into the research side of this and I found as I mentioned earlier, that folks with excessive body hair, darker skin tone, obesity are also having these issues. So I realized this isn't so much of a counterculture problem with the folks that are tattooed. Um, this is actually a much more widespread issue. And through additionary research I found there are some potential solutions out there and certainly some low hanging fruit that's worth commercializing.

Speaker A: That's excellent, that's a great explanation. Uh, that sounds like a real headache for folks in those buckets.

Speaker C: That's right.

Speaker A: Margaret, do you want to tell us a little bit about the problem you're solving?

Speaker B: Yeah. So Reliacare is a mobile application that guides patients and their surgeons through the pre and post op process to help both those parties manage that process better. So the problem that I identified is that less than half of patients actually feel confident about their at home care instructions. And yet the most common modality continues to be packets of paper. And as a result almost 20% of patients experience a readmission of to the hospital as a result of a post discharge complication. And the cost of that is so high for the provider. It's $15,200 per patient. And so there has to be a better way to manage this for patients and, and also for their surgeons as well. It will help organize all of that pre and post op information. Currently it's on packets of paper and sometimes you'll find that there's redundant information or information that doesn't even apply to your surgery because the preparation of that is cumbersome and not every detail can be checked for each patient. So all that pre and post op information will be organized in an easy to navigate manner. And any activities that they have to do before and after surgery will also be provided to the patient as well so that they can be walked through that step by step.

Speaker A: I see. Well, thank you both for explaining a bit about the problem you're trying to solve. Um, I'm looking forward to hearing a bit more about how you plan to solve it. Margaret, would you like to let us know a little bit about how you're tackling that issue?

Speaker B: Yes, I would love to. So Reliacare has a patient facing application and a clinician facing application. In the patient facing application, it'll not only have all of the information for pre and post op surgery in a very order organized and easy to navigate manner, all of the activities that the patient has to do before and after surgery will also be triggered to them as a notification. And also they'll see videos, really clear instructions on what to do. For me personally, I went through two surgeries and both times I forgot to use the antiseptic soap that you're supposed to start using two days before. The day before the day of surgery. I realized the day of surgery, oh my gosh, this soap is still in my kit. I forgot to use it and I almost had an infection the second surgery. So having those kinds of notifications and reminders even before surgery is really helpful. And then after surgery, of course, if you have an orthopedic surgery, which are the types that we're aiming to solve in the mvp, those activities, the, uh, exercises that you do to reactivate your muscles are really critical to the outcome. So having those notifications and guiding the patients through that is really critical to ensuring a successful outcome. And then finally, the last aspect of the patient application is messaging with the provider. So oftentimes, even with existing EHR systems, the messaging systems are really, um, clunky, have a lot of issues with duplicate messages or messages that are sent and not received by either party. So this will provide a streamlined solution for patients to reach their provider in case they have any additional questions or something comes up, it's better to identify that earlier rather than let it proceed. And then on the clinician application side, the clinicians I interviewed during the problem interviewing stage said their number one problem is all the messages and questions that they're receiving from patients. And even though they want to be there for every question. It's really difficult to manage that. Um, so what Reliacare will provide is triaging of critical messages so that clinicians can sort of try to better manage their inboxes and address the critical issues first. And then also it'll streamline the preparation of those at home care protocols. Instead of going through word and finding all the applicable ones, printing them out, writing in certain instructions, all of that can now be done really in a streamlined way in the clinician facing application. And then whatever they select for the patient is then sent to the patient directly.

Speaker A: That's really exciting. I mean, that emphasizes for me just how reliant we are now on, um, technology to move us from one place to the other. I mean, like, even, even the calendar on my phone, I feel like my phone drags me around like a big dog on a leash from appointment to appointment. And it's, um, hard for instructions from a doctor to compete with that if it's not right there on your phone pointing you this way or that way. And I think the same could probably be said for your solution too. Andrew. It sounds like more and more people are relying on wearables to let the data of their previous workouts and other activities they inform what they do next.

