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Episode 74

Apr 11, 2021

3 B’s: Bitcoin, Bubbles And Biden

Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and

uss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble? And what is the bubble indicator used by JFK’s father, Joseph Kennedy, who dumped all his stocks before the 1929 crash? This episode also covers expectations for Joe Biden and why Black America should have low ones, based on the structural orientation of his cabinet. 

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Episode 49

Mar 12, 2019

Jamilah Lemieux

Part 1: Jamarlin talks to digital media executive, activist and author Jamilah Lemieux. They discuss

lah Lemieux. They discuss her article, “The Power And Fragility Of Working In Black Media” in the Columbia Journalism Review and Lamont Hill being fired by CNN for his comments on Palestine. They also discuss whether Michelle Obama’s words on Rev. Jeremiah Wright in her book “Becoming” were a false equivalence.

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! Today we have Jamilah Lemieux, the magic maker, a writer, speaker, also an activist in our community. Welcome to the show.

Jamilah Lemieux: Thank you. Thank you for having me.

Jamarlin Martin: Tell us a little bit about your background and how did you get into digital media where you’ve been in the game for a while?

Jamilah Lemieux: I am originally from Chicago. I went to Howard and I studied theater there, and declaring acting as my major definitely came as a surprise to my friends and family. Folks said, “You’re a great writer. Why aren’t you majoring in communications or PR or English, something related to that.” And I was like, no, this is what I want to do. And I made a promise to my parents that I wouldn’t be a starving artist, that I would teach if acting didn’t happen for me immediately and before I even finished school, I got into teaching. I was like, okay, I’m not going to pursue theater. I just didn’t have the courage and belief in myself. Did education and worked in and around that space for a while, my heart wasn’t there. During that time I started a blog called “Beautiful Struggler”, which I got serious about it, if you will, in 2007. So right before I graduated from college and within a couple months I realized I really liked writing and I liked communicating with people online because this was back in the days of MySpace and everyone’s blog ended in blogspot.com and comments sections were not things to be avoided. They were treasured. It was a great opportunity to talk to other people. There were a number of us who…

Jamarlin Martin: So you were blogging before it was cool?

Jamilah Lemieux: Yeah. I was definitely an early adopter with social media in a lot of ways, relative to some of my friends and relative to some other really talented writers I know that kind of had to learn the internet after the fact, where there were some of us that had been in that space for a long time. But I think back to when I started blogging, folks like Damon Young and Panama from “Very Smart Brothas” and Demetria Lucas, and Jozen Cummings. I’d say about half of us were traditionally trained journalism graduates and the other half were people like myself that just liked writing. Just kind of found their way into it. And so from there I ended up getting a job with Ebony. I was part of the team that launched their website in 2012. I was there for almost five years and had a lot to do with the reimagining of the brand and bringing it into the modern day, before it’s current set of challenges. If you will. And then after that I did a two-year stint at InteractiveOne. I was the VP of news and men’s programming. And prior to having those jobs, which were both great experiences, I learned so much about digital media and I would like to think that I’m part of a group of editorial thinkers and leaders that really kind of defined how my generation and folks a little bit younger than us and a little bit older than us use the internet to talk about issues of race, gender, sexuality, identity really. And did a whole lot of freelance writing before and a bit during those two jobs and got the opportunity to speak at a lot of schools and be on a few cool TV shows and radio shows and a lot of podcasts. And last summer I was at a moment where I realized that the more my career trended upward on paper, the less happy I was in this space. Digital media as you know, is incredibly difficult. There’s still a lot of questions about sustainability.

Jamarlin Martin: It’s a depression. It’s a super hard game right now.

Jamilah Lemieux: Yeah. And it’s so much that the priority is around clicks and revenue as opposed to quality, of substance. And I really just want to make work of substance and I want to write again. And so I am now full time freelance. I’m working on a book and a television pilot and I’m also doing some communications consulting because I learned so much in that space and things that I can help or have helped brands and individuals and political campaigns with, but I’s untethered in certain ways now.

Jamarlin Martin: Do you hold the duopoly of Google and Facebook who are taking of course, a massive amount of advertising revenue out of the system, a lot of the advertising of course, is going to automated systems where people like yourself who want to write about things that they’re passionate about, who want to write about or critique the establishment or write about helping people or their community that can no longer be ad-supported. Of course Google and Facebook taking a lot out of the system, but offering very little. Do you hold these beasts that I would call them, these tech beast out in California, hold them accountable for taking so much value and life out of the system where to be a healthy community you’re going to need quality content and ad-supported content essentially?

Jamilah Lemieux: Absolutely. Both platforms, or companies I should say, are a gift and a curse. In so many ways I think of Google as more significant in terms of the gifts that it offers and how it has. There are things about that that come from the Google universe, I think, that improve the quality of our life in ways that Facebook has not.

Jamarlin Martin: That’s an important distinction. They don’t necessarily deserve it the same.

Jamilah Lemieux: No. Google allows us to access so much information, valid information and misinformation, and Facebook knowingly trafficked in the spread of misinformation in some very dangerous ways considering the outcome of the last political or presidential election. And down ticket races that have happened before, during and after. So it’s sad. I still use Google and Facebook, especially Google products. It’s almost impossible to divorce yourself from them entirely. At least Google. I think there’s so many great things about Google, but we’re still figuring out what monetization looks like for content creators. And that’s part of the reason that I don’t want to be in the business in that way again. I didn’t feel that I should continue to be in management or running sites because I’m not the person who has the gift of really understanding how to make these things make money. Now I know what good quality content is. I know how to produce it on a dime, I know how to produce it with the budget. Again, to sit in the leadership role in this space you really have to think about the money in ways that I would prefer not to.

Jamarlin Martin: Yeah. So with the rising inequality in America specifically, I think it could be explained in part where the folks like yourself and other content creators, they’re creating content, let’s say on Youtube. And so you create a lot of content that consumers love, but Google does not pay the content creator enough to compensate for their time to make a living. However, Google may share 30 percent with the content creator, but the real value is not in the revenue share. The real value that they’re pimping off the content creators is going to the share price. So as Google’s share price goes up towards $1 trillion, that’s on the backs of a lot of the media partners, the content creators. And so they’re getting just a very little piece of that advertising piece. But that’s not necessarily the real value. The value is being shifted to the shareholders and essentially, you have a problem that we’re facing. You wrote a beautiful piece that I saw online called “The Power and Fragility of Black Media”. And I read a point of view, and being in the digital media industry, that’s not appreciated in our culture. Meaning that you knew that there were problems in Black media in terms of hey, people getting paid late or this is out of place and this and that. But you had a certain sympathy in terms of hey, the same website, may be producing business content, they may get a $50 CPM or advertising revenue per thousand impressions, but this Black Company is getting $20 and you want to compare the Black media who has to fight these battles and get less for the same thing. You want to compare them to New York Times and compare them to other outlets, and that kind of nuance is not really out there or talked about. Can you talk a little bit about what inspired you to write that piece?

Jamilah Lemieux: Sure and thank you. I was actually approached by the Columbia Journalism Review for a package that they were doing about the lack of diversity in newsrooms and what it’s like to be the only Black person in one. And I said that has not been my experience. But because I’ve been very deliberate throughout my career, there were certainly times especially, I was at Ebony for five years and was able to amass a certain amount of visibility in the business. This was back when NBC had black folks on every hour, and I was one of them. So other opportunities with white-owned, white-led media companies certainly came my way. But I was so committed to staying in Black media for a number of reasons. And one of them being that I didn’t have to check my culture or my identity at the door and I didn’t have to explain it to people either. Trayvon Martin gets killed, we’re all upset, Mike Brown gets killed, we’re all upset. Trump is elected. Everybody, for the most part in the office is feeling unsettled or scared. And I still would say I’m unwilling in any sort of full time capacity and have certainly done freelance and done projects for other spaces but would not, knowing what I know about the insides of Black media companies and the two that I worked for were among either the largest or the best known. Again, just like you said, advertisers do not value them even when they have the impressions or the subscribers or the circulation rates of their competitors or others similar spaces I should say that are designed for mainstream or non-Black audiences that advertisers don’t treat them the same way. So beyond saying, we’re not going to give you the same amount of money that we would to say Architectural Digest or Vanity Fair, which are super niche, they don’t have high circulation rates. This is not just for mainstream audiences. This is for affluent audiences, right? But people want to spend a lot of money with those brands because they’re reaching consumers that are high dollar, you could argue. But also because they’re not doing Black content. They’re not talking to Black people. But beyond the lack of money, there was also this idea that Black content was harder to manage, that it was more controversial. So anything related to sex with scary for advertisers.

Jamarlin Martin: Brand safety.

Jamilah Lemieux: Yeah. Right. Brand safety.

Jamarlin Martin: It would be policed differently, is that what you’re saying?

Jamilah Lemieux: Yes. Policed very differently. I remember Jezebel years ago, back when it was part of Gawker Media Network of course, had a column called “Pot Psychology” where a young white, gay male writer and a young white female writer would get high on marijuana and answer reader advice questions. And it was hilarious. They did it on camera and there was a written portion to it, I believe. And I just remember thinking, we could never go there in our wildest dreams. Vice does a lot of content around pot. And I remember, fast forward to 2017, I did something marijuana-related for my last employer. And internally there was some serious discomfort. There were some concessions that had to be made and overwhelmingly there was a sense, I shouldn’t say overwhelmingly, but there were a number of people above my pay grade and I was the VP so I wasn’t a junior employee, that felt that we were doing something destructive or inappropriate in terms of the ability to sell the brand, not necessarily from a moral standpoint. But this is in the era of marijuana legalization and decriminalization measures across the country, and it’s becoming a part of pop culture beyond what it was in the 70s when you would call it a punchline really. “All the hippies are smoking”. It’s becoming normalized, but for us and something that people are using for medicinal reasons, and this wasn’t just a fun celebration of weed. This was about the social justice implications of decriminalization and legalization, the financial opportunities that exist for communities that have been targeted by the war on drugs and the medicinal properties in addition to the social enjoyment or whatever. But the idea that cannabis represents something that we need to take seriously and a lot of us need to reevaluate our attitudes about it, even if we choose never to indulge in it. And so that was not a clear, unequivocal, yeah, we need to do this because this is where the people are right now. We need to make sure that our audiences are getting that information, that there was fear that this cost us money. It just really spoke to the limitations of being in Black media spaces.

Jamarlin Martin: You’re one of the few people who spoke out when CNN fired Marc Lamont Hill over his support for Palestine.

Jamilah Lemieux: Yes.

Jamarlin Martin: And it’s something that I still talk about today. Why don’t people understand, it seems like, that’s a big issue, meaning that if we have the people who are actually courageous to speak out on these issues and we allow the mainstream media and the establishment elite forces in the society to suppress your activist such as Marc Lamont Hill, Tamika Mallory, these forces, if you allow them to crack down on your activist, the courageous folks, these forces can optimize the community in a way where you’re only allowed to talk about MAGA. You’re only allowed to bang against MAGA. You’re only allowed to be vocal about issues that we approve of. And I feel like they have us in a box, where they want us to stop talking about foreign policy and they had that same view with Dr. King with Vietnam. But can you talk about what’s so frustrating in terms of how that went down with Marc Lamont Hill?

Jamilah Lemieux: Absolutely. And full disclosure, Marc is one of my dearest friends. So I was bothered by it as a Black woman, as somebody who works in media, as somebody who has opinions that are not always in alignment with the mainstream and who knows how easily I too can be silenced. But I was also of course offended as his friend, and as someone who understood what he was saying. And it’s not that I think he’s incapable of saying something inappropriate or wrong, but what he said was taken out of context and used to portray him as someone who he’s not. And I think it’s important that we call that out when we see it because it’s dangerous and it doesn’t matter if this person shares your viewpoints or not. For me, it was less about what he said and defending the point that he was making, than it was saying, look at what they’re doing to him and why. Marc has been radical, and a radical leftist for a long time in terms of his thinking. But this is a scholar, and an activist, but this isn’t someone who was calling out for some sort of war like measures or violence. He was saying, look, we’re not going to see peace in this region until certain things change. And I think we should respect the right of people to feel otherwise. But to silence him, to remove him from the largest platform. Cause Marc always had a hundred jobs, but to take away the largest platform that he has when other commentators on the network have said things that were equally as perhaps incendiary, but in the other direction opposing…

Jamarlin Martin: You mean against Palestinians and Muslims.

