Wednesday, August 26, 2020

Out of the Crisis #20: the founders of Bitwise on the role of technology in empowering people, spreading benefits to underserved communities, and the creation of OnwardUS

Jake Soberal and Irma Olguin started Bitwise in 2013 with the idea that the technology industry could be used to fix a city--in their case, Fresno, CA. "Our fundamental thesis is that people of color, women, communities of concentrated poverty, have immense talent to contribute to the technology industry," Jake explained to me. "In addition, those humans, collectively, are the majority of America and they reside disproportionately in non-primary markets. That thesis to us, doesn't feel controversial. It feels really, really obvious."

In order to do that, they decided three things were crucial: teaching people to code, creating a sense of place around the tech industry, and proving it's possible to build and ship world-class software from places like Fresno. Seven years later, they've trained about 5,000 students and created over 1,000 new technology jobs in Fresno. 200 technology companies have chosen to locate in the city's downtown, occupying 250,000 square feet of space. In other words, they've more than proved their plan can work--so much so that Bitwise now operates in two more cities and plans to keep growing.

When the pandemic hit, Irma and Jake turned their attention to another problem. They founded Onward, a platform that matches displaced workers--usually, hourly workers--to industries that are hiring rapidly right now. The goal, Irma said, was: "Let's answer the requirements of this moment in helping people survive. And let's do that in a way that feels genuine to us." Onward provides "life essential services: food, shelter, money, childcare, training, and jobs" really running the gamut of what people need to move through the pandemic's impact on employment. The platform is currently in ten states and serving hundreds of thousands of people.

The three of us spoke about the role of technology in empowering people, spreading its benefits to historically underserved communities, our currently broken employment system and why they believe it can be fixed, and more. As Irma told me, "We don't have to wait for serendipity. We can be deliberate about these things. We can get folks to see their lives differently."

You can listen to my discussion with Jake and Irma on Apple, Google, or wherever you like to get podcasts.


A full transcript is beneath the show resources below.


Highlights from the show:

  • Jake introduces himself  (2:58)
  • Irma introduces herself (3:13)
  • Irma discusses quarantine and finding the equanimity to lead a company right now (3:33)
  • Jake's quarantine and perspective on the pandemic and where we are (5:48)
  • The current situation in Fresno (8:31)
  • Why they chose Fresno as Bitwise's headquarters and Irma's background (10:34)
  • Why she went back to Fresno after college (14:28)
  • The choice of entrepreneurship instead of the corporate ladder (17:31)
  • Jake's background in Fresno (20:46)
  • Irma's first entrepreneurial steps and how Bitwise came to be (22:56)
  • How Irma started a software competition in Fresno and met Jake (26:37)
  • Jake's take on how and why Bitwise came to be (29:26)
  • Why Irma wants to empower others and staying true to that mission (33:51)
  • Bitwise's growth trajectory and where it is right now (35:23)
  • The creation of Onward California (41:03)
  • What OnwardUS does and how it works (45:29)
  • The surprises in building Onward and the disconnection in unemployment services (47:29)
  • Irma gives an example of the kind of person they aim to help (51:54)
  • Their hopes for the future of Onward (53:34)
  • On how present circumstances have revealed a broken system and why Jake is optimistic (55:51)
  • What success looks like (57:54)
  • The importance of universal basic income (UBI) (58:09)
  • Irma's hopes and dreams for what's next (1:00:24)
  • How to ensure we don't waste this opportunity to rebuild something better (1:04:12)
  • How we get out of the crisis (1:06:22)

Show-related resources:

Transcript for Out of the Crisis #20: Bitwise

Eric Ries: This is Out of the Crisis, I'm Eric Ries. We are still reeling from the first order of consequences of the pandemic, but we are also starting to see the second and third order effects, unemployment, hunger, mass bankruptcy, and the inequity and injustice of this crisis. One of these effects that we are just beginning to understand the magnitude of is unemployment. It's becoming clear that there are two types of unemployment rippling through our economy. There's unemployment caused by the lockdown and unemployment caused by the recession caused by the lockdown. The scale of the problem is immense. So what are we going to do?

To me, it is clear that we need widespread retraining to make sure no one gets left behind in the new world that we are building. Jake Soberal and Irma Olguin are the founders of a company called Bitwise. They have been working on this injustice for a long time. Since 2013, Bitwise has supported people learning new skills in what they call underdog cities like Fresno, Bakersfield and Merced. Bitwise was shaping up to have a great 2020. Their programs teach software programming and IT proficiency to people who have historically been excluded from those fields, and connects their graduates with tech companies around the country. When COVID hit, Jake and Irma jumped into action. They created a program called Onward California in partnership with the State of California and with the support of governor Newsom.

The program puts displaced workers in contact with resources for essential life services, retraining opportunities and new employment. Their model in California was so successful they eventually created a new organization, Onward US, dedicated to putting American workers displaced by COVID-19 back to work. They are now operating in nine States. Their efforts in this crisis have been admirable, but as Jake and Irma made clear in our conversation, this is not enough, we need a widespread, fully funded WPA scale effort to put Americans back to work. Job retraining, up-skilling, in-sourcing manufacturing, these are necessary components, but they are not enough. What is needed is a commitment that nobody be left behind in the new normal we are collectively trying to build.

I'm grateful to programs like these that will help get people back to work, but by themselves, they will not solve the inequities of the old system. For that set of challenges we will need to be even more ambitious and determined. We will need to take inspiration from people like Jake and Irma. Here's my conversation with the founders of Bitwise.

Jake Soberal: Hi, my name is Jake Soberal. I am the co-founder and CEO of Bitwise Industries. We're a technology company headquartered in Fresno, California, and together with the Kapor Center in Oakland have partnered to deliver Onward US, which is an initiative to put thousands of Americans back to work.

Irma Olguin: My name is Irma Olguin, I'm the co-founder and CEO of Bitwise Industries. A company headquartered in Fresno, California. Grew up here in the Central Valley of California, left for early work and career in college, bounced around North America for a while, returned home to start this company.

Eric Ries: How are you doing, say a little bit about how you're handling the quarantine and what life has been like since we all started sheltering in place?

Irma Olguin: For my personality, sheltering in place and staying home and sort of nesting and those types of things, it's actually really natural for me and I don't miss as many things as one might think. And I certainly don't feel the same as folks that are on my team, but I definitely am disturbed by the world around me at the moment. So from a very, very personal micro level, I'm doing great. I'm healthy, I've got everything I need. And I don't mind staying home, on a macro level and just looking at what is happening in the world around us, that is hard to take.

Eric Ries: I think a lot of us are feeling that way. This is the contrast for many of us, between kind of being safe and cozy and warm at home and consuming this bad news. You read a newspaper or go on social media, the headlines are just apocalyptically dark. How have you managed your own psychology and how have you managed to kind of maintain the equanimity that's needed to lead a company during these times?

Irma Olguin: I think the good news in this time of rare uncertainty is that the decisions are relatively black and white in terms of what's good for the health of human beings, that of course sort of clashes with what's good for the health of a company. It just so happens that my disposition will always lean toward the health of human beings, it is part of who I am. And so decision making still feels very black and white. I think where things become disturbing or unsettling is when you watch what's happening in different areas of the country with leaders who are making decisions that you wouldn't make, and I think that that becomes hard to watch over and over and over again. Or maybe they're not leaders, right? Maybe we are talking about community servants or folks we previously thought were community servants. And that disappointment, I think that is the biggest lift for me right now is to manage my own disappointment.

Jake Soberal: So I feel like I'm in a pretty privileged spot. We've got a wonderful home just North of downtown Fresno here and are safe and have room, and the like. That being said, like it's just such a weird time. And so, I think I entered shelter in place believing that, well, I was just going to do my work from home and Sarah, my wife was sort of just going to do what she normally does. I don't think I realized how dramatically her world would be impacted. And then in turn, like things would just shift for our family. Like the absence of school, the absence of activities has, I think just turned up the volume on everything. And as a family, we've had to find new rhythms and figure out how to be sort of the best version of ourselves in this moment. And that's, I think been like, the six weeks or so have been a big adjustment on all fronts, but starting to find something of a rhythm in this really weird time.

Eric Ries: Can you share just from your perspective where we are in this crisis?

Jake Soberal: Oh gosh, I think we've barely left the batter's box, particularly as it relates to things like economic recovery, if we can even begin to talk about that as something that has begun. I don't think we have from my vantage point, not a medical perspective at all, but I don't think we have our arms around the health crisis, and I don't think we are talking even honestly about the depth of the economic crisis.

Eric Ries: It seemed to be my experience talking to folks and seeing our leaders, it just seems like we are in complete denial about the severity of what has happened and the scope of the response that is going to be required to begin the recovery process.

Jake Soberal: Yeah, I think that's right, realizing that we have a third of Americans that are out of work and the impact that that has in virtually every direction means that we've just got work to do with almost every area of society, whether that is how we think about going back to school, how we think about putting people back to work, the reality that most of us are thinking that we're going to put people back to work in the same or similar jobs when that's not going to be the case. I think that there is just quite a lot to figure out and we are getting ready to launch a podcast next week called Onward On-Air and Jim Fallows, a reporter for the Atlantic was on and one of the things he kept emphasizing is at a leadership level we need to provide empathy, hope and a plan. And I don't think we have anything resembling a plan.

Eric Ries: So let me get this right. Empathy, hope and a plan.

Jake Soberal: Yeah.

Eric Ries: Yeah. Oh my God, that shouldn't be such a high standard to hit and yet here we are.

Jake Soberal: No, no. And for me, I mean, it's putting words to something that you feel and Jim is just a super wise dude, but it felt right, and it also felt like it exposed a glaring void or vulnerability.

Eric Ries: Talk a little bit about the situation in Fresno. How are things there?

Irma Olguin: Fresno has always been this challenging place. We don't live on a coast, we live literally in the middle of the state, the driving industry here and since always has been agriculture. And so in the best of times, if you're responsible for feeding between 20 and 30% of the world's population, that's going to consume your thoughts and consume the economy, and you've got to put people to work to do that specific job. In a pandemic when the food supply chain, and really just like the way that people get food, even if you don't think about their consumption is not just critically important, it's life or death. And so I think that you see lots of protections and lots of effort being put into protecting that food supply chain. But I think it's also exposed places where it is weak and where there's opportunity to make life better for a great number of people.

That's really sort of off to the side of what we do at Bitwise, which is we're focused on the technology industry or have been focused on the technology industry and providing opportunity to folks who came out of other places, usually from a story of poverty and sort of provide them that upward mobility. And so I think the question for us in this moment is like, how do you marry those two things together? How do we keep providing opportunity, but also really pay attention to where and how people are able to eat and where and how people are getting their jobs. So I think Fresno being that challenging place, oddly enough, has sort of prepared us for this moment, because it's never been easy. There has never been a day in our company's history or even I think in our personal lifetimes, when you think to yourself, man, Fresno is the place to be because this is the lap of luxury.

Eric Ries: Why'd you choose Fresno, given the challenges of so many things, including running a company compared to some of the other more famous cities in the world?

Irma Olguin: I think choosing Fresno as home base is--it really like gets to like a very personal question for me, at least. I was through no fault of my own, through no grand plan of my own afforded a number of opportunities to go to school and to do some really neat and interesting work as a computer engineer and then start a bunch of companies and have some success there. And that is very, very solidly not the story of folks who grow up the way that I did and like many of our citizens have. And so for me, this is home. I want to make my home better, but I think even a layer deeper is I want people who have that story to have this outcome as well, or at least for this outcome to be possible. If we can get more young people who grew up in rural California to imagine their lives just a little bit differently, I think we actually do create a better world. And so that's why Fresno, I think we can do that here and it would be hard to make the case somewhere else.

Leaving Fresno was unexpected for me. It's not what I saw for myself that wasn't part of my life's goals, but going and seeing a completely different culture and sure it's still in the middle of the United States, which there's an argument to be made that it's not that different, but going from Fresno, California, or really more specifically Caruthers, California to Toledo, Ohio, for me for a West coast girl was culturally shocking. And it was really, really noticeable and there was this like layer of discomfort all the time, knowing that you are the only one like you in the area and being sort of faced with that again and again and again. And I think a lot of people experience some version of that, right? Where you're the only woman in a boardroom or you're the only woman in your technology program, your degree program or your training program, or, and on and on.

