ROB
Welcome to this “Ask Me Anything” session of the Disruption Now Summit. We're honored to be here with Max Tuchman of Caribu. -- Max, how are you doing?

MAX
I’m great. Thanks for having me. I’m super excited to kind of talk through the rough and the amazing parts of being a founder.

ROB
All right. Thank you for that. You've had a lot of success. And I know founders never feel like they're all the way successful because they're looking for the next step, the next step. That's just part of the process. But I want to tell you that we're proud of you at this moment and we're glad that you came on to tell us more about your experience. And you're going to get a chance to connect. We asked everybody to ask questions.

We're going to answer them back for you live so please interact. Continue to engage. We want this to be a collaborative process. We want to grow with you. We want to learn with you and we really want you to learn. That's the whole purpose of Disruption Now. We're about disrupting common narratives and constructs. And to do that, we believe we have to build, empower and grow and work together.

So Max, let me ask you this question -- so this is like our “Ask Me Anything” session. If you were talking to your younger self Max and you had to go back, just starting off with all these great ideas you had about what you thought the business would be like, what advice would you give your younger self in this business and then what advice would you ignore?

MAX
Oof, that's always such a good question. It's so tough. Like I said, there's just so many ups and downs of being a founder. And I think no matter what advice I would have given myself, I don't think I would have listened to it, one -- because that's just me, too.

Two, I think advice is really hard to take in unless you're in the moment, right -- unless you're in the right place to hear it. And I think the advice I would have given myself, which I don't think I would have been able to hear, was this is going to be a crazy freaking ride. I’m just kind of a planner and I’m a type of person that likes to have things in control.

ROB
You’re type to kind of like, “Path A, Path B.”

MAX
I have 19 contingents--

ROB
You got to line it all up and know what’s happening next.

MAX
Yeah. I feel I would have told myself like, “Hey, this is going to…” You know Bill & Ted's Excellent Adventure, right? Like if I could have stepped out of the phone booth and been like, “Guys, this is what's good…” I just don't think I want to believe myself. I would have been like, “Nah, she's crazy. This is going to be all up and to the right.” I don't know. I think the advice also would have landed on deaf ears because I was so passionate about this idea, and I still am. And you have to, right?

ROB
Yeah, you have to be.

MAX
If you are not obsessed… “Obsessed,” that's the word. It's almost to the point where--

ROB
So that's your advice -- “You have to be obsessed.” But it sounds like you didn't need that advice.

MAX
Yeah. So I always struggle with that question because I’m like, “Well I would have told myself this.” And I was like, knowing Bill and Ted of this year, I would have been like, “Nope. No, no, I don't trust that.”

ROB
Well what advice would you ignore? How about that?

MAX
So the advice I would ignore… I got a lot of terrible advice from people that… It was less about the advice. It was more of who not to listen to.

ROB
“To not listen to.”

MAX
Yeah. The people who were not founders gave me terrible advice. They were investors, right?

ROB
Right.

MAX
Not all investors are founders and they have a very different perspective. And I feel there were a lot of people who were like, “Oh you shouldn't continue” or “You shouldn't raise from these people” or “You should know your place” and like “Do these certain things” and I feel I was like, “If you've never been in my shoes, don't tell me what to do.”

ROB
Can you just think of some advice -- you don’t have to tell who the person is -- that somebody advised that you got and you're like… that somebody may be giving right now… I’m sure is giving bad advices and plenty of supply nowadays. Everybody believes that they're an expert in everything and they can go online and tell the world. And some people will believe that person because they look like they… “Oh they have 10,000 followers. They must know what they're talking about,” right? But no, not necessarily.

Is there one thing that sticks out in your mind or that just comes top of mind and you’re like, “Damn, that was some really dumb ass advice.” Sorry, I hope it doesn't offend you me cussing but it is what it is. Go ahead.

MAX
No. Actually, I swear a lot and I try to really reel it in for this because I’m like, “I don't know where everyone's at.”

ROB
The name of my show is “Disruption Now.” I do not care so go ahead if… yeah.

MAX
Love it. Well I swear like a sailor so… All right, it's on. I’m trying to think of some really bad dumb advice. Oh okay, I have a perfect example. So again, I’m building and growing my company in Miami. I’m from Miami. I’m Cuban. This is my home. This is where my people speak the same language. This is where I get a good cafe con leche where I can eat our own [food - 05:03]. Like Miami is--

ROB
We love Miami, by the way. We have a large Miami contingent here -- Black Angels. Miami is here to--

MAX
Yes. Yes, I know.

ROB
Monique Idlett-Mosley with Reign Ventures is coming. We have Karla Ferguson. Do you know the Yeelen Group?

MAX
No but love it.

ROB
She has a large art dealership there. She's there. We’re strongly represented in South Florida.

MAX
Well Miami's doing… I mean, again, there's not a lot of… I wouldn't call it an “equitable situation” between the Latinx population and the Black population in Miami at all. But there are a lot of really great things happening in Black tech. We have Black Tech Week. We have a space called “Tribe.” We have a co-working space specifically in--

ROB
Yeah. Brian Brackeen, he's been on the show.