Jamilah Lemieux: Right. Islamophobic things, anti-Palestinian sentiment, or having relationships with people that espouse those views and then to see young Black progressives be spanked for standing with Palestine, it’s unconscionable.

Jamarlin Martin: Do you believe that Tamika Mallory’s situation should be in the same issue of censorship of Black voices who step out that box? Particularly as it relates to Palestine and the foreign affairs of America.

Jamilah Lemieux: I think that Linda Sarsour of the Women’s March is Palestinian and has been a vocal opponent of Zionism for the entirety of her activist career. And that’s something that has led the Women’s March organization to be targeted for protest. And again, I’m not denouncing the opposition to the way that these three people feel. It’s just that taking away or condemning them for it. Closing doors to them, closing platforms to them.

Jamarlin Martin: Cutting checks. Trying to take away their ability to take care of their families because they side with Palestinians. And the way I feel is the American establishment, they have Black America in a box where we don’t care if you talk about Donald Trump, we don’t care if you just keep on protesting Donald Trump. But these are the issues where if you see MAGA over in Palestine, if you see MAGA in terms of Netanyahu in the far right in Israel, the United States has a far right and Israel has a far right. And the president of Israel is on that far right. But I think there’s a lot of deceit among Democrats and liberals were, hey, if you can bang against MAGA in the United States, why can’t you bang against MAGA in Israel? Why are things so different? We’re talking about principles, values, and white supremacy, but there’s so many people who are scared to talk about MAGA when it’s over there in Palestine.

Jamilah Lemieux: Right.

Jamarlin Martin: Rev. Wright. I know this is coming out of the blue. No one has been talking about Rev. Wright. However, there was a article in the Huffington Post where the writer titled This story, “Jeremiah Wright Knew What America was Becoming”. The Obamas can’t see what it is. And of course, Michelle Obama’s book, “Becoming” came out last year. It did extremely well, but there’s a passage in the book, some people are taking issue with the false equivalency where she compares Rev. Wright’s statements where she says she wasn’t in those sermons. Although they’d been following Rev. Wright for 20 years, and he baptized the kids and married them. Michelle Obama says, “Hey, look, we weren’t at those sermons that you guys are talking about”, but let me use words to make sure I don’t take this out of context. “We had lived for years with the narrow mindedness of some of our elders having accepted that no one is perfect, particularly those who come of age in a time of segregation. Perhaps this had caused us to overlook the more absurd parts of Rev. Wright’s spitfire preaching. Even if we hadn’t been present for any of the sermons in question, seeing an extreme version of his vitriol broadcast in the news though, we were appalled. The whole affair was a reminder of how our country’s distortions about race could be two sided. That the suspicion in stereotyping ran both ways.” How does that make you feel, where white supremacy and Rev. Wright’s statements can be put in the same box?

Jamilah Lemieux: I love Michelle Obama dearly. My relationship to her is certainly less complicated than it is to her husband. She’s not a politician, but that passage which I did read, as it starts to make the rounds, really disappointed me. I think a lot of us had hoped that when they left office that she would be unfiltered in certain ways. And she has been to some extent. And there’ve been things that she’s said off the cuff and just let her hair down and talked about some of her discomforts in the White House and some of her thoughts around the current administration, but I really would have thought that both or either of them in their memoirs would exonerate Rev. Wright and talk about why they did not feel they were able to defend him as it was happening, which was an understandable concessions in me in certain ways. But now that you’re outside of that situation, there are no more races to run. You’re no longer in office. I’d have hoped that she would have been, not forgiving per se, but just clear on the hypocrisy of comparing him to hate groups and racists. And I think I’ve come across other class mobile Black folks that achieve a certain level of success and wealth that disconnects them. And we certainly see it in celebrities, where even if it seems like in so many ways their hearts and minds are with the people, they still have a level of, I don’t want to just say optimism, but maybe naivety or disconnect from what it means to be Black for the rest of us. And so even if you don’t agree with the vitriol, it’s hard to understand why someone is learned as she is, or as he is, would not completely at least understand and respect the sentiment.

Jamarlin Martin: From our perspective, when I hear Barack Obama speak and he started going to Wisconsin, you can go to Youtube and he starts saying, “You’ve been hoodwinked. You’ve been bamboozled.” I knew then that there was something in him where, in my opinion, he was one of us when I heard him and he had a grin where it’s like I’m playing on a level where a lot of these white people don’t know. And then I read his book and he talked about how he liked reading “Final Call” and this and that. Some of us I think can live with Obama saying, look, for me to go to the White House, I got to distance myself from some of this stuff. Meaning that for me to be embraced by a racist country, I need to part ways with certain stock from a military strategy, political strategy perspective can live with. But the way you do that, to your point in terms of your pastor of 20 years, this is the south side before the White House. Michelle Obama looks like somebody else, or you think that’s not the publisher?

Jamilah Lemieux: I don’t know the ins and outs of the process of her book coming together. I wonder was that a concession, there’s still that desire to hold on to, you didn’t really mean this did you? Did you fight over, we can leave this in, one of these things has to go and you’d rather talk about something else that might’ve bothered people and to clean that up. As someone who’s from Chicago and did not grow up in the church, but Rev. Wright is and was such an important figure in the community, as is Trinity Baptist Church. It was because of their college tour that I was able to go visit Howard as a junior and confirm what I thought I knew, which was that I wanted to be there more than anything else in the world when I graduated high school. The ways that he and Father Michael Pfleger and other members of the religious community in Chicago, including Mr Farrakhan have put their differences aside and rallied together in response to the violence in some of our communities and some of the terrible racism, the Midwestern racism that folks weren’t really familiar with until Mike Brown was killed in Ferguson. I just think that he deserves so much better than that. And I would have rather that she didn’t address it at all and had to deal with the oversight then to continue to double down on this image of him as some… I even wonder, she said she wasn’t there for those sermons and it’s totally possible. It’s certainly a lot of Black middle class folks that come to church for holidays, they get there when they can get there, but they didn’t always. But I wonder when she says that image of him on TV didn’t look like what she knew. And I wonder, maybe you were there and you didn’t realize that you were there.

Jamarlin Martin: I didn’t read the whole passage, but she said she didn’t realize she didn’t catch some things, but that’s hard for me to believe. Obama said in his book he used the buy the “Final Call”, Obama has read in my belief, so much Malcolm X, when he went out campaigning, he’s using Malcolm X’s words. Some of the Republicans were right to identify Barack Obama that he had a knowledge of self. They knew that he wasn’t your average Black man running for office. I think they picked up that this guy had a knowledge of self. He was one of us. I cannot reconcile that you didn’t know Rev. Wright was about that life. There’s multiple videos in terms of speaking out against America, speaking out against white people.

Jamilah Lemieux: Oh No. I guess what I’m saying is I don’t think she realized it was a problem until someone else told her it was. She might have sat there and nodded her head, because that’s how older Black folks, especially in a lot of Black folks her age speak. And she might have sat there and been nodding and understanding it and totally getting it, but through this new lens and maybe it’s a new lens that she had to adapt to serve as the first lady of the United States. I would never want to hold any sort of political office. I wouldn’t want to date someone who had those ambitions or who does, simply because I know I can’t put aside my identity as a Black woman. There’s certain concessions and things that they had to make and do and hands they had to shake and people they had to sit next to, and I could never do those things. I can never.

Jamarlin Martin: You don’t think you can make the compromises?

Jamilah Lemieux: Absolutely not, no.

Jamarlin Martin: They have a $20 million check, they want you to write, hey, when Black people speak out against white people, it’s just like white people speaking out against Black people trying to get the boot off our neck.

Jamilah Lemieux: I mean, as long as there’ no clause in the contract that says two weeks later, I can’t be like, just kidding.

Jamarlin Martin: Yeah. So I’m a fan of Michelle Obama, I’m a fan of the Obamas. However, I don’t want to isolate this, but, whether it’s Marc Lamont Hill or this passage, there’s a sentiment in America and some of our people are picking up where if the former slave speaks out and the pain and suffering and the trauma that we’ve been under in the hells of North America, that when we speak out, you may hear some cuss words, you may hear some bad words, but this is a former slave speaking out who’s tired of the denial of freedom, justice and equality. So if we speak out and use words like cracker or something else, it’s different then a Donald Trump, a Steve king or that hiring manager at Google where they have all the power to enforce ideologies, but when Black people are speaking out in terms of activism, fighting for freedom and justice and equality, that’s different, we can’t be under the same law, in my opinion. In terms of this false equivalency where, hey, if you say this about a white person, that’s just like the Google executive or the Wells Fargo executive saying it.

Jamilah Lemieux: Yeah. I think it’s always been that way. That both sides-ism Trump of famously put a spotlight on when he said there’s good people on both sides, talking about Charlottesville after a young white woman had been murdered by somebody who drove his car into a crowd of protesters with the intention of killing people. To still say there’s good people on both sides. One, America is so largely hinged upon the idea that whiteness is inherently good, and so they’ll identify, “Oh, we’ve got some bad apples, but ultimately, most of us are good and you all have to prove yourselves as individuals at best and at worst, none of us are good.”

Jamarlin Martin: I’m going to leave Rev. Wright with this. When we look at MAGA, MAGA America, and you look at a lot of the darkness in America being shown to the world, it’s out in public. Rev. Wright was right. Rev. Wright, I believe, was on the side of God when he was making those sermons in terms of he’s telling you, “God damn America”. The MAGA was here before Donald Trump exposed it and created a cult. Rev. Wright was shining that light for the people to see, and of course he was taken out for that, at least publicly. This is part one. Tune into the next episode for part two. Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter and also come check us out at Moguldom.com. That’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

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Episode 48, Part 2

Mar 08, 2019

Diishan Imira

Part 2: Jamarlin continues his interview with Diishan Imira, founder of hair-care platform Mayvenn. They

re platform Mayvenn. They discuss how Diishan was mentored to think like a boss and “ask for the check,” and how much it meant to him to have investor Richelieu Dennis in his cap table. They also discuss New York progressives bangin’ back against Amazon and the growing negative sentiment against big tech.

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! This is part two of my interview with Diishan Imira. If you missed part one, you want to make sure you go back and check it out. One of the actors that’s going to be in a movie about the real OG Black Panthers out of Oakland. I’m not talking about the Marvel Black Panther, but there’s a movie coming out that’s going to be about the real Black Panthers. We’re gonna have some African Americans going hard and banging against our African brothers and sisters or brothers who are coming from London who are getting these roles in Hollywood. And so what the African American, what some of these people are saying is, “Why are all these Hollywood job’s going to African immigrants? Why can’t we get the jobs?” I think it’s connected to the Koreans or the Arabs. The reason you can’t get the job is because you don’t believe in optimizing culture. And you don’t have a knowledge of self and you don’t even want to get it, a lot of you. So you’re not going to be competitive to people who are connected to intact cultures, and have a knowledge of self.

01:26 —Diishan Imira: If you are an actor and you’re trying to be in Hollywood and you want to be a fucking blockbuster lead role in the movies, bitching about other people getting roles is not going to help you do that. It’s not going to help you do that. Even if you’re right. Of course, there is bias and there’s racism and there’s an unconscious bias and all these things are true. But just because this thing is true does not mean that that needs to be your focus. If that’s your goal, that’s not going to help you. Now, if there’s people outside who want to champion that as a cause and try to help Black actors get more roles, that’s their role. But as an actor and you’re trying to be in the game, same as like an entrepreneur, if you’re trying to be in the game and you’re a player, you don’t have time to be worried about and bitching about what the rules of the game are. You have to just play. So I wouldn’t be whining about that. I would be at the audition somewhere or I’d be studying these other actors to figure out how they’re getting these roles. That’s how I would look at it.

Jamarlin Martin: It was reported that you just had, of course, a $23 million fundraising round and you have raised $36 million to date in total, but what stuck out to me was you still own the majority. Is that factual?

03:05 —Diishan Imira: No. Okay. I’m the majority shareholder. Meaning I have the largest position.

