Steven Wolfe Pereira (Encantos) - Teaching Kids 21st Century Skills, Building a Direct to Learner EdTech Company, and Overlooked Opportunities That Make Real Impact

Hey folks, before we get started, I wanted to tell you about the Consumer VC Summit. The Consumer VC Summit is a 3-day virtual event that is focused on e-commerce, retail, and innovation. This is all happening February 23rd through 25th, 2021. Mark, Nathan, and I have really poured our souls into it. During the day is a mix of talks and panel discussions with some incredible founders and investors that focus on these sectors. In the evenings, we're going to be throwing networking events. And if you're a founder, you'll also have access to mentoring sessions, which means you'll meet 3 investors or industry professionals for feedback about your business. All of our talks and panels will also be available for replay with a ticket. Please check out summit.theconsumervc.com and enter Consumer VC for a 20% discount. This is also located in the show notes. We look forward to seeing you there. Now on to the episode. Hello and welcome to The Consumer VC. I'm your host, Mike Gelb, and on this show we talk about the world of venture capital and innovation in both consumer technology and consumer products. If you enjoy this show, please tell a friend or colleague about it and help spread the word. If you want to also search for other episodes or learn about some of the other resources that are available to you, head over to theconsumervc.com. Thank you, Samara Hernandez, for introducing me to today's guest, Steven Wolfe Pereira, co-founder and CEO of Encantos, an award-winning edtech company that believes kids learn best through play while teaching kids 21st century life skills. We discussed some of Steven's learnings working at both technology companies and communication The inspiration and insight behind Encantos, and how he introduces new brands. Without further ado, here's Steven. Steven, thank you so much for joining me today. How are you?

How you doing, Mike? I'm thrilled to be on. Thanks for having me.

So, so awesome. I think you're the first guest that also lives in Culver City as well, like me. So It's really great to have you here on the show.

I feel like you're so close by, I can reach out and touch you.

I know, I know. Exactly. If only, right? If only.

If only.

Yeah, man. Well, hey, so talk to me a little bit about the beginning. What was your initial attraction to technology and media?

So initial attraction to technology and media. I mean, I think it's one of the things where you never really know what your affinity is growing up. I think I was always attracted to technology. And if I had known that computer science was a thing, I probably would have majored in it. But I think I naturally gravitated to tech once I started my career actually in finance, in investment banking, where I got assigned to work on a lot of TMT-type deals. So technology, media, and telecom. And I worked a lot on privatizations of telecom companies in Latin America. And so that was actually my first foray into it.

No, that's terrific. And I remember when we spoke last time, you were talking about how you were, you know, working on the cloud before the cloud was a thing.

That's true, man. I was at Akamai Technologies in 1999, and that's when it was on-demand computing. You know, it was definitely— they were one of the pioneers, and no one kind of understood what they were doing, but everyone thought they were a hardware company, but they were actually doing a brand new category called content delivery. And today Akamai is about 35% of global HTTP traffic.

That's amazing. That's awesome. And I know you as well worked on the media side of things. You also worked at Univision and was involved with them on the marketing side. What I find interesting, and this is, you know, based off our conversation, I understand how your experience in media would really, really help you in terms of, you know, building Encantos. But I also found interesting was also the enterprise SaaS part as well really was helpful to your approach to starting a business. I'd love to just, if you can maybe just take us through how you think about your past in media and technology and really some of your learnings, especially on the enterprise SaaS part, and really how that has transformed and got you and really helped you with your business.