MAX
Yeah, Brian from Kairos. And there's a lot more that I think people are trying to do because… It is not an equitable situation but… Yeah, so born and raised in Miami. I love Miami. Also, the cost of doing business in Miami and running a company is so much lower than trying to do in San Francisco.

So the big piece of advice that I got when I was first starting out was from everyone being like, “Oh you can't build and grow your company in Miami. You have to move to San Francisco. You have to be part of Y Combinator” or some other douchey white boy thing and I was like, “No, I don't.”

Actually, my first startup was… I called [Imbroville - 06:24]. It was in Palo Alto in the valley and I just literally would go for days without seeing another woman, without seeing another person of color. The brotasticness of it was very… It was a bad culture. And I was like, “First of all, I don't want to build and grow my company in that terrible culture. I don't love San Francisco. I love Miami.”

Miami is my place of power and so I’m really glad that I didn't take that advice where people were like, “Well if you want to run a startup, if you want to get investment, you have to move to San Francisco” because I don't think we would be where we are today if I had taken that advice.

ROB
Yeah. So what surprised you most about becoming a founder? And I’ll say this, we had a survey come out and these were some of the responses that we gave for an answer. We said, “What surprised you most about being a startup founder?” We put: “A] The challenge of managing the process and just the details running the business. B] The lead time it takes to convert sales or raising capital. C] Underestimating the amount of capital it takes to actually sustain the business.”

MAX
[Laughter]

ROB
That sounds like that's going to be your answer. Or “D] The amount of time it actually consumed your life or E] The emotional rollercoaster of the process at large.” Which of those surprised you the most?

MAX
No, you can't choose one. Those are all--

ROB
Start with the one that speaks to you the most. Is it the rollercoaster ride? Is it… -- because there's one of those that speak to you more than the other. Like for me, I’m a visionary person. I’m really good at setting the vision, communicating. That's my thing. I’m not the operations person. So like managing the processes of the details and then underestimating the lead time for sales have been my biggest surprises. But that's me.

MAX
I would say pretty much the same for me. I’ve always been in roles where it was very clear if I was the visionary person or if I was the operational person. And I think with a startup… I went to art school and I remember we would always talk about how art school was one of the hardest programs because you're literally creating something from nothing, right?

ROB
Yeah.

MAX
Well I guess coding is very similar as well but sometimes you have structure. Like literally, with art, you have a blank canvas or you have a mannequin that you're about to put something on and I feel like that's a very similar analogy for a startup. First of all, you don't know what you don't know, right -- DKDK.

ROB
Yeah.

MAX
Two, you are building out a vision but you are also in the details. You're in the details in the big picture. And again, when I was executive director of Teach for America, I was the vision. I was the strategy. I had people underneath me who were dealing with the operations and the details.

Every day at Caribu, even now with a bigger team -- we're a team of 12 now -- I still am kind of doing both. I’m doing less of the day-to-day because we have more people to do that but I’m still a founder. I’m still really responsible for a lot of that stuff.

The other stuff I think kind of falls into that dissonance, which is because you are strategy and operations, you don't realize sometimes how much things cost or how long it's going to take to raise money or how fast that money is going to go away.

We raised our first $1.3 in 2018 and my co-founder and I did not celebrate. And by the time we wanted to celebrate, we were running out of cash and we're like, “We can't spend money on--”

ROB
You need the next $2 million, yeah.

MAX
Yeah, exactly. [Laughter] So we corrected that. And when we raised the $1.7 last year, we immediately went out and we celebrated. We had a really nice dinner together and we kind of pat ourselves on the back and we're like--

ROB
So do you think it's important to celebrate those milestones even though that’s what… You know, it's important to celebrate and take those moments.

MAX
I do. And now as I build out a team, I think it's even more important. We hit a pretty big milestone as a team internally the other day and we've got some ideas about how we're going to celebrate that. Every kind of big milestone, we try to celebrate as a team.

ROB
Oh it’s not public yet?

MAX
No. I can’t say.

ROB
Okay, all right.

MAX
The other thing is, I think for me, my motivation doesn't come from external things. It comes from internal. So if I raised a $3 million seed round, I’m good. I don't need to celebrate it. I don't need to go out. I don't need to get my nails… I’m like, “Okay. Move on.”

But I also realized that, again, because we missed that first moment, I was like, “It is actually important to pause.” Because there are so many small wins, there are so many big wins, you really should pause and take in the fact that you accomplished something because it's also a good reminder. It creates a memory for the tough times.

ROB
Yes. They are coming.

MAX
Yeah. So when it's not going well then you kind of have an anchor and you're like, “Hey, remember that time where we were celebrating and--”

This is actually a really funny story. We had raised a pre-seed, so like itty bitty money, but we decided to have a lunch to like… So we did kind of celebrate that one but it was a little lunch. It was like, “Let's just get together and have a lunch.” A-Rod, the baseball player, was about to promote Caribu.