Jamarlin Martin: So that brings up something that came up last week. So I was talking to an investor Kai Bond in Miami last week, and he’s a partner at Comcast Ventures. And when he said, “Look, I see hundreds, thousands of deals over the years.” He said when the Black men and woman come to the other side of that table, he said the majority of the time they’re under negotiating for the same thing that other folks have in terms of valuation. In terms of how much you’re going to…

Diishan Imira: They’re not coming strong enough.

Jamarlin Martin: Yeah. He’s saying that he has seen different types of entrepreneurs, but the Black men and woman, 80 percent or so of the time, they are under negotiating. Why is that?

Diishan Imira: You have to have the same degree or a sense of entitlement that the white guy has, when they come in. They see the world as, “I should be able to have all of this.” We don’t have that cause we’re coming from such a place of lack and scarcity, that we’re just like, “Oh my God, $250,000. Oh my God.” You know what I mean? That’s how we’re looking at it.

Jamarlin Martin: Who’s to blame for that. Or does that matter?

04:47 —Diishan Imira: Who’s to blame? Society. Again, macro scale, our history and our culture has created this situation where we as as people don’t value ourselves, our abilities, our potential to the degree that they really are. We’re intimidated a lot of times walking into places where we feel like we’re coming from such a place of scarcity and lack of, and you walk into this place of abundance and you’re scared to ask for all the abundance. It’s a crazy feeling. It is a crazy feeling. I’ve had to work on it myself to remind myself like, “Yo, don’t be walking in here timid. This is your shit. They’re lucky to get a piece of my shit.” That’s how you have to think about it. And in fact, the first lesson I learned in raising money that I didn’t even realize I was not doing, and somebody reminded me. I would go have a meeting with somebody and they’d be like, “Oh, this sounds amazing, and Dah, Dah, Dah, Dah. Okay, great. Let’s follow up and have the next thing.” And I would leave the meeting. I’d be like, “Oh, this shit went so good. We’re going to have a follow up. We’re going to follow up. It’s going to be a follow up.” No follow up. And then somebody asked me, “Did you ask them for the money? Did you ask them if they would invest?” And I was like, no, I didn’t. Why would they invest if you didn’t ask for it? I was not even asking for it. I was scared to ask for a quarter million dollars from somebody that don’t know. And it’s not a natural thing. You know what I mean? No one ever gave me a quarter million dollars or $50,000 or anything like that. It’s a weird feeling. But then as you start to understand the psychology, you understand their side of things. They’re just as eager and nervous about losing the deal. So then you start to understand how valuable you are in that equation and that we’re both here on the same level and that’s how you need to interact with people. And by the way, end of the day, people really don’t want to invest in you if they feel like you don’t have that sense of self worth also.

Jamarlin Martin: That brings up a concept by an academic called stereotype threat. He’s done a whole book on this subject where he says that when we go into these situations, because there’s a perceived stereotype, it messes up our performance. Does that sound right to you?

08:03 —Diishan Imira: Yeah. I mean you, you walk into these meetings, but that’s the challenge, right? That’s the challenge. You walk in with all these stories in your head about who that person is, who you are, how you think they see you, how you think you should be seeing him. There’s all this yippity yap in your head, built up of all this nonfactual, not based on actual real experience. Just these storylines of who you are and who that person is in that room and it’s very confusing. Our talents as African Americans is that we have to always know that we’re Black. We have to for survival, you have to know that it is dangerous out here as a Black man. There’s real stuff going on, real threats. At the same time you have to hold that and at the same time you have to walk into that room and forget that at the same time, and forget all the storylines that go along with that. You’re just in this room with this person. You guys are eye to eye, that stuff does not matter. If this guy doesn’t fuck with you because you’re Black and he can’t get over that, you’re pitching the wrong person, then that’s all there is to it. Next. Who’s the next investor I’m pitching? It’s hard to navigate, but it’s doable, and a lot of people are getting funded now.

Jamarlin Martin: Richelieu Dennis, I believe he was the lead investor of your last round. How important is it for you to have a Black man in your cap table sponsoring you, where we got to own our rise. Meaning that, yeah, there’s all these programs and diversity and stuff, but some of our people who have the bigger wallets, they can step up and we got to own our own rise, at least a piece of it. It can’t be just begging for checks from white folks in Silicon Valley.

Diishan Imira: Yeah. It means everything to me. Rich is one of the most amazing, inspirational human beings that I’ve ever met. And I just get so much inspiration from his story and the time, the patience, the commitment, the unwavering of his mission to bring it all the way to completion and fruition and build a massive company that held its core values, served its community and won economically. And having the patience and commitment to ride that ride, that’s so inspirational to me. To have somebody like that who, prior to knowing rich, I did not have a figure that I could look at and be like, I’m trying to be like that guy. I’m trying to do that. Exactly what he did, that’s what I’m trying to do. And now I have that guy in my corner, got him on my cap table, got him in my boardroom, and now I want to win even more. I want to make Rich even more money because of what he’s done, how he’s done it, the way that even in winning now, the way that he’s now going back out and supporting the community and putting dollars behind the things that he’s talking about. It’s amazing and I don’t really see it being done anywhere else to that degree that Rich is doing it.

Jamarlin Martin: What’s a big thing that you learned since you got into the game that you wish you knew before that you had to kind of go into these corporate streets and learn it, but you didn’t get it before but you wish you had it before you started.

12:31 —Diishan Imira: I think the earlier you can be really confident and not see yourself as minimal in that world and you see yourself on that same level, the more effective you’re going to be and the more successful you’re going to be in that world. Ben Horowitz, when he invested in Mayvenn, shortly after he emailed me and he was like, “I’m going to introduce you to a couple of CEOs who run billion dollar businesses and you need to talk to them because you need to stop seeing yourself as the odd duck Black hair guy and you need to see yourself as a CEO of a multibillion dollar beauty franchise.”

Jamarlin Martin: You got to own it in your mind.

Diishan Imira: You have to be it. You have to be that and you have to see yourself that way. And that is, coming from where we come from, it’s a further distance to travel to mentally to get there. And so you have to put in extra work to get yourself and keep yourself in that mind, in that mind frame.

Jamarlin Martin: He didn’t say it in those kind of these words, but kind of like, “Hey dude, you’re undervaluing your vision and what you bring to the table.” And he’s just telling you the real.

Diishan Imira: He was like, “I can see on you, you don’t see yourself as big yet as you are, and you need to see yourself as bigger.”

Jamarlin Martin: If there could be two pillars you can leave the audience with in terms of being successful and being a successful entrepreneur, what advice would you share for the audience?

14:26 —Diishan Imira: One, I think that you have to invest in your strengths and invest in things that you have an advantage in. So there’s a lot of people saying, I want to be an entrepreneur and they’ll come and they’ll talk to you about, “Oh, the market for this thing over here so big and this thing over here is broken and Dah, Dah, Dah.” But what does that have to do with you? Why are you suited to go after that? A lot of people miss that step. You have to know yourself that you have to take inventory of what you’re good at and what you suck at. So, if you’re like a sociology major and you’ve been working at the bookstore and then you come and say, I’m gonna make a marketplace for Uber. I’m going to make an Uber for parking or something, because the market’s so big. What are you talking about? What does it have to do with you? The business you go into has to be based on you or else someone else who that business that you’re going after, that business is for them, they’re gonna kick your ass. You’re just going to get walked all over because he has, or she has the advantage. So one is, I tell people you need to sit down and you need to take inventory of who you are, what you’re really good at, what your strengths are, what resources do you have that other people do not have. You need to take stock of what you have. And then based on that, look out into the world and say, where does all of this fit into, which one of these slots? And then that’s your lane. Don’t try to just pick a lane cause you think it looks good and pretty and big and then you just cause it’s a big opportunity, you pick the lane and then you just throw yourself down and then four or five years later you realize, this other competitor, he was born for that shit. He was born for that and now he’s walking all over. You don’t get yourself in that position. So it’s a very broad thing, but it’s self-awareness, be self aware. One thing that changed a lot of things for me in terms of in the early stages of things was for me to stop thinking about time so much and be more patient about when things are supposed to happen. In my early twenties, I was like hustling and buying shit out from China and selling shit out the trunk of my car and I was just making fast money and I was like, by 30, I need to be a millionaire. And that was very destructive. That was not constructive for me because it forced the very short term thinking way of looking at opportunities. When I got past that and it really just became about, alright, pick the thing that you’re meant to be, the lane you’re meant to be in, commit to doing it and there is no time. The amount of time that it requires for this to be successful is when it’s going to happen. Don’t put a time frame on stuff. Just find the thing that’s for you. Get to work and just commit to it.

Jamarlin Martin: Recently Amazon was planning to create over 25,000 six-figure jobs in Long Island city/ Queens. There was backlash with Amazon. People started asking questions in terms of, hey, Amazon, their market cap is $800 billion. Why would New York tax payers offer them $3 billion in tax subsidies or incentives. Apple or other corporations, they come and set up shop in the state. They’re not begging for any corporate subsidies or whatever. Hey, you want to do business in state? You guys are worth almost a trillion dollars. You guys pay for it. And the deal based on recent reports, it came down to the subsidy and also a push for union protection for workers. I personally don’t know why you’re worried about a union for jobs that are going to be a $100,000, $150,000. They started asking questions and Bezos just said, look, you guys are going so far to the left, I don’t got time for this. I may have to pay out $50 billion in a divorce. I got people tapping my phone. I don’t got time to talk about…

19:44 —Diishan Imira: That’s why I need it. That’s why I need the $3 billion, I got to give her $50 billion.

Jamarlin Martin: So, there’s growing tech backlash where Silicon Valley, Google, Facebook, not Silicon Valley, but big tech, Amazon, people are starting to ask really big questions in terms of the inequality in society and just a few companies kind of controlling a lot of share in the economy. What are your thoughts on Amazon pulling out of New York because of these issues?

Diishan Imira: Full disclosure, I don’t know all of the details of all of this stuff that went on. Certainly I could just say that Bezos can do that. He’s a very strong example of what patience gets you and patience ultimately gets you a lot of leverage to do whatever the hell you want to do. But these companies and these businesses are from inception devised to be winner-take-all businesses. Silicon Valley, this is what they’re looking for.That’s the mandate. The mandate is, how are you going to take all of it? So I’m not surprised that we’ll find ourselves in a world where you do have companies that have leveraged technology and massive, massive, massive amounts of capital to develop impenetrable moats around them and leverage that cannot be broken, so Bezos can put the thing wherever. He’s gonna get it where he wants it, how he wants it ultimately.

Jamarlin Martin: Do you see anything wrong about New Yorkers saying, look, we’re concerned about this place turning it into a Frisco, where there’s a hundred thousand or so homeless everywhere that’s getting in your way while you go into a Starbucks, homeless everywhere. But all these tech companies are doing good.

22:19 —Diishan Imira: No, I don’t see anything wrong with that. I’m from Oakland and I don’t like how Oakland is now because of the culture that has spread out from Silicon Valley and bled into Oakland and all the Black people can’t afford to live there anymore. And so now it’s like a lot of just transplants from San Francisco or all over the country who live in or work in Silicon Valley have zero understanding or really any respect for the culture that was there or the history that was there in Oakland and feel very…

Jamarlin Martin: Or Seattle.

Diishan Imira: Or Seattle, and feel very entitled to the place. I personally don’t like the culture that has been created there and the culture that has been sort of diluted or erased out of there as well. So no, I don’t think there’s anything wrong with that. I’m just saying it’s a very hard force to fight back against.

Jamarlin Martin: And for the audience, when these talk about hiring 25,000 people at 150k salary, they’re not hiring people in Queens or Long Island City, those people are getting pushed out. What the community is saying, we need to start looking at this stuff because we see San Francisco, we see Seattle, let’s be thoughtful about this. It’s not just simplistic. 25,000 jobs. Let’s start crip-walking for Amazon. What’s your response to this tweet? “When everyone thinks micro and short term, they often lose macro and long term. Hollywood gave it all to Netflix. Media companies gave it all to Facebook.” New York just had a few questions for Amazon, that when people are simplistic and short term and they can’t rationalize markets and they’re not thinking about the big picture, well Netflix is going to break Hollywood, Facebook is going to break the media companies and control the advertising market, when you’re not thinking big picture.

