“How This CEO Scales 8 AI Startups Without Losing Focus | Infinity Constellation (Podcast 486)

You're one of the only people I've ever heard say that, you know, I could be a trillionaire by now. Which is crazy to think that in the next, in the next few years, we will have our first human who is a trillionaire. Which, you know, I remember hearing about a billionaire when I was a little kid thinking that everybody wanted to be a millionaire, but we'd heard of a billionaire. Now everybody wants to be a billionaire, but we've heard of a trillionaire. It's ridiculous.

I believe I said if I could predict every market move, I could potentially be a trillionaire. That being said, I think, you know, there's a lot of people who are ahead of me.

All right, you're going to love this episode. Today we have the CEO and former COO of a group called Infinity Constellation. His name is Brennan Pothitas. Brennus is a very, very strong CEO, but it's really cool to know his transition and how he moved from that COO role into the CEO role of this holding company that owns eight companies in the AI space. You're going to learn a lot from him on leadership, on growth, on finance, focusing on what really matters, and also on taking care of himself as a leader, almost like someone would take care of a racehorse to make sure that they're actually ready and winning races when they are racing. So we'll see you on the inside. You can listen to all of our episodes on Apple and Spotify anywhere you listen to podcasts. You can also watch them on our Second in Command podcast YouTube channel. This will definitely be one to bookmark, to share and to probably listen to more than once. See you on the inside. So, Brandon, welcome to the Second In Command podcast.

Thanks for having me.

Yeah, looking forward to this very much. You and I just got to chat just a little bit in the back channels before we went live that you're from Portland, Oregon originally, and I had started a business up there about 30 years ago, which brought me to the West Coast. So we both have some pretty good memories and times on the west coast and Northwest. How did you end up going from, I guess, a kid coming out of school a bunch of years ago to where you are now? Give us the short story because you're now the CEO and there's a reason why we have you on the podcast because you moved from the CEO role. But how do you. What was your career to get you to the CEO of Infinity Constellation?

Yeah, that's a great question. I've always been, ever since I was a little kid, I'VE always been having my own businesses and I've been like this generalist in the business. And so I started my career actually in risk and compliance and banking, weirdly enough. And then I helped, you know, basically join one of the first neobanks called simple and Portland, Oregon. And that's really where I worked really closely with one of the co founders, Shamir, and started in a finance role but then sort of became a generalist in that and then ended up in a product role. And then from there I moved out to New York City where I helped build Bloom Credit, which was like one of the first really like credit data companies that, that was, you know, furnishing and cleaning credit data and doing like end customer APIs around credit data. And that's where I, I worked with Matt Harris, who's the, the CEO and the founder at the time, a product role, really working on software. But I ended up doing a lot more in the business itself around like sales, operations, recruiting. And so even though I had sort of a VP of product tile, I, I would have if I looked back now I'm like, I was really like a coo. And then I went on to build a couple different insurance companies. And from when I sold my last insurance company, Butter, to Odeco, which is supply chain company, the founder of Invisible, which is one of the world's largest AI data training companies, reached out to me and said, hey, would you help us spin businesses out? Because we have a really large AI data training business and they're serving the Fortune 500 of the world, sort of being Palantir for operations and they were trying to have us build new companies and we were talking about building this Holdco and I wanted to be a founder in that Holdco and they were like, great, well you should come on as COO and support the team. And we need a lot of help on, you know, finance and operations and recruiting and reporting. And so that's, you know, that was the first time I had the CEO role and it lasted all of, I don't know, like maybe 90 days or 120 days. But then I look back at my career and really like just being, being sort of internal CEO or being generalist is something I played a couple times in different roles in the past and it fit really nicely. So that's how, that's how I sort of like came from Portland and ended up being a CEO in New York.

I love that. All right, so you look like you're about 24. You're clearly not. You got the, the benefit of some age going for you. How, how old are you now? Mid-30s.

I just turned 38 tomorrow, actually.

Okay, so same, Same, same age roughly as my wife. 38. So you're, you've been around long enough to have done what you've done? Yep. What do you think were the major lessons from kind of the crisis of meaning? Did you have any lessons from the edge where you were, you know, on the cusp of getting fired or on the cusp of pulling all your hair out or on the cusp of stressing out that you can talk about kind of some of those lessons for us?

Yeah, I mean, I think balance and mental health is incredibly important.

Right.