ROB
Oh wow.

MAX
And of course, his people start getting in touch with me during our celebratory lunch. So we didn't even really get to celebrate that one because I was so worried about… It’s like, “Oh wait, what are they going to post? Okay, let me make sure everything…” My co-founder was sitting across from me. He’s like, “Cool. This was fun.” Like, “Mm-mm-mm.” So taking that time, like an uninterrupted time, I think, is important.

ROB
Yeah, if you get A-Rod to promote your product, you might have to take some time. I mean I guess that's one of those things that happened. So let's get into what Caribu is -- how you came to the vision. So what is Caribu for those who don't know and what does it do and why are you so passionate about it?

MAX
So we bring families together in virtual play dates. That's the kind of easiest way to say what we do. Our product, we are the leading kind of educational family entertainment platform that helps kids, 0-13, to have virtual play dates with family and friends no matter how far apart they are. We did have a pretty big market before the pandemic and now with the pandemic, it’s gone bonkers…

ROB
I imagine it’s… yes.

MAX
…because what I think happened is grandma… We call her “Glam-ma” -- so “glamorous grandma.” In Spanish, it's “Abuela fabulosa.”

ROB
Yeah, because nobody really wants to be called “Grandma.” Some people in the black community, they want to be called “Mimi.”

MAX
No, they don’t.

ROB
They want to be called nothing but something else. “Don't call me “grandmother.””

MAX
Well not only that but when I talk to investors about my core customer and my market… Imagine me walking in and being like, “Oh it's a grandma.” Immediately, someone's head goes to, “Oh this person is 90 years old. They have a life alert necklace and a cane. This is a terrible product, a terrible market. They're never going to get any traction.”

ROB
Fascinating.

MAX
So we call her ”Glam-ma.” And we show pictures of Kris Jenner, Tina Knowles, Goldie Hawn and we say, “This is a woman 50 to 70. This is who we're going after.” And as soon as we show that picture and we call her “Glam-ma,” there's something that changes where people are like, “Oh yeah, that is a growing market.” And that woman has money.

ROB
Wow. I would have never thought of that, Max, till you said it that way. But people's biases and my bias would have clicked into like, “Oh you're talking about somebody who’s never going to get on the internet. You're marketing to somebody that's going to have no interest in doing that. They just want to do what they've always been doing,” right?

So did you come up with that through… Was that just instinctively there for you based upon your experiences and knowing “Glam-mas” or was it from the experience of people shutting down their perspective as soon as you said, “This is our target market”?

MAX
There's a couple of pieces to this. So when we first launched Caribu… As I mentioned, it's virtual play dates. You can read and draw together in a video call.

Some people watching this might be like, “Well what's the difference between some FaceTime?” Well in FaceTime, you have a huge children's book and you're trying to get it in front of a tiny little camera screen and the kid can't see you and you can't see them. You have to buy two books where the kid has the book and you have the book when you're a traveling parent. It's a terrible experience to try and do this through FaceTime.

Our app has an in-app library. We have thousands of books and activity sheets and coloring and drawing and games and recipes and origami and things you can do together in a video call.

When we first launched Caribu, when we publicly launched in 2017, my co-founder and I, we were for the traveling parent. I had been a management consultant. I knew a lot of people were traveling Monday through Thursday and I was just like, “My gosh, parents really need this.” Well we found out--

So we raised the $1.3 -- that was the first part of our seed round -- and we knew the statistic that 90% of startups fail between seed and series A because they run out of cash looking for product market fit. So we were like, “We need to find product market fit asap.”

And right around that time, First Round Capital had just come out with an article, an interview with Rahul from Superhuman, and he was using the Sean Ellis’ growth hacking questionnaire which--

So finding product market fit is an art, not a science. But Sean Ellis, he put kind of a science to it. And Rahul had used this at Superhuman. It had been really successful. So I was reading sort--

ROB
So what’s that? We’ll make sure that people get it. What is that that you use? What’s the advice?

MAX
So I would look up “First Round Capital, Rahul, Superhuman” and you should be able to find this article.

ROB
Okay.
MAX
What he did is he asked his power users four questions. And again, a lot of people use this and they call it different things. It's a four-question survey. The first question is, “Would you be devastated if Caribu went away” or whatever product. And the first question, what you're trying to figure out is who lives and dies by your product. Who is obsessed? Who will pay money? Who will pay more money because your product is just an antibiotic, not a vitamin.

And then you have three other questions. These three questions, I can't remember what they are. But the first ones are so important. The other three are like, “Who is this for? Who is this not for? What would you improve about the product” or something like that.

And the reason why the first question is so important is that if someone could care less if you live or die or could care less if your product exists in the world, why are you listening to their advice? And I think that's one of the things that's really tough with founders is you're getting feedback from your users all the time. But if your users don't care if you live or die, if they would not pay for your product -- you're talking to free users -- and then you're building features for them, this is how all startups die because you're just running around like a chicken with your head cut off.

ROB
That's such an important point then I’ll let you finish.