24:31 —Diishan Imira: I would agree with that. And I think again like people taking short money is always the downfall. Taking the short money is always the downfall and the person who’s got the more patient capital is going to get you in the end. The leverage comes with the time. So it’s really tempting to just try to take the bag, but then that’ll be all you’ll ever get is the bag and you won’t get any power, right? There’s bag and there’s power and power comes from leverage. And leverage comes from having influence over a large area of some sphere of influence. And so if you just keep selling off little pieces of your influence and whatever for little bags, you will not have anything left. So I think that’s good for New York to be asking those questions and for New York to value itself like that, right? Not undervalue itself and say, “Why am I to give you all my shit just for you to come over here and kick it and make even more money.” This is New York, this is New York. I feel him. I feel him. They’re like, don’t come in here acting like this isn’t New York. You know what I mean? So I’m with them on that and I don’t feel any sort of way, I don’t feel sad for Bezos. He’s gonna be okay. He’ll be okay. I’m guessing even after he loses the $50 billion.

Jamarlin Martin: On that note, I want to thank Diishan Imira for coming on the show.

26:16 —Diishan Imira: Thank you, man. This was fun. I appreciate it.

Jamarlin Martin: Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter and also come check us out at Moguldom.com. That’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

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Episode 47

Mar 05, 2019

Diishan Imira

Part 1: Jamarlin talks to Diishan Imira, founder and CEO of Mayvenn, a platform to

of Mayvenn, a platform to empower hair stylists and take back ownership of the beauty market. Diishan talks about why his father refused to pass down a “slave name,” his work in China, and how Black women were his first investors. They also discuss his razor-sharp focus on customers and being PR-light.

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! Today we have Diishan Imira. Welcome to the GHOGH show.

Diishan Imira: Thanks for having me.

Jamarlin Martin: A little bit about Diishan. I was really happy to get this interview. We’ve interviewed entrepreneurs across America, Black entrepreneurs across America and the consensus I got in the community was a lot of entrepreneurs, they get a lot of press, get a lot of buzz, there’s a lot of hype, there’s a lot of headlines. But the consensus I got, was you’re the real deal, that you’re the man with a really strong business that has momentum. You have the fundamentals down. Why isn’t there more press about you?

Diishan Imira: I haven’t sought a lot of press. Not because I’m like really some like master strategist and it’s all some big plan to be quiet about things. But I’ve always just been sort of quiet when I work. I like to do things and then after I do them, then talk about them. And then I often find myself, even after I do a thing, feeling like it’s not good enough, I need to get to the next level, I want to do another thing and then I’ll talk about stuff. But I’ve also found that all the attention from press is very distracting and generally is not that good for whatever your core metric or KPI in your business is, which usually is customers and sales. And press does not always equal sales. And a lot of it can be very seductive and gets you into feeling like you’re the man, cause you’re on a magazine cover or you’re getting accolades and people writing about you and talking about you. And the next thing you know, people are calling you and you’re going on the road and you’re talking at shows and you’re on the circuit and you’re not in the office. So that can hurt an early stage entrepreneur to not be focused and not have your eye on the ball. So I’ve come to look at press as much more strategic and it’s really about how exactly is press going to drive forward the business. A lot of the stories that people want to discuss, or the press has wanted to talk about with me has been about fundraising, and these are mainstream publications, Forbes and Fortune and these types of things. Their audience that they’re speaking to is a business crowd. That story is interesting and that story is cool, but my customers are not necessarily ready that magazine. That does not translate into more people saying, “Oh I should buy more hair from Mayvenn.” So I’ve just generally looked at the opportunities for press and then I’ve said, is this going to help or is this not going to help? and then I’ve also found that like the mainstream press, they would prefer to focus on that story than talk about the actual business. And so that’s a little annoying to me actually.

Jamarlin Martin: Do you think it’s a coincidence in terms of valuation and momentum, that the most meaningful traction among founders that look like us, and you’re not looking for press, but when you started you weren’t looking for press, do you think that there’s any correlation between the two, the fact that you are relatively with other entrepreneurs, I would call you very light PR, relative to the traction you have?

04:10 —Diishan Imira: Is it a coincidence? No, I think there’s a correlation. I think if you stay out of the fray, you’re going to be more focused. And if you’re doing press and you’re doing it not for the sole purpose of attracting more customers, then you’re probably wasting your time as it relates to the business. You might be getting like more popular, right? That could be a benefit for you personally. But it’s not necessarily going to benefit the business. So I do think that for me, there has definitely been a correlation.

Jamarlin Martin: What’s the origin of your last name?

Diishan Imira: Oh, my last name is a whole story. Yeah. So, it’s not my mom or my dad’s last name. So I’m mixed, half black, half white, and my mother’s ancestry is Russian Jewish, my father’s Black. So they were both Bay Area hippies and revolutionaries. And when I was born, my dad did not want to give me the slave name and his last name is Wiley. And we were a really big family on that side too. He’s got like 12, 13 brothers and sisters. So they wanted to just give me my own name. So he took a word from Swahili and my mom took a word from Russian and they put them together and made my last name and that’s what it is.

Jamarlin Martin: I would probably argue some correlation there. You had a father that said, “I cannot give my son a slave name.”

Diishan Imira: Yeah. Honestly growing up and as a kid it was just frustrating cause I was confused by, why is my last name, all these other kids, their last name is their parent’s last name. And people would get confused at school and on forms and stuff like that. They’re like, who’s your dad? Who’s your mom? But as I got older I came to like appreciate that. I appreciate the way that they looked at me and the way that they looked at what they expected for me, which was to just be completely my own person.

Jamarlin Martin: Did your first investors know that you were half Jewish?

Diishan Imira: Well, first of all, I want to just give credit to my actual real first investors which were two Black women that I knew from my college years. I studied abroad in Tokyo when I was a sophomore. I went to Hampton and there was another student on the same program who was coming from Spelman, and she was a year ahead of me. A ridiculously smart woman. And we got really cool, became friends. We’re still friends. This is probably 2001. So in 2012, 2013 when I told her I’ve got this idea for this thing. She was like, “You’ve got to do that? I’ll invest.” And she ended up giving me $10,000 and her best friend gave me $10,000. Those were my first investors. And I’m very proud of that.

Jamarlin Martin: Wow. They’ve got to be sitting nice.

Diishan Imira: They’re sitting nice, as they should be. Black women started this company. Black women lifted me up and put me in the game.

Jamarlin Martin: For the audience, explain what Mayvenn does and how you came up with idea?

08:01 —Diishan Imira: Mayvenn exists because I wanted to empower the community to have more ownership over the beauty market that we support and we pump billions and billions and billions of dollars into. I used to live in China. After college I moved to China. I was there for two years and I had been importing products since 2003. I just started buying stuff off the street in China and I would send it back home and people would sell it for me, send me the money back. And then that turned into a full on business where I was just buying containers of everything, furniture, art, clothing. I would import it back to Miami or Atlanta had a warehouse. I would post stuff on Craigslist. I had a show room and I was just hustling, no order to it, no structure. It was just like cash in a backpack, go to China, give them some money, watch them load up my container, meet the container at the port. Bring all my shit to the warehouse, post some ads on Craigslist.

Jamarlin Martin: Do you credit street game out of the Bay in terms of yeah, you went to college, but are you bringing more street game to the table than your average entrepreneur at this stage in terms of you just want to go get it, you’re doing this business with China and you’re just kind of trying to make it happen.

Diishan Imira: I’d definitely say I’ve always had a mentality of selling something. That was a very, to me, empowering and liberating thing to do was to be able to sell something and make some money from it. And so the Bay, that definitely put some of that spirit in me. And then honestly, I got a lot of my hustle from China. I lived in China for two years and I’ve never seen people hustle like that.

Jamarlin Martin: What parts of China?

Diishan Imira: Shenzhen, Shanghai. I saw a level of hustle and a level of being willing to do whatever it takes over there that I had never seen before. And the energy of people pulling themselves out of the mud and doing anything they could to sell something and make some more money. And I have a tremendous amount of respect for the hustle of China and China’s where they are today because of that. So I’ve got a lot of my game from China as well.

Jamarlin Martin: Yeah. So I went to Beijing and Shanghai in 2008, and the food sucked. At least in my experience.

Diishan Imira: Where?

Jamarlin Martin: Beijing and Shanghai. I talked to other folks…

Diishan Imira: They didn’t take you to the right places.

Jamarlin Martin: So you had the right places from the start.

Diishan Imira: Because the Chinese food in China is crazy. It’s ridiculous. But you just have to go to the right place. If you go to the wrong place, it’s going to be really, really wrong. It’s going to be super wrong. There’s now where in the middle. You can get the best Chinese food you’ve ever had in your life that you just can’t get here.

Jamarlin Martin: Our guide, I guess, was taking us to some really funny places. This one place I just remember, they have prawns and when I saw the prawns, it was very crispy and …

Diishan Imira: No kung pao.

Jamarlin Martin: So you’re hustling and what’s the next step?

11:44 —Diishan Imira: Okay. So anyway, I said all that to say that my background is really in supply chain and China, and importing and hair came along. I became kind of the guy that everybody knew, all my friends knew me as the guy who could get you stuff from China. So I always had people calling me, “Hey D, can you get scooters from China? Hey, can you get whatever from China?” I’ve imported all kinds of shit. You wouldn’t even be like, what the hell? How are you importing this stuff? I’ve imported slabs of granite, I’ve imported jet skis, clocks, paintings, everything, which all just came from people calling me and saying, “Hey, can you get this stuff?” And so that sent me all over China. I would just be traipsing through the middle of nowhere looking for these factories and just going into factories and talking to these guys. So that was really my skillset, was that I could really work that side of the world. Fast forward, I moved back from China. I was importing stuff. I went back to school, I did an MBA, came back, moved back to the Bay and I wanted to start something. By that time I knew I wanted to start something that was going to connect the internet with all the things I was doing. And I had discovered around that time, 2007, this is when Facebook was going bonkers and became this really big story and actually, at that time I didn’t know about Silicon Valley even though I grew up 40 minutes from there. And then I saw that, oh shit, there’s this place over here, 40 minutes from where I’m from and they’re just handing out $10 million checks to kids.

Jamarlin Martin: Are you from the hood?

Diishan Imira: No, born in the hood, but moved out very early, when I was five. And I was very fortunate to be raised in the Oakland hills, but I didn’t grow up in a very business-oriented family. They’re very social justice, education, overthrow the system. Corporate is bad. That was the ethos I was raised with. But ironically it was like be yourself and be free. It was an ethos of, be liberated. And what I saw was that being free and being liberated in this world meant you have to have your own and you need to be in control or you will be in somebody else’s building at their cubicle, making them money. So that kind of translated into an entrepreneurial mindset for me. I did my MBA. I moved back. I was trying to look for what I wanted to do. I knew I did not want to go work at a company and I needed brain space so I could think and I could test and try different things to figure out what I wanted to do. So I took really menial jobs right after I finished my MBA. So I was valeting and cars, doing yard work. I did a bunch of little weird random ass jobs. I was, you know those guys, they’re called surveyors, the guys that are like out in the middle of the street and they’re looking through that little thing and I was like, what is that shit? So I learned what that was, did that for a little while. I did whatever I could to just keep money in my pocket, but also have the rest of the day free for me to think and figure out what I wanted to do. And then somebody called me in my family, a hairstylist. She asked me if I could help her get some hair extensions from China. And so I did that to help her out, brought back these hair extensions, brought it to some hair salons. The salons were like, “Oh, this is fire. Can you get some more?” And then that turned into me just, this was like another easier way for me to make a little bit of money while I think about what it is that I want to do. So next thing I know, I’m selling hair out the trunk of my car to all these hairstylists in Oakland. And the deeper I got into that, that’s when this thing started to percolate in my head. And it didn’t start with some sort of affinity to hair or beauty. What really kicked it off was I’m driving around, I’m selling these hairstylist this hair and it’s blowing my mind that they don’t sell it. Right? The volume of this hair that’s moving through these salons is in the billions, but the salons themselves were not the ones selling it. The customers were going to this beauty supply store across the street, buying it and then bringing it to the hair salon and then 95% of all the beauty supply stores are owned by Koreans. So you literally just only have outbound, all the cash is all outbound out of the community. None of it is inbound. We’re just buying it. The stylists are just installing it and putting it in, working with it, but they’re not making any money off of it, and they’re referring all these customers to go over to the store and buying it. So feeding the store, but the store is not kicking anything back.