Speaker C: That's correct, yeah. It's actually quite fascinating. So Gen Z and Millennials are the target demographic for smartwatches, which also synergizes to the tattoo industry, which is my initial focus. And, um, Gen Z and Millennials, they do not prefer to go to the doctor. Um, they prefer personal insights that are easy, convenient, um, digital, constantly accessible. And so from a continuous monitoring perspective, I think we're still at the early stages of the curve to have those types of devices implemented to get those types of insights. Um, so for me, I find having those advancements, um, in technology for smartwatches to be vital for the future. It's literally saving lives. You can look it up online. There's all kinds of news stories of folks realizing their blood oxygen levels, um, drop significantly, they're becoming hypoxic at new elevation. And if it wasn't for the watch, they wouldn't have known to get to some sort of care in a timely manner.

Speaker A: That's great. Well, and without divulging any secret sauce, is there anything you can tell us about how you're solving that problem in the sensor space?

Speaker C: Yeah, I certainly can. So the sensor that's on the back of smartwatches, it's the same type of sensor used for fingertip pulseometer um, if you were to go to a doctor for a checkup and they want to check your blood pulse and things like that. And that sensor, it's using PPG technology, which stands for photoplethysmography. Um, it allows you to measure again your blood flow, oxygen levels, breathing rate and so forth. And through a bit of fact finding had to come to the acceptance that this type of technology again, is not, it's not changing. And what it does is it flashes lights on your skin. And so you have typically green lights and red lights. The green lights are good for motion. So think of a watch as you're moving your wrist, your arm, just constant generic daily movement. And the red light, it flashes less frequently. But that's good for skin penetration. However, it's not good with motion. And so you have these two color spectrums, while they kind of work in tandem, neither is good with motion and good with skin penetration. And so my angle that I have been working on, I found that through a software algorithm, angle, um, this really can't be fully addressed. There, There are discussions, there are other companies out there that are trying to find a way to manipulate software. But when you get into things like an Apple Watch product, they are so proprietary and strict about opening up their software. In fact, the settings that you have with your Apple Watch are so limiting. Once you realize your Apple Watch stops functioning, you have to turn off risk detection. And when you turn off risk detection, you have no heart rate tracking, no sleep tracking. Um, you basically lose all the security features. So let's say you did misplace your watch and you had your Apple Wallet tied to it. Someone can just run off and use it. So the software is limiting, the hardware is limiting, and therefore I was able to rule out some possible solution angles. And that's what brought me to my current solution that I unfortunately can't openly discuss today. Um, but it is quite exciting. There are some silly workarounds you can find online, but there's no viable sustainable commercial solution today. And that's what I'm here to offer.

Speaker A: That's excellent. And, uh, I'm sure everyone's going to be excited to see it when it launches. You did mention working within the constraints set by kind of larger companies in similar spaces. Maybe each of you could comment on how you view competition and what your kind of competitive advantage is in each of your arenas. Uh, Mario, would you like to start us off?

Speaker B: Sure. So there are other competitors that have identified this need and attempted to penetrate, um, the market by providing a solution. But it Seems like these solutions require really high upfront implementation costs. And also some, um, introduce actually wearables and additional dashboards that right now providers, their issue is just even responding to questions from patients, managing monitoring those dashboards, trying to get actionable data from them from those dashboards has been really challenging. So for my target, initial target customer, it's a privately practicing orthopedic surgeon. And for that customer, a high implementation cost, additional monitoring is really a roadblock that they're not able to overcome. So for Reliacare, the way we have implemented the tech stack is to allow for no fees when implementing a new clinician. And also we really took the time to observe clinicians and their existing workflows so that we try to integrate directly into that and minimize any additional touch points that are required. And if we do require a touch point, how do we streamline that, uh, as much as possible. So I think we've taken a lot of effort to really understand our customer on both ends, the patient and the provider. There also are very large EHR systems like Epic, uh, and Cerner. Those have full integrations with hospitals and are doing quite well. But I think in that private space the opportunity is still there and that's what we're hoping to obtain.

Speaker A: Yeah, that's interesting. It sounds like you each have different kinds of customers. Andrew, it sounds like your product is a little more consumer facing, whereas Margaret, yours more business facing. Even if it is independent practitioners instead of large health systems. Maybe it's worth a conversation about how you plan to reach your customers and the different challenges you face in those pretty different arenas. Andrew, have you given much thought yet to how you plan to reach your customers? Or is all the attention on the prototypes for now?