MAX
Yeah.

ROB
We've talked about this before, too, on the show and many times over. In order to grow, you have to eliminate. People think trying to figure out what is the perfect product that can appeal to the most people is a stupid way to think about it, right? It's not. It's, “Who are your diehard fans? Who are your top 100 people that you need to convert,” not, “Who are the million customers I need to get” because if you don't know that number, you're not going to ever get to the million. So if you want to grow, you got to eliminate. Go ahead.

MAX
And investors will look at that. They'll say, “Oh wow, you got a million people. Great. How many of them are using the product? How many of them retained?” Investors are savvy. Yes, you can go out and spend a lot of money and get a million users but if they don't stick with you, if you've just kind of gone wider than more narrow, you're kind of screwed.

So this was actually advice given to me by the founder of CurlMix. She had gotten to her first million in revenue and she was like, “I had to fire some of my customers to get there.” And I was like, “What does that mean?” And I just thought that was so helpful because that's exactly what she was saying. It’s like, “You have to figure out who that core customer is and you need to ignore…” Not ignore. I mean other people are going to constantly come in. But like you kind of need to focus on that core customer and ignore the needs of those customers that, again, could care less if you exist.

So when we did this survey, that's when we figured out, “Whoa, grandparents are obsessed with this thing.” Because think about a grandparent. They're trying to--

ROB
You found this out through data in other words.

MAX
Just through the survey, yeah. What was so great about it is that it gave us a place to focus, like you said. We started firing a bunch of our customers. We’re like, “Hey, uncle” -- who likes to use this recreationally, like once a month -- “we're not going to build for you.” Right?

ROB
Right.

MAX
And even the traveling parent, they wanted features of like, “Oh we want to upload homework.” And I was like, “But you don't care if I live or die. You have other products you can use.” But glam-ma was obsessed. She was like, “There is nothing like this out in the market for me who is trying to build a relationship with my grandchild through mobile and tablet. And FaceTime sucks” or whatever else. And also, FaceTime only works iPhone to iPhone or iOS to iOS, right?

ROB
Correct.

MAX
So if you’re iOS and Android family, you can't FaceTime, right? You have to get on WhatsApp or Facebook messenger or whatever. So that's when we figured that out.

And then Ashley Brasier from Lightspeed has been doing some research on this market. She calls them “Middlers.” I think that sounds very Lord of The Rings, kind of middle earth, so I chose “Glam-ma.” “Glam-ma” plays better for the investors.

ROB
I agree. I agree. That sounds much better.

MAX
Yeah. And I used her research because, again, investors are looking for growing markets. And you, as a founder, don't always just do what investors want you to do. But they're smart. They're pretty smart people. But for us, we realized 10,000 people a day become seniors. That's a growing market. Also, there's a ton of bias against seniors in how tech savvy they are.

ROB
Absolutely.

MAX
It’s an underestimated market, right? So we found this really amazing opportunity that no one else kind of… Everyone else is fighting for millennial mom on Instagram. I was like, “I'm going to go after millennial mom's mom who's on Facebook on her iPad.”

ROB
That's awesome. That's awesome.

MAX
Yes.

ROB
I mean knowing your market was key and that's I think really insightful observations and data for people to take away. Let's think about a moment that you can think as your--

We talked about the emotional rollercoaster of the process. Can you think of a moment that seemed like, “Oh my god, this was horrible.” It felt like such a failure, such an L, such a loss, but that ended up actually setting you up for more opportunities in the future. Can you think about that now in hindsight, if you have an example like that?

MAX
So many Ls. But you’re right. Every L, you turn it into… right? I see every mistake or every loss as a learning opportunity. You never want to make that mistake twice. And you're going to make mistakes, right? So what did you learn from it? What did you really test? And that's what everything is. Everything is just a test. And I think there are so many places where we went down the wrong direction or we built the wrong thing or we went after the wrong audience or we went after the wrong investor or we--

ROB
Well think about the one. There's so many.

MAX
Yeah, I know. It’s like, “What’s that [crosstalk - 21:44]?

ROB
I know there’s one in your brain. What’s something that sticks in your brain -- the first thing that came? Like, “Wow, that was something that I really just took. I can instruct people on how they can view that and grow from that and how I’ve grown from that experience.” Can you think of one?

MAX
The best example is probably… When you're a founder and you're managing your runway, you are always thinking about… Okay, every time someone presents you with an opportunity for money, you have to make a decision. “Is this a good person to take money from? Will they take us to the next level? Will they be founder-friendly? Will they be a good partner?” And then, “Do I have enough runway if I say “no”? If the person is not right, do I have to take the money” --because we're going to run out of cash. Is my back against the wall?

And this is exactly what happened to us last year where we were raising kind of that second part of the seed round in the spring of 2019. We met an investor that we really liked. I mean he really understood our market. He had a lot of really good ideas for us -- would have been a great partner. And then we got the term sheet for… It's half a million dollars so that's going to extend our runway pretty dramatically. And we were already starting, obviously, to raise in the spring.