Jamarlin Martin: Are you doing this just in the Bay at this point?

17:20 — Diishan Imira: Yeah. This is in Oakland, I’m just selling hair out of the trunk of my car to stylists. All great American entrepreneurs, they sell it out of the trunk and I tell people that all the time, you’ve got to sell it, just sell it first. That’s the foundation of everything. If I didn’t go sell it, I wouldn’t know these things.

Jamarlin Martin: People want to get a deck and get a meeting…

Diishan Imira: They want to get a deck and a meeting and go raise $1 million and do all these things and build the website and do all these things before you go get a customer to even validate that you even have a good idea.

Jamarlin Martin: Does that make you more bearish in terms of negative that this economic cycle in tech is going to turn? Because you see so many people out there that don’t care about customers and product and getting validation. They don’t care about profits and fundamentals that there’s a lot of fluff out there in the market and as you know, sometimes that signals that you’re going to have a turn in the cycle that this thing is going to bust.

Diishan Imira: It will bust. And it’s just cyclical because there’s always fluff and there’s always waves and then there’s a buildup of fluff.

Jamarlin Martin: You’re right there in the belly of the beast in Silicon Valley. Do you see a lot of fluff out there?

Diishan Imira: Yeah. Of course. But I always have. I wouldn’t say I’m the best at like reading the macro economic trend and to be able to tell you when the tide’s going to turn and when the thing’s going to pop. But I definitely see is going to happen.

Jamarlin Martin: You see a massive amount of fluff?

Diishan Imira: For sure. And that’s the game, in every game. When the money starts getting easy, then all the little tricksters start coming and try to get it easy. People start coming when the money is flowing.

Jamarlin Martin: Are you seeing any tightening of financing conditions where investors are smartening up and not being as loose with their wallet as they were maybe three, four years prior?

Diishan Imira: No, not really. I wouldn’t say that. I wouldn’t say so. I’m fortunate also to have some fantastic investors that don’t go with whatever the wave is. They’re pretty disciplined about how they do things. Whether the market is this or the market is that, they’ve got the way they will look at and they’ll be more disciplined about the way they look at things, and those who have the most interaction with, but no, I wouldn’t say right now there’s a tightening. Not that I can see.

Jamarlin Martin: Let’s go on. So Mayvenn…

20:13 —Diishan Imira: So I’m selling the hair and I’m just like, this is crazy. It’s like we’re getting robbed. That’s when my upbringing in social justice combined with my hustle mentality sort of converged and I was like, these stylists have all these customers and they have the relationship with all these customers. They should be the ones selling it. If I can give them a platform that made it easy for them to do this without them having to invest capital and manage inventory and all this stuff, we could unlock and build an enormous distribution channel for our products and both sides of me would be satisfied in this equation. I would be helping my community and we could build a big ass business and that really lit me up, that we could do both at the same time. And that’s so much of the business relied on an expertise that I had. I had been building that domain expertise of importing and sourcing from China for 10 years by the time I started this. And that was a critical piece. And so by that time I had really started to understand that you’ve got to choose. There might be what you love and what you’re passionate about. Then there’s what you’re good at and this is what you have an advantage at and the thing that you’re good at and you have an advantage at, in my opinion, is your gift and you invest in your gift. And so that excited me. Who else can do this? I don’t know any other like Black dudes that speak Chinese and go to China and can do all this stuff and can work the street level.

Jamarlin Martin: Yeah, I read that you even had stylists in your family, so you had some education in your family about this business. When I was reading your story, I’ve known this about other entrepreneurs, but I felt like you were the only one in the world that could build this business because of your history, your family.

Diishan Imira: And that’s how I felt and that’s how I pitched it. And I felt like because of that I was even more obligated to do it. If I don’t build this thing, who else is gonna tie all these different things together? Who’s going to pull China together with the streets, with Silicon Valley and the Black community who’s going to pull it all together. And I just happened to have this amazing constellation of experiences and resources to be able to do this exact thing.

Jamarlin Martin: Most of the hair comes from India.

Diishan Imira: I think the misconception is that. India is not a mass exporting and manufacturing economy. China is the manufacturing and exporting… their entire infrastructure over there is set up to make shit and export it, right. Which is an incredible amount of infrastructure. So India doesn’t have all of stuff, all that set up the way that China has it set up. So the way the hair business works is the majority of all of that hair, comes from India, but it gets shipped to China as a raw material and then the Chinese factories turn it into the finished goods, and then export it out of there.

Jamarlin Martin: You’re kind of putting the stuff together and you start figuring out kind of what Silicon Valley’s about. How do you get your investor meetings?

24:13 —Diishan Imira: Man, I’ve just been so fortunate, man, to meet amazing people along the way who have just pushed us forward. But it was this friend of mine who I’d met around that time who was working at, Zynga, and Zynga just went public and he was saying he was really into what I was trying to do and he’s like, “Yo, I’m gonna give you 15-grand.” Something happened or whatever. He couldn’t do it. There was a bunch of stuff that went on there and he called me. He’s like, “Hey, listen, I can’t do it, but my mom, I told my mom about it and my mom is like, I don’t even know him, but I’m going to give him $15,000 to do this. He has to do that business.” Another Black woman that put me in the game didn’t even know me and said, that needs to exist. And she sent me $15,000. So now like all this stuff’s piling up to where it’s like I’m the only one who could do this. I’ve got people who don’t have a lot giving me a lot. Okay. So I’m just sticking with it, this is it. I’m taking this thing all the way. I’m obligated. And that’s what excited me. So, I got that first, that was like $40,000. And then I went to all these pitch events. So I didn’t really know anything about Silicon Valley either by this time. So I knew that my next kind of big hurdle was crack that, so go figure out Silicon Valley. And I looked at Silicon Valley like it was China. It’s another culture. It’s another country I’ve never been to. They speak a different language which I need to figure out. I need hit the ground and figure out how they talk so I can figure out what their culture is. Right. And when I say how they talk, I don’t mean how they pronounce stuff. When you learn people’s languages, you learn their culture, you learn things about what drives and motivates them and where the origins of certain ideas and beliefs and things that they have. A lot of that can be learned from the way that people talk and the conversations that are had. And so, I would just go to every tech event. I just went to every single one. I would just sit there and I would just listen. I would listen to the panels and listen to how they talk about business. And how they talked about marketing and how they talked about sales and how they talked about product and lean startups, and all this kind of stuff. Started learning these ideas. I’m starting to see how they see the world.

Jamarlin Martin: Yeah. For the audience. What year are we in here?

Diishan Imira: 2011 or 2012. So then that led to me saying, okay, I’ve got to put a deck together and sort of understanding that the idea was, go and try to build some sort of little prototype of this thing to demonstrate it could work at all, and then put that into a deck, and then go and try to talk to these guys. I started my first process of trying to make a deck and a lot of that was throwing out all the shit that I had learned in business school, because business schools don’t really teach you about Silicon Valley and that culture of business there. I was used to like, okay, I gotta make a 40-page business plan. In Silicon Valley I need a 10-page deck with as few words as possible, show me charts, graphs and the relevant information. And for me to just get excited that there’s an opportunity here and then we go. So I had to relearn that and simplify what is in my mind, I’m thinking of all the different moving parts or whatever and they’re like, “I don’t want to see all that shit. Give me 10-page deck.” So I started doing that. I went to the Oakland Small Business Development Center and they helped me for free to make models to make the deck. Meanwhile, I started going to these pitch events. When I got the deck complete, I would start to go to pitch events and start learning how to pitch. And I turned out to be very good at pitching. And I would even win some pitch events. The first pitch event I went to, I won. But then people on the panel were like, “That sounds amazing, but I don’t know anything about Black hair, Black women. I can’t invest. But I support you.”

Jamarlin Martin: You get a lot of like, the market’s too small. White folks, it’s a niche.

29:15 —Diishan Imira: Yeah, there’s definitely a lot of that. Definitely a lot of that. and unfortunately I think that the the words Black women…

Jamarlin Martin: Double niche.

Diishan Imira: Yeah. And in the mind of the mass culture, Black women, it’s minimized all around when in actuality Black women not only economically a supernova in size, but then just culturally drive so much of everything that we do. That was always very frustrating because people would just instinctually be like, “Oh, it’s small, it’s niche.” So there was a lot of that and a lot of like, “I don’t get it, but I like what you’re saying, it makes sense, but I don’t know anything about this world, so I can’t give you any money, but I’ll support you. I know this other guy go to this pitch event or whatever.” So people were doing what they could within the confines of what their comfort levels were with stuff. So ultimately somebody who had been on three or four of the panels that I had pitched at and he’d become a fan, a champion of mine. He’s like, “Yo, I want you to win so bad. I cannot invest because I just don’t know anything about this shit. But I know one crazy motherfucker who might do it, and his name was Dave McClure.” Dave McClure was the founder of 500 Startups. So he introduced me to Dave McClure and applied to 500 Startups. And then we got into 500 Startups in early 2013.

Jamarlin Martin: Okay. And what does that package look like for the audience?

Diishan Imira: At that time, they give you $50,000 and you give them 5 percent. They give you $50,000, office space and they will line you up with investors for the next four months to try and pitch and raise money. So for me, 500 Startups was really the kickoff because I didn’t know investors, and to have networked and tried to meet the number of investors that I had that I met in 500 Startups would have taken me forever. So it really truly was an accelerator. It accelerated me. When I got into 500 Startups, they helped you put the pitch together and they said, go research all the angel investors out there. Get on Angel List, make a list of 100 investors, bring it to us and we’re going to make intros for you to whoever we can. That was priceless. They put me in front of the audience that we’re trying to get to. And so by the end of that summer, we had raised like $850,000 and the $40,000 that we had going into 500 Startups, there was like $6,000 left by the time we got into 500 Startups. And they gave us another $50,000.

Jamarlin Martin: So you leave 500 Startups and you raised more money right after that, right?

Diishan Imira: Yeah. Over the next year we raised another million and a half.

Jamarlin Martin: Okay. How many investors did you pitch to to get that million after 500 Startups.

32:43 —Diishan Imira: That million and a half, it just came. I didn’t have to. Well, after 500 Startups we had $850,000 and we launched the company in October of 2013 by February, March of 2014. We were doing almost a quarter million dollars a month in revenue, maybe a little less, $200,000 a month in revenue.

Jamarlin Martin: So you’re starting to print revenue pretty quickly?

Diishan Imira: We turned this thing on, we jumped on Instagram. The whole business is based on acquiring hairstyles. So we would try to find hairstylists, say, “Hey, I’ll give you a free website. It’s going to have all the inventory and the hair on it. You don’t have to buy any inventory, manage any of it. You just get your clients to buy, we’re going to ship it directly to them and we’re going to give you a commission off everything you sell.” It’s a perfect deal for the stylist. There’s no upfront money. It’s all upside. Right?

Jamarlin Martin: So would it be fair to say your average entrepreneur, they’re going to take that idea, e-commerce, hair, they’re going to take it B2C, that the genius in your model is you’re taking this product and you’re saying, I’m coming B2B, terming the stylists as another business out the gate and I’m building the distribution system.

Diishan Imira: Yeah. And that’s the way I looked at it was building a distribution channel, not a brand, not a B2C brand. To me the power is in distribution and having a platform and then if you have a distribution channel of all these stylists then you could sell anything through that channel, it doesn’t have to just be hair.

Jamarlin Martin: Did you ever think about Mayvenn as B2C?

Diishan Imira: No.

Jamarlin Martin: There wasn’t a pivot early on or nothing. It was just B2B out the gate.

Diishan Imira: Yeah. Cause I was selling it to the stylists, and they were then giving it to the customer. So the way I ever saw it was, you stylists need to be the point of distribution for this. You should be the point of sale for this. You have the advantage, right? You have a relationship with the customer, you should be able to convert that customer better than any place else. I will say that now, where we’re at in the business, we have a very heavy B2C component that we’re doing, we can get to it later, but we’re launching something that’s massive in scale and going to just change the whole game and it’s very B2C but it’s leveraging our entire stylist base now that we’re everywhere. We can get into it.