I think for me, like I was so used to hearing different languages spoken and for instructions from my mom and grandmother to be half in English and half in Spanish and for dinner to regularly consist of tortillas and beans. Like to go from that, to experiencing none of that, really, almost ever, you notice it, you never really lose your awareness of that. And so you're always trying to consciously or subconsciously figure out like how to work this new system. What does it look like to look like you belong in this different culture and not signal to everybody that you don't have the same background, the same story. But it was also wonderful, while that was challenging and new and in some cases frightening, it was a wonderful experience and I got to do all kinds of things, including study alongside of some of the smartest people I've ever met and learn under some folks who've done wonderful, wonderful work in the technology industry and to experience weather that I would never otherwise experience.

Like all of these new things, it was a rush. It was the most difficult period of my life bar none. But I think coming out the other side of that, I'm so, so grateful for that experience. I think it has shaped the way that I approach life and work today. And yeah, I'll never let that go.

Eric Ries: You graduated with a tech degree?

Irma Olguin: I did. I have a bachelor's in computer science and computer engineering.

Eric Ries: So talk about what you saw as your choices at that point. You must've felt like there was a world of opportunity in front of you. How did you sort through what you wanted your next step to be?

Irma Olguin: Planning my next steps has never actually been a strength of mine, it's a little bit more animalistic, I think, than that, whereas I know and respect people who have this grand plan for their lives. And in fact, my co-founder is one of those, right? Jake is absolutely the young man, the six year old boy who knew exactly what he was going to be doing when he was 36. That was never me. I think I'm very much like there's a bone over there that I want and I'm going to go and get it with my teeth. Right? And it's hard to see the next bone and the next bone when you don't really sort of think about it in a long term trajectory sense. And so when I went to school, it was because school had become an option suddenly, it wasn't part of a plan.

And then when I was leaving school, there were a certain subset of jobs that were then available to me. And then, there was a tragedy in my family and I ended up wanting to come back and be around family and realized that the best version of my career and whatever was going to happen next was going to be nearby them and affecting their specific lives. And when I say family, of course, I mean my biological family, but I also mean my chosen family, my community and the folks that I grew up with. Maybe not by name, but archetypally, that was the family that I wanted to affect. And so those choices, it feels like life has almost made those choices for me. And I feel as though every time a new opportunity is presented, it just makes crystal clear sense in the moment and it feels obvious and right that I do that thing next.

Eric Ries: When you made the choice to live elsewhere, did you feel like you had to give something up career wise?

Irma Olguin: Well, when I originally left California, you're giving up all of that community and support for sure. And for someone who grew up around a lot of people that are kind of--you miss your pack. You're a litter of puppies and then suddenly you're not with your litter any longer, so that was hard. And then leaving, going and experiencing the wider world, getting an education, doing computer engineering work in a bunch of different places, there's momentum that's built there, you're gathering connections and your network and experience and job opportunities and et cetera. So sure, to return home was in every way, starting over again from a professional lens. I had no network on the West coast. I had no job prospects on the West coast, I was going back to my litter, but I was not bringing any of that professional help with me. And so yeah, I think I gave away probably what could have been a lifetime of climbing the corporate ladder and traded that instead for entrepreneurship.

Eric Ries: It's such an interesting example of how privilege operates in our society, where some folks have the opportunities and family and all those conveniences. It's kind of all wrapped up into one and it creates this kind of glide path for them into conventional kinds of career success. And others are forced to make really difficult trade-offs like that. But what I think is so interesting about it is I've gotten to meet many people who have been on that glide path, who climbed the corporate ladder. And of course that many of us who are more of the misfits who have wound up in entrepreneurship, and there's actually a kind of a rich reward that comes with being off the beaten track and away from those centers of power. So you made the choice to go into entrepreneurship, to abandon those kind of professional supports. What was it like?

Irma Olguin: It felt natural. It was as though I figured out what I should be doing with the experience I was so recently afforded because I think that designing my own life, but also getting to figure out ... getting to determine how I was going to participate in the world, felt natural. Whereas, taking the job at X company, advancing to Y position, attaining Z salary, didn't feel natural. It felt as though I had become part of a machine and couldn't really find myself in it. So entrepreneurship while extraordinarily difficult from the perspective of like what it takes and what it asks of you is its hard to see a different version of my life anymore, because it's so much a part of like who I am to be able to say, we're going to go after this kind of business or this kind of deal, because it has a profound impact on lives. And getting to say that, and not having to sort of triple check that with everybody around you is worth it. It's worth how difficult it can sometimes be.

And I think too, the transition into entrepreneurship also lends itself to a mindset of like, you've just got to put down things that don't work a lot faster than in any other version of your professional life. And so that, again, that too feels natural. This thing is not working, we're not going to do it anymore. Let's try another thing, that changes the way that you look at success and failure and goals and shapes it into something I think is more attainable for the vast majority of us. So even though, again, this path is difficult from a personal emotional level, from the flexibility it affords a person to try things. And if you can really sort of sit in that mindset, and I think Eric, you know this. You wrote the book on this, literally. If you can do that, if you can put yourself there, you can bring other people with you into that mindset. And I think that there's a great power in that.

Eric Ries: Yeah, it's an incredible feeling when that team kind of comes together in defense of a common vision. What were you doing before the pandemic? How you came to run a major technology company in Fresno. That's not exactly people's first association they have with Fresno.

Jake Soberal: Yeah. So I actually grew up here in Fresno. And actually in a suburb just to the north and east of town. Like a lot of kids who grew up here, you begin to think the best and most exciting version of your future exists somewhere else. And that is what guided me, like many others, to pursue school and early career elsewhere. Bouncing around the country, went to school at the University of North Carolina, Chapel Hill. Did law school in Southern California and had no intention of coming back. I did though cherry pick an externship opportunity during law school for the court of appeal here in Fresno, which was a good gig, but candidly I thought the kids from Stanford and Berkeley won't apply.

So it would be easier to get the good externship in Fresno than it would be in LA. And so I did, and I landed the gig and came back and started digging in. And I shared a number of times that the work was fine. What was the most impactful piece of that summer was the realization that I was deeply drawn to this place. And I felt as though the most impactful best version of my story of myself was here. It was the place where I can do the most good. I didn't know what that would look like. Then came back as a sort of a young intellectual property attorney, working for a wonderful firm here in town. Dug in and not so long after that began representing this upstart five foot nothing Latina founder from Caruthers, which is a rural town to the south and west of Fresno. That of course is Irma Olguin, who is the co-founder of Bitwise.

We very quickly realized that we had a shared vision for something better and different in Fresno. And I think in each other, found not only that high ambition, but somebody that we believed could pull it off. And began dreaming around what that might look like.

Eric Ries: What was the first thing you tried? What was your first entrepreneurial steps?

Irma Olguin: Well, it's not glamorous, but the first I tried as an entrepreneur, it was out of necessity. When I first returned to California, I was, again, without job prospects, without a network. And I lived in rural California. I was not in a city center, and so things like internet and reliable vehicles, all of those things were hard to come by at first. And so my first entrepreneurial experience, returning to California, was cleaning out pantries and garages of other people, and then selling the wares; the crock pots, the guitars, the leather jackets that you find in those places. Selling those things at the flea market on the weekend. And trying to figure out sort of one nickel at a time, one quarter at a time, what your profit margin is going to be for the week. And whether or not you can turn that into lunch, or can you turn that into a tank of gas? And can you turn that tank of gas into an interview?

It was a journey, but that was my first entrepreneurial experience. Was selling sort of thrift store level things at a flea market.

Eric Ries: How did that lead ultimately to starting Bitwise?

Irma Olguin: Gosh, I mean, when you're scrounging and scraping for your tank of gas. The victory that you feel when you realize that you're in a position to not scrape and scrounge for those things any longer, I don't think... I'll never forget what it feels like to not count the change. And to be able to give that feeling to other people or help them find that feeling. That's what Bitwise is about. Sure, we use technology as the tool to make that possible, but ultimately it's about agency. And I can't see myself living my life in a way where my time is not directed in making that possible for other people.

The path to Bitwise was not a straight line, for sure. It went from selling things at a flea market, to picking up some side jobs, building websites, to sort of accidentally accepting a challenge to start a nonprofit in the coding competition.

Eric Ries: Well, how did you do that accidentally?

Irma Olguin: I was earning these contracts, these web development contracts, and then being relatively desperate and new, building out my network. If somebody asks me to connect a printer, I would take that job too. And ended up building this client base and a reputation for doing almost anything that touched electricity. Right? I would pull cables, I would connect networks, I would build websites, I would form teams. It was just all over the map. And I remember what ended up happening was that I was doing that for this... It was an incubator. It was a very small incubator in Fresno. All of those different jobs, connecting printers and what have you. And the CEO of that place, at the time, comes to me one day and he says, "Irma, why are you the only person that I've ever met in Fresno who knows how to do these things?"

And I remember looking back at him and saying, "Because you don't hang out in the right places. The folks who do these things, they're wearing hoodies and flip flops and they have their heads down in Starbucks for four and five hours at a time, and they're writing code for eBay. You don't know them because that's not your crew." That statement was met with disbelief, and basically he said, "Prove it." And so I did. I set out to prove it. Started a software competition to draw folks out of the wood works, that I knew were doing this work silently, quietly, their own sort of single-person technology industry in the heart of California. And wanted to bring them together in a very public way. And so offered cash prizes and got a bunch of sponsors. And through this competition, it was a raging success.

And in a single day, something like a 100 or 150 new technologists were exposed to the world that didn't know they were there. And that was cool, that was a cool feeling. And ran that competition for, want to say five years. And it was actually at that competition and the nonprofit that ensued, that was my first touch point with Jake, who is my co-founder. It was a recent transplant back into Fresno. As the story goes, he was looking around for "Who's doing the technology stuff in Fresno?" He kept hearing my name and he reached out one day and said, "I want to sit on your board. I want to sit on the board of this nonprofit." And yeah, can't say that it was smooth sailing from there, but that was the very first interaction where I thought this is an impressive man.

I disagree with his choice of career. I think being an attorney is maybe not the lifelong sort of goal for this guy, but I'm interested to see where this relationship goes. That led to a fast friendship, honestly. We got into great and wonderful fights together. It was a ride, and here was this person who is at least as smart as I am, if not more, who just wants to disagree with everything that I said, but would actually listen when it turned out that I might be right. And I thought that that was refreshing and different and challenging for me to have to deal with somebody who could be wrong. He ended up becoming my representation for a different company that I started. He was our IP attorney. And again, we were friends through that process. We ended up sharing our frustrations around what was not happening in our city. This really, really challenged place. Like why couldn't we be something else or become something else. In pursuit of that answer, we started Bitwise.

Jake Soberal: I have so many things to correct.

Eric Ries: Yeah, Jake.

Irma Olguin: Oh, I dare you.

Eric Ries: I was going to ask who wins most of the arguments?

Jake Soberal: Irma. That's not a good question.

Irma Olguin: I thought I was going to get through that whole thing unscathed. I couldn't even hear you breathing.

Jake Soberal: Yeah, where do I begin in correcting the record here? First of all, Irma is a genius. I talk nice. And so the intelligence question is not in play, but I think the most important thing substantively that I think was sort of glossed over there is we tend to... Even as entrepreneurs, fundamentally we're disrupting something, we're trying to do something in a way that it hasn't been done before. We tend to get locked into, "Well, this is the way things work." And what I think you heard in that, like "I accidentally created a software development competition," is actually not quite right. I think that one of Irma's real gifts is that... What was being said there by the CEO she was speaking to, is that, "We can't do technology in Fresno because we don't have the talent." And Irma's response was, "No, no, no. The problem is you don't know how to find the talent. One, and you haven't done anything to create the talent. Two. And we can change that, we can build a system. We can build pipes for that."

And I think that becomes so profound, in that, Bitwise here is this big company now that is somewhat flashy and making meaningful amounts of money and having big investors and all of these sorts of things. But if you rewind the tape to the day that I was seeking out Irma, what Irma was doing is she had a software company where she said, "Well, I'm going to grow. And so I'm going to also sort of teach a cohort of people around me how to do the things I do." And so she had an Academy. "I need community in order to support those people and the idea that tech could thrive in Fresno." So she started a co-working space. "And then I, of course, need revenue for this." And so, as she described, "Fixed everything that touched electricity."

Irma had built the ecosystem that is Bitwise in it's sort of beta version just because it was natural to her to fix the whole problem, and not just a piece of it, that made things better for her. And I think that's a really, really big deal. And so much of what we do today at Bitwise was really where... And in my role, I was a very useful microphone to the work that Irma very naturally came to, and happily so. So really what you've just heard is the origin story of the work that today is Bitwise.