And one of the things that a lot of people don't know is there is no raising over the summer, right? Everyone's on vacation. Kind of like you wouldn't raise over the winter holidays. People are just kind of distracted over the summer. We knew we were starting into the summer so I had to take that into account. And I was like, “Is this--”

So we get the term sheet and it's predatory AF. This guy was betting against us which, again, that's--

Look, you can't blame an investor for trying to make money. That's what they do, right? But there are some investors that are going to do it in a predatory way and there are some investors that are going to bet on the upside and going to bet on you as a person to be able to do things.

And at the early stages, when you get all those predatory terms or someone in the early stage is trying to get on your board for a $10,000 check, that is predatory, right? In the beginning stages, you are trying to build something. And when you have these people who now are making decisions with you, like when you're still kind of in that very formative time, this is… I mean look what happened to Brian, right?

ROB
Yeah.

MAX
He brought on a board member way too early. And that's really the story--
ROB
He talked about that. That was his learning lesson.

MAX
Yeah. So here we have this guy. He presents us with a predatory term sheet. I'm freaking out because my runway is dwindling and here's an opportunity for $500,000 and I said “no.” Looking back, I’m like, “Hah, we are fine.” But in the moment, I was like, “Oh my god, I literally could have just killed my company” because we may run out of cash before we're able to raise that amount of money. And because of that moment, because of that loss of that cash, we ended up turning to equity crowdfunding which--

ROB
Right. Let’s actually go to that because we talked about that and you said, “I do believe this is a new opportunity and” -- not “new” but it's still fairly new -- “a process, crowd investing, we want to be proponents of. We want to actually help more people do it.” Talk about how you became successful.

Dawn, who we're going to interview just a little bit after this, I think she had success but a really different path. People looking at crowd investing think that you probably have to have a huge social media following. You got to be well-known. You have to already just have thousands of potential investors in the gate.

Tell them your process to success -- how you were able to distinguish yourself and how you went about doing that and how you ultimately became successful in that path of crowd investing because I do think it's a new way of getting funding that many of us are looking at now.

MAX
And also diverse founders are being really successful in equity crowdfunding which is… Again, I think the numbers of us underrepresented founders that have been successful in equity crowd funding is a higher percentage than diver… You know, underrepresented and underestimated founders have been successful in venture capital, right?

ROB
Yeah, the numbers are ridiculous.

MAX
Yeah. Those are super small in equity crowdfunding. Again, still nascent but we're doing really well. I think we're on our eighth black woman to raise over a million dollars on equity crowdfunding. That’s insane.

So Dawn had probably more of a social following but I relied on an email list. I had a network from when I worked at the White House, from when I was a management consultant from my business school days. I had a huge email list and a huge network that I could go after. That is actually important. That is critical. You cannot do a successful equity crowdfund, I think, without that. But it doesn't have to be social media. You don't have to have a blue check mark to do it but you do have to have some kind of list.

ROB
How large was your email list?

MAX
Over 10,000 people.

ROB
Yeah, that’s a good size.

ROB
Yeah, that’s the list I started with. And that's the important part is you do have to start with a list because everyone, I think… Especially for those of us who have been super successful in equity crowdfunding, we give off this vibe that equity crowdfunding is so easy. It's like online dating. It's like you just put up a profile and everyone likes to marry you.

ROB
You did [swipe laugh - 27:04]. You’re a stud.

MAX
Yeah.

ROB
Yeah. [Laughter]

MAX
No, a lot of work goes into that profile photo, right? It's the same thing with equity crowdfunding. A lot of work goes into… It's almost like B2B versus B2C, right?

ROB
Right.

MAX
Both of them are really hard but B2C requires a marketing team and B2B requires a sales team. It’s the same hard, it's just a different team or a different skill set.

ROB
Right. So it requires a marketing team and a marketing strategy and a market that knows you specifically. I think that's really important to point out.
It's funny, the survey we did in terms of what were the biggest issues with diverse founders in terms of getting access to capital, the number one answer was the “Lack of the network.” And that's one of the biggest issues. My hope is that this platform will help to build that. That's my goal with this platform because people I think underestimate the importance of relationships. Relationships is how you get funding. People think like, “Okay, it's transactional.” It's relationships first and people knew you, believed in you over the years.

And you have credibility with this. I’ll say it, you worked for Teach for America. You worked for the White House. It’s not like you came out of the blue and said, “Let me come up with this idea to help kids and parents with educational opportunities” and didn't have any actual center in that. So I tell people, “You have to know what problem are you solving and why are you the one to solve it?”

MAX
Yeah.

ROB
And then, “Do you have a network behind you that understands that you're the right person to actually do this?” So you've come there. I didn't think about it from the point of view of if you're dealing with a sales team versus a marketing team. So you have to have a really good marketing team for your crowd investing strategy.

MAX
Exactly.

ROB
Tell me what you look for in a marketing team and what you think helped make you successful. You already had the market but what in the marketing team that gave you advice?

MAX
Well there was no marketing team.

ROB
Oh it was just you, okay.