Jamarlin Martin: Can you share some metrics in terms of the stylists who acquire the opportunity to generate revenue? So you’re creating an ecosystem and of course the stylists are now partnering with you and they’re making money across the United States.

Diishan Imira: Yeah. I mean we’ve signed up over 50,000 hairstylists. You have a very skewed distribution in terms of how much the stylists sell. So you’ve got, like any marketplace, your power sellers, right? And then you have this very long tail of people who just sell a couple of times here and there, they’ll make $50, $100 bucks extra or whatever. And then you’ve got your power sellers who, I think our top selling stylists in a year, have sold over a million and a half dollars of hair, and made $300,000, $400,000 from Mayvenn.

Jamarlin Martin: I read that one of your inspirations was you have people outside the community in Harlem and Watts and ATL who are making hundreds of millions and in some cases billions across beauty and hair, Black beauty and hair, that these folks have been draining value out of the system and we don’t get a commensurate share of that. Can you talk a little bit about how that provided inspiration where hey, we have to start getting some money back in terms of all the money going out to other folks?

37:26 —Diishan Imira: Yeah. And I want to be very clear. So Koreans own the majority of the Black beauty market.

Jamarlin Martin: In terms of the retailers.

Diishan Imira: Yes. And at the distribution level, all the hair extension brands that are sold at the beauty supply store are also Korean owned brands, but they buy it all from Chinese factories, but then they’ll only distribute through their Korea-owned beauty supply stores. The way I look at at things is that okay, they came over here, they saw an opportunity, they took it, they’ve done everything in their power to keep that market and it’s on us to take our market and to participate in our market.

Jamarlin Martin: You’re saying don’t go blame other groups who are trying to eat.

Diishan Imira: I’m saying, if you want to you can, it’s not gonna help you though. The blaming part of it as an entrepreneur ain’t going to get you out of the bed. You’re not focused on doing the shit. Yeah, you can. If you want to sit there and focus on that, go ahead. If it makes you feel better to bitch about it, you could be right. Also, if you want to be right, you could do that. If you want to get to the shit and get the money, you would probably spend less time thinking about that. Also like I said about the Chinese. There’s something to be said for Korean immigrants, after a war, coming to America, going into neighborhoods where they don’t even speak the language, but the culture itself, Black culture is completely different. And setting up shop, you can’t not respect that. I don’t get caught up a lot, it’s not an us versus them. It’s the market that we feel like we should have a share in. Alright, let’s think about how to go and get it.

Jamarlin Martin: Would you say that, whether it’s Koreans or Arabs, or other immigrant groups, Indians coming into hoods all across America, setting up shop, profiting, scaling their retail operation. The reason why they are so successful versus you don’t see Black people, particularly African Americans owning those shops is they have a knowledge of self, in terms of a more intact culture and based on our history in America, we don’t, we can’t reach back and we don’t have a lot of the good stuff that they’re bringing to the table from their country of origin. Would you say that explains a lot of it? It’s cultural.

40:30 —Diishan Imira: Yeah. A lot of it is cultural and there’s an ethos of working together we have yet to develop as African Americans. We still have so much emotional trauma to overcome to get all that fear and anger and shit out of us to be able to just look at one another and not be scared and work together and do it, and pool resources together and be able to think long-term enough to hold out on certain things and not immediately take the fast dollar. You also have to have a long term view. You can only see as far ahead as you can see behind. And we have such little understanding of our history that we also get caught in very short term thinking. We don’t look very far into the future. Chinese and Koreans, from my experience and their culture, they look generations ahead and they’re thinking about that in how they operate on a day to day right now.

Jamarlin Martin: This is part one of my interview with Diishan Imira. Be sure to check out part two. Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter and also come check us out at Moguldom.com. That’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

Read More

Episode 46

Feb 26, 2019

Kai Bond

Jamarlin talks to Kai Bond, managing partner at Comcast Ventures Catalyst Fund. They discuss the

st Fund. They discuss the Fyre Festival being flagged during due diligence and Kai’s observation that most African-American entrepreneurs are under-negotiating. They also discuss a Washington Post article suggesting Facebook is psychopathic. 

Read More

Episode 45

Feb 19, 2019

Ryan Wilson

Jamarlin talks to Ryan Wilson, founder of Atlanta’s Gathering Spot. They discuss Wilson’s plans to scale

s Wilson’s plans to scale his profitable subscription and events business, and whether Kamala Harris’ candidacy will result in a civil war in Black America. They also discuss the term “people of color” and why Atlanta is one of the hottest cities for tech.  

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! Today we have Ryan Wilson, the cofounder of the Gathering Spot in ATL. Welcome to the show.

Ryan Wilson: Thank you. Glad to be here.

Jamarlin Martin: We’re going to dive right in to something that’s been really active in the community on Twitter in terms of Kamala Harris announcing her run for president of the United States, and one engineer at Google that I know, she mentioned that she thought that this could ignite a civil war in the Black community in terms of tensions and emotions are so high over the candidacy of Kamala Harris. Does that sound extreme in terms of some of the divisions in the community because it touches on race and gender. It’s just a very emotional, at least from my perspective, I agree that this is a very emotional topic right now.

Ryan Wilson: Yeah. I don’t see it as a civil war that’s about to come. I mean, I think that what Senator Harris best represents is that, or the challenge maybe that her candidacy is going to pose is that she was a prosecutor, right? And has been a prosecutor at the highest level of her state. Right? And so there are a number of cases that she’s participated in over time that I think people are going to draw issue with. And I think that’s part of what you see right now, is that the immediate reaction is about people being concerned about her opinion about several death penalty cases and drug related cases and where she’s had to advocate on behalf of the state. Do I think that that goes to a civil war? I don’t. I think that we’re going to have an informed discussion about if she’s the right person to represent the community and then ultimately the nation.

Jamarlin Martin: See, I don’t think it’s just about her record on criminal justice reform. Actually, she made some mistakes. She’s being forced into taking certain positions. Some people get hurt. I could come closer to buying into the candidacy of Kamala Harris, if that was the only issue. To me, there’s a promiscuous amount of issues, that lead up to, hey, when the lobbyists and big relationships, when they’re in those rooms, when no one is looking, what type of decision is that political leader, is that president, is that Senator gonna make when no one’s looking? That pressure is on the line. And of course in the Iraq war you had Obama, Elizabeth Warren, Bernie Sanders voting against the Iraq war, meaning that the pressure was on, everyone’s rushing, go to war, go to war. And you had Biden voting for the war. You had Hillary Clinton voting for the war. From my perspective, if you observe Kamala Harris’s trajectory, I got to think that she’s definitely, likely, in that situation, in the future to be on the Hillary Clinton and the Biden side of the establishment. Do you think that’s fair?

Ryan Wilson: I think it’s somewhat fair. I mean, she has in many ways a longer record than a lot of the people that we’re talking about. Right. She’s just had more time to have more opinions about more issues. She has a ton of things that I think people are going to be upset about that are outside of criminal justice reform, but really going to get to the heart of other issues. Ultimately I think people are gonna be mad about it. I don’t dismiss it though. I think that the time that we’re living in, what’s going for her is that she’s a woman of color. That’s going to be shattering a couple of different barriers. One, in seeking the highest office in our land as a woman. And the second person in history, that would be a person of color. So those two things, I think, are compelling, especially in the era of Donald Trump. That contrast to him, I think, is powerful.

Jamarlin Martin: I get we shatter barriers, but would you vote for a candidate if you thought that, hey, this is the type of candidate that’s going to go and take over Venezuela or vote to go into Iraq for war, or go to war with Iran. Would you trade, hey, I get a Black president, I get a Black woman president. Would you trade that in terms of the symbolism and the kids can see the Black people at the top with killing a million Iraqis? I mean, is that, as a human being, is that a fair trade where I can see this person at the top, but they may be doing dirty stuff. They may be doing questionable stuff, they may be murdering people, but if they’re Black or if they’re a Black woman, hey, that’s going to give the people this extra kick. Who cares if all this other crazy stuff is done by this leader?

Ryan Wilson: Yeah. I’m with you. But I think that the problem with our country in general, right, is that you can really look at any leader and have those same sort of issues. Republican or Democrat, doesn’t really matter. At the end of the day, the United States for its history has participated in actions that I don’t agree with. Right. And so I can’t say that it’s so much as a trade, but…

Jamarlin Martin: That’s what it sounds like because it sounds like people are saying that Kamala Harris, there is an emotional attachment, she’s going to break down barriers for sure, and we want that. I want America to have a Black woman president. We want that to happen. But if you look at her proximity to lobbyists and Silicon Valley, Google, Facebook, giggling was Sheryl Sandberg. After the financial crisis, while she was district attorney, she allowed the current treasury secretary, Steven Mnuchin to get off the hook in terms of they were doing something shady with the mortgage. And so, it’s widely known that hey, you’re letting this guy in this bank off the hook, that is some part of some suspect dealing. And so we call into question, are you going to bang for the lobbyists, special interest groups, Wall Street, Silicon Valley. When you get in the office, are you going to be banging for them, or are you going to be banging for us?

Ryan Wilson: Yeah, I mean I think that that’s a fair question and I think it’s a question that has to be asked of all the candidates, right? Call me a pessimist, but if you look at most of the candidates that are in the race, all of the things that you just raised are certainly in play with them too. The unfortunate part about our political system right now is that to get elected, it takes a lot of money and it takes, in many ways, having relationships or interactions with businesses that, many of us in some way shape or form, say that we don’t lake. But I try not to be, when I’m looking at any particular candidate, to be a person that solely focuses on some of their negative attributes, when those negative attributes a lot of times are the same negative attributes that most of the candidates in the field have.

Jamarlin Martin: So essentially what we’re saying is, look, the Black candidate who’s very close to lobbyists and special interest groups, they needed the money. They have all these negatives, but because they’re Black or a woman, that we need to cut them some slack and allow them to be a little dirty.

Ryan Wilson: It’s not cutting them any slack. It’s using the same rubric. So the same rubric that we use with Senator Harris, we have to use with Senator Biden and all the other folks that you’ve listed who are allegedly getting into this race. We’ve got to hold all of them to the same standard. And a lot of times what we don’t do, we circle in on, I actually think it’s a problem, we circle in on one candidate in particular and try to point out all of the different ways that we don’t find them authentic. Their peers in many ways, if using the same rubric, are not engaging in politics any differently.

Jamarlin Martin: Okay. So Kamala Harris says the issue of Palestine, our Palestinian brothers and sisters, she, like Hillary Clinton’s, similarly…

Ryan Wilson: Very similar platforms. If you look at Senator Harris and Hillary Clinton, the platforms are not that different.

Jamarlin Martin: Oh, it goes deeper than that. Kamala Harris had a secret meeting that she wanted off the record with the lobby group for American Jews. So she wanted it off the record. And so the people, when these candidates go in front of these lobbyists and the politician says, “No, what I’m going to tell you, this cannot get out. This is special stuff.” Right? Okay. Hillary Clinton, of course, it came out, she didn’t want to release the transcripts when she was talking to Wall Street bankers at Goldman Sachs. Okay. So, you don’t want to release the transcripts. The media is pressing you, we want to know what you’re telling these Wall Street bankers because you’ve got a high position. We want to know. She said “No, I’m not going to release them.” So they hacked and they ended up getting information about that speech. There’s questionable statements from Kamala Harris where she says that the Palestinian issue is not a political issue. She’s riding on one side no matter what. Essentially she has pretty much positioned herself for this. And of course the Democratic Party, they’re not necessarily, I believe, going towards a pro-Palestinian position, the left is going more to a neutral stance that we’re not always automatically for one side. If you go kill 50 Palestinian kids, we’re coming to the position where yes, we are going to criticize that. It’s not like we’re always going to defend one side no matter what. And so, I think, the Palestinian issue is a proxy for other things. Meaning that, is that politician going to step out the box in and do what’s right?

Ryan Wilson: Yeah. I mean, I think the thing about politics is that it’s about what the alternative is. Right. And so I don’t think that there’s any candidate that we’re going to find in any race that is the perfect candidate by any stretch. Right? I haven’t found one to date in any election that I voted in all the way through local elections, and so this is the problem with progressive politics in general. We have a terrible time. We fight with one another so badly, that a lot of times we lose focus on the actual issue. The thing that we should be paying the most attention to is our current president and his administration. Right?