Absolutely, man. Well, it's a long, strange journey, right? I mean, it's funny how all of these things are truly connected, but I think the 3 most important macro trends of the 21st century are direct-to-consumer, you know, which is all centered around first-party data, personalization, which is only power— you know, possible and powerful when you have first-party data, And then subscription, understanding that you are now going to have a recurring revenue relationship with your customer and it fundamentally transforms the way you go to market. But I feel like a lot of that experience started by working in tech originally at Akamai Technologies. But I've been working in tech for over 2 decades and my last 3 gigs before joining Encantos full-time was actually as a CMO of different data technology companies, whether that was DataLogix, which got acquired by Oracle, Neustar, which was a public technology company that got taken private, and then the last one being Broncast, which was an AI analytics company. But I feel like the common thread was always understanding how software as a service, how understanding data and performance marketing was really going to drive and connect audiences. And I feel like all those skills are exactly the, I guess, raw materials or the ingredients for me to really kind of provide that to Encantos and bring it to edtech, which I think has been sort of lacking those skills.

Yeah, I would say, what was your attraction to edtech? And as well as, I guess, you eventually then founding Encantos? Love to learn more about the origin story.

Yeah, well, I mean, look, I pride myself on trying to be a lifelong learner. I think I've always had an affinity to education. You know, my family's from the Dominican Republic, and I think any type of immigrant family, you're always taught that the one thing that people can't take away from you is your education. So there's always a lot of value put on education, but specifically, I think I was just always inspired by learning, right? And how do you really just be a sponge and just, you know, be passionately curious and learn from anybody and everybody? And I feel like that was one of the things that I always took from me because I didn't really have that exposure. I mean, I grew up at a time when the internet wasn't really a thing. I think when I was in my senior year in college, I graduated in '95. I think they were just coming out with Pine and having email servers coming across campuses. So, you know, it was really this idea of how do you learn things? How do you learn new technologies? How do you learn new businesses and industries? And, you know, I think by starting in finance, I just got exposed to lots of different fields and I just wanted to soak it all up. But I've always been passionate about education and I always thought that at some point I would go into teaching, but it turns out that I'm just taking all of my experiences on the business and technology side and now bringing it into edtech.

That's awesome. That's awesome. So tell us, for those that aren't familiar with Enkentos, tell us a little bit about your company's mission. And also, I'd love to know too just how you think about the education space since there's so much technology that's going into it. There's so much innovation happening. I would love to kind of hear how you think about it, maybe on a macro level, and also where Enkentos Absolutely, man.

Well, I mean, first off, you know, it kind of took a pandemic to make edtech cool. I think it's kind of crazy. I mean, we started the company in 2016, and the whole idea was how do you take those kind of 3 trends that I mentioned beforehand— direct-to-consumer, personalization, and subscription— but how do we bring it to edtech, or, you know, specifically education, but using technology to really enable it? And what we wanted to do was build a direct-to- Instead of direct-to-consumer, we actually call it direct-to-learner because we're focused on kids and families. But how do you build a direct-to-learner subscription platform that is powered by brands? And I think the insight was, you know, Sesame Street kind of pioneered this ages ago, right? Like, you want to learn through play. And Maria Montessori spoke about this over a century ago, that kids learn through play. So it's not necessarily something that is new. But I think the whole idea that entertainment is candy and it could only be, you know, Toy Story 4, Frozen 2, like it's not going to have substance. That's kind of one side of the spectrum. And the other side is that education has to be serious. It's about testing and standards and, you know, all this kind of rigor around it. But it really makes it boring and it takes all the fun out of it. And one of our early advisors, Sir Ken Robinson, who has the most watched TED Talk of all time, How Schools Kill Creativity. You know, there's a lot of thought of, you know, how schools really focus more on education, but they really don't focus on learning and inspiring kids to learn how to learn. So we thought if you could take the best of entertainment and the best of education, but have it powered by technology, you know, that's kind of what we're trying to do. And the way we talk about it is we think that we're developing a brand new category called story teaching. And that really is exciting because you're taking characters and worlds that kids want to be a part of, focus on 21st century skills, the learning literacy and life skills that kids need to learn, but we're fusing it in a subscription platform with digital and physical products.

That's fascinating. And thanks so much for explaining that as well. I'd love to know how you think about when you maybe introduce a new product or how you think about the software component versus the physical goods component? Because that to me just seems quite complex, and maybe it's not, but I would love to just kind of hear your part to it.