Speaker C: Well, partly true that a lot of the attention is on prototyping and product development. At the moment, however, this has been fairly well thought out. It's essentially full sending it into the digital age. So we're talking social media campaigns, a lot of education. So what we found through early surveying is that a lot of individuals don't quite realize they're having a problem with their smartwatch and they don't quite realize the magnitude of the problem. And once folks become aware, it's kind of like the elephant in the room that you can't ignore. So our current approach is really on the education side, which leads into one of the core values of the company and that's to be an advocate in this space for populations that aren't getting the technology and features that are promised to them when they make these expensive investments in technology. You know, some of these watches are $1,000. They promise you X, Y and Z and you may never get those features and you may never have those benefits. And so, um, our approach is heavy on the social media side, especially with our target demographic being Gen Z and millennials. So we're talking Instagram, TikTok, um, there's going to be a heavy, heavy investment in the Amazon space. So it's Digital, it's definitely B2C. It's going to be a lot of E commerce, less song, brick and mortar. Um, and just getting out there and letting people know that hey, we're here to help. We want to be an advocate and partner one day with smartwatch manufacturers, have this be a recognized, worthwhile investment for them on the R and D side. Right now we don't see that. So it's kind of a grassroots movement approach I would say. Um, and we'll see where it goes from there.

Speaker A: How would you approach the decision to market this direct to consumer versus licensing it to a larger company?

Speaker C: Yeah, that's a great question. What the sentiment is in the industry right now is that larger companies don't want to publicly acknowledge the issue, I suspect, and honestly it's up to the larger companies to confirm. But I think the second that they acknowledge the issue, it's going to hurt them from a marketing revenue perspective. Their objective obviously, uh, at a company corporate wide level, they want to increase shareholder value. What that means is they want to sell as many units as possible, have as much revenue as possible, maximize profit, decrease costs. And so I think the second that uh, they would acknowledge, hey, if you have tattoos, excessive body hair, dark skin tone, obesity, our product may not work for you with these features, it's going to hurt their bottom line. So I don't view the larger companies as a viable partner out the gate. I think it's important to create a customer voice that isn't quite there today. There are no advocates in the space again and the education is partially there today. So my belief is we have to go direct to consumer. It's the only way to get the recognition behind the issue that it deserves. And from there we hope to eventually partner again with these big manufacturers. But I think for now it's buried in the fine print in accuracy disclaimers. You can um, you know, open up the small pamphlet that comes with your product. You can view the verbiage online. They use fancy language as well. So I'd seen obesity referred to as degradation of skin perfusion. Some manufacturers I think that is one of the most direct that says, hey, if you have tattoos, don't expect any of this stuff to be accurate or work. And so it's just very interesting. Uh, you know, the manufacturers are aware of, they're just not going to hurt themselves by publicly stating any of the claims that I'm trying to make today where these sensors have high, high failure rates. So B2C is the way to go. And again, hopefully we get that grassroots movement to bring this to a larger scale.

Speaker A: Well, that's a thoughtful observations and an interesting strategy, Margaret. I'm sure going business to business is a little bit different. What's your approach to building out your customer base?

Speaker B: Yeah, so we will perform validation of the MVP@ uh, UCI hopefully in the next couple of months and we're hoping to utilize that data to build trust and build a sales case with other orthopedic surgeons as well. Then continue to try to bring on more privately practicing orthopedic surgeons that experience this pain point and want their patients to have a overall better experience.

Speaker A: Do you find that there's a lot of variation from practice to practice as to what they find kind of compelling in your sales cycle or I can imagine kind of customizing that message to individual practitioners like the Challenger.

Speaker B: Yeah, I think that's an approach that one of our competitors has taken and why their implementation cost is so high is they approach each practice and ask them what's your biggest problem? And then they redesign their solution to help address that. But for Reliacare, we are very clear in what our workflow is and we try to observe as many different private practices to understand the variations and integrate as much as possible seamlessly within that. And so instead of saying we'll adjust everything to fit you, we're saying here's the solution. If it can help you, it could be integrated, um, pretty seamlessly into your practice. And then we'll start to push updates that clinicians ask for so that hopefully we continue to provide value added features rather than trying to adjust to each practice. I think we can't solve every problem, but we'll clearly state this is the problem that we will solve and it'll be easy for you to integrate well

Speaker A: in driving all that adoption and innovation. Sounds like an expensive endeavor. Uh, which kind of brings me to a topic near and dear to my heart as a corporate lawyer is fundraising and kind of how each of you plan on funding your company throughout these efforts.