And so I talk to founders every day because I'm trying to recruit them and to build stuff with us. And it's really important to not only be 10x good at your craft. Right. But you also have to love it because then you're going to outwork everyone around it. And the only way you're going to into that flow state is if you're exercising, you're sleeping well, you're doing whatever charges you up. Because if you push yourself. There was a role I had many years ago where I tried to just brute force the role and I ended up just like kind of breaking and failing in a lot of ways. And that was really pivotal to me to get like my mental health in order, get my fitness in order, get all aspects of my life in order because it creates higher performance. And that's, that's probably like my first biggest learning. And then my next is like, don't outsource your problems. And so I used to kind of probably have like a, I guess I would say a confidence issue around, oh, I really don't know how to do xyz. So like, I'm going to find someone and hire them to do it. And a lot of founders, I think, try to just like pay to make that pain go away. And that, that I think just drives you to your problems in a Ferrari. Like you're basically just burn a bunch of cash and you have to really learn that problem yourself. Then you're going to have the expertise to like, know who's really good and credible to be able to solve that problem. And turns out like you might actually end up being like the expert on that problem yourself. And so that's something I'm always like reminding my team, reminding myself to do. But those are like my two big levers.

That's interesting. I don't think I've ever heard anyone talk about that outsourcing your problems. When I was replaced as the COO for 1, 800, got junk. I took them from 2 million to 106 million. They brought in the former president of Starbucks USA to bring my replacement took about a year to find her and she was let go a year later. And she was definitely outsourcing the problem. She wouldn't listen to the franchisees, she wouldn't listen to the front line. It was always hire these big corporate consultants to come in. And I think she just wasn't even close enough to the core of the business to really even get it, which kind of makes sense. So on, on some of these, these stages of your growth, are there any big lessons from the transitions that you pulled when you move from one company to another? I think we often forget about those transitions, but did you ever learn anything in those? And starting in a new company, how to figure out the new company quickly, how to build relationships with people that are already there? You know, any of those kinds of lessons that come to mind?

I mean I think this kind of goes in line with the outsourcing of your problems is like get down really tactical on the data and the customer. And I think a lot of people talk about this like at least in like startup land and scale land, like you want to go down, understand the customer's needs, understand the data, what's really driving the business. And whether you're in a finance role, CEO role or any, any role in the business, like what are the drivers of your business? And so I'm you know, usually in like an interview or when I'm coming into any new company, I'm like, well, creating a new company. Well, what are the drivers of the business? Where are we constrained? Are we going to be demand constrained because supply constrained? What's our power? What's our advantage? Are we counter positioning the market? Then I go in and say okay, let me try to like prove that wrong or prove that right. Like where, where am I wrong? And you know, I started my career in risk management and compliance and banking and you know, I had a, I had a really like awesome VP at the time. And she would tell me like if you can't explain the risk like you, you're not, you can't write this report if you can't explain to me what the risk is here. And so that's like one of my favorite questions of myself and of people in the business is like, well like what's the risk? Like what's the business risk? And I spend a lot of time Trying to understand that as quickly as possible. And then especially in like really fast evolving markets like AI or in like Black Swan events, you know, when there's like a recession or, or something like that, like you have to understand those risks change. And so like that's, that's something I like really dig into to like, you know, when I'm creating a new company or coming into a new role or, or anything. And it's just been instilled in me since, you know, my early 20s in my career.

I think there's a correlation between that and, and something Elon Musk said about a year ago, which is if, if you as the CEO or COO of your company don't know the one big problem facing your company, you are the problem. Right? So like if you can't explain this risk, you're the risk. Right. There's something interesting there in terms of taking care of yourself. And then I want to ask you a little bit about Infinity Constellation, but in terms of taking care of yourself, what is your specific. Do you have like a morning routine, do you have an afternoon routine? And do you treat taking care of yourself as kind of part of your core responsibility? Like do you look at getting to the gym or you know, going to yoga or working health habits? Do you ever take this as oh, I'm taking time away from work or do you look at this as you're like a racehorse and you need to take time to take care of the racehorse.