Sure. I mean, I think part of it is really having a very clear north star. And so for us, the whole north star for, for Encantos is we want to be the home for inspiring kids to learn 21st century skills. So it actually starts with the pedagogy, right? It really starts with do you have the learning literacy and life skills that kids need to learn, but packaging it in a really fun, entertaining, engaging way? And that's where the story comes into it, the characters. And obviously we want to have cultural authenticity because if you look at kids today, over 50% of them are diverse. So really understanding the story and who is telling the story matters. But once you kind of understand the entertainment and the education side, how you bring it to life, that actually is the fun part, right? Because now you can leverage all these incredible technologies to really engage kids. And we're truly at the tipping point of the next wave of innovation because the first 5G iPhones just came out. You know, there's a lot of hype around it, but it's going to probably take a couple of years to really start to see all of the different use cases and technologies that are going to be enabled by 5G. But we're really bullish on how 5G is going to enable AR and VR in terms of every single industry, but specifically for entertainment and education. And when you think about really having integrated digital and physical experiences, that is where the story teaching gets really exciting because you can start something in an app, but the learning doesn't have to stop there. I mean, I think most parents know you can't have a kid on the screen for 8 hours at a time, right?

I mean, I'm struggling with that with, you know, my, my kindergartner going through Zoom kindergarten, right?

Like, you don't want them on a screen that long, but there obviously are a lot of advantages to learning through apps. And so once that experience is done, you could continue the learning through physical experiences, through, you know, either learning through play with, you know, products, you know, like blocks or toys or games or puzzles. There's so many different ways to have physical and digital working together and the software that can personalize those learning experiences. That's the exciting part.

No, that's really interesting. I love that. What I appreciate about it is because not only obviously we can all learn so much online and be attached, but at the same time, It's also probably not the best thing for kids to always be online, right? So also having physical goods that they can actually, you know, touch and feel and play with, that's great. And learn that way. I'd love to know, how do you think about on story teaching, how do you think about when it comes to like introducing new characters or building stories? I know that obviously you're learning about very maybe modern elements with, you know, cultural diversity, which really shouldn't be modern, but, you know, just introducing these things that maybe aren't really thought about being introduced maybe, you know, 20, 30 years ago, but would love to just kind of hear about how you think about, you know, introducing new characters.

So the way we think about it is that we're actually building franchises, right? So, you know, you could have Mickey Mouse, and you could have Peppa Pig, and you could have Ricky Chicky, which is, you know, our lead character from Canticos, which is our number one bilingual preschool brand. But I think behind all these characters, there has to be a creative, right? There has to be a beating heart of a creator that has a story they want to tell. And we're fortunate that My co-founder and kind of my partner in purpose is this woman, Susie Jaramillo, who is a world-class creative talent. She is an Emmy-nominated director, producer, artist, illustrator. She went to Pratt. She is just an incredible talent. And having someone that really knows how to tell stories and that has the eye and also the fun and the wit, right? Because it's not meant to be boring. I think that's the problem with a lot of education just in general and edtech specifically, where you're taking kind of a If you take a physical worksheet and you're just going to digitize it, that's not edtech, right? Oh, you had some kind of business rules or some machine learning around something to personalize something. That's still not enough. You really need to create the worlds that kids want to be a part of. You want the Hogwarts. That's where kids want to live. They want to be in Arendelle. They want to be a part of these worlds and have characters that they actually fall in love with, but also that they could see themselves with. So the fact that we actually have characters that look like what America looks like, right? I mean, when you have 30% of kids today being Latino and there's nothing out Literally nothing. I mean, what, you had Dora from 20 years ago? I mean, I think we can do better. So I think there's just this pent-up demand from— if, you know, 90% of new parents are millennials today, I think they've grown up in a world that is diverse. They want their kids to be citizens of the world. So how do you create characters and stories that are entertaining, engaging, but also educational? And I feel like that's the fusion that we're doing. And it's part of our secret sauce.