MAX
It was just me. I was the marketing team.

ROB
Okay. Well look, how much did you raise online? You raised them… Was it $1.2 million?

MAX
$1.7…
ROB
1.7 -- just a little bit [of change there - 29:19].

MAX
…with this marketing team.

ROB
Yeah, with one person. Okay, tell me how you went about your marketing. So how did you go out there and start the process?

MAX
So the other thing I want to focus on which you just mentioned is… Okay, fine. There might be someone listening to this who's like, “Well I didn't go to a fancy business school. I didn't work at the White House. I don't have that list of 10,000 plus close friends and family.” You can build that. And I built it over time, too. Right?

ROB
Right.

MAX
A lot of that list in the last couple of years running Caribu was from people I met at conferences. I did pitch competitions like a crazy person. My whole first year, we were bootstrapped and we won cash and prizes from being the winner or finalist in over 30 pitch competitions. At each of those pitch competitions, I met investors. I met judges. The judges were usually investors. They were ecosystem builders. I also built that list over some years.

So for anyone who's freaking out and being like, “Oh my god, I can't do this,” you can. Just know that you need to start with a list. So if you don't have that list, you need to give yourself six months to build that list. And then what are the things that you're doing to build that list?

I wouldn't start a crowdfunding campaign whether it's rewards-based product crowdfunding which is Kickstarter and Indiegogo or equity crowdfunding. I would not start either one of those without a list. And then once you have that list, it is a marketing play.

The entire summer, I slept four hours a night which is my usual but it was… I usually go to bed around 3 a.m. but now I was going to bed at 6 a.m. just because I was just so slammed. Right?

ROB
Right.

MAX
You’re emailing that list constantly. You're setting up your campaigns. Did they open? Did they not open? What did they do? Did they finally kind of invest?
ROB
You used MailChimp for that or Constant Contact?

MAX
Neither.

ROB
Neither?

MAX
I do everything through Gmail and YAMM. YAMM is a mail merge tool called “Yet Another Mail Merge” and it's super-fast and easy. The Mailchimps of the world just… I don't know. Anyways, I don't like them.

ROB
Yeah. That’s okay.

MAX
And it's also more personal to just get a Gmail from someone instead of something that looks super-designed then it feels like, “Oh this is…” Because remember, these are people that know you and trust you and you're building that validity.

That was another thing that we had in our back pocket was we had been in the press a million times. We had celebrity kind of partnerships. We had really big brands that had invested in us already. So we had that credibility. Sometimes, when people go into equity crowdfunding, they're doing this as they launch. So whatever you can do to prove that to everybody--

ROB
So you don't advise that. It sounds like you advise having some runway of credibility, one way or another.

MAX
Yeah. I mean you don't have to but it makes things easier is what I’ll say because people… You know, again, they're investing in you. They don't know you personally, sometimes, right?

ROB
Right.

MAX
So 30% of our investors were people that I knew from that list and 70% were people I’ve never met in my life.

ROB
They just saw your social credibility and assumed like, “This is somebody I want to take an opportunity with and take a risk with,” which is… I mean Dawn has a similar story, really. I mean the reason why she has that huge following is because she's been doing this similar path, right? She was out there making the pitches. I think Angela Benton has… She's been in this for a long time, right?

MAX
Yeah.

ROB
I don't even know her that well but I know she talks about data and about the importance of protecting your own data is. I know when I listened to her, I believed her. I think that comes down to it.

MAX
Yeah. And that's what you're doing is you're reaching out to people on LinkedIn. You're reaching out to people that you're cold on LinkedIn, telling them about your raise. You're looking for everyone that says “Angel Investor” in their bio.

ROB
How much time would you say you were doing that because you said you were up to a while. I mean I need some sleep so good for you. How much time would you spend just reaching out, just putting stuff on Instagram and whatever. That was all your time basically, sounds like.

MAX
Yeah. I mean it's literally your full-time job. That's another hard part about doing equity crowdfunding when you're new.

Well here's the thing. Let me put it this way. Reaching a million is going to be a lot harder if you're new to the game, right? Your product is new. You don't have that validation. You don't have that huge email list. I personally think the only way to get to a million or a million plus is if you have those things in place.

So equity crowdfunding might still be an option for you to raise $200k or $500k. Most people stall around $200k, so that's a good goal. But remember that there's costs associated with it. There's your time. There's the marketing that you're doing it. There's the time away from your business where you're really just focused on this. There's the fee that you have to pay. Equity crowdfunding comes with a fee. There's the time before you get the cash because it all goes into escrow and things have to be like, you know, have all that--

ROB
And did you actually advertise on social media? You did that, right?
MAX
We did and we were actually really successful. We had a really high ROI on our [crosstalk - 34:18]--

ROB
I want to tell people how important that is. But you have to invest, my guess, in research and marketing and doing digital targeting. This stuff works but you have to know your market. You knew your market.

