In this episode of Fundraising Radio Ramsay Brown, the co-founder of Boundless Mind explains how he as a first time founder was raising money for his company and gives advice to other entrepreneurs on this process.
Ramsay's LinkedIn: https://www.linkedin.com/in/ramsaybr/
In this episode of Fundraising Radio Ramsay Brown, the co-founder of Boundless Mind explains how he as a first time founder was raising money for his company and gives advice to other entrepreneurs on this process.
Ramsay's LinkedIn: https://www.linkedin.com/in/ramsaybr/
And, alright, let's get started. This is fundraising for you and today's, I guess before we have rmc brown Co, founder at boundless mind, raise two point five million dollars, and got acquired by thrive global.
And this will mainly talk about raising money from high net worth individuals.
So, professional angel investors will talk about pitching yourselves and your idea to those investors and how to push to the most interrupt and we do a brief reset. Yeah. Just for.
And you tell me how this changes things, or what, you sure, when I went back in through and discussed with my own business partner, the exact nature of the fundraise we did.
I actually learned that the investor that I thought was high net worth was actually what was the high net worth individual, but they were actually an accredited angel investor.
and that is,
that is how they thought about their investing that we looked through,
that I wanted to make sure that that that caveat was highlighted because I've met people who have got investment net worth and and they make it clear that it was that.
But I wanted to clarify that and and make sure that that was no. Yeah I'll I will not focus as much on that. Then I'll.
Remove that, from my Pre Pre speech so let me re, record that this this is fun. Reasonable entities yes, we have Ramsey brown Co founder at boundless mind.
That brings two point five million dollars and got acquired by global. And this episode will mainly focus on first time entrepreneurs, raising money.
First time, entrepreneurs raising money, specifically deep tech, and how to pitch yourselves to investors, and how to push this psychological, emotional side of business in terms of stars.
So, rmc, Alaska caused by giving us some federal on yourself and on boundless might. Absolutely Constantine. Thanks for having me it's a pleasure to be here today and hello to everybody other listening. Thanks for joining us. So my name's Ramsay brown.
I'm a technologist, an author, a neuroscientist and a mediocre golfer.
Every now and then my first company was domain Labs, which was, then became boundless mind, which my business partner doctor, adult incomes, and myself founded in twenty fifteen.
My a passion and work lies at the intersection of technology, human behavior design and quality of life.
So, I'm obsessed with the ideas and businesses that can be built that find a way to align the things that capital wants. The things that technology wants. But most importantly, the things that humanity wants.
as we viewed that building Labs,
one of the most important things that we saw as a challenge in the twenty first century forward,
was that in a world defined by having almost enough for everyone enough kilocalories, kilowatts and killer.
Jules, the fastest some of the fastest growing threats to public health and flourishing were largely problems where our behavior, and our habits were getting in the way of building a better society.
These were things that ranged from things as as daily as being able to trust the veracity of our news and having good news consumption habits to the foods we ate to how we treated our bodies and one another to how we pay down our debt.
So the company we built found a way to use what we knew about the underlying neuroscience of behavior change,
and why it is that people form habits,
and then make that knowledge able to be accessed and usable to the developers of smartphone apps to make their apps more engaging and retentive enable to help people change their behavior at
their core by rewiring.
What it is that they wanted.
How exactly was this application working yeah. So one of the things that Dr combs and I noticed was that academic neuroscience knew a ton about or I should be a little more caveat. We had really good models.
That could explain or model and predict why people did what they did in terms of decision making and especially around weighing our options that we previously being reinforced for. We have really good as an industry animal models of this.
We had good human models, and we had an increasingly set of accurate, computational models, neuro networks that resembled at some architectural level.
What was happening in your head that frame for the decision making parts that would handle things ranging from deciding what food you were going to eat to whether, or not you would execute an addictive behavior? Good models of those.
And we recognize that technology companies, especially smart phone apps, we're looking to solve this thing. They called engagement. How do you get people to do what you need them to do inside your app?