No, that's really inspirational, to be honest. And that's just amazing. What do you think about, you know, you're giving back and legacy and maybe What are some of those as well as a business? Because of course you're developing this new area of education, which is really exciting, but would love to know as well what you think in terms of business traits that you think might've been overlooked, nonexistent, maybe 20, 30 years ago, and that maybe you're striving for with Enkentos.

Of course. I mean, for us, it was really from the beginning, we set the company up as a public benefit corporation. So I think a lot of people are familiar with maybe the B Corp movement, using business as a force for good, And we actually took it a step further. We actually incorporated as a public benefit corporation.

So it's written into our bylaws.

We're a C-Corp just like any other C-Corp. But by being a public benefit corporation, it's not just about shareholder value, it's about stakeholder value. And probably the most famous public benefit corporation, PBC, is Patagonia. But there's so many others. You know, there's Allbirds and there's Etsy and there's Kickstarter. And, you know, there's tons of folks that have really adopted this mentality of really doing well by doing good. And part of our whole ethos is all of our brands have a cause that they support. So for Canticos, if we're the number one bilingual preschool brand, well, guess what? That brand is supporting bilingual educators and we support those teachers around the country, right? There's so few resources and just tools to help these teachers teach 2 languages. I mean, you want your kids to be kindergarten ready in 2 languages. That's what that brand is all about. So by giving back to the community, certainly there's tons of low-income communities that we support with free products and, you know, free, you know, kind of codes to the app. But we want to make sure that each of our brands has a social cause that they support.

No, that's, that's amazing. And it seems like you, you not only talk the talk, but you walk the walk in terms of building products that are helping children, but also have a company that has a triple bottom line. It's not just about financial returns, which is just amazing. So I know you brought up your 3 bands, would love to also just dive into the 3 bands that you currently have developed under Encantos and how you think about developing more brands. What's the thought process?

Sure.

So I think the fun thing is we get to be direct-to-consumer.

And because of that, it gives us a lot of freedom in terms of how we bring a brand to life. And so, you know, in previous lives when I was either at Univision or Publicis, I used to run the Walmart media business. I used to run all the multicultural media business. So I got to work with Walmart and P&G and Coke and Kraft and Heineken. So I've seen world-class brands up close. The fun thing is we now get to create world-class brands that are going to stand the test of time. I mean, they really mean something to, you know, kind of kids and families today. So we're really identifying back to the North Star of inspiring kids to learn 21st century skills. We're trying to identify those lanes that really no one has focused on. And we are creating a brand that is going to be culturally authentic, is going to have organically those 21st century skills woven into it, the learning skills like creativity, critical thinking, communication, collaboration, what they call the 4 C's, literacy skills. And it's not just, you know, kind of the reading, writing, arithmetic kind of thing, but it's also literacy around civics. Literacy around the environment, around health and wellness, STEM. I mean, there's so much that needs to be kind of understood from a literacy perspective. And then arguably one of the most important areas are life skills. Right. How do you develop the social-emotional skills that kids need, especially in a time when isolation happens through social media? Obviously, kids aren't able to interact with each other at school because of the pandemic. But these are the life skills that parents really want their kids to learn and they're not being taught them in school.

I mean, the whole idea of play-based learning really kind of ends That's what happens at kindergarten.

Once you enter elementary school, that's when you start the rigor of testing, right? And so you lose all of the Montessori-based, play-based learning. We want to continue that through our brands.

So we pick a lane like bilingual education and we've created Canto Ticos.

We picked our next brand to be Tiny Travelers. And that's all about helping kids become citizens of the world. How do you inspire kids to learn about geography, language, and culture? And so we're literally doing every country from around the world and we start all of our brands with books. But that is going to be an animated series. That's going to be a subscription app and a subscription box. And so on and so forth. So all of these brands have, again, digital and physical ways that the brand comes to life. But again, we're picking these swim lanes that are really in demand and again overlooked. And it happens to be with either diversity, equality, inclusion at the heart of the brand.