Speaker B: I guess I could go first.

Speaker C: Sure.

Speaker B: So initially, before the San, uh, Diego pitch competition and There was also a CSU pitch competition. I was thinking I'll have to refinance my home and then put whatever money I can into a, uh, software developer contractor and go from there. But uh, through some of the pitch competitions I was able to raise enough money to at least be able to afford the initial first release of Reliacare. And then from there hopefully I'll have enough data and evidence that perhaps I'll have investment from other sources. But initially it'll be through the pitch competition and hopefully go from there.

Speaker A: That's so good to hear. I mean, I think, um, obviously as a corporate lawyer I love deals, doing financings with investors and that's where I spend a lot of my time. But whenever I have a client who can bootstrap it through creative means, I'm always really impressive at that because investors are useful for the money and their experience. But it's expensive money at least compared to uh, pitch competitions and other kind of non dilutive sources. So that's very creative of you to go for those opportunities. I'm sure the zip launchpad and lab and center at SGSU are welcome resources in that regard. Yeah. Andrew, have you taken a similar approach?

Speaker C: Yeah, I certainly have. I think it's absolutely fascinating the types of, uh, what do you call it? Not a dilutive grant funding that is available when you're an entrepreneur within a college program. So as someone that's in their last year of their masters, I am um, grasping at every opportunity I can. I've gotten a little bit of funding today, more than enough to address my needs currently. So I'm good at the moment. Our fiscal barrier to entry is quite low for this initiative. I have a little lab set up at home where I'm tinkering with different prototypes and tweaking designs and things like that. And that's that in conjunction with the services offered by the incubator at sdsu, I'm covered. In the meantime though, I think when it does become time to scale and you need to make a significant capital investment into inventory, tools, machinery, possibly even headcount things of that nature, sure I could see an investor coming on board at some point. We're not quite there yet, but from the few pitch competitions I've done, I have networked with several interested investors already where I've gotten their contact information and they say, hey, reach out whenever you're ready for uh, some sort of investment. So I think the excitement's there. The funding that's currently needed is already secured. Feeling pretty good from a financial Side, um, I just got fortunate, I would say, with this product idea in business.

Speaker A: That's good to hear. I know a lot of startups at early stages struggle to raise enough even to take those first steps. It's exciting that you've got that running the ladder sorted. As you prepare to raise money for your next inflection point, there's a lot of complications and interesting things to consider. Have you given much thought to your next round or have any questions that have been percolating?

Speaker C: Yeah, I certainly do. It's a bit of a, uh, gray area for me as an inexperienced entrepreneur that hasn't reached pre seed or investments of that nature. I'm a bit curious to know what type of legal protection or guidance one may need if they start to work with a VC for additional seed funding.

Speaker A: Sure, there's a lot to consider, but it falls into three main buckets and uh, I'd say it would be corporate securities and tax. Uh, on the corporate side, the main question is how do you structure the investment? And when you're seed fundraising, there's usually three options. It's either a preferred stock, convertible note or a safe. And each has relative advantages and disadvantages that you and your attorneys can run through. On the security side, it's really a question of the nature of your investor and what information they're entitled to and the manner in which you raise your funds. And then, uh, on tax, there's different ways to structure the transaction to take advantage of certain benefits like qualified small business stock. And that's just a long way of saying you should make sure to get an attorney involved early to run through the details with you. So that when you start negotiating with investors, you're armed with the knowledge of how these deals normally work and what aspects of them you really care to negotiate in your term sheets.

Speaker C: Uh, that's fantastic. I know who to go to.

Speaker A: Well, thanks. So that's all really exciting. Maybe if we back up, it'd be good to hear about what made each of you want to start your company and kind of choose to be an entrepreneur at all. Margaret, would you like to start?