Whether that's to push a button or add something to their cart or message a friend or adhere to their diet or payback they're alone these behaviors. That could be very quoted in, or very deep in one off all these apps just try to figure how to get people to do stuff.
So we saw where to bridge the gap. There. We knew from neuroscience. Some of the underlying models of why people do when they do and how to change that and we saw the need for APS to be able to consume that. So, what we did is we built a system that would be available as software as a service.
That any app could download and install and select particular behaviors that their users would perform, add this to your card, go for a job, take a picture of the meal.
You just eight small payment against your loan particular behaviors that then could be optimally reinforced.
We could make people feel fantastic at the right moments and it's the right pattern and frequency over time cause them to cause their brains to release and experience that little. Oh, that's a little better than I expected.
I mean, Labs and it turns out that's not trivial. Getting that hard getting that right is a mathematically hard problem to build an engine that would predict for everybody when, and how should they receive that hit?
Because we're really trying to work backwards from is their understanding of surprise your modeling, their notion of surprised.
And then figuring out when, and how they may be surprised, we made that available to apps and they could install it as an SDK attach the actions to reinforcements. They designed that.
We're often things as simple as,
confetti writing down from the top of the screen, something really small,
and said that we were able to demonstrate with split testing the,
that had an outside impact on how frequently we would come back and perform those behaviors we're able to show that across apps ranging from things that helped me take my medicine on time every day to things that help me fight cyber bullying or
drive safer without looking at my phone.
We were able to actually change how frequently people did these things by adjusting some of the underlying math medical parameters for when, and how to reinforce them. That's what the literature said we should be able to do. That's what the model should work. And that's what we found did actually work.
That's the company we built and that's the value provided to our customers. That sounds really, really complicated. So, we'll get back to the topic of, you know, raising money for deep tech. Just later on.
My first question is when you were a Co, founder of a bonus mindset back in the Labs, you were first time true printer and you were actually still in university. How did that affect your fundraising versus were investors?
Like, are you going to, for your your education, or you can have staying college was gonna happen? How, how did that affect you? Yeah, absolutely.
So, that was actually one of the first things we realized is that this is really been a, a night times and weekends fun side, project, between two friends that wasn't at all related to what we were doing academically. Dr comes.
And I worked on clearly different parts of neuroscience at the time, but we just cobbled together enough and anecdotal know how neuroscience to start building out these hypotheses.
When we've gotten some traction with that, just working on it nights and weekends, and some early, alpha and beta customers, we're seeing value from it and it kept working and we kept getting invited to come talk interesting panels or meet interesting potential customers.
Eventually we got looped in through ten, Ryan gold, bless his heart at what was then in venture now tala. Who say, hey, you gotta talk to my, my friend, Matt at Lowercase Capital. I think you guys have really get along.
That was the first investor. We'd have a really talk to who looks at we're building and said, oh, I get I immediately see how this is going to be valuable companies can use this, you know, you guys seem really smart and it sounds like there's a really big opportunity here.
Let's figure out something that can work. One of the things that we realized very quickly was, we could not be both founders and students. So doctor comes as much farther in his pH. D. had to complete that.
But, for about a year after, we got our first check from Lowercase Capital and deep for capital. I do.
I did slightly Bal out of my pH D, take a masters degree instead and go run domain, full time. Because it turned out our financiers looked at this and saw a lot of potential, but really they need to focus. And that's completely reasonable.
If you if you only have so many hours in the day, and what you're doing is not related to what you've been doing academically, you know, there's some instances where I've heard of people who, like, hey, you know, I worked at the tech transfer office. It turns out my pH. D. is we're working on some IBM.
That was the case, is this something completely different and they said looking you need is clear of anyone who gets involved financially to expect you to completely focus on this and we agreed to that and said, yeah, that.
That makes a ton of sense and since I was a little farther away from the finish line, I bowed out brand Delta. Meanwhile, doctor comes finished his pH. D and then came and joined me.
So, I see that my next question was about how you reached out to the first investors, but it seems like you've got just a lot of inbound to asking you to participate those events and you found all those connections there. Right?