Eric Ries: That is actually a common trait among the very best entrepreneurs. You know, there's certainly people out there who are very self-aggrandizing and think everything they do is brilliant, but a lot of the really great entrepreneurs that I've had the chance to meet, they don't see their work as a big deal because they can't imagine doing anything else. So they can't imagine the world in any other way. And it's actually a common finding in the entrepreneurship literature, that people think of entrepreneurs as risk seeking. But actually, if you genuinely believe in your vision, it doesn't seem risky to you at all. It's the people around you who see it as risky. And so the attribute that is needed is the ability to help them cope with the stress and the anxiety of what they perceive as risk, but in your heart, if you see that Fresno can be a different way, the fact that that vision has not been realized for, I don't know how many decades you want to count it as, but for a very long time, it doesn't really matter.

And so I really appreciate both of you kind of sharing that prehistory of how this came to be, because I think it's important for people to understand how change actually happens in the world.

Irma Olguin: That's a really strong point, Eric. I got to say the idea that you really can't see it a different way, and it feels... Not to sound condescending, but in many ways it feels like this is an obvious next step. And we must do this if we're going to change X. I feel convicted by that every single day. Every single day, I feel like we must put this foot in front of the other in this direction, or we are not going to have the effect that we said we could have.

Eric Ries: What did you want to change with Bitwise?

Irma Olguin: I wanted folks to feel that same sense of empowerment that I currently feel in my life. And in my life story, I come from a family of field laborers. What I saw for myself was more field labor, right? Or the highest and best getting that job at the Texaco or the ACE Hardware and climbing the ladder to be management, right? Like that is what I saw for myself. And it didn't turn out that way. And when you look in the rear view mirror, the fact that it didn't turn out that way had nothing to do with this master plan that I had laid out for myself.

And it was really these moments of serendipity that continued to pop up. Certainly, I had to take advantage of those moments of serendipity, but it wasn't... Again, I did not puppet master myself to this place. Instead, I feel like life sort of shoved me at these opportunities. And that feels like a fixable thing. We don't have to wait for serendipity. We can be deliberate about these things. We can get folks to see their lives differently. We can get the training into their hands and provide the reliable vehicle, so that they can arrive at that training. We can help them get that first job. Like all of the things that led me to that moment, where I realized I was no longer counting the change, we can do that on purpose. So that's what we set out to do, and every day we have to ask ourselves, "Are we still doing that? Or are we just getting big?"

Eric Ries: Tell us a little bit about where Bitwise is today. What's the growth trajectory been like?

Irma Olguin: I believe the world thinks that we are growing quickly, Jake and I feel as though... If Bitwise lives in dog years, can we do that twice as fast? We are impatient, and in some cases, petulant and would like to do a lot more of the things that we are working on. We'd like to try a lot more things that factually won't work. When we set out to grow this thing, we wanted to build something that Fresno itself was going to be proud of. And then when we realized the impact that all of these moving pieces were having in Fresno, we had to ask ourselves from a moral obligation, "Is it on us to take this to other places that faced similar challenges and see if it works there as well?"

And so we set out to do that. I think that our lives and the trajectory has been interrupted by this pandemic, but largely we're making that same effort. "Can we change things for the folks among us who are the least advantaged, and help get them into positions where they have that agency in their lives? Onward was born out of that. is the platform we built to help shorten the time of displacement for folks who were being laid off in really great numbers in one industry. While we're watching these announcements on the news that other industries are surge hiring, can we matchmake? Can we put those things together? We wanted to accomplish that but then if you think about how that actually has to happen? A person needs dollars in their hands. Right?

They need food on the table. They've got to take care of these immediate needs even before they think about a replacement job, at whatever hourly rate or salary they were at before. That became Onward. Life essential services, job matching training resources. What we're doing with Onward, is the same thing that we were doing with the Bitwise ecosystem. It's just taken this format during a pandemic. When the world stops being on fire, do we want to go back to sort of the more, maybe not traditional to everyone but traditional to us, format of we ran in-person classes and we build wonderful buildings and we put those people into jobs, and we have this sort of ecosystem effect where the technology industry is activated in places where you don't expect to find it in the United States. Yeah, we would love to do that, but let's also answer this moment. Let's answer the requirements of this moment in helping people survive.

And let's do that in a way that feels genuine to us. So while our growth trajectory in the way that we announced to the world we would grow, is probably delayed a couple of months. We haven't stopped growing and executing on our mission during this time, and it's probably important now more than ever that we do that. So I think shooting the moon, we get to do this. The world stops being on fire, we go back to growing and we're across the United States changing lives and helping people get to that moment where they're not counting the change either.

Jake Soberal: I think there's something so important and strange about where Bitwise is at in its growth trajectory. Our fundamental thesis is that people of color, women, communities of concentrated poverty, have immense talent to contribute to the technology industry, which... Oh, by the way, sort of is the industry of our age. We're creating more opportunity and wealth than any other industry on the planet. In addition, those humans, collectively, are the majority of America and they reside disproportionately in non-primary markets. That thesis to us, doesn't feel controversial. It feels really, really obvious. The strange thing is that Bitwise is in three cities today. And in those three cities, we are the largest actor in the United States that is doing this work that is advancing this thesis. And so the world is beginning to say, "Man, you really did it." And Irma and I are looking at each other, and saying, "That's not even a rational statement." There is so much more work to be done. It's so profoundly obvious that we are neglecting the majority of talent that could be leveraged to grow prosperity on the planet, it just feels like this gigantic disconnect.

And so while we might be making venture capitalists quite happy in terms of our growth and return profile, et cetera, it doesn't feel as though the world really understands the work from an impact standpoint, or from a size of opportunity standpoint.

Eric Ries: So I'd like to get some more specifics from you, because I feel like we've been talking about this very conceptually but we're losing the human beings behind the story. So could you tell us about what actually happened behind the scenes that led to Onward California?

Jake Soberal: So we were, I think, just a couple of days into being fully remote as a team, and our thought process had been that step one was to get our team home and safe, and step two, and there were literally hours in between, was to think about what is our role in meeting this moment, particularly set against the context of Fresno. We're a venture-backed technology company with a bunch of cash, a bunch of really smart people. We've got a degree of privilege and influence, and we felt obligated to put that to work in a moment where there were needs emerging around us.

And so we tackled a couple of different things. We started a grocery program that ultimately grew to be one of the largest in the state. And then we began to think also about the fact that fundamentally in a non-pandemic setting, Bitwise is about helping folks without opportunity get opportunity. And what we were watching, here in Fresno, were our friends and neighbors by the hundreds lose their jobs, watching individuals literally in the buildings beside us at Bitwise, where we've got four downtown buildings, be laid off in the dozens.

And it felt as though the world was talking about unemployment as something that was coming, and it felt very present for us. And so we had not long after that a session set aside with Mitch and Freada Kapor of the Kapor Center, who are also investors in Bitwise, Mitch serves on our board. And I think it was a day or two later, we had been wrestling with these things, and then that conversation surfaced them and their hearts were in a very, very similar place.

And so in that conversation, I think we spent two or three hours together over Zoom, we began to not just say, "Okay, well, this is a big problem. We should do something about it." But to really like get tactical and well, "What could we do about it, and how would that work?"

And before you know it, we're sitting there with the founder of Lotus 1-2-3, architecting a system for putting America back to work. And it was pretty amazing. And then in their trademark fashion, without more, said, "We'll put up the seed donation to accomplish this, and let's call this person and this person and this person to see if they want to participate."

And all of a sudden Eric Schmidt is at the table, and MasterCard is at the table, and the folks at McClatchy, and on and on, and now we've got this coalition built. We are connected with the governor of California, who's saying, "Let's deploy this at the state level." It felt like it really gained immediate and fast momentum, but was born out of something that weighed heavily for us, and it weighed heavily for Mitch and Freada, and fortunate to be sitting in a spot in the world where there were enough resources in the room to begin to do something about it.

I think that what shouldn't be lost in there is that Bitwise's model fundamentally is about how do we raise up folks from a story of poverty, folks from communities of color, women, to be software engineers. And we do that via apprenticeship. So when we're talking about building all of these things, we're not talking about your conventional team that was ultimately responsible for building and deploying Onward. We're talking about folks who had come up in that apprenticeship model, women and people of color in Fresno, and in Oakland, and in Bakersfield. That because of the model that unearthed them, we're in a position to build a software platform in 11 days that will ultimately put tens of thousands of people back to work.

And that's a pretty profound circle of life, if you will, that was realized in such a short loop.

Eric Ries: Talk a little bit about what the platform does.

Jake Soberal: Yeah. OnwardUS is a web-based platform. At its core, it's built on Salesforce and WordPress. And what a user experience is for somebody coming to the website is hopefully it's communicating to you that this is a resource to help you find the things that you need on your way back to work, in addition to getting back to work. So the site takes in a little bit of information about the user, their identity, their preferred industry, their desired earnings, their education, et cetera. All of that is voluntary. But then what it uses that information to do, is dynamically then return the resources that are most relevant to you, the user. You, the job seeker, across three categories. Life essential services, so food, shelter, money, childcare, training, and jobs. And the idea is that one of the things that we do as a society, and it's well-meaning in a moment of crisis, is that we throw information, and lots of it, at the individual who's experiencing trauma.

And what Onward is endeavoring to do is both aggregate that information, but also organize it for the individual who's living through traumatic unemployment. And so that ability to match the resource to the human, based on the human's unique attributes, is really the fundamental functionality of Onward. And the hope is that Onward is... It's not an endpoint to anything. Onward is not the one hiring the individual, Onward's not the one training the individual. Onward is not the one providing groceries to the individual, but we want Onward to be a beginning point to everything that is necessary for the wide variety of stories and journeys back to work that are going on across our state and country today.

Eric Ries: Tell us a little bit about what surprised you in building this so far.

Jake Soberal: I think one of the things that was most surprising with Onward is the number of actors in this space, broadly workforce and systems of unemployment, and the like, and one, how much, really, really good work has been done in thinking about how we serve unemployed people, but two, how disconnected it is from one another.

And so you have this agency in this state, or this secretary of labor in this state, or this foundation in this other state that is thinking deeply about training, and how we match a person to training, or jobs and how we surface them to a job seeker, and on and on. But so terribly disconnected. And that was I think, somewhat alarming, because we're spending these same resources over and over, essentially 50 times across the country, to solve the same problem.

And I think that then the thing among that that stands out the most is just how complicated, and just how early days we are in in how match we human beings and people to training, to the training that is going to help them get to the thing that they want. Our system for doing that is really, really bad.

If somebody wants to get into say a construction job, how do we tell them what to do? Is there a pathway to go and try and get a job with a construction company, because there are construction companies that will hire them? Is it a better pathway to get an apprenticeship with a union, because that's a pathway into a really good paying job? Is there a pathway to go and get a degree in construction management from Fresno State University, because that's a good degree? Is there a pathway instead to go and get a two-year degree that's going to communicate that they have a base level of soft skills that are going to ready them for a wide variety of jobs potentially within the construction industry? All of those are viable paths. We have virtually no ability to help an individual make that decision. We simply leave them to it.

Irma Olguin: I'm laughing to myself over here because you are so much more muted about your opinion than... We're trash at this, like as a whole, we are bad at this. There doesn't appear to be one working system that is helpful in the way that you could talk about this makes sense to do this at scale.

Jake Soberal: It's absolutely true. So we drop folks off at the end of high school, if we are able to get them that far, and then we hope to meet them on the other side. That's literally our plan. And that I've given the example of a construction industry, now let's imagine any other industry. Software development. There are as many, if not more pathways. A career as a medical technician, same story.

Now throw a pandemic on top of that, and I have begun down my pathway and landed a job in the restaurant or food service industry. And now I'm not fresh out of high school, I'm not still living at home. I do not have a safety net. I've got to not only build a track, I don't have the option of going further in the industry I pick, I've got to build a track out of that industry and into a new one. The standard, we'll go to community college and then get your four-year degree, and then maybe get a master's degree, and then do this other thing, is gone. Your life has already spent those days. And so the problem of not being able to chart humans to training is exposed in a really profound and tragic way by the state of things today.

Irma Olguin: I think if you imagine a, and this is not any particular person, but I'm just building an avatar on my feet here, a 49 year old woman who has been a waitress at a diner for the last 28 years of her life, and maybe has raised a kid or two and they've recently flown the nest. In the pandemic, in this pandemic, she's lost her job. She's not looking for a re-skilling opportunity, she wants another waitress job. She's looking to recuperate lost income one-to-one, or as close to one-to-one as possible.