There's a number of good points in there. I think one point that I didn't think about, and it makes a lot of sense, is that as you say, after kindergarten, that's when testing starts. And that's really almost when you're, I guess, maybe formal education starts per se. So to also kind of continue that path for children. Yeah, I think that's extremely important. Obviously, this is a venture capital podcast. So we also have to talk about the fundraising side of things. And so I'd love to know, what was your approach when you first began thinking about fundraising?

Sure. Well, you know, it's exciting because we just closed our Series C, which we're super proud of. We had Charles Hudson at Precursor Ventures lead the round. And we had some really great folks participate like Jeff Weiner's Next Play Ventures. We had Steve Case's Revolution: The Rise of the Rest Fund led by David Hall. We also had some great individuals like Spencer Raskoff and our new chairman, Sal Trujillo, who was actually the first Latino to be the CEO of a Fortune 150 company. And he's been on the boards of Target and Bank of America and WPP. So I feel like we really have a great group of folks that are mission-aligned. I think that was really the key thing that we were focused on is capital is certainly a commodity and you really want people that believe in the And when you start to talk about something that is, quote unquote, edtech or impact-oriented, you have lots of folks kind of roll their eyes, right? I mean, for a long time, edtech was really not an interesting area for folks. They kind of overlooked it. And the minute that you say, oh yeah, we have some content as part of the mix, well, then that becomes like a third rail, right? Because no one wants to invest in content. No one wants to invest in a media company.

But we don't have advertising as part of our business model.

We're a subscription-based blended learning platform and we're doing direct-to-consumer brands. So it was very interesting to see that. It took a while for some folks to realize what we were building. And by design, we didn't play our whole hand from the beginning because we actually started our company in a very lean tech way. We just started with physical products, actually with books, but we hacked the system and we actually became our own publisher. And the whole idea was to really figure out how to use physical products to start to integrate them with digital products and use all of that as hooks to drive subscriptions.

But now we're at that point and I feel like it took a pandemic again to make edtech cool.

I think now everyone is realizing that edtech is an incredibly vibrant sector. There is so much to be doing in this space. And the whole idea of homeschooling and things like that, those markets are going to triple over the next 12 to 18 months.

No, that's really helpful. Thanks so much for explaining that. And that's interesting too, as well, just on the business strategy side of things, how you thought about maybe the physical good as the hook in some ways, and then getting learners to lean in to then paying for the subscription. That's a really fascinating way. I mean, what's also fascinating too is edtech now, it's a lot more popular for sure. But what's interesting as well is that DTC businesses and physical good businesses, at least tech investors have shifted away from those areas just because you don't have those growth opportunities like you did in the early 2010s, late 2000s. And was wondering, was that ever an issue, the fact that you were selling physical goods to investors or not?

Yeah, I mean, you know, it's interesting, right? Like, I mean, Disney just had their Investor Day yesterday, right? And they announced monster growth in their Disney Plus subscription app. And that is literally, I think, what you're gonna see every company kind of go through. Everyone is going to go direct-to-consumer in some way, shape, or form. So I don't view it as a fad.

I appreciate that from maybe a venture side, you know, there's an arbitrage opportunity and, you know, you want to be the first one or the second one in. But like, I'm trying to build brands that are going to like last the test time, right?

Like, we're building brands that actually mean something to the consumer. We're focused on the audience that we're serving. And by going direct, that just happens to be part of, you know, kind of the business model, right? But I don't view it as a fad. I think it's critical that by getting first-party data from a direct relationship with your customer, and because we're building a learning platform where they will grow with us over time so that we could cross-sell and upsell, that is part of that whole, you know, kind of idea of Going direct and the fact that we had both digital and physical products. Of course, when people saw like, oh, we had a book, they were scratching their heads like, what are you talking about? I don't want to be in a book business. No, no, no, no, no. This is a means to an end, but not everyone saw that in the beginning for sure.