Yeah. And that's what we found was. So fantastic.
Is this the story of of two people just completely bootstrapping a thing that they think the world needs is even if you're doing is the nights and weekends ways if you can narrow down at the the one thing that is absolutely small enough and
shabby enough but that still creates value for your potential customers, get out there down.
Beg them to try it. Give, give it to them for free set up.
And if they can't pay you for it, because they're also small, but they like it and they like you and they trust you and they needed continue to give it away and just asked to meet someone ask who they connected you and grind on that and grind on that in green on that and by no means.
Am I going to take the traveling this? Very like, post talk? Well, Here's what worked and success for me. So, a little work for you're telling because that's garbage. That's garbage. And founders do it all the time.
And it's garbage, it's predominantly look, we got lucky that through that process. We just kept saying yes. To meeting people and letting them try it and letting them try and I'm gonna try it. And we were five free, full blown pilots deep.
When someone looked at this and said, you know, I I bet our investors would like to take a look at this. So to totally avoid the works trap.
What we may find is that how lucky we end up getting maybe proportional to how often we say yeah, sure. I can make this easy for you. I ask in return is help me continue to get this in front of people. Right?
It was one of the first things that we got right was just do it for free get in front of people someone, at some point is going to see enough value in this. They'll say, I've got someone you should probably meet, because they might be able to help you do this a little more seriously. And you said exactly. That's a perfect advice.
And my next question is going to be how do you put yourself out there?
So, to receive those invitations to the events, you have to have some sort of online presence for having some sort of a blog or a YouTube channel or something that to expose yourself to those invitations.
We didn't we actually hunted,
so we sat there and we combed through the app store,
and we combed through tech crunch and we've made a bottoms up short list of apps that we thought it might be great to work with.
And we hounded them. We hunted them down, we called emailed, we reached out on LinkedIn, we called people.
And we were to, like, my business partner was a computational economist, and I was an anatomist, not salespeople.
I remember doing our first call with the founders who signed a pilot with us and I had to take two shots of whiskey beforehand.
I was petrified of the idea of someone who I thought was so much more farther along than us and so big because they had a landing page. It looks like it turns out. They had no money and they were bootstrapping.
And you have to do with the beginning. I wish you could say. Oh, yeah, man we growth hacked it. There's no such thing. You have sometimes just do hard stuff. That sucks. And that's what we did, we just go around against it.
I think there's a, a big trap that a lot of people getting, because we wanna, we want something from nothing. And I think a lot of we otherwise would consider growth. Hacking is absolutely like, it worked once therefore this is how it works. It's kind of garbage.
There's really no substitute for, like, really hard, honest work. And that's what we yeah, we just, we scratched and clod at the dirt until we bled until. We got a few people to say, yes.
To trust us enough to let us plug in this this. Otherwise, what could have been dangerous inside their app? Because it may the execution of their app dependent on our serves, because it was a blocking synchronous process.
And again, to be clear, here's the economist. I wasn't anatomist. There was no one who's the VP of back end engineering we just have to left our way through it and builds. Yeah, we had no idea what we're doing any aspect.
So I think we were good at learning, and we knew we were good at talking, and we knew that would probably be enough to get us pretty far and it did it.
Yeah, but we're able to do really quickly was learned, was learned back in engineering was learned how to pitch our product properly was learned how to talk to investors and I love that because I go into us.
He was an undergrad and met a lot of kids who were in the business school and USC business school has this huge at least at the time. That's very holier than that. While we're in the business school.
So, you don't know anything, any practical skills, not interacting with a business school, but then I meet applied scientists or artists or engineers and musicians who just grinded at it and who learned how to do all of those other steps.
And I'm not saying, by any means, any of us could, for example, prepare financial statement, or, like, an s, one filing.
But there is a thing to being very good at anatomy and economics and science and reward prediction, error, modeling, and then learning how to talk to customers, learning how to conduct user research, learning how to speak with investors, learning how to tell your story.