In my early part of my career, I was very scarcity minded and I was all about grinding it out and grinding out every inch in the business, which I think there's times when that's important, you need to hit the afterburners. But fundamentally most of these high growth businesses, and I'm sure like with 1-800-junk like there's power law advantages like hiring the right employee, doing the right, you know, ad like really spending that right time. And you have to be in a very like present flow state of mind to be able to execute on that stuff. And so as I sort of transition into different roles, like for me it's really like part of my job. And if I'm not doing that, I'm, I'm failing because I'm the biggest risk to the business because I'm spiky, I'm under optimized, I'm not communicating well to my board. Usually communication completely drops like when, when you're, when you're not taking care of yourself. And so that regiment looks like I, this year I actually Cut alcohol completely, which was a huge lever. And I know everyone's talking about that right now, but I organically did that. And so, you know, like all frosty CEOs, I struggle with anxiety or cos struggle with anxiety. And so taking. Taking alcohol as a depressant out, like, really helped. I make sure I get over seven hours of sleep a night and plug to eight sleep. They like boost my REM and boost my other sleep by like about 20, 25%, which really matters. But the biggest thing is whether I have to do it in the morning or I just do it on my time. I have my team book out at least an hour for me to weightlift multiple times a week, like over three times. And I lift heavy, heavy weights. And I just, you know, for me, like, it might be Pilates, it might be yoga, it might be going for a hike, but just that movement. But for me personally, Olympic lifting really took me back into, like, you know, when I was playing sports in high school again. And I just, like, really, really love it. So it almost gets into, like a meditative state for me. I won't look at calls, won't look at emails, and I just focus on that. And that's me time. And more time than not, I come out of that and I go, and I have an idea and I go, oh, my God, I don't have to text this. I have to text this person right now. Because I just thought of this and it let my brain process. And what I found out is that this zoom world where we're in zooms as sea levels back to back to back to back. You're. You're getting all your sort of brain power drained and you're not able to process where, if you remember when we're all like, in person or if you're in New York walking around when I'd walk between meetings, that's actually buffering time to then reflect on that, think about it, be creative. And so I've put a lot of stuff to just get creativity back in there. And then the last thing I do is, you know, I've done executive coaches before in my past, but, like, I also have a pretty, like, regular therapy routine as well for, like, the personal side of my life. And. And then the one thing that, you know, I've taken from others is I generally when I'm home every day at like 6, I. I make sure I'm there cooking with my wife and being present with my wife. She's a repeat founder too. And that's just something we do and I might do that, go to bed and do emails later. But like that's just like part of my routine. And so all those things together, like family health, mental health, physical, come together to help me perform better. So I, I, I pretty much like explained to, you know, my therapist or people I'm training with, I'm like, I'm like a high performance athlete. Like I'm working in AI startups and I'm create, I created eight of them. Our business is growing really fast. Like I need to eke out every bit of performance possibly can. And so I'm always like looking for new ways to sort of like eek that out. And I wish I had that. Like this mindset has sort of been something I've adopted really recently in the last couple years. I wish I would have like when I was 24 figured this out because I would have been way ahead of where I'm at now. So.

Yeah, totally got it. Totally agree. And I, I quit drinking two years and, and two weeks ago. Decisions I ever did, it certainly gets way easier. All right, so Infinity Constellation, I want to find out a little bit about the business and then I want to talk to you about the transition that you've made from COO to CEO and what that transition was like and what the differences in the roles are. So tell us a little bit about Infinity Constellation.

Yeah, so Infinity was born out of a company called Invisible. And Invisible helps train 80% of the world's LLMs and then helps implement those within the Fortune 500. So like really large businesses, AI training and applied AI. The founder Francis basically came to me because I was an early, I was their first enterprise customer many years ago. And him and the board approached me and asked me to help be CEO of a holding company that they were concepting where we would find AI service businesses and launch them. And so we were struggling with the innovators dilemma, right where we have one really big customer over here. But how do we launch these, these small businesses now, but they could be a billion dollar disruptive business tomorrow. And I think that's a problem every business has around allocation and budgeting. And so what we came up with is first we were like, okay, should we do a venture fund or should we do a PE model? And we realized that actually a Holdco is, is a great, a really, really great model for this. I think there's a Canadian company, Constellation Software that I think did this. And there's also a lot of like the most famous is Berkshire Hathaway, but there's ones for dating apps and crypto and cpg. And the, the benefit of a holding company is that you can be very capital efficient and human efficient and equity efficient. And so we created the first AI holdco. We have eight businesses. We've gone basically 0 to 6 million of ARR in 12 months and then we just raised 11.5 million. But what those businesses look like is we have a design as a service, business radiance and so it's the best in the world. Design fast, better. And, and the secret is, is we take AI process platforms and we build those around designers. Another business, Everest. We figured out that a lot of people are trying to commoditize executive assistance with AI. I'm sure you've seen a lot of the like $100 a month, you know, scheduling EA. We actually figured out, we're like no, no, people are really important. Let's go find the best EAs in the world from like tier one venture funds. But then let's recruit them and then build tech around them so CEOs COOs like yourself could basically have a best in class EA with the tech around them so they're more efficient, better, faster. And so we've done this eight times and we, we generally go and hunt and find a paired like a repeat founder and we place an operating team and then we find a great applied AI person and we build a business and we seed it and so that's how it works. And you know, for me it's been a pretty incredible process because I started really foundationally building this business as a coo and then the board wanted me to come in and be CEO and raise external money and launch externally from Invisible, which we just finished. And so we're very happy about that and you know, the rest is hopefully going to be history.