And we hear that story, the world at large I think hears that story. And we think, "Ah, let's get her into training so that she can become something else." I think we really need to take a long look at how we are thrusting that viewpoint onto other people, that that's not always what they're looking for, nor is it their life's goal.

I think the diner waitress at 48 is thinking, "Can I get something to do at roughly the same hourly rate and tip structure for the next four or five, six years of my life, and retire?" And I think that that for me, is a surprising piece in this process of building Onward, and deploying it to all of these different places, is how much we want to inflict that viewpoint onto other people, that they should up-skill or re-skill, or retrain into a better paying job. I would like for us to stop doing that, and instead make it possible for folks to meet their goals where they're at, in the way in which they want to meet them. That feels profoundly important to me.

Eric Ries: What do you hope for Onward going forward? How do you see it growing?

Jake Soberal: I think that we see two threads for Onward. The first of them is that we want the tool to continue to reach more people in more places, because we think it has great value in helping them get back to work. And so that is continuing to lean in to the present rollout. But I think that as important, particularly with our entrepreneurial lens on, it's revealing all of these gaps in things that are problems we're really interested in tackling. So for example, this surfaced a conversation with a good friend of ours, Michael Tubbs in Stockton, the Mayor of Stockton, who rolled out a couple of years ago a pilot program in universal basic income. And that's deeply related obviously to the idea of being a displaced worker.

And so we've been collaborating and in conversation around might we be able to accomplish a software platform that made the work that he's done with UBI in Stockton, and which is fundamentally getting dollars to financially poor people. And that's the challenge. Can we make that plug and play, such that if another mayor or county decides to adopt that, we can have a system ready to help them do so. And that's just one example of about a dozen, where the work of Onward has revealed gaps and problems that we're interested in solving.

And there's a broad coalition attached to it, where we're now thinking one-to-one conversations with a wide variety of them of, well, how can we do that? And that's really, really exciting, but it exposes a great depth of need.

Eric Ries: Has building this, I don't even know what to call it, it's a platform, it's like a part tech platform, part social service agency, quasi-public private model for what a 21st century response to a crisis might look like. Has building it made you more optimistic, or less optimistic about our situation?

Jake Soberal: It has made me less optimistic about the system that is in place. What I think present circumstances are revealing is not just a hard moment, but a broken system. The systems we have set up for putting people back to work, for serving them while they're out of work, for making sure that people get a proper wage in the job that they're in, for any number of different things, are broken. They're not working well. What leaves me though optimistic, are the human beings at work on the problem. And so what I mean by that is you have Joe Barilla, the secretary of labor in Colorado, who is coming at this work in a holistic way, and engaging community partners to think about, openly, about how they make their system better. You have Schmidt Futures that is just pouring out money to solve problems all around them.

And you have the Kapor Center which is stepping up to the plate in about 100 different directions to do something that matters in a difficult moment. And so the human beings that we're interacting with. Governor Newsom in California, they're the right people, we have the right stuff to solve this problem. So we're optimistic that this is a moment where we can begin thinking differently about how we rebuild these systems, and not just rebuild the same systems that advance the same inequities.

Eric Ries: Just move them into the cloud, and make them 20% more efficient at producing gravely unequal opportunities and outcomes.

Jake Soberal: That's exactly right. I'm optimistic that we can make different decisions in this moment that is measured by, I think, a reality that there's a window in time in which we get to make a decision about whether we're going to rebuild the inequities, or build something new and better.

Eric Ries: So what does success look like? What do you hope will happen if we build a new set of more just and sustainable institutions as part of the new normal, on the other side of this?

Jake Soberal: Oh gosh, I've got a list.

Eric Ries: Let's hear it.

Jake Soberal: I think that cities around the country begin adopting universal basic income.

Eric Ries: Talk about why that's important to you.

Jake Soberal: It is because of something that is an often refrain for us. And that is that there is something magical inside of every human being wandering around, we only get to experience that magic if that person feels as though they're secure enough to have food today, water today, a place to sleep today, and those require dollars.

And so if we can get everybody enough dollars for that base set of things, we get to experience their magic. If we do not, then we do not experience their magic. And we choose over and over again to not give the majority of human beings that opportunity.

I think that we need to lean in heavily in this moment to apprenticeship models, as a way back to work. Where we are doing something... Irma just put forward the commission around jobs recovery that was convened by Governor Newsom. It said, "We have been lamenting for decades, the need to rebuild the state's digital apparatus. This is the moment to do it, and it should be accomplished by thousands of apprentice software engineers that we're readying for industry when they finish that work." And in the process of doing that, could create tens of thousands of jobs. And you could take that same model and apply it to any number of different industries. I think that we have not thought deeply enough about what a proper minimum wage looks like. And as we put people back to work, why not pay everybody $20 an hour instead of what felt like a radical conversation around 15? And any number of different things in that category that think deeply, not just about how we get people back to work, but about how the work that we put them back into is something that could sustain the quality of life that any one of us would be satisfied in.

Eric Ries: Irma, what are your hopes and dreams for the new normal?

Irma Olguin: I'd like to take down some of the expectations. So we have been so ingrained in our culture. This is very pie in the sky, and it's hard to imagine....

Eric Ries: Well, so is building a major technology company in Fresno not that long?

Irma Olguin: I'm not without hope, but undoing some of those things that have become part of the fabric and fiber of these barriers to entry that we have stood up in a person's life journey, in some cases, that's college, in some cases, that's the ability to afford a home. There are lots of places... The ability to bank, honestly, let's go all the way to whether or not a person has access to a bank so that they can do normal things like have a legit cell phone, right? Or apply for a credit card, these things that we have stood up over time as barriers to entry in the way of life that I currently enjoy, now, to me, it feels like the moment to tear them all down. Why wouldn't we? They've been broken. The world broke them for us.

So I think that this is an opportunity to enact a bunch of different things. UBI, or universal basic income, is a really wonderful example of a thing that solves, could potentially solve a lot of those issues at once, if you sort of spider out from it. Where do folks bank if they are... if UBI exists? And what are the requirements for that? That's just one simple example. Look at the school system, right? Nothing about our school system works right now. It was built 100 years ago in a world where, literally, the time in the seat was the most important thing. And now, we're in a position where time and seat does not make sense. Can we rebuild that so that there's a different, important thing that we are watching or set of things that we are watching?

And if in fact, 50% or more of your schooling is going to take place online, then does it matter which district do you live in, or can this become a system for choosing where you go to school differently, such that you can enjoy the same benefits as the person on maybe the affluent side of talent or in the school district that has a reputation for doing a great job? Now is the time to rebuild those things and to rethink those things. But I think what we are facing is a world that's waiting to go back to normal. We long for that normalcy. Great chunks of that normalcy were trash.

Eric Ries: How do we make sure that we don't waste this opportunity? One of the recurring themes in conversations that I've been having has been the consequences of past crises, not just past epidemics, but past crises in education or in finance, and the times in history when we have reacted to crisis as an opportunity, and really used the facts of the crisis, the fact that there is tremendous labor and raw materials that are suddenly available, where the economy is no longer putting the pressure on every company, every organization to deliver everyone's 2020 plans. Everyone's 2021 plans are totally blown to hell. So sometimes, we retrench and retreat in the face of fear and despair when those things happen. And occasionally, it becomes an opportunity to lay the foundation of a more equitable, more sustainable future. So what's your view on how we make sure we don't waste this opportunity this time?

Irma Olguin: I think if we're not going to waste this opportunity, we have to get a lot more creative about what acceptable looks like, looking at things like training programs and what were the gates before to creating a training program that was recognized, being able to tear some of that down and say there are a lot of opportunities right now. It doesn't look like what the world used to look like. That mindset of the thing... the world that this thing was built in doesn't exist anymore is a complete mind shift. So I think in order to not waste this moment, we have to do a lot more letting go, a lot more saying this doesn't work anymore. It didn't work before. Let's not return to a thing that didn't work. Let's get really, really creative about what we think works now.

And really, I think adopting a lot of what you've been saying for years and years and years, which is we got to try some stuff, we got to do it quickly. We don't need to build out the whole thing to know whether it works. We just got to get to that, that MVP, that version that tells us enough data before we can make a new decision, I think we have to do a lot more of that. And I think that, thanks to your work and the work of others in the technology startup space in particular, that mindset is easy to come by. But I think when we were talking about systems that have been in place for 60, 70, 80, 100 years, those things, it's going to be really, really hard. So I think if we can adopt more of the mindset that we have to try and fail and try and fail until we get to a new MVP, it's going to be really hard to change anything. So, that's how I think we make the most of this moment is encouraging the folks who have power, decision making power, to try new stuff.

Eric Ries: Where do you think we go from here? How do we get out of the crisis?

Irma Olguin: I think the most sort of level headed version of this crisis is to accept that its ramifications will be with us for a long time in that folks who were recently laid off, it will take them a while to get back into jobs. We need to accept that school will not look or feel like what we expect school to look like. We have to accept that things like life events, right? Weddings, funerals, those types of things, it's going to look and feel different than before. But I think if we're ever going to get to a place where we recognize something that's normal, we have to give scientists time to do work. I mean, we've never experienced anything like this in our lifetimes, at least, where we're relying on one profession to sort of save the day.

But I think that this is it. We've got to give them time to come up with the therapies, to figure out whether or not a mask works, to come up with a vaccine that is not harmful. And that profession, we have to buy them time, and that means changing what we do for longer periods of time than we are comfortable giving them. On the other hand, on the other side of the coin, I think that they are working at light speed. We are seeing unprecedented announcements and the time to trial and all of these things that are really, really impressive. Meanwhile, we are at home, making our 17th batch of Rice Krispies treats and wanting to go back to normal where we can see our friends and have coffee together. We've got to buy them time. I think that, that's ultimately how we get out of this thing is if we can all be responsible citizens and give our fellow human beings who are doing the super hard work time to save us.

Eric Ries: Irma and Jake, I want to thank both of you for coming on and taking time out of what I know is such a busy time. And just, thank you for the work that you do. If we're going to get out of this mess, if we're going to have a better future, it's going to be thanks to entrepreneurs who build those new 21st century institutions. So, thank you.

Irma Olguin: Appreciate you, Eric. Longtime admirer of your work. Everybody in my industry of course knows who you are, and so it's an honor to have this discussion with you and to be able to just share thoughts.

Eric Ries: Thanks. That's very kind of you to say.

Jake Soberal: Thank you so much for having us. Really enjoyed the conversation here, and appreciate the work that you're doing with this podcast.

Eric Ries: This has been Out of the Crisis, I'm Eric Ries. Out of the Crisis is produced by Ben Ehrlich, edited by Zach McNeese and Sean Maguire, music composed and performed by Cody Martin, posting by Breaker. For more information on ways to get involved, visit If you or someone you know is leading an effort to make a difference, please tell me about it. I'm at E-R-I-C-R-I-E-S on Twitter. Thanks for listening. Please rate and subscribe wherever you like to listen.

Thursday, August 20, 2020

It's time for lean philanthropy: a case study

I’ve long been an advocate of using Lean Startup principles to advance non-profits and philanthropic organizations, whose work is so urgently needed at this moment in history.

As in many areas of the crisis, I have seen a number of new organizations founded to help alleviate hunger and food insecurity in the wake of COVID-19. SF New Deal and Frontline Foods were early leaders. In this blog post, I want to share the story of a lean pop-up organization called HelpKitchen. Its creation was a chance to see how Lean Startup principles can be applied to philanthropic work as well as high-growth startups. 

Early on in the crisis, I recruited Justin Mares to build a team to run this experiment. Below, you can see how he and an all-volunteer team quickly validated a need, tested assumptions, and built a lean, fast-moving organization that has served over 170,000 meals in the weeks since it was founded. I hope the lessons he shares here will help others involved in philanthropic work during these challenging times.


In April, the world was about a month into the COVID-19 pandemic. As workers were furloughed and laid off, millions of Americans found themselves newly food-insecure and hungry, without any idea of where to get their next meal.

Lines at food pantries were hundreds of cars and hours long, as the food security system struggled to keep up with unprecedented demand. Some food banks saw demand 3-4x normal, just as their volunteer base shrunk due to worries about COVID-19 infection.


 Minneapolis, Minnesota: Cars line up at a drive-thru food pantry. Neil Blake/Grand Rapids Press/AP

The food security system was (and unfortunately still is) completely overwhelmed and struggling to meet the massive influx of need.

That set the stage for HelpKitchen - a non-profit organization we started in the last week of April. Since then, in about 3 months, we’ve fed over 170,000 people and injected over $1mm into the local economy in San Francisco and Detroit. Our goal is to try and ease the burden lockdowns have placed on both local restaurants and the food security system.