MAX
We did. You're right -- you have to spend money to make money, right? So a lot of the Facebook ads, because they were doing so well, it was a good investment. Some people have spent like $25,000 just in the Facebook ads and marketing to get their campaign to be successful. I don't think we spent more than $5000.

ROB
That’s really good.

MAX
Our campaign was so insanely successful in so many different ways -- in the word-of-mouth. And then we had celebrities who were investing. We had two NFL players invest which then kind of made it even more viral. We hit the one million in two months which is unheard of.

ROB
That’s incredible.

MAX
We hit the 1.7 in three months. The campaign took a life of its own. And the other really cool thing--

So some people, if you're in the consumer space, you… Like in breweries, microbreweries are really popular on equity crowdfunding because you have a membership list and so your customers become your investors. With Caribu, we knew our customers weren't going to be investors. That just wasn't--

Remember, an equity crowdfunding investor is a very specific type of person. That's why social media followings, I don't think actually makes any difference because just because someone's following on social media doesn't mean that they fit that criteria of wanting to be an equity crowdfunding investor which is why the Facebook ads are actually so important because you can target--

I mean it's a young dude. That's the demographic of an equity crowdfunding investor, right? But we broke that model because we ended up with investors that became customers. So the glam-mas were like--

ROB
That’s awesome. That's great.

MAX
Yeah. The glam-mas were like--

ROB
[Indiscernible - 36:04].

MAX
Yes. It was amazing. It was so perfect. I mean literally, the best decision we ever made was doing equity crowdfunding because we ended up with all these glam-mas that were like, “I have this pain point and I can afford to invest and I want to invest and I want this to be the next Lyft or Way…” and so they would invest. And then they would start using Caribu because they were like, “I have this problem.” So that was great.

ROB
No, that is great. Let’s have a talk about building a team and founders and the struggles you could have there. In the survey, we asked, generally, like, “What’s the most important aspect in finding a co-founder? Is it their character? Is it their commitment to the mission? Is it their ability to raise money or have some other ability that you may not have?” Is it one of those or is it something… You know, what would you choose out of those -- commitment, character, the ability to fill something that you may not be that good at? What's most important out of those three?

MAX
I would say there's two and the two are non-negotiable. One is trust and the other is complementary skill set.

ROB
Yeah, that goes the character. “Character,” yeah.

MAX
Yeah. I feel like you can trust someone implicitly but they don't have a complimentary skill set to you, right?

ROB
Yeah.

MAX
Like you trust them but they can do the same thing you do. They want to be on the pitch competition stage and you're like, “You need to go build the company” or “You need to go build the product.”

But someone may have a complimentary skill set to you but if you can't trust them, if you don't believe that they're going to work a thousand percent on this product like you are… I mean that's a big reason why founders kind of break up because both are not as committed or one has like a life situation that comes up and they're like, “Sorry. I need money. I need to have a salary.” Those things come up. But you can't predict those.

So the two things I would always look for in a co-founder is, “Do they have a complimentary skill set to mine” -- whatever that is.

So I was the fundraiser. I needed someone who wasn't a fundraiser. I needed someone who could go build the product while I was fundraising. And he was looking for the same thing. He was like, “I can build the product but I don't want to talk to strangers.” So I was like, “Okay. Well perfect. Match made in heaven.” But we had to implicitly trust each other.

He has a wife and I spend more time with him than I think he spends with his wife. I mean you have to be obsessed. You both have. It’s like a marriage, right? You both have to be obsessed with this working.

ROB
Yeah. Did you ever get that wrong? Did you build with someone that you thought it would work and you had to figure out how to build into that? I’d love to hear that because I know we discussed that beforehand and it sound like there was something there.

MAX
Well yeah, the first startup, [Imbroville - 38:56], I had a co-founder who was a lovely person. He was awesome but we have the same skill set.

ROB
This was your former company. That was your first company.

MAX
It actually never took off because the network effects weren't there. We were trying to build like eHarmony for foodies company at a time where Foodspotting and Yelp and all these other companies were kind of taking off and they were taking our market. And for our product to work, you need networks and you need the network effects. We actually never ended up launching. But we went out to Palo alto, San Francisco area and we were trying to make it work.

But the thing, again, now that that experience taught me when looking for my next co-founder, try to not find someone that you just have a lot of fun with, who's a lot like you because then that's the problem, right? We both wanted to do marketing. We both wanted to do restaurant research. We both wanted to talk to investors because that's my skill set, that was his skill set. And that's when we realized, “Wait a second…” First of all, the idea wasn't going to work because of the market but then I think the founding relationship wasn't going to work either.

ROB
Yeah. Interesting, you had a failure to lead that way that actually left you to that. So maybe that was your answer. I don't know.

MAX
It helped with this one because I was like… When I found my co-founder at Caribu, it was so quick to be like, “Yeah, this is it.”

ROB
We want you to keep bringing in the questions you have. We're going to make sure that Max gets a chance to answer them for you.

Let me say this -- another “Ask Me Anything” -- you have a committee of three, living or dead, that you can ask for business advice, life advice, who would those three people be and why?

MAX
Mm.