But I love the model. I love, I love how almost infinitely scalable it is because you have so many different roles that you can hire around and empower and then so many different that you can scale out into different categories or verticals and it's, and it follows the outage. I've been saying for about probably two years now that you know, employees don't have to be worried about being replaced by AI, but employees have to be terrified about getting replaced by employees who use AI. Yes, it's, it's kind of like 25 years ago when I walked into, I can't believe it was 25 years ago.

Holy.

25 years ago I walked into 1 800, got junk and the CEO looked at me and he was laughing. He goes, you have a laptop. He goes, what, are you going to carry that from meeting to meeting? I'm like, yes, that's exactly what I'm going to do. And two days later Brian went out and bought a laptop because he's like, oh, I get it. Right. And now it's completely ridiculous to think that you would even want to have a desktop like a laptop. So it's a tool. And so for you guys, one of the crux isn't really coming up with new ideas. It is around people, right? It is around recruiting great CEOs and COOs. So what's your model for recruiting great people? And, and do you work with executive recruiters on that? Do you just leverage PR for that? Can you kind of talk to us about what you do?

We go on some world class podcasts like this and then no, but largely we are people constrained and so we have access to capital. Our business grows fast, we know our model works and so really it's finding the right people who want to build with us. And so we typically go out to our network so you can go to our site and you can, you can apply. We have a great careers page and across our eight companies and then we're probably going to launch another three later this year. We're looking for right sea levels, sea levels, right operators and our vibe is like where we start capital light, we build a real business with profitable unit economics and we, we like people that want to get in and build with us, that have a good track record but really want to apply AI to a services space. And so you know, typically I'm finding people across all different industries, all different stages of career and it really comes down to just, you know, are you, do you believe AI is going to be fundamentally like disruptive and then two, like do you have an ability to come and put your shoulder against something and make some motion? And that's at the C level, the CEO level, CTO and on. And yeah, we're, we're definitely going be hiring a lot this year because we need more mortgage.

And my, my guess would be that you're hiring in the middle to younger part of Gen Y. You're hiring the 26 to 40 year because they've got some business experience but a tech stack experience. Right. They actually understand and embrace technology. Whereas you look at a Gen Xer like me, I'm at the first year of Gen X, I'm almost a technical luddite. I'm, you know, I'll be 60 years old in October that I'm not your guy, even though I have all the operational experience. Is that true?

I, I think we, like, for me, it's a state of mind. You know, I think in a case like you, like, you come in with a great background in the service industry. We don't know, like, that's really, really valuable. Like, I think Elon Musk said, I'm.

Not looking for, I'm not looking for a job. I was just.

But like, yeah, I think Elon Musk said that like most foundational models have like sucked up all the available data on the Internet and now it's like the thing that, that, that isn't on the Internet, that's really valuable. And so a lot of people that are in services career are actually really valuable C levels to us. And so for, for our team, we're, we're really great at hiring applied AI people. And so I actually have some, some CEOs. Some of them are not successful. CEOs are like, definitely. They're not millennials and they're not Gen Z. So like, you know, I won't call them out, but like, I think that's a little bit of the secret sauce is like applying that, that deep expertise plus the, you know, the AI angle. Whereas conversely, like some of our best AI engineers are really early career folks because the engineering is actually completely changing and how you prompt engineer is really different than how you code. And so that's, that's just like, it's, it's very interesting, like roll by roll, how we're being disruptive or being disrupted right now by AI in general, you know, Interesting.