It was a doable thing is an exciting thing at the end of the day. You're not just good at the things of being a founder. You're also still a very deeply technical person right?
And just f, Y, I for people who are s one and wants to Google, it probably is not the right thing for you right now, because it's a filing for people who are prepared to go to for an ideal.
You're not right but I have a question about what you just recently said, which is you,
none of your none of the CO,
founders were technical people,
and you still had some serious technology behind the app.
So how do you manage to do that? So, did you actually hire someone? Do you find a freelancer to do part time? Did you outsource it? What happened there?
very fast so at the beginning,
I knew enough Python for some of the things I'd worked on previously and Dr Colmes knew a lot of the underlying applied philosophy of reward Pictionary learning and how the product should work on a
And then we sat there when we identified that the core thing we were building was this API system, we said, well, that, that can't be that hard. We're both pretty good at computers. I bet we can figure that out and.
Before that we thought we'd bring in someone technical, we thought very early on. It's fine. We would just be this like, I'm in the ideas where the ideas it's, like, shut up, dude, get busy, get dirty.
And I said that I brought up my sleeves and got really sweaty on nights and weekends learning and the, and then I'll go and all these, these full stack technologies. We'd need to build our first prototype.
But it was enough all had to be was enough. That I had, hey, here's an endpoint. Here's documentation. Here's what you're expected. Call response should be. Here's the medium latency time like oh, okay. That sounds like the things. I need. Great customers and trust us for that.
So we ourselves became technical, real quickly. What we found was that was enough to actually get us pretty far.
That got us through maybe the first year or two working at this. What we've identified after fundraising was that a lot of the early gains that we'd had for really great backup napkin assumptions and and early models. We've worked on.
We came to a point where we said, okay, we actually need people who are much more specialized in various fields.
And through that journey, we found, or students of ours who followed as home after we gave a guest lecture at their one of their upper classes who walked back to the laboratory continuing asking questions.
We found other friends of ours from the pH. D. program.
We found people who, when through our path Hacker News had a field day with us for a few times, calling us fascists and telling us that we're building brave new world and ugly mind control technology. Yeah.
After after I spent an evening after one too many, cause lights responded to on Hacker News, someone whose comment Fred reached out and said, I've been watching whole conversation. I am in Los Angeles advanced DevOps work.
I'm in, we've got people who believe some people were deeply technical who believed in us people who believed in this mission that there was a thing that could be built that would engineer human behavior.
And that can be used towards human flourishing.
Right, right that's that's a wonderful epic story. I love where this is going. So I have a question about fundraising in terms of when you decided, you know, it's time for us to raise some money.
We can put strapping more one was that period of time. When was that breaking point?
Basically, we, you know, it's funny about a week or two prior to that point, I had sat down with my business partners, man we've been, we've been slaving at this night weekend for a long time. We've got a few really cool case studies.
We've met a lot of really interesting people, but like, Where's this going? Because we're, we're we're in school, right? And I don't I don't know how to think about that balance between the two because this is.
Both of these things deserve attention and I think we are actually pretty close to the point of saying, like, this was a fun project and a fun experiment, but we really need to focus on when we got that first introduction when our first customers said.
Hey, man, I've got someone I need you to meet and ended up being a lower case Capital who, who liked us, like, permission who saw the vision and who was able to help us get off the ground.
And and then it introduced us to a few of the people he knew that he respected and the venture capital community, and then with him and deep for capital and social starts, helped us get off the ground with our with our first preceed check.
But we were very close to being at that that no revenue mild traction, bootstrap founder's place, and then saying this isn't for us. Rep, very close to that. That's that's really interesting.
And, you know, that's exactly the point where we're talking about luck. So it's great. It's great that you didn't quit now resin that and let's talk about the acquisition. So how did this happen? You got acquired by it right? Global did you actual prepare for the acquisition?
Or did you just get an inbound from them saying, hey, you guys want you by you knows? I should caveat that.
I had left the company prior to that about six months prior to the acquisition, but we, we met three global years prior so we found ourselves in.