Jamarlin Martin: I disagree with that.

Ryan Wilson: We’re in terrible times right now.

Jamarlin Martin: Yeah. I think it’s a privileged position, particularly people with pockets, people with the wallet to say that Black America, we need to be focused on Mueller. We need to be focused on Trump and how that’s going to be resolved. And we just need to play it safe and go to the center. Meaning that our brothers and sisters in Watts, in Harlem, in Chicago, these political decisions, they impact a lot of lives and most likely, I believe, the Corporate Democrats get their way, based on the trends and the history, they’re probably going to put a lot of troops back in war. So these decisions are really big. Now I get the Mueller and Russia investigation, but there’s still an opportunity to, hey, you got to get this stuff right. You got to really dive down and go beyond the optics.

Ryan Wilson: I agree. I think the main problem with progressive politics, again though, is that folks on the right are a lot better at framing arguments. They’re a lot better at social movements. So what they do, if you read books, like “Rules for Radicals”, the right does a very good job of framing. They run as far right as they can and they shift where center is. And that’s the thing that we don’t do as people on the left. We play center politics the entire time, never run left. And so our middle was really kind of right of center all the time. And so I agree with you, on that level. I think that, I don’t look at any of this as an either or. It’s not either you pay attention to people of color or we pay attention to the Mueller investigation. I think we have to pay attention to both. And we have to challenge candidates by running farther to the left, exposing them to the issues in our communities that matter. But at the same time, it isn’t a bad frame to also point out, look what’s going on on the right right now is extremely problematic. I think that it actually helps frame why movement to the left matters.

Jamarlin Martin: This leads into Bernie Sanders.

Ryan Wilson: Are you a Bernie Sanders fan?

Jamarlin Martin: Not a fan, but I would look at each candidate’s position and kind of see who’s the closest that reflects my values and what I believe him. So Bernie Sanders, Elizabeth Warren, she recently said in her campaign platform that, look, I’ve seen it. This political game is rigged. It’s rigged on both sides. Wall Street lobbyists, they have rigged the system. We need to remix the system where money, corporations and lobbyists, special interests groups. They don’t rig how the game works in a way where, what you vote for and what you want, once that person gets into office, these elements, if you get into office, because the money is of course competing with the voters. But if we change the way money impacts our politics and influences our politics, a lot of these issues go so much faster. So I get it that, hey, we’re working with all micro issues and we need to fix this. We need to fix that. But if you re-engineer the power and influence of money in politics, that Black vote, the equity of the Black vote go significantly up. Because we don’t have the Sheldon Adelsons and the big billionaires who pour money into politics to represent our interests. So the Black voter needs the money to go down. That should be a big issue. And so if you rank the candidates, if you say that hey, money in politics hurts Black people. When we examine the political system in the United States, the big wallets, all these other groups who have big wallets and the influence politics, it hurts our people because we don’t have the big wallets. Why isn’t that a top five issue? And so what I’m saying is, if that’s a top three issue for me, and I think it should be for many others, then Kamala Harris, Joe Biden, Beto, Cory Booker, they will score, they would score low.

Ryan Wilson: And so would Elizabeth Warren and Bernie Sanders. Right? I think it is very difficult, right, to be the beneficiary of a system and advocating truly for its collapse. I’m skeptical of people…

Jamarlin Martin: Who’s advocating for the collapse? I’m not familiar with that argument.

Ryan Wilson: Maybe collapse is not the best word, but what you’re describing Senator Warren is interested in doing. It’s very hard to be a beneficiary and, frankly, elected by a system that you are saying you’re going to dismantle some way afterwards. I don’t have any more trust in the ability to be able to do that. That’s as concerning to me. And maybe I should say, as our previous conversation about Senator Harris.

Jamarlin Martin: I mean, you look at Ocasio-Cortez. Today, it was reported, she sent a letter to Facebook. Her colleagues, Chuck Schumer, of course, his daughter is what I would call a lobby daughter. Chuck Schumer’s daughter works at Facebook. A Senator wanted to investigate, and look into Facebook. He told that Senator Warner to back off. Nancy Pelosi, her family owns millions of stock in Facebook. The Facebook elites of course, really were embedded with Obama and helped him get elected. And we didn’t have any regulation or no consumer privacy. The Democrats just let Facebook run wild. I think this stuff is so blatant.

Ryan Wilson: If the Democrats let it run wild, what did the Republicans do?

Jamarlin Martin: The Democrats. Sheryl Sandberg. Google, their candidate this election is Cory Booker. Eric Schmidt, and I give the Silicon Valley establishment a lot of credit. They’ve been grooming particularly Black candidates and they have been playing long ball. They’ve been investing in Cory Booker’s company, doing whatever it takes to hook the Black politician who’s desperate for money, desperate to kind of be competitive. And they kind of make the deal with the devil. I just think that it’s pervasive, and Silicon Valley is more aligned with Democrats. Republicans are more aligned with Wall Street. That’s in my view. Essentially the greed that Obama banged against in 2008, the financial crisis in Wall Street, it just went to his side. It just went to Silicon Valley, the tech, the big wallets over in California.

Ryan Wilson: I think what we’re describing, if you see something on both sides though, that’s kind of the overall fault in our political system, right? It’s less about Republicans and Democrats and it’s more about cases like Citizens United where we’re saying that many of these corporations are people. What our fundamental focus should be on is that our political system right now. Yeah, it does. I agree with you. It has too much money in it. I think there’s way too many big organizations that have the ability to influence the outcomes of elections. But that to me is again, less of a red or blue thing and more of a fact that our political system overall really needs some examination. And I think that’s from money in politics to how we elect people all the way down to the electoral college.

Jamarlin Martin: Is that a top five issue for you?

Ryan Wilson: Yeah I would say so. I think Citizens United…

Jamarlin Martin: Can you explain to our audience, what’s that about?

Ryan Wilson: The easiest way to understand citizens United. And to me it actually connects to a broader, if you want to talk about top five issues. One branch of government that we don’t pay attention to enough as people of color and as citizens, is the influence that the Supreme Court has on policy, right? We take for granted the influence that that body has. And what we don’t acknowledge about it is that historically it has been a very conservative institution. Even the most quote-unquote progressive cases that we point to day in and day out, a lot of those, if you really step back and look at them are very conservative opinions too by so called liberal justices, right? And so Citizens United, to get back to that, essentially, what it allows for, is it facilitates all of this big money in politics, where the court essentially said that organizations are people and therefore, because they are people, their ability to be able to participate in campaigns knowing that they have the financial wherewithal that goes way beyond the average person, should be considered as people under our law. But again, it’s a part of a long string of Supreme Court cases that are extremely conservative in nature and harmful to us. We as Black folks, people of color, need to be spending more time trying to institutionalize laws by way of legislators and stop appealing to the Supreme Court as a body because it has never proven to be an effective institution for us. That goes all the way back to even cases like Brown v Board. Not a good decision at all.

Jamarlin Martin: Where are you from?

Ryan Wilson: I’m from Atlanta. I grew up mostly in Atlanta. I was born in L.A. but grew up here.

Jamarlin Martin: Okay. What age did you move to ATL?

Ryan Wilson: First time I moved when I was six. Moved here right around the time of the Olympics and then moved away again to North Carolina. Then I came back.

Jamarlin Martin: What part of L.A.?

Ryan Wilson: Inglewood.

Jamarlin Martin: Okay, cool. Very familiar. I’m from L.A. as well. You’re building some amazing things in ATL. How did you get to starting The Gathering Spot?

Ryan Wilson: Yeah. So it’s really interesting where life takes you. I graduated from high school here in Atlanta. Went immediately to Georgetown for Undergrad, spent a lot of time in the diversity inclusion space first on campus. And then we kind of moved off campus to working on different community issues. Was involved in a whole bunch while I was an Undergrad. But I went there with the intention of becoming an attorney. I wanted to go to law school immediately after Undergrad. Graduated, went straight to Georgetown Law School and I quickly found out while I was there that I didn’t want to be an attorney. I promised my mom that I would finish and so I did that. But for the last two years of law school, I started working on what’s now The Gathering Spot.

Jamarlin Martin: So you graduated from Georgetown?

Ryan Wilson: I did graduate.

Jamarlin Martin: I dropped off Syracuse law first year.

Ryan Wilson: Georgetown and Syracuse. That’s no good. But the inspiration for the business really came about, I was in need of a couple of things. On the community side, college is interesting if you look at it. There’s people from all over the world, a lot of universities, there are speakers coming all the time. Your friends are probably studying different things than what you are. And what I found when I went to law school, that network went away pretty quickly. I was all of a sudden around basically just a bunch of lawyers, right? There weren’t opportunities for me to engage with different types of people and that community that I felt as an Undergrad just was gone. And so the core of what we’re doing here, I tell folks all the time, we’re not in the space business, we’re in the community business. You’ll find a little bit of everybody. We host a ton of experiences and connect people through work, dining and then through events.

Jamarlin Martin: What was your pitch in terms of what The Gathering Spot does?

Ryan Wilson: Yeah. So at our core, The Gathering Spot is an invitation-only private club. What does that mean? So by way of space, we operate a full restaurant and bar. You have to be a member to dine here at the restaurant. It’s open for breakfast, lunch and dinner every day. We are pretty co-working space. That’s workstations, private offices, really any work environment that you need. We keep that open 24 hours a day and again as a member of the club, you can use it.

Jamarlin Martin: For our audience. If I’m an entrepreneur in Nashville and I’m stopping over in Atlanta for a couple days, can that person be a transient guest?

Ryan Wilson: So you can apply for membership and not live here in Atlanta, but we don’t offer day passes. So to become a member of the club you have to go through a process, right? That involves an interview and ultimately our team really is looking to maintain balance inside of the club. There’s certain really important sub-communities that we formed here. And so like for example, a number that I’m really proud of is that 60 percent of the membership base are women. And to make sure that that stays that way, we pay a lot of attention to making sure.

Jamarlin Martin: Would you say that you’re more Soho House than WeWork?

Ryan Wilson: I wouldn’t say we’re either one of them.

Jamarlin Martin: Are you in the middle or just a totally new category?

Ryan Wilson: We’re a whole different category. Right. So the approach here combines elements of what you’ll see and then there’s members, there’s a membership component, there is co-working as a part of it. But how we come together here and what we do is, with all due respect to those businesses, just very different. Different demo, different way that we go about connecting with each other.

Jamarlin Martin: You’re a subscription business essentially?

Ryan Wilson: Yeah, in some way. We host a lot of events.

Jamarlin Martin: Yeah. If you could share this on a percentage basis, how much of your revenue is subscription versus the other stuff?

Ryan Wilson: So I can’t say to an exact percentage, but I would say a good bulk of our model is connected to the membership dues and fees. But I mean, we hosted 1400 events last year and we specialize in corporate functions, a lot of times with the biggest brands in the world. And so that’s a pretty significant part of the business as well. And then we operate the restaurant, so there’s food and beverage that is part of what we do too.

Jamarlin Martin: How did you connect with your co-founder?

Ryan Wilson: So we were on the same freshman floor as undergrads at Georgetown. No expectation of opening a business. He’s from Saint Croix. And when I graduated or when I was going into law school, he was still working in D.C. As a portfolio manager and I started talking to him about the business, needed someone that could help me with the model. He had a finance and accounting background. And so that’s why we teamed up. But we spent most of our undergraduate time as roommates.

Jamarlin Martin: And what type of margins are possible with your business? Let’s say you execute your business plan over the next couple of years.

Ryan Wilson: So I would say this, business has been profitable since its first year. And so good ones.

Jamarlin Martin: So you’re cashflow positive now out of the gate.

Ryan Wilson: Yeah. Ever since we’ve opened.

Jamarlin Martin: Yeah. Okay. Very nice. WeWork is not. And that kind of speaks to what I believe is a lot of froth in the market where as you saw in 2008, 2009 I guess in the real estate case, credit scores, who needs those and who needs that? In 2000 who needs profits. We can go off clicks, but a lot in the tech space in general, not just Black tech but just in the tech space. In this part of this cycle, which I think is the end. No one cares if you can generate cashflow. No one cares if you could generate profits. No one cares if that business has enough cash to go another six months. I’m just going to raise more money and flip it to another company until this shit stops. What do you think about that? Cause it seems like the consensus mentality where I’m just going to sell the business and just raise money, raise money, sell business.