Well, I, I was a reference for Elon and Kimble in their very first round of funding for Zip2 back in January of 95 when they, they wanted to raise $600,000 for Zip2. And Kimball called me that night, he's like, what did you tell them? I'm like, did I screw up? He goes, no, we wanted 600 grand. They gave us 3 million. That was 30 years ago. But they based it all on his operational experience. He didn't know anything. And Elon was unbackable because he was the tech guy. Well, I've got a couple of referrals I'll make for you, only offline. I've got three different amazing search firms that specialize only in kind of C level talent, but I also have a fourth that only specializes in kind of director level ops, people that are really, really strongly trained. I love that all of them will be kind of good secret weapons when you're on a growth trajectory because it's how fast you can bring the good people in. Right. You lose so much time where momentum is momentum. So talk about, talk about your. Go ahead.

No, and I was just going to be like. And those kind of firms are great because they make sure you don't drop the bar. You know, it's so easy to like, in the CEO or CEO role just be like, wow, this is painful. I'm just going to hire someone for it. And I think having like a really, really good exec search and really good executive search partners helps make sure that bar stays really high.

So, yeah, I refer people through our partners. We have about 15 different partners for the CEO alliance, but three that are in the recruiting space that I refer any companies to them. And they take really good care of people because they get so many referrals. The question I have for you around your growth. So you came into infinity. At one point, you were the COO of Infinity, and now you're the CEO when you were the coo. Talk to us about what your role was.

It was really about. I mean, I first came in and we had the concept, like the conceptions of a bunch of ideas and we had an idea of the structure, but it was really to partner with the executive team and get reporting in line, get financial, like, get financial reporting in line, get. Get the idea of infinity together. And so it was like very, I'd say it's like very internal focused with like our different businesses. And so it was a lot of, like, reporting. It was a lot of operations. It was a lot of making sure that data and numbers are reliable and making sure that the businesses were positioned appropriately and like, really working. And especially in a holdco where I'm building different businesses, it's like working and supporting those CEOs in a really tactical way around, like, we automate finances, it, H R and legal. So it's like putting a lot of that stuff on rails. And that. That was largely like, what I was focused on.

And then. Did you have a finance background coming into this? You did. Okay, that. Because I know you mentioned finance and analytic and kind of the compliance stuff. So you had a finance background, you understood data, you understood that's. Do you think you could be successful in your role without that?

No. And. And you know, I have a master's in finance and before that, econ. And so I got very familiar with P and L and risk early in my career. And it's something like, I don't think you have to come from a finance background to be really successful as like a CEO or COO or even head of marketing, I think. But you do have to eventually, like, learn that, learn what drives the business, learn how your business makes money or loses it, and then learn how you can, like, mitigate that to a certain degree. And so that's something I've just spent a lot of time with over my career. So, yeah, I feel I'm very comfortable in that space.

Well, and then there's also the cash flow component. People always talk about making and saving money, but they don't talk about how cash is your oxygen and you can suck it out of the business even though you're profitable because you don't have the right either unit economics or the, the cash flow conversion of your cost acquisition and lifetime value.

Our, our best companies are positioned the best, and it's all around cash flow. And so that's actually the fun thing about building in a Holdco is you get to sort of like, see a bunch of different businesses over time in different industries. And that's been an early learning. We've, we've basically pulled out. Is that, like, positioning is everything. And if you position around pricing and services where you can have really strong cash flow, you deliver a great product to your customers to deliver something awesome for shareholders. And it's just, it's funny how, you know, I wouldn't have necessarily said, like, I've always heard of positioning and thought a lot about it, but I didn't realize, like, how key. Like, it's probably the, the top, the top thing to do. And they're, you know, there aren't. They don't really have a, a close second, in my opinion.

Yeah, I know. I agree. You see, you definitely see it through the right lens. Okay, so in the COO role, you walked us through what, what that was. What's changed now that you're CEO? What do you not focus on or how have you decided or been able to kind of delegate and elevate from what, what you were working on?