No, that's really helpful. Yeah. I always think that it's interesting, just investors that come on the show, when you talk about brands, some of them have kind of swayed away from brands. Others are like, that's crazy. Some of them only invest in brands and love investing in brands. and won't invest in anything but brands. So I always just find this stuff really, really just interesting. So was it harder to fundraise during COVID So, you know, it's interesting.

The trajectory is we, you know, we were bootstrapped. You know, I was fortunate to have, you know, the ability to start the company after, you know, some of the exits that we had. And so we really took our time to kind of build out the model. And I feel like that is really where we're focused on trying to build this very scalable platform, because everyone in venture wants something that is venture scale, right? Everyone wants the next Facebook or whatever it is.

Well, maybe Maybe not Facebook these days, maybe Airbnb.

But, you know, it was really interesting early on. We had some initial interest from folks that were, again, very mission-aligned. And I feel that that was where I can't thank them enough.

But, you know, Mitch and Fred at Kapor Capital, they were the lead for—

we did 2 convertible notes before we did this Series C. And they were the ones that really just saw the opportunity and the fact that we were building something that maybe, you know, at that moment in time in 2017 and 2018, you know, it wasn't all there, but it was obviously a means to an end. And we were getting there. And they participated in actually all 3 rounds. But it was really getting a group of folks that believed in what we were building. And it was definitely not for a lot of folks. I mean, people either didn't like edtech or they didn't understand why we were doing books, or they thought that this was like a hit-driven business. And so we don't want to be in media. And then honestly, it was a lot of folks that didn't understand the diversity angle. You know, and I think maybe in the wake of Black Lives Matter and the murder of George Floyd, all of a sudden people now kind of care about diversity. But definitely in '17, '18, '19, it was a Yeah.

That's also just really interesting to hear. Was it harder just meeting with folks as well? I mean, I've heard investors say that establishing conviction with founders remotely has been really challenging. Did you ever sense that or not so much?

When COVID hit, I think that's where all of us were just like, wow, what's going to happen? And we definitely saw at first everyone, I think, was just shell-shocked in March, but very slowly but surely we started getting a lot of inbound because Because again, all of a sudden people were waking up to like, holy cow, everyone is going to be learning from home. 9 out of 10 on the planet are now learning at home. So we actually were able to get meetings with folks, obviously over Zoom, very easily. I think the thing of actually closing a round, like everyone will take a meeting and maybe some people are just trying to meet because they wanted to say they met with a diverse founder. I mean, we're obviously very unique because it's a full, you know, kind of diverse set of execs at the company. It's actually 4 Latinx founders. But, you know, we have an incredible mix of talent the company and we're also female majority owned. So there were a lot of interesting angles from that lens. But I think some people just took the meeting to check a box, to be candid. Some people were generally curious about, okay, I think there's something here in edtech, but it's maybe outside of my kind of comfort zone or my core competencies. But they were curious about edtech. And then legit, some people were, wow, I really see the opportunity and the fact that, you know, you have brands that are meeting this moment. We want to help you get to the next level.

But definitely, if you look at the folks that have invested in us, it's interesting that a lot A lot of them happen to be either women, people of color, or people that have kids.

I think that has been, you know, definitely folks that understand what it is that we're building. And if they don't meet that criteria, maybe it took a little bit longer for them to understand what it is.

Yeah, I think also just folks that understand the problem, right? Folks that really identify with the problem itself. That makes a lot of sense. So I would say, what is one thing that you would change about venture capital?

One thing I would change about venture capital. I think that's a really great question. I think there is perception that having impact means that you're in a nonprofit business or something like that. I feel like the whole ability, and if you read some of the research that Kapor Capital has done and they put out their impact report, you really can see that by focusing on impact, you could actually still have outsized returns at the same time. So I feel like that is kind of something that needs to be debunked. I also just feel that the whole idea of, oh, you just need to do one thing, right? Like this very linear, like you need to do one thing and just not really understand that sometimes one thing is actually integrating a couple of things. I feel like there's a lot of conversation about that because people would be like, well, why are you doing a book thing? Just do the app. And it's like, no, there's actually a reason why this is a blended learning approach and you actually need both. But some folks were like, no, I just want you to do one thing. And oh, it's kind of pattern recognition, right? Like they only understand— I've seen, you know, 50 apps, this is what they all do, you don't meet that model, so I'm not interested. And that's fine, but then they're certainly missing the opportunity because it just feels like lots of people are chasing the same thing. I mean, you know, look at Clubhouse, right? Like, oh, let's give a ridiculous valuation to something and, you know, here you go. But there's no track record. And, you know, but we're used to that pattern recognition versus something that might look different.