We’re hopeful that by sharing our story, others in the tech and philanthropic world can get some ideas for ways they can use lean principles to help their communities through this trying time.

How HelpKitchen began

The idea for HelpKitchen began with a conversation between Eric Ries and Jeff (founder and CEO of Twilio) and Erica Lawson. Jeff, Eric and Erica saw the massive increase in demand the food security system was experiencing, and wanted to do something about it.

As soon as Eric and the Lawsons had agreed to tackle the problem, Eric began talking to people in the tech community who were willing to help.

We connected in a WhatsApp group for tech people involved in COVID response projects. I was in the group due to my involvement (with Brent Summers) in launching GiveLocal, a site where customers could support their favorite restaurants through COVID lockdowns by buying gift cards. As soon as I saw Eric was looking for help with a food security project, I wanted to help. So did the two friends I looped in, Brent (again!) and Jeff Nobbs, who I’d worked with at Perfect Keto.

Sketching Hypotheses

We began by creating a few hypotheses, based on  what we saw happening in the food security system:

  1. Restaurants were hurting due to lockdowns: less foot traffic, less revenue, and facing the prospect of laying off many staff members. At the same time, they had fully licensed kitchens and access to purchasing food at bulk discount prices. After all, buying food in large quantities and selling it at a markup is their entire business.
  2. Food banks were seeing increased demand, but struggling to meet that demand. They were also experiencing a volunteer shortage due to concerns over the spread of COVID-19. To make matters worse, many food banks'  sources of food supply (extra restaurant food, food company donations) were disappearing
  3. Food insecure individuals fell into two camps. In the first camp were those who had experience with the food security system and understood how to navigate it. The second was made up of millions of newly food insecure individuals who had no experience navigating the system and needed a meal. This second group included many people  who had recently been laid off or furloughed.

After looking at the various stakeholders involved in the food security system we had an idea:

Why not have restaurants feed people struggling with food insecurity?

The model was simple: we’d build a SMS texting tool that matched the food insecure with a free meal from a partner restaurant, all covered by donor dollars. By doing so, we’d keep restaurants busy (and their employees working), inject funds into the local community, and ease the burden on food banks.


Validating Assumptions

Having come up with our hypotheses, we then created a series of assumptions to validate as we moved forward:

  1. Restaurants would happily participate in a program that generated revenue and gave back to their community.
  2. We could build a technical backend that matched food insecure individuals with partner restaurants.
  3. Those struggling with food insecurity would be willing to share some information and text a phone number to get matched with a partner restaurant to pick up a meal.
  4. This system would provide a scalable answer to the food security problem, which would resonate with donors.

In the spirit of lean methodology, we set about proving these assumptions, starting with the restaurants.

Fortunately, Jeff Nobbs (one of the pillars of the HelpKitchen team) is the co-owner of Kitava, a restaurant in San Francisco. He helped finalize our assumptions, and then went and interviewed several restaurant friends. After some positive feedback, we set a 24-hour goal to get 10 restaurants on board. If we couldn’t get 10 restaurants to commit in one day, the idea likely wasn’t compelling enough.

Fortunately for all involved, restaurants responded extremely well - we had nearly a 100% participation rate for restaurants we reached out to.

After getting 10 restaurants to commit to participating in a pilot, the next question was: could we build a system that matched those in need of a meal with a partner restaurant?

The fastest way to get a system up and running was with a no-code solution. Brent, who previously founded a no-code education company, spun up a text-based intake system with Twilio. When a request came in, we used their Flex chat system to manage requests and responses. Then, we had an Airtable dashboard on the back end where we could manually match restaurants, manage capacity and pair individuals in need with a restaurant near their zip code for a meal.

Though this V1 buildout was incredibly manual - as it required each of us to monitor the Twilio Flex chat for hours each day, and hand-match individuals in Airtable - it worked well enough for us to validate whether we could use technology to pair individuals with restaurant partners. Assuming it worked (which it did), we figured we could simply build software later to automate the matching and texting process. Fortunately for all of the founders’ romantic relationships, we automated this in just a few weeks. To see how the system evolved, Brent put together a full writeup here.

Once we validated that restaurants wanted this and we could match individuals to a restaurant to get a meal, we decided to test our most important assumption - would individuals in need of a meal text a number and get matched to a restaurant near them?

To make sure we were only reaching those who were in need, we printed flyers with the HelpKitchen number, compiled a list of food drives in San Francisco, and handed out flyers made to people waiting for food in lines that stretched for blocks. And on day one of handing out flyers, we managed to feed 50 people at our pilot restaurant! Assumption: validated!

Lastly, we had to validate that this approach to building a scalable tool to address part of the food security program resonated with donors. After all, in order for this all to work it would require the generous donations of philanthropists and (ideally) the support of government programs down the line.

In this regard, we were incredibly fortunate that Jeff and Erica Lawson agreed to donate $2mm to fund our approach and prove this out as a valid and scalable way to help those struggling with food insecurity.

That was enough for us, and with those assumptions validated we went to work.

Testing the MVP

We landed on the below MVP approach to roll out and test:

For those who need a meal, they simply send a text to HelpKitchen and tell us what neighborhood they’re in and how many meals they need (up to a limit of eight if they have a large family). We then match them with a partner restaurant who prepares their meals for pickup. The individual then picks up the meals, gives the restaurant their name and last four digits of their phone number, and our work is done. .

For restaurants, they agree to partner with HelpKitchen, set a price per meal, and tell us what they’ll be making for the individuals we match them with. Restaurants then tell us how many people they can serve each day and we match them with food insecure individuals. The restaurant gets access to a dashboard that shows them how many people are going to pick up meals each day, and marks meals as fulfilled each time one gets picked up.

For donors, they donate to feed the hungry in their community while also keeping restaurants in business, and restaurant employees employed. They can be confident that each dollar of their donation goes directly to feeding a hungry individual.

On the back end, we got to work building out the MVP matching tool: first by having me, Jeff and Brent manage and respond to incoming messages while manually matching individuals to restaurants in the Airtable sheet. As soon as we got to the level of hundreds of meals per day, this became all-consuming, literally taking hours of our time to manually match individuals to restaurants and manage restaurant capacity. To scale further, we built out a team of volunteers and built an automated system that balanced restaurant capacity, individual requests and zip code assignment. Before long, we were feeding thousands of people per week. As the system needs evolved, we built more features to make sure we were helping people and restaurants in the most efficient way. This included implementing a “learn phase” to complete our MVP, which took user feedback from those picking up meals, sent that to the restaurants and led to improved meal pickups.

We also invested time in building out a set of Standard Operating Procedures (SOPs) for restaurant partners to use and reference as they worked with HelpKitchen. As the system scaled (and our tech back-end could match thousands of individuals daily to restaurant partners), we recruited more restaurants to the program and handed out more flyers at food banks. We also began to partner with organizations in San Francisco (like Glide) to reach those in their community who were struggling with food insecurity.

After just four weeks, we were serving nearly 20k meals a week. Pretty wild for an all-volunteer team that had hacked together a system with nothing more than Airtable, Zapier, Twilio and a bit of Javascript.

Where we are now

After validating that the HelpKitchen system can match tens of thousands of individuals with restaurants each week, and after 170k meals served in the last few months, we’re now focused on scaling the HelpKitchen approach to more cities across the country.

Today, HelpKitchen is live in two cities (San Francisco and Detroit) and in discussions with several others about expansion. We’re incredibly proud of the progress we’ve made in a short period of time and eager to continue helping more people.

If you think you can help us achieve our mission, please reach out or donate.

Since our end-of-April launch, in just over 3 months (and with no budget and  an all-volunteer team) we’ve served 170,000+ meals, contributed $1mm+ to the San Francisco and Detroit local economies, and raised $2.3mm in total for the HelpKitchen operation.

Thank you to our core group of volunteers: Sarra Mumayiz on the operations side, and David Head, Jason Dielman, Ryan Wang, Tom Monks and Ahmad Khan on the tech side. We could not have done this without you all!

Monday, August 17, 2020

Out of the Crisis #19: Revolution Foods co-founders on feeding kids and families, being parent-entrepreneurs, and scaling food security innovations

In 2006, Kristin Groos Richmond and Kirsten Saenz Tobey founded Revolution Foods to help ensure quality food access for all children across the nation. As Kristin told me, "every child deserves access to an incredible education and every chance in the world to build the life and career of their dreams. You can't do that without quality nutrition and without health."

When the coronavirus began to shut down schools, a major source of food for kids all across the country, the company's mission took on new urgency. Everyone involved with Revolution Foods swung into action. As she recalls, "once we as a team and ecosystem of stakeholders got our plan together--and a big part of that was our incredible school partners, who said, 'We are going to feed as many kids and families as we can,'-- within a week, we were building at light speed what would be the next iteration of Revolution Foods and our feeding system."

Because it's not only kids who are being affected by the pandemic, that new company has, as Kirsten explained, "developed new menus and evolved our culinary platform to include adult meals, senior meals, meals that can be consumed without being heated up because they're being delivered to people in homeless encampments and whole new ways of getting meals to people in need from a packaging and logistics standpoint." It's an enormous responsibility, and a crucial one.

In our conversation, we talked about the history and difficulties of school nutrition before the pandemic, scaling a company while having a young family, what's changed at Revolution Foods since March, and how investors and partners have supported and helped expand the company.

You can listen to my discussion with Kristin and Kirsten on Apple, Google, or wherever you like to get podcasts.


A full transcript is beneath the show resources below.

Highlights from the show:

  • Kristen and Kirsten introduce themselves and address the current moment (2:48)
  • The mission and history of Revolution Foods (5:42)
  • Turning a dire situation into a mission-centered opportunity to help (9:30)
  • How the product design class where they met led to Revolution Foods (11:41)
  • Why they were drawn to the problem of providing nutrition to kids (15:16)
  • Starting the company while also starting families (17:21)
  • Supporting and investing in entrepreneurs who are parents (21:19)
  • The early days and customers of Revolution Foods and how it grew (24:02)
  • Why school nutrition programs have been challenging (26:48)
  • A for-profit company doing public service (30:36)
  • Being a good corporate citizen (32:43)
  • The company's 2020 plans, pre-pandemic (35:16)
  • The moment they realized things had changed (37:15)
  • The first days and weeks of the pandemic (39:22)
  • The drive and imperative to feed people in a time of crisis (44:52)
  • A second founding and rebirth fueled by the passion of the whole team across the country (46:25)
  • Raising awareness about the scale of hunger and of the solutions needed (48:59)
  • Policy recommendations for getting through the pandemic in "a safe and stable fashion" (52:22)
  • Where philanthropy can have the most impact (55:57)
  • The silver lining of food security innovations (58:05)
  • How to help now (59:24)
  • Where we go from here (1:01:21)

Show-related resources:


Transcript of Out of the Crisis #19: Revolution Foods

Eric Ries: This is Out of the Crisis. I am Eric Ries.

Within a matter of days, the schools were shut down. We had no other choice. I've spoken before about the effect that this had on learning, but what about the other social services schools provide? Schools are about so much more than just education. For many students, schools are the one place they can rely on for a consistent meal. This structural inequity is truly awful and the schools being closed made it worse. But looking deeper, you can see that it isn't just about getting food to under-resourced children, our entire food supply chain in this country is fragile and unpredictable, especially for the most vulnerable among us. It's not like hunger is a new phenomenon. The tragedy of malnourishment was a regular feature of the old normal, but it doesn't have to be in the world we are rebuilding right now.

Kristin Richmond and Kirsten Tobey have been working on fixing the problems with school food for more than a decade. Together, they founded Revolution Foods in 2006. Their mission is to build lifelong healthy eaters with kid-inspired, chef-crafted food. They were providing low-cost healthy meals for schools across the country and, before the crisis, were delivering two million federally reimbursable school and community meals per week nationwide. So when the pandemic hit and the supply chain began to unravel, Kristin and Kirsten jumped into action. They used their existing infrastructure to start getting meals into the hands of those who need it most. They found ways to support longterm care facilities, homeless shelters, and other locations serving those most at risk, all while schools, their main source of revenue, were closed.

Rev Foods rapidly scaled up. But as you'll hear, there is so much more to be done to stop the tsunami of hunger washing over our country. We need to turn our entrepreneurial talents to start solving problems of this size and caliber now. Mass hunger may seem like a problem too big for any one of us to tackle alone, and at some level it is, but every time we try to solve our major problems like food disparity or education inequity, we learn and get closer to a solution, so let's not wait anymore. Pretty soon it will be too late. This is still an exponential crisis and every day matters.