Yeah, I mean, I think it. It's a lens shift. Right. And you, you still have to think about the same risks. You still have to think about the drivers of the business. But, you know, I had a much more internal lens as a coo, whereas now as a CEO, I have a really external lens. So I spend a lot of time, like, my main job is to give context to my investors and my board so that they can weigh in and like, provide the right governance and the right input, especially like a really fast growing business. I sort of joke, like, we have eight kids and I have a lot of aunts and uncles that help with those kids. And like, it's a lot to like, explain what's going on with all those, you know, making sure the numbers are right, thinking about strategy, thinking about positioning, recruiting that next great board member, recruiting that next great CEO or coo. And it's very much external focused, whereas I was much more internal focused, if that makes sense.

Yeah. When I was in Seattle in the late 90s, I was running an Internet company and we sold to a Holdco that owned about eight different companies. It was called Shop Now. And when Shop now, they had a group of kind of internal shared services that all the eight companies used. And then the eight companies tried to do business with each other as much as possible. Some of that, I think, was a bit of the Internet shell game was like, I buy a million dollars in advertising from you, you buy a million from me. We both booked a million in revenue, but we both booked a million in expenses. I mean, I don't know how that was even legal. What kind of shared services do you run now amongst the eight companies? Or do you operate them as completely different businesses with completely different teams?

I mean, we definitely operate the fundamental business as completely different teams with different businesses. So we have a lead engineer, we have a CEO. They care about their product, their delivery, their marketing, their positioning. But then on the back end, because as a Holdco, I need really good, strong, accurate financial data to make allocation decision. Things like we centralize finance, we centralize information technology to have controls over access and security, which is really important. And then we centralize HR as well, because we find across all those, you get economies of scale. And then that's also like, whenever you're talking to a founder and they want to come build, you're like, hey, you can actually just start selling and building your product tomorrow. Like, we have all this infrastructure in place that you normally would spend a year putting together, and we have it for you at your fingertips so you can focus on the right thing to build. It's, it's pretty attractive. So we, we put a lot of effort or the whole team, but I, I spent a lot of my first part as CEO, like, really getting that foundation in place. And now as CEO, I'm out, you know, singing the gospel around why that's awesome. To build and hold Go.

So one of my mantras in business has always been that a leader's core job is to grow people, right? To grow the skills and the confidence and the connections of our direct reports. And it's one of the areas that I feel like most startups and even early stage VC fund or PE funded companies are really lacking. They tend to get good finance expertise, they tend to get good governance expertise, they tend to get some good connections from biz dev. But nobody really drops in to teach the management and leadership team how to run meetings and how to do interviews and how to coach people and how to train people and how to run like. So you have all these managers who think the answer to everything is to add more people and that that's not the answer to everything. Anything other than more complexity. How do you, how do you help or do you help these companies or do you just hire leaders that are good at that?

I think it's actually, I think it's a great question there, I thought a lot about this and there's actually, there's venture funds out there that offer really great services around that stuff. And I think a lot are trying to differentiate with their platform team. And you've seen that over the last like five years, like, especially as more like, you know, 20 years ago there was a small amount of venture funds and now you can raise from thousands. And you know, like even in Europe, like someone the other day was saying there used to be 50 funds, now there's 2,000 in Europe. Like even regionally there's so much competition. I actually think a lot of people have tried to diversify in this, but I actually think it comes down to the incentive model of the business itself. And so the reason that a lot of founders, and this is my opinion, the reason that a lot of founders go and I think just try to solve their problems with hiring is, you know, you raise 5 million bucks and then you go and you look out and you're like, okay, I gotta burn this in 18 months. What am I gonna do? Burn that? A lot of them don't have great go to market channels or great other things. So you can put a slug into that. But then ultimately like, okay, I'm gonna hike these hires. And it's like, well, what if now I can Instead of raising five, I can raise 10. Oh, just hire two people instead or three. And I think that works all the way up market during zero interest rate, where like you had companies raising hundreds of millions of dollars and they're like, okay, I'll hire 20 marketing people and then that'll work. And so I really think it, it comes down to like, you know, incentive of the model around where you Burn and deploy. And for me, like, that's what's so attractive about the Holdco is that we start really small with a cash commit, but we, we don't. It's not hey, go burn 5 million bucks, it's hey, build a profitable business with AI and try to do it with as little people as possible as fast as you can. And when you flip that incentive, it magic happens. And that I think is going to be the important thing. And I look at tech as a whole, and I look at how much value tech has created over the last 30 years, but then I think also like how much extra capital was probably deployed into things that it didn't need to to create that value. And it's just something I spend a lot of time thinking about. Which is why that's a great question.