Speaker B: Sure. I think my passion for invention started at an early age and I actually had an opportunity to work for a startup software medical device during my undergraduate studies. So seeing how quickly and how, I guess the magic of the team, of the startup team was something that just blew me away. And I was always wanting to be a part of something like that again. And after working at a larger sized company, a more established company, a mid sized company, you really get to observe and see kind of what you would and wouldn't do. And so I think that opportunity to go back and start something of my own, perhaps implementing what I've learned and then hoping to build a team that could build something amazing again, I think is what really motivated me to try coming back to the startup space.

Speaker A: I love that. That's, um, my favorite part about what I do is being able to work with such a wide range of clients. My biggest deal last year was $4 billion and the smallest one was in the hundreds of thousands. And it's nice to get a sense for how the big players operate, but then still experience the excitement of young entrepreneurs like yourselves. Andrew, do you have a similar story or what made you, uh, want to take the leap?

Speaker C: Yeah, almost identical to Margaret's. It must be in the blood. Uh, but it's something I was, I want to say born with. Um, but as a very young child, we're talking three, five years old, I would go to the beach, gather seashells, paint them, go door to door and try to sell them. Uh, I've always been interested in adding value and having some sort of business at a very, very young age. Had the lemonade stands, set up my own little stores in my house to try to get my family involved. And then similar also to Margaret, I started my supply chain career with a startup company, worked there full time for the first five years, kind of jack of all trades. But what was most interesting to me was the R and D development side and just seeing this ability to create and you know, folks may not be asking for the product, but you can make it, create value, present it, and all of a sudden customers want it and business would be booming. And I'll never forget those times. And ever since I'd moved into the corporate space with large medical device manufacturers and as I got through my mba, picked up some more beneficial visionary skills. This was always something I've wanted to do. And um, as someone that's more of an executor, it's exciting and thrilling to finally have the ability to create something meaningful.

Speaker A: That's wonderful. Is that what you found most rewarding so far about entrepreneurship or is there anything else particular in mind?

Speaker C: Certainly that's rewarding, but the skills gained just from being an incubator, you think you have it all figured out, you think you have the education, you might kill it at your day to day job, but in fact it's a totally different world and you start to look at problems differently and trying to understand, do you have a problem worth solving. So by going through these thought processes and seeing other people's success and failures, you really learn so much more that you can't get in the classroom or in a traditional workspace. So for me, just being in an incubator, testing and failing and seeing other people's tests and failures and just learning new methodologies through experienced mentors and things of that nature, it's immensely valuable. So that, to me, is the most rewarding. Whether my idea takes off or not, the experience is worth it.

Speaker A: That's great to hear. Margaret, what have you found most rewarding in entrepreneurship so far?

Speaker B: I think I mentioned before, but I had two ACL surgeries myself, and the first one was my first surgery ever. And I actually thought, this is pretty straightforward since the appointments were maybe 10 minutes long. And it seemed like it's pretty much in and out outpatient surgery. But I was just hit with recovery from the anesthesia, the pain, and I lost the post op instructions that actually had complications where I ended up in the er. And it was a very difficult experience. And the second surgery, there was so much more emphasis on that pre and post op education. I had a better outcome and it made me realize how important that at home care really is. So as an entrepreneur, being able to build something that I hope will help all patients have access to the best care and best guidance as possible is something that's so meaningful to me. And also it's difficult because sometimes you go to receive feedback where, you know, it's, this is definitely not a good idea, don't move forward, or, you know, there's so many challenges here you're not going to be able to address that. There's so much doubt that is brought upon that you have to face as an entrepreneur. And so it really forces you to look upon yourself and think, do I really believe in myself? So it kind of forces that as well.

Speaker A: Um, is that what you find most challenging? Tuning out the naysayers? Yeah.

Speaker B: And I think like Andrew was saying, in a large corporation, you're executing the vision of the company, but here you're, you really have to believe in yours. And it challenges that and, and kind of brings you back to, do I really believe in myself? Do I believe in what I'm delivering? And it's a whole nother journey going through that, I think.

Speaker A: Yeah, well, you know, they, they call lawyers, counselors, and, uh, you know, sometimes when a client calls, I feel more like a therapist than a lawyer because, you know, it can be isolating to be a Founder, do either of you have co founders to lean on?