But that's kind of the zero to one, right?

Like, I feel like, and, you know, Airbnb when they were starting, right? Like, how many people turned them down? I mean, Brian talks about it all the time, right? So I feel like it's harder to understand that zero to one, but really investing the time to not just blow it off because it doesn't fit that model.

Those are the folks that I feel like are going to make the outsized returns.

Yeah, I think those are all great points. And relating back to you and your business, I mean, you know, I also think physical goods— for the investors that think about it just as a SaaS business or want you to do one thing— that's also your differentiation, 100% your differentiation, the fact that you're doing both physical and software and aren't just focusing on one.

So it also becomes this incredibly valuable tool. I mean, you know, I really look, you know, as an analogy, you know, kind Peloton. I mean, if you think about them as a subscription business, but that bike is the physical good. That bike is the hardware. That is a reminder of that brand in the house.

When you close the app, it's out of sight, out of mind.

But if you actually have a physical product, like one of our books that are beloved, that are award-winning, and they also, because it's the kids and family space, when you're putting your child to bed, you don't want to have a screen in front of your kid. You want to read to them. So understanding the consumer, Not just using it as, you know, kind of a throwaway line that I'm customer obsessed. No, really understand what the day in the life of the consumer is. And in our case, it's the parent, right? It's the parent that's making the purchase. There's going to be a time for screens. There's going to be a time for physical products. And I think that blended learning approach is what is unique about our model. It just happens to be wrapped in a subscription, but it definitely took some time for some folks to see, oh, why are you doing physical products?

I absolutely agree. I mean, as I was just looking over it because there's a Peloton right next to me and seeing it just always reminds me that I need I don't need to do it every day, even though I wish I did every day. No, I totally agree. I totally agree. And I think that relationship too, of like physical products and SaaS businesses, and really all the innovations that have been coming out, Peloton, your business looks really, really fascinating, and others. I think it's just almost this new wave of these different types of businesses that are both thinking about physical goods as well as like a software component. What's one book that inspired you personally and one book that inspired you professionally?

I mean, there's so many, so many good ones. I would say, you know, from the personal It actually is like any of the books by Sir Ken Robinson. So I'm just a really big fan of his. Unfortunately, he actually passed away this year, but he was just such an innovator in terms of education. And, you know, when you think about how kids learn, when you think about the things that you want your kids to learn, you know, you want them to be creative. You want them to be innovative. You know, we talk about all these things all the time, but it's so disconnected from what the— I affectionately call the industrial industrialized, you know, kind of educational complex.

Right.

The way that education is built for the 20th century of the industrial era, it just doesn't lend itself to creativity and innovation. And frankly, all the things that kids need to not just survive, but to thrive in the 21st century. You know, this is going to be the AI era. If it is going to be, you know, anything that can be automated will be is the mantra.

Right.

So kids need to learn things that only humans can do. Right. Memorizing something. Guess what? A machine will do it better. don't sleep. So if you want your kid to be creative, if you want them to be innovative, if you want them to have critical thinking skills, you really need to lean into that. So anything by Sir Ken Robinson. And then on the professional side, I feel one of the best books that I've read is Unscaled by one of the VCs over at General Catalyst, Hemant. It's just a brilliant book. I feel like it really feeds into the whole narrative of the 20th century was all about economies of scale and mass markets, and the 21st century is about unscaling and really getting to markets of one. And so that ties into the whole idea of going No, I love that.

I love that. And neither have been featured on our book list, so really excited to add both of those.