Well, yeah, even, just even like. And for people that don't know the term burning money, that means spending money or investing money, usually at a pace that's faster than you're getting a return. So you're spending it and you're losing money quicker, knowing that you're going to go to the next funding round, which I've hated that model forever. I've hated it. And I remember being at a conference about 10 years ago. I was sitting beside the founder of Hootsuite, Ryan Holmes, who I ended up coaching and running the strategic planning for a couple years. We were sitting, talking at a table and finally I kind of pounded my hand on the table. I said, will someone stop talking about raising money and start talking about making money? And he looked at me, he goes, I agree we have to turn to profits. Like, we have to get like, I don't understand where this idea has come from about just grow at all costs. And. But when you're raising money, you guys are in the process right now of raising 11 million bucks. Eleven and a half million bucks.

Yeah, we just finished raising our first raise of eleven and a half million.

Okay, so you're raising money. What kind of is that institutional money? Is it friends and family? Is it angel? What's the level it makes of investors?

It's a mix of angel, family, office and venture.

Okay, so from these different groups, they have different expected, you know, return rates. Right. Your family wants to get their money back, hopes to get their money back, but they're going to be a little bit more patient than a, you know, a VC firm or a private equity firm that needs it to be in a certain number of years. How do you, how do you manage those expectations? And now where Interest rates are so much higher it feels like their expectations are bigger. Is that true or are, are their expectations more tampered because of the market that we're in?

I mean I think you look back to you know, multiples or you look at multiples over time and you look at as well as like returns and the tech sector over time. Like I think fund returns are at a, at a pretty like low position relative to like the 90s and early 2000s. Yes. And so I think LPs and everybody would like more and for the model to work like they need to. Ironically like I think a lot of folks need to invest in the next Facebook, LinkedIn, Microsoft, Oai. But a lot of those businesses actually didn't take hundreds and hundreds of millions to make their model work really well. It's all back to positioning but for us like it's less around source of capital, it's more around what like like mindedness as well as like understanding our story and then the value you can bring in. So freestyle is our lead investor. Maria Palma is our, is our partner there. She's incredible, right. And she's venture backed with you know, great venture LPs and she sees the story of AI services as something where it has a massive TAM. We can get there if we're patient and we build the right businesses profitably. And she's very aligned with our capital efficiency. She's very aligned with how we build businesses and she's really excited about it.

Right.

Whereas the flip end we have other family offices who I won't name but like you know, fairly notable and they're also massively aligned with wow. Services can be disrupted for the first time in a hundred years with tech. And yes, we have a long time view and like yes we want to be involved in this and so I think it is like a bit of a different process but different sources of capital help diversify your syndicate. But also end of the day you're bringing investors into your community and we ask them to be really involved and we're really hyper transparent and so that brings in the right people. Not which I think like the wrong impression or the wrong thing where I think maybe the market is failing to a degree is really really high multiple valuations on venture in early stages and then you look at at like the growth stage of the rounds and not seeing anyone IPO at the right multiples and I think that that's really, really risky and that's where you lose control of your company. That's where you lose, you make bad Decisions you, you bring in for the, the wrong type of management. And so that's, that's really like if I was giving like friendly founder advice would be, you know, even when we raised this first round, we were thinking of like, well, what's going to be the reasonable multiple we want to target when we ipo and like where do we think the market will be? And like we're probably gonna be wrong because that's. If I could predict that I'd be a trillionaire. But thinking about that I think is incredibly important because all these markets work together. And that's where I've seen a lot of things break right over. Raising at a bad multiple with the wrong business strategy, the wrong fundamentals. And you know that's, that's where I think the market, the market will eventually correct. The market corrects. And you know that's where you see like very low series A to series B conversion rates. Like I think everyone's like around 10 or just under that right now. You look at even lower B to C to D or like you know, D to ipo like that those rates are the lowest they've been in a long time for that.

I think it is a strange market. So are your investors now understanding that this is not a builder boss grow at all cost kind of model or are you place. Are you planning on doing a series B shortly? You know, you're raising your first round will.

So we're not constrained by capital because our businesses are gross margin positive. I won't quote specific financials because my finance guy will get mad at me. But like we have, we have solid fundamentals and our ability to create new businesses and get really rapid revenue growth in profitable segments. That some are, some there's a lot of venture players, some there are no venture players. Like we're very diversified and I think that makes our.