Speaker B: Not yet. I don't have a co founder yet, but I am looking for a technical lead. I do want to have the product at a point where we can see if we're aligned in the vision and then bring somebody on.

Speaker A: I see. Andrew, do you have a co founder?

Speaker C: I don't. I'm a one man show so I really lean on the incubator program. And um, I know there's incubator programs like this throughout the United States. Highly recommend them, I'd say 90% or more, don't quote me on the statistic, but they're type A personalities and everybody seems to know somebody and so if there's ever something you need, some sort of guidance, feedback, resource, it's really the place to go for the support you need in the early stages. Once this gets off the ground, the concept that I'm running with personally for this particular business, it falls within my bread and butter wheelhouse. So I'm a supply chain guy, I scale things up. Uh, I'm all into market expansion. I almost run as a one man team in these big corporations. So for now I'm more about equity retainment. I'm not looking to splinter that off just yet. I'm open to it down the road but at this time it's not warranted to bring additional headcount on.

Speaker A: I see. And Margaret, do you lean on the incubators, the two or where else do you look for support?

Speaker B: Yeah, it's been an amazing resource to have the incubator at San Diego State also provided a mentor who has experience with launching medical device companies himself. So it's been so helpful to bounce off ideas with him, receive recommendations from him. But in terms of, like Andrew is saying, resources from the incubator, there isn't really other founders in this space currently at the zip launchpad, so it's been really leaning on the mentor.

Speaker C: Yeah. If I could also chime in just on the co founder approach that I've seen through different incubator experiences. You really need to be in lockstep with a co founder or co founders. The decision making can be slowed down significantly. You could have folks with totally opposite visions, mission statements, values, and that really slows down any and all progress. I've seen quite a few startups dissolve entirely just from the co founders not aligning on what the future looks like for the company. And so you know, the co founder that might leave the company could have been the most ideal original founder had they just sought it through to fruition. So I find it to be sensitive. It's. I wouldn't advise it to necessarily everybody. I think it's more of a resource overload if you need to bring in different expertise to the table for your company. Otherwise, to me being able to make quick decisions and maintaining the vision and values, it's most valuable in my opinion to just retain that with an initial. Call it a CEO founder.

Speaker A: Well, and that's a good point. And another reminder to bring in your corporate lawyers early because no one gets married expecting to get divorced. And when you find a co founder, it's like a marriage and you have to think through in your organizational documents what happens when, who gets paid when, but also if it's not working out, what happens. It's an important fork in the road that warrants a lot of thought. Careful drafting. For example, a, uh, lot of companies are founded on a handshake and no one bothers to think through vesting terms. If you've got your co founders and you just get half the company and you didn't bother to subject those shares to vesting and someone leaves a month later, it's hard to get those shares back. Whereas if you thought about it ahead of time and had them subject to vesting, they'd only have the shares that they earned along the way.

Speaker B: Would you recommend bringing in a corporate attorney even for establishing a deal with a contract company?

Speaker A: Oh, absolutely. So I mean there's a lot of landmines and commercial agreements of any kind that you want to have someone who sees those kinds of deals every day take a look at. By contract company, you mean for software, uh, development.

Speaker C: Yeah.

Speaker A: Well, and so the other thing to think about is how your IPs handled each of those arrangements. You want to make sure that if you've got someone else making IP that the company is going to end up using or kind of become core to the company, you want to make sure that your contracts with them have all the provisions. You need to see that that intellectual property is automatically assigned to the company and that there's uh, no question as to what they invented on their own versus what they invented for your company.

Speaker B: That's really helpful because I just about to meet with another development company next week and potentially I was just going to sign the sow and not think twice about it, but now I don't want to. I want to bring you in if possible.

Speaker A: Yeah, well, definitely someone take a look. Usually these things are pretty formulaic and you'd expect them to have those provisions. But you'd be surprised when people sneak in or don't bother to address as you go to raise money. Slipping on those little contracts can create big diligence issues later. Maybe if you have someone make some key IP and then you go to an investor and say, I'd like to have you own part of the company. When the investor does their diligence, if they see that the IP was improperly assigned or that it know there's a question as to the whether that company would own that. I've seen that. Kill deals.

Speaker C: Wow.