Maybe I wanna say,
maybe late twenty sixteen over,
over a couple of times a beer whole company out at a a local great sausage place and Venice beach that we all love going to talking about what one would build a hypothetically to do the exact opposite of what our
company does so our core product was about changing peoples behavior to make do things more often.
Dr combs positive. What would you do to get people to do things? Less often? How do you induce friction in digital experiences without getting someone to just full blown quick or delete the app? And we thought that was really interesting, because we were beginning to see that.
A lot of people were becoming really dissatisfied with how social media in particular was impacting there. Mental health.
They were feeling like, I don't I keep using Facebook, but I don't like Facebook and we thought back to the work of Dr beverage and others and neuroscience and psychology around the distinction between wanting and liking.
And one of the analogies that was classically made, I believe, by Dr. B. F Skinner was that no one who finds themselves with the deep gambling addiction likes the behavior of gambling.
They just have a very strong wanting for it are wanting is about the things that we have been reinforced for and therefore seek.
Entrepreneurs are seeking liking is our subjective pleasure of the experience as it happens. So, the
things that we want, we wants liked very much, and our liking may some side.
It almost always does such as the suffering of the human condition, but our wanting remains very strong. So people have this very strong drive to consume Facebook, but it was no longer providing them any joy whatsoever, but there was something there so we start looking at okay.
What's inside tech connection? Well, it's, it's these, these similar types of reinforcement pathways that we're engineering for good that we're getting use towards things that weren't making people happy. So we built an app that would help people unhook from.
Those vicious cycles, and his apples called space, because we without us is that people didn't actually want to break up with Facebook. They just wanted some space. They just wanted some breathing room. The metaphor was app for the cultural moment.
And space would allow users to select and addictive app on their phone and create icon for it.
And if you click that fake icon, you were forced to perform a breathing exercise that lasted between six and fifteen seconds.
Depending on how frequently you've pushed the button recently, if you've been very responsible and having new space, but that much the breathing delay is very short. If you have been opening Facebook constantly. The breathing delay is actually quite long every time.
And once you've completed the breathing exercise, it would cartwheel you into the app would take you to Facebook. Actually.
So, in this sense, we built a a dynamic system that would introduce a responsive quantity of friction to behavior that you wanted to change before letting you do the actual behavior.
That that was called space,
we put it out on the app store and Apple rejected it and they rejected aggressively when I got on the phone with Apple to understand what was going on what the Apple representative told me was that any app that discouraged
using their phone was unacceptable for distribution. Of course. Long story short.
I got exceptionally upset that went out and bought a case of Red Bull and pulled a few in a row to rebuild the app that was previously from scratch as a web app because recognize that if we could probably go around the walled garden,
we can just make a web app,
and the web app would be equipped to have someone sign up walking through onboarding, take payment or free trial and then create these app icons and manage all that itself.
You know, seventy two, frantic hours later we have something ready for distribution. We get it out the door. Lowercase capital was running Lowercase alpha at the time a textbooks mailing list. We get it out to people put it on product time.
It's product of the day goes, have a really well, we don't think any of this, anything of this for a little while. It's just a fun project, because it's not our is the opposite of our core business.
We do this for a little while,
and I get hit up one day in an email from the executive producer sixty minutes that he had just been a Davos and I just got an interest on Harris who had previously been and ethicist at Google who was now trying to work on
being tech addiction with organization time.
Well, spent, which eventually became the center for human technology, and they were trying to pull together a sixty minutes episode about how technology is rewiring. Our brain. One thing led to another.
And next thing I know I'm talking to Anderson Cooper in our shabby startup garage and get a speech about why Facebook is trying to rewire you to consumer Facebook.
The next day after this lands, we got a phone call from Apple saying, I believe there's been some mistake, because we're very clear on sixty minutes of that Apple would not let us help people become addicted into their phone next day. Apple verses their decision of course.
Yeah, yeah surprise. Right and in this process we get to Arianna Huffington who's running a global who has been an advocate for mental health, but specifically mental health as it relates to our technology.