I mean, Sir Ken has a great book called Element. You know, he's written extensively about, you know, kind of education, you know, how finding your element, You, Your Child, and School, Out of Our Minds. I mean, he just has such great stuff. I think his last book was You, Your Child, and School.

That's awesome. That's great. That's great. I'll certainly have to check him out. That sounds, that sounds really, really, really cool.

Also watch the TED Talk. I mean, again, the most watched TED Talk of all time.

Yes, yes, I certainly need to.

Not only is it thought-provoking, he's also might as well be a stand-up comedian because he's also ridiculously funny. And as a Brit, he's got that, you know, that British humor.

That's awesome.

That's awesome. I will certainly check it out. That's amazing. My final question to you is, what's one piece of advice that you have for founders?

You just got to start.

Like, there is no perfect time. You're never going to have perfect information. You're never going to have things that are going to satisfy, you know, the venture community, you know, partners, whatever it is, you just got to start. Just go direct and talk to your audience. Like, all the tools are there. I mean, we started in 2016 and we bootstrapped and we put out a book and an app and a YouTube video just to test and learn, just to get initial data. Was there demand for this? And a year later, we had over 30 million views of our YouTube videos. Right. I mean, that's what kind of led to us doing the partnership with Nickelodeon. And then we got the Emmy nomination. And so We would have never been able to do all that stuff and get to where we are today, where we now have our subscription app, which just got nominated for Best Learning App by Kidscreen, competing with Lego and Sesame Street. I mean, you know, it got its 3rd nomination for Best Digital Preschool Series. So this thing all took off by us just putting something out there and getting real-time feedback from customers. All the tools are there. Don't wait for it to be perfect.

Just start now.

If you are an entrepreneur, start No, that's a great—

that's multiple good points. I think you said to me, like, 2 real ones. Obviously, start right now. And then also as well, listen to feedback from your customers. And when you're starting, look at maybe on the iteration side, okay, what do people like, what they don't like about your product. And so no, that's, that's, that's really helpful. And I completely agree. I guess there's never a great moment to start. So just always start now.

That's great. Yeah.

And the other thing I will add is, you know, talk to other entrepreneurs, right? I mean, obviously, there's a lot of different folks that have opinions, you know, on the venture side, on, you know, partner side, whatever Whatever it is, but talk to people that have been in your shoes. It's really interesting to get advice from people that have never started a business. It's really interesting to talk to people that are giving you advice on what to do with your company, but they've never kind of really been in your shoes. And some of the best, most candid advice that I've received is from other entrepreneurs. And, you know, I feel like really understanding people that are walking in your shoes, it's never going to be, you know, the exact same experience, but just understanding some of those commonalities from the, from the founder side, from the entrepreneur side, I think is really important.

No, that's That's great advice as well. Talk to other entrepreneurs and 100% agree that that could be way more valuable with folks that have been in your shoes than folks that might not have started a company.

By the way, I mean, you know, maybe it's like, how do you actually get off the ground and what's the best way to do that? You know, maybe it's, oh, you know, I did a convertible note. Should I do another convertible note or do I try to go straight to a price round? Just understanding the impact because there's so many things that you're just going to get blindsided by.

Right.

You know, all the things that only from a founder perspective, you know, understanding dilution, you know, maybe it's not so much about dilution. Maybe it's more about control.

Like, those are like the real questions.

That's the real talk that so few folks really shine a light on. But you're only going to get that feedback from other founders.

Yeah, that's really, really helpful. Really helpful. Well, Steven, thank you so much for coming on the show. I love the conversation. Thanks so much again.

Mike, thanks so much. And hopefully I'll see you in downtown Culver sometime and we can have a drink.

Exactly. Once all this clears out, we'll certainly have to do that. And there you have it. It was terrific having Steven on. Steven, thanks so much for coming on the show and for chatting. You're also welcome to follow me on Twitter @MikeGelb. For all episodes, please visit theconsumervc.com. Thanks again for listening, folks.