ROB
I love this question.

MAX
This is like the dead people at dinner question.

ROB
[Laughter]

MAX
And also, I think it's so important. I think a lot of times the first answer is three white men, right? So I’m always thoughtful about who in the world that I listen to and a lot of these examples.

So the first person is always Nelson Mandela because I need sometimes advice on how to take the high road. [Laughter] Not even the high road but I need someone like him to be like… Yes, there are wrongs that have been done… I don't know how to say this exactly.

ROB
No, I get it. I mean because it's easy to--

MAX
You need to ignore the pettiness, right?

ROB
Yeah.

MAX
I think that's his lesson.

ROB
The microaggressions.

MAX
Yeah.

ROB
Listen, it's very tough when people say something like, “That was so stupid” but you got to figure out how to respond. That emotional response intelligence is an ongoing journey. Go ahead. -- For me, too.

MAX
Exactly, yeah.

ROB
You and I have the same type of personality, I can tell.

MAX
Yeah, yeah. Right. Because I think I can pop off, right? I remember in Invictus -- and not to boil his entire memory to a movie -- but I think that movie hit that skill that he had that I think is… It’s like a monk, right? It's such a level of self-actualization and realization that most of us haven't reached yet. So I would seek him for that type of like, “How do I just focus on the real important things?”

Golda Meir is one of my heroes. She was one of the prime ministers of Israel. She was one of the first female global leaders. I remember that there's a part of her story where she had to start a war because when you're the prime minister of Israel, you're starting a lot of wars or you get involved in them.

She was the first person -- again, stereotypically as a woman, right -- she thought of the war not as, “What are the economic benefits to this” or “What's the strategic” or kind of like, “What do we need to win here?” She thought of it as, “I’m sending children to possible death.” She thought of the human aspect of it.

ROB
Right.

MAX
And especially this is why you invest in female founders, right? This is why a lot of times we bring higher returns -- because we do take all of those things into account when we make decisions.

ROB
Yeah.

MAX
I remember when I was in business school… I went to Harvard business school where… It's the 3Ms. It's McKinsey, military and Mormons. A lot of your classes are made up of those three “M's.”

So we had a lot of military in our class. And I remember our professor started the year with, “Pay attention to when your military classmates say something” because a lot of people I think from the business world would just be like, “You don't know what the hell you're talking about, military person. You've never been with a P&L and a big decision and bringing in a billion-dollar account.”

But what the professor was trying to say is, “The military members of your class are the only ones that had to possibly make a decision where someone was going to live or die.” That still gives me chills. And I was just like, “Yeah, you have to take a lot of more…” You have to really be thoughtful about the things, the factors, that go into a decision when you are on a battlefield versus when you're in a cushy building in Manhattan. So, again, I think that's where Golda would come in where it's just like, “How do we take into account all of the human aspects of the decisions that we're making?”

ROB
Wow. That’s great.

MAX
Yeah. Those are the two that I always kind of think about. I don't have a third. I have to think of someone.

ROB
You don't have to have a third. It's fine. You know, I appreciate you being on the show. I’m going to ask you a final question.
MAX
Okay.

ROB
You have a Google ad, Facebook ad, whatever you want to say that says your beliefs, your philosophy. What would that be and why?

MAX
This is going to sound weird but in fourth grade, I became obsessed with the Nike mantra which was “Just Do It.” And ever since fourth grade, I’ve just been on a path of “Just freaking do it.”

ROB
Yeah. All right, that's pretty easy. I mean mine is, “Define yourself for yourself by yourself” because… It’s my mother. I struggled in school early on. I was put in learning disability classes and basically decided that wasn't going to be the route. It's not what I’m going to do. I know you appreciate this being in education.

So once that decision was made, it was like… This was a huge controversy. They were telling my parents that, “He's going to fail. It's never going to happen. He's not going to be able to perform at a high level in these advanced classes.”

And this teacher, particularly, that I was close to said, “Look Rob, you’re not going to be able to go to college. I’m not saying this to hurt your feelings but I don't want to set you up for failure.” And after like coming home in tears, talking to my mother, she was like, “Look, you don't have to be defined by any of their lower narrow expectations. You define yourself for yourself by yourself.”

So that's been my philosophy -- to not try to fit myself into some preconceived notion that somebody else had made up because their mind is limited. It doesn't matter to me. And my goal is to help others disrupt that. That’s why I was glad to have you on. It's been an honor to have you as part of our summit. We're going to have you back on again. I can't wait till you raise to a billion-dollar company. I’m going to go ahead and call it out to the universe that it's going to happen.

MAX
It’s coming.

ROB
Yeah.

MAX
The first Latina unicorn.
ROB
Yeah, I hear you. Max, we're going to have more because we're going to start calling the unicorns because we're going to start expecting it, right?

MAX
Absolutely.

ROB
Max Tuchman. We're going to take your questions afterwards. But I will say it has been a pleasure.

MAX
Awesome. Thanks for having me, Rob.

ROB
Thank you so much.

[END OF TRANSCRIPT]