So, we had a fantastic time getting no, Adriana and her team through this process and it really was space this product designed to help people take control of the relationship.
The phone that I think the thrive team really resonated with and they really aligned on. And so, over the years, we actually built a great friendship between the two companies.
We would, we talk to her if she wants about how things were going in the behavioral health and wellness technology space, what they were seeing and working on what we were seeing.
And working on how maybe able to collaborate, and we kept up that relationship and nurture that relationship for years. It really only came to be that in. I believe it was for the mid twenty.
Yeah, probably early twenty, nineteen, but it came to pass that looked at what we're building and the team we'd imagine to look at this. This looks like a exactly the kind of thing that we're trying to to do more of in our brand.
It was, it was really only that we had through this very sensitive, just pathway nurture this fantastic relationship between two organizations that we were able to to really easy more easily, then I think we would have expected, be able to facilitate that transition.
Nice. That's that's a great story. And we're coming up to the last two topics of today's episode first one being successful founders as a source of capital and advice do any advisory roles, or do do any angel investing.
Right now, I do not get any angel investing, but I do do a reasonable amount of advising.
I think that there is a thing, like, being a first time founder it is, there's this not to do the thing that everyone likes to do in tech where you have to say anyone must quote or sit there and take your turn.
But I'll sit here and taking my turn, he wants described and I might watch the exact quote. We once described building a company is kinda like showing class.
Like, it's kinda, it's kinda of terrible at times, but it's probably more accurate, like chewing heroine silk
glass because it occasionally feels absolutely fantastic. And no one should go to H***. But there is but there is something.
Not not broken inside founders, but something that's itching that they want to go scratch with their company. Otherwise they'd just go work in someone else's company like the drawl to go to take on and an insane amount of risk to almost constantly get rejected to almost constantly.
Have things not work, so don't do it. You're still showing up. There's something you're scratching with that and, you know, it's a good way to scratch that edge. For sure.
But I love working with first time founders, because having, especially been on myself.
It gives me a chance to talk to myself and a time machine.
And say, hey, I know you have a high degree of certainty about this decision you're about to make, but I'm you in a time machine, and I promise you, that's almost going to work if you change this one thing about it instead.
Because you're seeing must be correctly reaching just one thing it's definitely going to work. So is this really great way to to nurture the community through the next cycle people who are trying this for the first time? Absolutely. And that's great to hear that you were doing advisor rules.
And the last thing for a day is a call to action was that one thing that you want the listeners to do as soon as this episode is over.
if you're the first time founder,
and you're building in the current where in twenty,
we've watched a lot of assumptions that we had about the structure of doing almost anything.
And but bull run completely changed. And now we're looking at massive unemployment.
Now, we're looking at a lot of economic agility we're looking at ecological challenges we're looking at now finally, addressing longstanding, regional and subjugation challenges.
There's a lot of things that we're very different about being a founder four or five years ago for the first time.
That is today challenges for anyone out there,
trying to build their first thing we'll get anyone to pay attention to their first thing I call to action will be this if you were out there right now,
trying to build something you were trying to get into the hands of people give it away.
Give away right now. Largely. People aren't a complete purchasing freeze. A lot of organizations have spoken with recently. Aren't buying anything.
Especially anything new something new and you need to find out whether or not the new thing you built is good. And you were starting to scratch at product market fit, how you figure out what values and latently this thing creates that you might be able to capture.
The emphasize the capture part right now,
just to get people to use it,
get people to use it and understand how in times of plenty,
they might have paid for this and then work backwards to say,
in times of scarcity,
what sort of arrangement can be made,
but but continue to fight for that validation and understand right now that it is probably more important that you better understand whether,
or not anyone actually wants what you have then immediately trying to monetize it.
Great great advice. I will wrap it up here because I think there's anything else to add. So thanks a lot Ramsey for coming up. And for sharing your experience there was definitely a fun. App is a really enjoy doing this. Thanks Constantine.
It was a pleasure to join you. Absolutely.