Speaker B: Okay. That's really helpful to know. The timing is perfect.

Speaker A: Great. Well, I, I guess we're coming up on the hour. Maybe it's worth taking a second and just have each of you say what you wish more people understood about founders and companies at this early stage. I feel like every time I open up social media there's someone with a deep voice telling me I need to wake up, uh, at 2 in the morning and you know, know, run 10 miles before I spend all day drop shipping things. So there's probably a lot of misconceptions out there about what modern entrepreneurship looks like and I'm curious on, um, your perspectives.

Speaker C: I want people to know that entrepreneurs, I mean, we're very passionate about what we're doing. We must be, we're making sacrifices basically to improve the world. I think Margaret alluded to this earlier, but there is such a time commitment and it's not just your time, it's your energy, your emotion. I mean, that's personal equity that you're giving up to pursue, you know, some sort of solution to resolve a problem. A lot of folks, they're full time engineers, full time operations employees at, you know, as another big company, we have to get the bills paid. What's also fascinating to me is the failure rate of startups. I believe the statistic is that 20% of launched startups fail within the first year. And over the long run that balloons up to about 90%. So you have this bucket of people that are serial entrepreneurs. They're just planting seeds everywhere they go, hoping for something to sprout. Then you also have this other bucket of entrepreneurs where maintaining their mortgage payments and bills and having reliable income is a priority, but then their next priority is to improve the world through a new product or service. I think folks look at entrepreneurs and say, oh, you got lucky, you're a business owner. Like, oh, uh, everyone should become a business owner. It's not easy. There's definitely a sacrifice and a struggle and you go through a Lot of emotions you have to be able to cope with failure to be able to get to success. So it's a risk that we all take as an entrepreneur and the majority of us will never make it. So hats off to everyone that's an entrepreneur. I have so much respect in this space for any startup, anyone that's just trying to pursue their dream well.

Speaker A: And, um, you know, as a, a lawyer, I get jealous of entrepreneurs. Risk tolerance. I think a lot of times I'll, I'm so honed to finding the, you know, what could go wrong around every corner when I meet an entrepreneur and I see the fearlessness. It's inspiring to see people will need to roll the dice on their idea and stand behind it. Market. Is that similar to, uh, your experience or what do you wish people new about entrepreneurs?

Speaker B: I was thinking, I'm having difficulty answering this question because I feel like haven't made it yet. So I feel like I'm not in the position to provide any insightful feedback yet. But I think the most interesting part is like you're saying, where do you draw the line between I'm willing to move forward with this and risk so much for it versus I need to turn. And I think making those decisions is the key to being a successful entrepreneur. So we'll see if I could do that.

Speaker A: I like that answer. And I think often you only hear people talk about the entrepreneurship experience in the rearview mirror. I think for every roses and rainbows story of entrepreneurship, there's that 90% of entrepreneurs that Andrew talked about that don't make it. And it's important to know what you're signing up for when you're starting a company and being prepared to do so in a way that, you know, does manage risk in an intelligent way, then protects yourself in those downside scenarios, you know, obviously without sacrificing the, uh, vision for where you actually want to go and the steps it'll take to get there. So I wouldn't discount your perspective there, Margaret. I think that's valuable for people to hear. Andrew, do you have anything to wrap it up?

Speaker C: No, this was great. I just want to thank you for your time, Jason, and, uh, this was an honor to do this with you, Margaret. So thank you to Mintz. You guys are wonderful. You provide excellent guidance in our incubator. You're certainly a resource I look forward to partnering with in the near term and long term.

Speaker A: Thank you, Andrew. Appreciate it. Margaret, any closing thoughts?

Speaker B: Thank you so much for this opportunity as well. I didn't expect to learn so much about the benefits of bringing on a corporate attorney and in aspects of not only fundraising, but also establishing meaningful contracts with potentially consulting companies as well. So thank you for sharing that. And the timing could not be better for me, so.

Speaker A: Well, and thank you both. I always, uh, you know, like I said, this is my favorite part of what I do, is meeting with entrepreneurs like yourselves and seeing what the ground floor looks like and the rise up. It's exciting stuff. And thank you for joining us.

Speaker B: Thank you.

Speaker C: Thanks, Jason.