Here's my conversation with the founders of Revolution Foods.

Kirsten Saenz Tobey: My name is Kirsten Saenz Tobey. I'm the co founder and Chief Impact Officer at Revolution Foods. I got into this work with Kristin because I started my career as an educator and saw firsthand what it looked like to have both not enough access to high quality food, and also enough access to high quality food and how that impacted their ability to learn. I have long been an advocate of high quality nutrition and food access, and this has been a great journey in doing that at a large scale.

Kristin Groos Richmond: My name is Kristin Groos Richmond. I'm the co-founder and CEO of Revolution Foods. I co-founded Revolution Foods with Kirsten Tobey in 2006 to ensure quality food access for all children across the nation.

Eric Ries: So thank you both for coming on and for the work that you do every day, and especially in these difficult times. Before we get into the story and the company, how are you doing? How's your team been? How's everyone holding up in these dark days?

Kristin Groos Richmond: Well, it's certainly been a historic moment for our country in every way. We are dealing with a pandemic and crises that has left so many people unemployed and, especially relevant in our job, food insecure. And we've layered that with another crises of the exposure of continued racial injustice throughout our communities. So leading a team that is mission-driven, incredibly diverse, and incredibly committed to access across our communities has been both a challenging, but also a very motivating force for our team. So I'd say we're holding up, but we're being very honest about the pressure, challenge, fear, the questions that are on everyone's mind right now and trying to hold space for that.

Kirsten Saenz Tobey: I would agree that the team is working harder than ever and also in very different conditions than we've ever worked before, whether that's folks working at home or folks working as essential workers in our culinary centers. The emotional impact that that has on everybody, along with the sort of layers upon layers of crises that are happening in our communities, makes it not an easy time to be working on anything. But I think having the mission propel everybody's spirits forward and knowing that every day we're all coming in and doing what we're doing to make sure that people can get through this crisis, and potentially more crises, better nourished and in a better place is what keeps us all going every day.

Eric Ries: Talk a little bit about what the mission of Revolution Foods is.

Kirsten Saenz Tobey: The mission that we have held since day one, 15 years ago, has been to create access to high quality, and we like to say, it inspired chef-crafted food.

Eric Ries: I really admire the company, and I have for a long time, and in the interest of full disclosure, I'm an investor, so been on this journey with you for some time. But I especially admire the way that you have thrown yourselves into relief efforts very different from the product that you were building just a few months ago. So would you talk a little bit about the history of the company and what the product was pre-crisis. I think it would be useful for people to hear how the company came to be, what you were both doing before you started it, and what's been the journey till now.

Kirsten Saenz Tobey: We started out with a mission that was really focused around feeding kids in schools who had less access to high quality food because of the neighborhoods that they were living in, because of the communities that were in food deserts, and we looked at the rates of health challenges related to nutrition in those neighborhoods specifically, high rates of obesity, diabetes 1 and 2. Kids growing up in communities of color is at a risk of contracting type 2 diabetes. Even when we started, and some of these statistics have gotten worse, but one in three kids in America are overweight or obese, and a lot of this is because of lack of access to good high quality food and culturally relevant food in the places where these kids spend most of their time.

So in our early days, we were very focused on the sort of K through 12 education space. We started out serving charter schools, very quickly expanded our program to be able to be relevant for public district schools. Even up until this year, probably three quarters of our business was in schools and then the remaining part of the work that we did was in afterschool programs, preschools. We had just started expanding into some senior meal programs. But all of those meals that we have been providing for the last 14 years, qualify for the federal subsidy programs that are designed to increase food security for kids and families in low income areas. That's the national school lunch program, school breakfast program, after school supper programs, and then senior feeding programs that are all federal dollars that are going to provide meals to these kids and families.

When COVID hit, we saw that food insecurity  was increasing rapidly, not just among kids, but also among adults and families, and there were people losing jobs left and right. I think we're now seeing, as everybody probably knows, just higher unemployment rates than we've seen since the Great Depression, so it's not just kids who are food insecure now, and so we've very quickly developed new menus and evolved our culinary platform to include adult meals, senior meals, meals that can be consumed without being heated up because they're being delivered to people in homeless encampments and whole new ways of getting meals to people in need from sort of a packaging and logistics standpoint.

Kristin Groos Richmond: I would say the three things, to build on what Kirsten just said, the three things that we were able to bring ourselves back to as leaders when COVID hit and we literally lost 50% of our business overnight on March 15th as schools shut down. So it was a dire situation for Revolution Foods as a company, as well as a dire situation for the communities we serve from a food security standpoint. So both of those things happened at once.

We looked at ourselves and we said, what are we best at? What is our super power? From a mission and purpose standpoint, we have always been about access and quality, so that was a natural place for our team to lean in harder to the support that we knew would be needed across our communities.

From a product standpoint, we have focused for years on culturally relevant product design, so not sort of sitting in an ivory tower and saying, "We know what kids in communities want to eat across America." These are incredibly diverse and proud communities with their own culinary legacy and pride, so we've focused demonically, I would say, on designing product that is respectful and appealing to a broad range of students and families, so we knew we had great product design to address diverse communities.

And then we also looked at our operations and said, "We have a footprint across the US that can produce and distribute millions of meals every week, fresh meals to 400 cities and towns at incredibly affordable prices given the way we have cost optimized our footprint and our program." So we looked at those three things and we, I would say, turned on the turbo gas, I guess, like you wouldn't believe, and due to an amazing ecosystem of team leaders and city leaders and school partners and investors, just catalyzed the message across communities to say we're here to serve right now and we can scale very quickly. That was a blessing for our team and for the communities we serve.

Eric Ries: So how did you two meet?

Kristin Groos Richmond: We met in Business School at UC Berkeley. We were at Haas School of Business. Kirsten and I met actually the first day of school and became friends, but became business partners in a product design class where each student was tasked to come to the table with a new product idea. We both came to the table with transformative vision around healthy meals in schools and the fact that the quality of meals that our students were receiving generally were not high enough and not respectful enough. We both had a vision, from slightly different angles, to start a company that would increase access to healthy, delicious, and very affordable food so that it could be accessible to all students.

Eric Ries: I think most of us, when we think of product design, we think you're going to reinvent the washing machine, or a phone app or something, why this?

Kirsten Saenz Tobey: So the class was a product design class, but I think that the question that was asked is, what's a problem that you see in the world that needs to be solved? So it was much less about sort of what's the next cool widget that you can design and more about, where do you see a need in the world around you? It was one of these really cool classes where we were encouraged to really think big about don't think of the solution, think of the problem.

I remember that day when we both came into class and each were talking about the problem of kids not having access to high quality food in their communities, probably because we both had come from backgrounds where we were working in issues of education, and nutrition, and food, and had sort of seen this really firsthand as a burning need in our communities, that there's a lot of work being done around, or at least at the time when we were both very interested in education, there was a lot of work being done around education reform, and what's the right way to teach the whole student and all of this work. But for people who are really interested at the core, I think, being involved in education in some way, we both saw that the sort of lack of nutrition and lack of culturally relevant food for kids who were disproportionately suffering academically and from a health perspective, that that was an enormous need that we both saw.

In some ways, at that point, we didn't know yet what the solution exactly looked like, but we saw this big sort of problem in society. The very cool thing about the program, and then some of the other business planning classes that we took afterwards, was we were really encouraged, I think, to look at the need and talk to the people who are experiencing that need most sort of dramatically out in the real world. For us, that was kids, and students, and teachers, and principals, and parents, and understand what the nature of that need is before you assume you know what the solution looks like.

Eric Ries: What was it about this problem in particular that you felt drawn to try to solve it?

Kristin Groos Richmond: From my perspective, I started my career in investment banking, completely different segment, but had a life-changing opportunity to help start a school actually overseas in Kenya and saw, day in and day out, the advantage that students who were well-nourished, and that could mean coming to school having eaten a good breakfast, coming to school with... In our case, we didn't provide lunches at this school, so coming to school with a healthy lunch. The difference that that made when we had morning and afternoon classes, their ability to focus, their ability to engage, their ability to certainly score well on tests. But it was in and out of the classroom. And so for me, I felt, and I think Kir and I both share this core belief, that every child deserves access to an incredible education and every chance in the world to build the life and career of their dreams. You can't do that without quality nutrition and without health on so many levels. And this was a gap that our friends in education, our teachers, our principals ... We had a superintendent at one point say to us, "Kris here, if someone can solve this and help bring a quality solution to the school space, sign us up. We'll be your first customer." And that kind of testimonial kept coming back over and over from our friends in the education space. And so I think we saw it and still see it as a core piece of whole child learning and really as a big social justice issue as well in terms of providing all of the levers and touchpoints for students to be successful.

Eric Ries: When did you start the company?

Kirsten Saenz Tobey: So we started the company in 2006. We literally started just as we got our first term sheet for investment on the day that we graduated from business school in June of 2006. And it was actually the same time that Kristen was giving birth to her first baby, literally the same day that we received the term sheet and graduated from business school. So it was a big day.

Eric Ries: Funny how life works, huh?

Kristin Groos Richmond: All at once.

Kirsten Saenz Tobey: And then we started serving our first meals in August of 2006. So after running a very small pilot program while we were in business school to kind of do some early product and concept testing and actually get food out into lunch rooms in public schools, we were able to use that pilot program as sort of a way to gain some visibility with potential investors and to bring a couple of our early investors on board to help us get started. So we opened our first kitchen in that summer of 2006 and started out serving 500 meals a day out of that little rented corner of a catering kitchen in 2006. And we finished that first year serving closer to 1,000 meals a day, which felt like a really big increase going from 500 meals a day to 1,000 per day in that first year.

Eric Ries: It all seems like it happened remarkably fast. And I got to ask actually, because you brought it up, what was it like to do all this and also be a new mom?

Kristin Groos Richmond: So the interesting fact is Kir and I, between the two of us, have had five children in the course of starting and building this company over 15 years. So I've had two little boys and Kir has had three little girls. So we are now very well-versed in being parents and entrepreneurs. And I once had an impact investor, who you know well, who said to me, "It's okay. You're going to be tired anyway. So you might as well be tired both as a mom and as an entrepreneur." And she's like, "The people I know who get the most done have the most on their plate." And we always hear that. But it's been very inspiring.

I mean, number one, having a co-founder who has always held that space of look, we've got each other's back, and that has been absolutely key. Number two, it's really amazing to be a parent when you're building a company and a mission that is all about quality access for children and helping parents, many of whom are working multiple jobs, frankly, both moms and dads and single parents and grandparents who are raising kids. To say, I actually feel a little of what these families are going through every day, and I can deeply empathize with a parent's desire to always do better by their child. And so that piece has been, I think, even more powerful as we've pursued the journey of being, in our case, moms and founders and CEOs. It's been a really powerful piece of the journey.

It's been great for role modelship on our team and for other leaders, women and men, frankly, who are looking to start families and always come and ask us, "How do I do it?" We can do a whole other podcast on that. But I think generally it's been an incredible experience. And the thing about it is when I asked my boys, if I ever say, "Oh, gosh, I'm sorry, I can't make this. Or I'm sorry, I have to work a little harder to do this," they say, "Mom, you guys are serving kids food all over the country. We know you can't miss this. We know you can't be late to this. We know you have to be there." So it's a pretty incredible kind of full circle.

Eric Ries: I appreciate you sharing those stories because it runs so contrary to what has become, I think, kind of a gross conventional wisdom that being a parent means you can't work hard enough or you're not productive enough, or I'm not even really sure what the theory is. But you can't be an entrepreneur and a parent at the same time, that just it's too difficult. And it's, I think, especially in the tech industry, part of a very family unfriendly set of beliefs about what's important about people's whole identity and bringing that to work. So I wonder if you have encountered resistance or confusion. You have investors from the impact space, but also some straight from the technology industry. Has that been an issue at any time in the company's history?

Kirsten Saenz Tobey: I think for us, what's been pretty interesting is we've had an incredibly supportive group of investors and board members and executive team members, many of whom are parents themselves. And I think maybe if we weren't being productive, we might get more skepticism. I think probably if you ask the people that we work around and work with, they would say that we are working and more productive than a lot of people that they know who aren't parents. I think that there's a lot of sort of proof is in the pudding in what are we creating and what's the outcome of what we have done that kind of impacts people's judgment of whether it's possible.

What I always tell people when they ask about how can you be a parent, especially people who are just starting to think about starting a family or what have you and being an entrepreneur at the same time, I mean, one of the things that Kris and I have always said to each other is, "There's never a great time to have a baby in your life. There's never a bad time to have a baby in your life." You sort of figure it out as you go and, if anything, and it's hard to tell somebody who's a new parent this, but I think it actually gets harder as your kids get older and become sort of closer to teenagers that you start to realize that you want to be around for them when they questions. You're not meeting all of their basic daily needs of making sure that they're fed all the time like you are with a newborn, but as kids grow kind of emotionally, their needs change too. And so there's never a great time, and there's not an easy way to balance it all, but there's also never a bad time.

Eric Ries: So starting in that first year, you grew from 500 to 1,000 meals a day. Who were your customers in those early days? And how has that changed over the course of gosh, has it really been 14 years now?

Kristin Groos Richmond: It has been. We started with a group of charter schools in the Bay area, specifically in the East Bay, and they were great kind of pioneer early adopters, very flexible and they could easily implement a new program quickly. We got our track record down, I would say. We really focused on our meal design. We really focused on starting to build out that fresh food manufacturing and logistics capability at a very small level, and it's grown significantly.

So here we are today designing, producing, distributing close to three million meals per week across 400 cities. And our customer base grew probably ... It took about four to five years to really have school districts become a significant percentage of the customer base that we serve just because of scale needs, because of more rigorous procurement processes, just operating track record for the most part.

And we've been able to expand to some very large school districts, including San Francisco Unified and Boston Public Schools. As Kirsten said, we began serving city systems like the City of Houston, the City of Denver, where we have worked with mayors primarily and their mayoral team to implement quality feeding initiatives across afterschool programs, across parks and rec programs, across early childhood programs. And then moving into the COVID period, we've really expanded our adult and family reach.

So at this point, one of the things we're most proud of is creating and providing multi-day family meal packs of meals that we're distributing through COVID right now, 100,000 meals a day in New York City at this point. So it's been fast-scale. And again, our ability to expand and diversify our customer base and our product offering has been all about that combination of product design, manufacturing, logistics, and staying true to, in our case, the mission of a fresh, clean label. So all-natural, no-artificial-anything food, which has been a hallmark of our platform. And I'll tell you, it took us 10 years to really build that clean label supply chain for the community base that we serve.

Eric Ries: Talk a little bit about why historically school lunches and these kinds of programs have been so awful.

Kirsten Saenz Tobey: So I think, I mean, one of the things that's important to say is that there's been a lot of kind of challenge in the realm of school feeding for many, many years. I think for a long time it was just not an area that schools were focused on. It was something that they sort of had meal programs because they were supposed to, but it really wasn't until the last couple ... and in the early days of the national school lunch program, when it first was established in the 1940s, it was really a lot about hiring local people to cook onsite at schools.

And then as time went on and school budgets got more constrained, there was cost cut out of the system to be able to keep some kind of food coming into schools. And that kind of happened along with the industrialization of the food system. And the result was, when you looked 20 years ago at what was being served in schools, some of it was not what many people would choose or would design if they kind of looked at the problem from the ground up. But that wasn't to say that there weren't a lot of hardworking people doing the best they could with the resources that they had. I think there just wasn't a great awareness of some of the health impacts of some of the ingredients that were being served or just the fact that there wasn't a supply chain for school and more institutional feeding settings that could allow for higher-quality ingredients to make their way into schools.

And in many cases, there were facility challenges with what you can do with the equipment and the facilities that exist in schools or that had been maintained or not maintained in schools. And so when we set out, we looked at the fact that a lot of schools don't have the equipment and the sort of culinary capability to design and produce good high-quality food, kind of scratch style. And school systems don't have the resources to be going and doing extensive surveying with kids and asking them what they want to eat and doing taste testing and those kinds of things. And that was the approach that we have taken is like, let's bring the student voice into this. Let's make sure we're very familiar with what the kind of local culinary culture is in the places that we operate, whether it's in New Orleans or in New Jersey or in Southern California, where you have very different sort of culinary cultures.

And so I think that that's where we've been able to kind of take this approach that's just very different from what any individual school is able to do, because we can take kind of our culinary approach. We can bring in the equipment that's needed into our culinary centers that are operating at a scale serving hundreds of schools versus a school district that's serving just a few schools that can't afford to put in that kind of equipment. So I think we've been able to take an approach to sort of quality and cultural relevance because of our scale that individual schools or districts are challenged with doing. So it's not to say that schools have chosen to feed their kids bad food in any sense. It's really that the sort of resources, both human resources and kind of product design resources, that are available to schools were really and are really limited.

Eric Ries: What about those people who think there's something a little bit odd about a for-profit company serving public schools?

Kristin Groos Richmond: Well, this is an interesting topic. I believe that a company's core mission, and this is spoken from a mission-driven CEO and entrepreneur, I believe that the mission is in our DNA and that respect for quality food that has been really part of our governing principles, combined with the ability to raise capital and scale and access some of the operating knowhow that we've been able to do in a for-profit structure has been a very, very powerful combination.
I can recall talking to parents across the United States when they were looking at a new partner for their district and saying, "This is a company that's been a B Corp certified company since that was an available option for us." I think we were one of the, at least, first 20 or so companies that was a B Corp. And we did that with our board and investors to say, "We're here to change a system and improve a system for kids and families, and we believe that by serving quality values-based meals, we will actually build a valuable, scalable, impactful company that can reach more students in the model that we're in. So from my perspective, I actually think if you build a for-profit company the right way, with the right governance and the right DNA and the right structure, you can actually have an outsized impact on systems.

Eric Ries: Well, I totally agree with that, of course, and yet one of the problems that so many mission-driven companies run into is it's hard for the public and customers and partners to evaluate who's serious about this. How can people know what the governance is, or how do you address that issue as it's come up, as you've engaged with your community stakeholders? How do you convince people that even though a lot of companies have this kind of high-soaring rhetoric about wanting to be a good corporate citizen, that there's something different about Revolution Food?

Kristin Groos Richmond: Well, in our case, our standards that we adhere to from a quality standpoint for students are written into our RFP and bid responses, and we have a very clear list of never, ever ingredients that we do not allow in our food under any circumstances. We are not a company that shifts up and down based on the socioeconomic status of the communities we're serving, and we have a multi-year track record in that. From a business standpoint, we've actually optimized a supply chain and delivery platform based on that so at this point we can deliver that level of quality more affordably than anyone else, debatably.

We write those standards and commitments into our RFP, and the same goes for the Crave surveys that we do with students. We are committing to do a certain amount of consumer-based design, so meaning we are not, again, creating our own what we think are the right menus for the community. We are creating our menus in partnership with the community, and we're committing to that, going in. That's a very important part of who we are as a company, and so we're not just saying it. We're actually writing that commitment into our partnerships.

The other thing I'll say is we believe it takes a village. I think you could probably gather that by talking to us. Whether it's as moms or as CEOs, we believe that food insecurity and quality access to food is a very, very large issue. We're addressing a $20 billion market just in schools alone, and there's room for a lot of players on the public and private side. So when we go in to serve a school district, for instance, we're bringing in nonprofit partners to work with in parts of the model. We're bringing in Food Corp to do food education. We're bringing in programs to do parent cooking lessons. We're bringing in programs that can partner on gardens.

But we also are, I think, humble enough to recognize what we're good at and where community partnerships, many times nonprofit, we have nonprofit suppliers of food in a similar fashion. We know where to complement what we're doing with, I think, the best and most high quality providers in the business, whether for-profit or nonprofit.

Eric Ries: So starting to bring it towards the present, what were your 2020 plans like as the new year dawned? Must feel like 100 years ago now.

Kirsten Saenz Tobey: I mean, I think, like everyone, as we were looking at 2020, that this is the year that's going to mark our 15 years of operating as a company and start the 15th school year of operating. We've been continuing to grow as a company every year and grow at a pretty rapid pace and expanding our impact in communities. So I think we were sort of looking at 2020 as being another year of growth, a year to really make sure that the company was in a place to be, long-term, financially sustainable and to really ... As the company grows, we've invested more in systems and processes and optimization, as Chris said, to make sure that we are able to deliver sort of the highest quality at the most reasonable prices for our partners.

We were, I think, preparing for 2020 to be just another great year of growth and kind of solidification of the foundation of what we were going to be able to deliver to communities for the decades to come. I think specifically we were seeing the opportunity to start expanding, kind of using our platform of fresh food manufacturing to expand into more channels, whether that be sort of convenience store, corner store fresh food or family meals in different forms. So we were kind of starting to think about those things and looking at how can we evolve our model to be relevant to even more kinds of school districts with different kinds of equipment and infrastructure and that sort of thing. But, obviously, 2020 has actually accelerated some of those ideas in some ways and has put others on hold because of the pandemic and everything else that we've been facing over the last couple of months.

Eric Ries: When did you realize the pandemic was going to close schools and effectively shut down all of your customers?

Kristin Groos Richmond: So we started having meetings with our largest partners about the potential of COVID shutdowns I would say March 1st. Some of our larger school systems, Boston and San Francisco, for instance, were, I think, incredibly on the pulse. They're led by really world-class operators, and I think they were very on the pulse of what might be coming, but very little activity across the nation.

So it was a very quick turn. I would say we started thinking hard in March about how to protect our employees. So we issued guidance around how we would think about safety guidelines in our facility, the importance of our GMPs, our good manufacturing practices, many of which cover the sanitation that's so critical for COVID, our deep sanitation processes of our facilities.

Obviously, for all of our employee base, hand-washing and staying home if you had any symptoms. I mean, one of our first thoughts was, "Gosh, we cannot afford to have part of our company, our drivers, our dishwashers, our production managers, our receivers, we cannot afford to have folks feel like they can't stay home if they're feeling like they might be sick or have symptoms. We have to let them know right away that they will not lose their job, that there is a plan to support them if they need to stay home, thereby protecting them and the rest of the company."

So we were starting to do this thinking kind of late Feb, early March, but the speed of the school shutdowns on March 15th I think took the company and certainly the broader nation by surprise with the speed at which they happened.

Eric Ries: What was it like for each of you personally, watching the pandemic kind of roll out and become this global phenomenon and having to deal with the loss of revenue, the need for urgent action? What were those first days like?

Kirsten Saenz Tobey: I mean, I think in those early days, like many people, I was certainly not seeing how long-term this was going to be. I think it was like as each day went by, you started seeing an understanding what was going on at a larger scale. So when schools first shut down, I think many of us thought, "Okay, well, this shutdown could be a couple of weeks. Schools could open back up after spring break, once we get a handle on things."

At the same time, we were kind of shifting the whole mindset of the company from going from what traditionally has been sort of an annual planning cycle where we're talking to schools in the spring about their plans for the fall and bringing that into the form of contracts that last for a full year or up to four or five years. Then all of a sudden, we were shifted into a daily to weekly sort of planning cycle, right, where it's like, "Okay, what's happening tomorrow? What's happening next week? What do we know is happening the week after that?" Then beyond that, we have no idea.

So, I mean, at least for me personally, it was this kind of day-by-day recognition that this kind of week-to-week planning is actually the new normal. It's not like, "Okay, well, let's get through these couple of weeks and then we'll start to see normalcy resume and we'll go back to an annual planning cycle." At the same time, on the personal side, with our kids' schools shutting down and all of a sudden having three kids distance learning from home and my husband and I both working from home, that shift has been challenging on so many fronts as well. But I think just on the personal front as well as on the work front, we've started to recognize this isn't changing in weeks or months. This really is something that we have to figure out how to kind of get to a level of sort of sustainability on how we're going to operate.

Kristin Groos Richmond: I would say for me, I was very, very concerned in the first ... I would say from March 10th through March 20th, I don't think I slept at night. I was probably most concerned about the students we serve. We know roughly 75% of the kids that we serve, and that's pre-COVID was 2 million meals per week, breakfast, lunch supper. 75% of those kids rely on school meals as a primary source of nutrition.

So it's not like a nice to have, "Maybe I'll pack my lunch. Maybe I won't." No. It is "I am going to school, where there's a reliable source of nutrition and it's something that I count on and my parents count on." So there was a huge, huge amount of fear that I felt around that. I think the second order of business was "What is going to happen to Revolution Foods?" I mean, we support roughly 2000 employees across cities in the US. Our parents we serve often are our employees. So we've got full families and community members working for us that are also family consumers of our product and our schools.

Like most food companies, we weren't running on an enormously cushioned margin and cash balance. So when you lose 50% of your business over the course of a week and you're not sure how you're going to build it back up, that is beyond concerning. I think for me, I was maybe paralyzed for a couple days there. "Just how are we going to respond?" Then once we as a team and as an investor and sort of ecosystem of stakeholders got our plan together, and a big part of that was our incredible school partners, who said, "We are going to feed as many kids and families as we can," sort of dam the torpedoes, a couple days later, within a week, we were building at light speed what would be the next iteration of Revolution Foods and our feeding system. From that point forward, it's been kind of sheer momentum and adrenaline. So that probably describes my journey fairly well.

Eric Ries: It sounds incredibly intense. I was talking in one of these conversations with Brian Chesky, who talked about the collapse of revenue and the dramatic effect that this had on Airbnb. He described it almost like a second founding, like you have to found the company all over again. It's a new product, new world, new economic reality. Was it like that for you, too?

Kristin Groos Richmond: Yes. Without a lot of runway, and I'm sure Brian felt the same, but, I mean, for us, I knew our runway was short and I knew our consumers were incredibly reliant upon the product. I would say the most motivating and inspiring thing that has happened at Rev Foods, and that's saying a lot, because there have been a lot of inspiring ... There have been a lot of hard days and a lot of inspiring days over the last 15 years. But at one point, I can recall a huddle, because we started doing team meetings every single day at nine AM and three PM Pacific time, and we said, "It is more important than ever that our team hears from us and that we are together in this. We are together in the ups, we are together in the downs, and we'd rather just put it all on the line."

At one point, very shortly into COVID, I can recall a very lovely team member saying, "Let's be honest. The fear of food security, the threat of food insecurity in our communities is far greater than the threat of COVID, as serious as COVID is. So let's get to work, people. We have families to feed, and we cannot afford to miss work." So that really has been the rally cry, and then, of course, the intensity of keeping the team safe, because feeling a tremendous responsibility to our team, who has worked days, nights, weekends, holidays, there has not been a break because of this rally cry of making sure that no family goes hungry on our watch, if we can avoid it.

Kirsten Saenz Tobey: I would just add I think that that concept of the second founding is a really interesting one that this is, in some ways, a moment of rebirth. The big difference is ... and, of course, we have so many amazing stories from our early founding days of working through challenges. But the difference is that today we have this incredible team of people all across the country who are going through this with us together, and the amount of sort of innovative energy and intellectual capacity and problem-solving ability that we have on this team across the country is 1,000 times greater than what we had in 2006, when it was just a few of us in a kitchen, right, in terms of how quickly can we solve problems? How quickly can we develop new ways of working on things? Plus, we have the whole foundation that we've built over the last decade and a half. So how can we use this platform?

Just seeing the problem solving happening in each of our regions and with each of our leaders across the different teams to say, "Hey, I talked to this community organization that's trying to get food to people in X, Y, or Z setting. Hey, the city of New York is trying to get food to homebound people across all five boroughs of New York, and they want to leverage their 12,000 underemployed taxi drivers to do it. Can we make this happen?" It was like over a couple of weeks, we put together a plan to make it happen. That wasn't Kristen and I putting together the plan. That was our incredible team of operators and partnership team members in the New York and New Jersey region. So I think having this incredible team that's working together on the reinvention and the regeneration of this next chapter just is so inspiring and motivating to all of us.

Eric Ries: In the conversations that I've been having and the relief work that I've been doing, I feel like there is still this sense, frankly, of denial about the tsunami of need that is going to crash over us as the human and economic devastation of now multiple crises come to fruition. And hunger is really one of the most basic needs that our food security system struggled to deal with even before the crisis, and now it's about to get potentially tens of millions of people worse.

So talk a little bit about... What have you encountered, what have you seen, in terms of raising people's awareness of the scale of the problem and, therefore, the scale of the solutions? And what do you think all of us should be focused on right now as we try to reconstruct the foundations of our society to cope with this?

Kristin Groos Richmond: Well, I'll give a couple anecdotes, and I think Kir and I both have a few very key policy recommendations that I'll let her speak about. We are seeing families and individuals line up at 3:00 AM and wait eight hours on a daily basis to collect food; whether it's at food banks or whether it is at school feeding sites across the country, from San Antonio, Texas, to where I'm from, to New Orleans, to New York City, to Oakland. So there's absolutely no doubt that the need is enormous. And I think everyone is trying to do the calculation of, "Okay, does reopening equal people coming back to restaurants, back to stadiums, back to airports, back to the spots where the majority of the 30 to 40 million people who have lost their jobs in the U.S. Work?" And I think the general consensus of those of us who are closest to food in those spaces is no.

There's a recent statistic that says that only 35% of Americans will go back to restaurant dining this year, and 50% of Americans will not take an airline flight until 2021, at the earliest. So think there's some pretty clear data now that says that a reopening does not correlate directly to these jobs coming back right away and that about 50% of the job loss is likely to be persistent job loss, which means that as a country, we have to continue to double down on food security as an issue. There's also a common acknowledgement that when a person or a family misses three meals, that is one of the highest indicators towards social unrest.

And so both from a compassion for our communities and an overall safety and security standpoint, no matter which way you look at it, we have to double down on ensuring that there is a safe path to recovery for millions and millions of Americans who did not expect to be here today. And that involves some really smart policy and continued efforts of people who are... We know that food banks and school districts, frankly, have been absolute central hubs of feeding across cities. These folks have been doing this for months at this point, and there's a lot of exhaustion and there's a lot of budget pressure. So the imperative to act in a smart way has never been higher. And I think, Kir, you can share a couple of the key policy recommendations that we believe are critical to kind of get through this time in a safe and stable fashion.

Kirsten Saenz Tobey: Yeah. I mean, there's clearly a big need for a public safety net around food and a bigger safety net than we currently have because of the food insecurity that will be incredibly persistent along with the joblessness that we all see currently and the very slow economic recovery that I think is likely to happen over the coming months and years. And so there are a few kind of specific things from a policy standpoint that are important just for, sort of, stability of the current food state safety net. The USDA has been putting out waivers that have been incredibly helpful for schools to be able to continue serving kids even with schools shut down. So those are waivers around meal service times, meal pattern requirements, ability for weekend meals to be reimbursed, ability for multiple days worth of meals to be distributed at a time to students and families.

And all of those waivers currently have only been extended through the end of this summer, where I think most people realize that come September, we're not going to be back to complete normalcy. So I think one really critical thing is just to have... The USDA needs to just recognize that those waivers need to be extended through the entire next school year, whether or not schools need them. They may not need to use them, but to... it's critical for schools to continue to have the freedom to distribute meals in the way that they currently have been because we know that school is likely not to be completely back to normal in the fall. I mean, we also think that even with the, kind of, economic collapse schools will continue to be an important hub for food distribution partly because students may be going to school, at least occasionally in the fall, but also because schools are sort of trusted and centralized community hubs already.

And it's important, especially as people are hesitant to go out and about too much, that schools can continue to serve the important need that they have been serving in providing a place where families can pick up meals a couple of times a week and bring them home. But we think that it's really important that meals be available and funded, not just for students as they currently are, but also for entire families. Because what we know now is that meals are being taken home by... intended for just for students and kids, but entire families are hungry. And so the food that's being distributed is not enough to ensure food security for everyone who is currently suffering and who will continue to suffer from hunger and food insecurity.

So we want to see those, those waivers continue. We want to see new sources of funding for family meals. We do think that there is a big place for philanthropy here that... Unfortunately, philanthropy is sort of the next source that's out there when there are gaps in what the government can provide. So I think it is critical for philanthropy to step up, not just for relief feeding in the next few weeks and months, but to actually think about longer term commitments around feeding families so that those gaps can be filled.

Eric Ries: What are the most impactful things that philanthropic dollars could be going towards right now?

Kirsten Saenz Tobey: I mean, from a food security standpoint, I think it literally is food. It's that there's a need to get food, whether it's prepared meals or family meal kits, out to families that need them the most.

And that clearly is... it's a bandaid solution, to just get food into the places where people are hungry. But I think that is important while we try to rebuild the economy. Actually getting food into people's kitchens and into people's homes is probably one of the most important things to ensure continued both social stability, health stability. And ideally, that will also contribute to people being able to contribute economically in the longer term.

Eric Ries: It has a historical parallel to me going back to the WPA where in depression circumstances, you have a credible number of people who are unemployed or underemployed at the same time that you have massive social needs far beyond what a market-based solution can quickly enough deploy. And we have to use philanthropic and government dollars to fill that breach, to put people back to work, and in this case, to feed the hungry.

And yet, I've had so many philanthropists that I've pitched this to over the past, I don't know how many months it's been now, who it's almost too simple for them to want to do it. There's no complicated theory of change. There's no 10-step program. It's just we need to turn money into food and feed it to people right now.

But on the flip side, this is one of the few truly scalable things you can do with philanthropy. There's only so many virologists and science labs, and they should be fully funded of course. But the next marginal dollar, you start to hit diminishing returns. Whereas with this hunger catastrophe, I wish it wasn't so, it's a tragedy that it's so, we can put almost unlimited dollars to use and we can make an immediate humanitarian impact incredibly fast.

Kristin Groos Richmond: That's right. And what I would say is with any crisis situation, there are a few silver linings. And a couple of the silver linings that have happened here in this world of food security is the innovation that's happened around city-wide distribution around, again, just I can't thank enough the schools out there who have become central feeding hubs for the community. And the infrastructure right now is there to provide to families. The innovation has happened very, very quickly.

I mentioned in New York City, we're dropping off 100,000 meals, and miles of taxi cab drivers are lined up to distribute these meals door-to-door to families. So in Boston, bus drivers are delivering meals to home-bound families throughout the city who are food insecure. So there's a lot of infrastructure right now that is allowing for scalable food security. And so we need to keep that going and leverage off the progress that has already been made and is set up.

And so, to your point, this is something we can build off of and keep going in a highly efficient way.

Eric Ries: What can people do to help right now? If there's anybody listening to this who's been inspired by your story and they want to be part of this fight against hunger in this era of crisis, how can they help?

Kirsten Saenz Tobey: Well, I would say there's a couple of things people can do to help. First, if there are either schools, school districts, or community programs in your community that need support in getting high quality food out to their families, they can certainly reach out to us. We have capacity to expand what we're doing. And particularly, if there's a need for safely packaged, unitized meals, we can certainly support schools and community programs with our wide array of food options.

I think if people have money to donate, they can donate to our non-profit Feeling Good Project, which is a fund that we've established where philanthropic donations can be turned directly into meals that we distribute to families in need. And so we can provide the link to that if folks want to donate directly.

Eric Ries: Yeah, we'll put a link in the show notes and definitely encourage those who are able to donate.

Kristin Groos Richmond: There's another group that I'd like to mention, World Central Kitchen and Jose Andres, who are doing just incredible work, too. We're working directly with them. They're also doing incredible work to revitalize restaurants and make sure that local restaurants are able to produce and feed in that local capacity as well on the adult meal side. And so they're pretty well-known now, but there are some great organizations doing work out there, The Red Cross, Share Our Strength. So very good partners in the community right now working very hard on this.

Eric Ries: All right. I want to make sure we get that call to action in. So finally, where do we go from here? How do we get out of the crisis?

Kirsten Saenz Tobey: Good question. I think what's going to get us out of this crisis is as a combination of confidence, public health intervention, and all of that while maintaining stability in that sort of Maslow's hierarchy of needs of which food, water, and shelter are the most basic. And so I think we see our role in that as let's make sure that food is not the limiting factor for folks and for economic recovery and for health recovery. We're clearly not going to solve the health situation in terms of what it's going to take from a public health standpoint to eliminate the pandemic from our country and the world, but I think we can do our part to make sure that while we're working through the public health side of things, that people's basic needs are being met through high quality food being reliably available to everyone who needs it.

Eric Ries: I want to thank you both for your work, taking care of those who are in need, and setting an example for how companies can be a force for good in this world. It's been an honor and a pleasure to be on the journey with you and especially to see you work with such urgency and just Herculean effort, your whole team really, in this time. So thanks for taking time out from that much-needed work to share the story. I just really appreciate the conversation.

Kristin Groos Richmond: Thank you so much, Eric. We appreciate being on the podcast and the recognition for the work and the need out there. So we appreciate you.

Eric Ries: This has been Out of the Crisis. I'm Eric Ries. Out of the Crisis is produced by Ben Ehrlich; edited by Jacob Tender and Sean Maguire; music composed and performed by Cody Martin; posting by Breaker.

For more information on the COVID-19 crisis and ways you can help, visit If you are working on a project related to the pandemic, please reach out to me on Twitter. I'm at E-R-I-C-R-I-E-S. Thanks for listening.