Ryan Wilson: Yeah. I’m not into it. The thing for me is, yeah, there are a lot of companies that are raising a round to just raise another round. Right? And I think that what TK, who was my business partner, what we set out to do from the beginning was to build a sustainable business model. We paid a lot of attention to how do we make sure that this thing works. Right? Actually works, not working because we have a bag of cash in the other room but works because we’re able to actually see that people use the service that we provide and invested in the community that we’re building. At the end of the day, my parents are entrepreneurs and…

Jamarlin Martin: You got a lot of game from your parents?

Ryan Wilson: Oh, 100 percent. But there’s a real fundamental lesson that I had kind of baked in from the beginning was that at a very, very basic level, a business is able to care for its expenses. If you can’t do that, I question the success of that business. There are businesses that we all use, and if you read the prospectus that comes out, you’ll find the entrepreneurs in many cases saying, we don’t ever know how it will be profitable. And for me, that’s not a business.

Jamarlin Martin: What would you say to the the bubble crowd? They will hear you and ATL and you’ve been profitable from the jump. You got your thing going, you’ve got a lot of things popping. But that bubble crowd in Silicon Valley that’s kind of programmed by the economics of venture capitalists, in terms of they try to make it fit where, “Hey, you’re not big enough. You’re not doing monster rounds. This thing can’t become a billion dollar business.” And so that mentality, of course, I would call it a unicorn or bust. You see a lot of, unfortunately, I see a lot of our people, a lot of Black entrepreneurs trying to make their opportunity fit with these boom and bust investors where they don’t care, obviously, if nine out of 10 blow up. They don’t care if your business blows up, they got 50 other bets out there. It’s just a number.

Ryan Wilson: So I’m glad we’re recording this because I do think that we can become a big business. And, I mean, the approach that we’re taking is actually not a radical approach. There are businesses that have been profitable and figured out how to scale without having to take on the type of capital or that mindset that you imagine. And no, the thing about venture is true, in many cases they artificially inflate the value of the company and then have you chase it. Many of those companies failed and the ones that don’t fail, whenever there’s some sort of liquidity event, the investors take their cash off top. Right? So the model in lots of ways doesn’t work. Businesses of color, but a bunch of businesses, right? Venture is not right for every type of business, but it doesn’t mean that you can’t scale your business if you don’t take in that sort of capital or have that mindset about the business. And so again, I’m glad we’re recording this because if we do what I think we’re capable of doing here, we can scale this business successfully and we’ll have done it without doing any of the venture stuff.

Jamarlin Martin: How much capital have you raised, if any?

Ryan Wilson: No. So the first round was $3 million. Okay. All family offices, high net worth individual money and it’s patient capital.

Jamarlin Martin: Okay. Got It. So it’s not coming out of big institutionalized VC, which is good. That’s what I’m saying. This bubble crowd is like, I got this fancy name on my cap table. I got all this money. And of course, the way the economics works in terms of in a bubble environment at least, a lot of folks, our people specifically, will see headlines saying this entrepreneur raised $30 million, this entrepreneur raised $20 million. They don’t understand when that business is sold and all those investors are in that cap table, if you’re trying to create wealth, the number’s not the headline on the the PR strategy or the magazine. Really you want to be looking at, hey, if this business IPOs or is sold, I’m taking home x and these people are not going to be making 95 percent of the value creation.

Ryan Wilson: A lot of entrepreneurs need to spend more time really understanding that business because it is a business, right? So you’re betting heavily on, let’s call it 10 companies for the sake of this conversation, knowing that one of them is going to be successful. Right. And the way that that VCs hedge the risk is that once there is some sort of liquidity event, their cash is coming out first, right? And so if you don’t prove your thesis, it doesn’t mean that they don’t get paid. So say that they valued the company at $100 million and it sells for $80 million. Well that $80 million is theirs. And so folks don’t understand that it’s very difficult as the entrepreneur, as the founder, to make a ton of money in that system, unless the company is valued at more than what you raised money at.

Jamarlin Martin: You mentioned patient capital. Can you first explain to our audience what patient capital is and can you also explain, when you tapped patient capital, was it intentional in terms of, hey, I’m not even trying to go get that bubble of Silicon Valley money. I know what flavor of capital I need at this stage.

Ryan Wilson: Yeah. I’m raising another round right now and have the same perspective. So patient capital really is, you’re going to investors, you have a model and you have a thesis about when there will be a liquidity event, but what you’re asking them to understand about the business is that it might not follow the same three to five-year horizon. Right? And so there are a lot of investors that want their investment to do more than market, but aren’t necessarily looking for unicorn status in three years. That doesn’t mean that the business won’t grow to be as big as any company that you’ll see out there. But patient capital, a lot of times, is not looking for that return in really, really short timelines.

Jamarlin Martin: And what was your process in finding the right investors and tell us about any rejections you got.

Ryan Wilson: I was rejected 97 times, I counted them. We were rejected regularly. That’s part of the game when you start to try to raise money, you’re not a fit for most people. But, this is the other thing. If you’re building something that’s disruptive and people shouldn’t be able to understand it immediately. If they can, you should be worried about that idea. Right? So we took that as a sign that we were actually onto something rather than being frustrated by the process. Because, again, you kind of have to be the crazy one in the room. If what you’re building is actually something that’s different. If it isn’t and people get it instantly, it’s probably been done before.

Jamarlin Martin: I want to repeat what you said, I think it’s powerful. This brother said he was rejected 97 times. And so we have to understand, if you’re going to play this game, this game, do not start the game. If you’re going to start going into investor meetings and you get three or four rejections and you start saying white folks this, white folks that, the systems is rigged, this is not the game for you, don’t even start this game.

Ryan Wilson: No. I mean you’ve got to think about how hard it is for someone to get a dollar out of you, right? There’s two things that I think that every entrepreneur has to do. The first thing is you’ve got to put all your chips on the table first. I put everything that I had. My business partner put everything that we had. So by the time I started talking to you…

Jamarlin Martin: When you say everything, what are you talking about?

Ryan Wilson: I mean every single penny that I could possibly find plus credit cards plus anything. It is very difficult to ask people to pay you, to give you any sort of amount of their money when you haven’t done the same. Right. So we put all of our chips to the center and then had a really, really informed conversation with them about why we thought that they would be a good partner for what we were doing. Understanding that the majority of people, even if they thought the concept was okay, we’re still going to say no, because getting someone to give you their money is one of the hardest things that you can possibly do in any context. Go ask people in the nonprofit space, right? It’s really difficult to get people to, it’s in part strategy plus an emotional connection a lot of times. And what folks don’t get is that they’re most of the time investing in you as a person and not even really the concept.

Jamarlin Martin: When you’re going through your process in getting 97 rejections, you’re not thinking about, hey, if I was white, I would have gotten an acceptance by now. What’s your psychology going through those rejections as a Black man?

Ryan Wilson: So look, I think that there are certain realities about being Black and raising capital, right? The numbers don’t lie. It is harder to raise capital in our community than what you see in others. Right? I want to acknowledge that. But no, I believed that I was the person that was onto something different. Right? And so if you don’t have confidence as an entrepreneur, you don’t have anything, especially early, right? You have to believe in yourself more than anybody else.

Jamarlin Martin: Even if, as you say, I believe that the institutionalized white supremacy and discrimination is there. It’s there. Not only is it there but you have the extra thing where, hey, they don’t see us a lot. People want to invest with people they can joke with and geek out with on their terms. So even if the white supremacy, the discrimination, the boys club, the I’m comfortable, I don’t see you. Even if all that stuff is true, you are better off not dwelling on it. And let me just add another point. This, I believe, speaks to the difference of a lot of our brothers and sisters who come from Jamaica and Nigeria, where we’ve been oppressed in a way where there is a lot of baggage in terms of, the system is on us in the system is against us. And it’s true. It’s there.

Ryan Wilson: Yeah, the system is.

Jamarlin Martin: But if that Nigerian, that sister from Cameroon or that brother from Jamaica, if they come over here without that thinking, usually or what I have seen in my life, is that they kick our ass. I’m African American of course. But if that Black woman or man comes from Jamaica, comes from Nigeria and does not see the stuff that we have been institutionalized with, in terms of the stuff that we’ve seen, they’re going to kick it. Sometimes it’s better for you not to even see it, for you to go after and build the institutions that you need to build.

Ryan Wilson: Well, it’s hard to be scared of something that you haven’t seen before. Right. Institutionalized racism, it’s impact is real, right? You spend, depending on who we’re talking about, decades trying to get a person to believe something about themselves. And it’s very difficult when that person has an idea that they suddenly forget, several decades worth of training that suggests to them otherwise. Right. So I do think that what you see is a confidence. A lot of entrepreneurship in its early stages is about your mindset, right? It’s about how you’re approaching the problem and the overall mentality that you have while going into battle every day. And that’s how I look at when you’re trying to start a business. It’s a battle every single day. And so yeah, if you’re coming into that battle with a ton of confidence or really with a lack of full understanding about how the world perceives you and your perceived limitations, that’s a powerful thing not to have when you walk into the room each day. And so, a lot of this though is about confidence and so that’s what I would tell myself through those 97 rejections. Keep rolling.

Jamarlin Martin: What was the most memorable rejection?

Ryan Wilson: A four-hour long meeting that I had where at the end of the meeting, the guy said, “So what is this?” After talking for four hours. So we had a four-hour long meeting, at the end of the four hours, he said, “So what is it?” He had not been paying attention through four hours of conversation.

Jamarlin Martin: What do you think that was? I had experienced similar to that.

Ryan Wilson: The mistake that a lot of entrepreneurs make is that, and the thing that we just accepted, is that nobody cares and nobody has the time. So even when they have agreed to have a meeting with you, they still don’t care.

Jamarlin Martin: You didn’t take it kind of personal.

Ryan Wilson: It was. It was, but look at your own day, right? Imagine that there’s this foreign person sitting there talking to you about this concept. Right. And you’ve got other stuff going on, you’ve got a business and kids and a job and you’ve got other stuff happening, right? And so it’s very difficult to push a person past one, just connecting to what you’re talking about, let alone getting them to actually cut a check for it. Right. That’s a hard road.

Jamarlin Martin: Yeah. This brings up an experience I had, where we were talking to investors and the CEO of Demand Media, they’ve changed their name now. I think their ticker symbol was DMD. So we’re talking in New York in the office and this guy comes an hour and a half late. And I start running my presentation and I’m going off of notes on my presentation. He’s like, are you really going to go through the presentation? But this guy was the biggest dick that you’ve ever seen, in terms of the arrogance…

Ryan Wilson: A lot of times it’s intentional. A lot of potential investors, which you’ll see if you’re out in that game, their thesis is that they’re investing in you, not in the business. And so I was in conversations where they were intentionally trying to rattle me. They we’re doing things specifically to see how I would react to them. And a lot of those times, like those things were rude and they were trying to figure out.

Jamarlin Martin: They’re trying to figure out like, “Hey are you going to go Black man on me?”

Ryan Wilson: The question is, so being an entrepreneur there’s pressure and there’s people that are rude, there’s customers who are going to be rude, so what do you do in this situation?

Jamarlin Martin: So this testing, where they’re trying to put pressure on you, you didn’t take that as racial? It was just something like, Hey, I’m taking it as other entrepreneurs get the same experience.

Ryan Wilson: No. I took some of it as racial. I think that the degree to which I got it. I think even the degree to which they were willing to ask me questions I thought were strange. Race was a part of it? But there’s no doubting that when trying to start a business as a person of color, it is really difficult to gain the attention and then specifically to get people to actually cut you a check. The main reason why that is that that same way that institutional racism harms confidence when you get into the process, it also builds preconceived notions about who it is that you’re speaking to.

Jamarlin Martin: Let me play devil’s advocate. Okay. So your people say you guys get rejected because of a race, and in the Black woman’s case, race and gender. If you had to estimate, and I’m talking from the devil’s perspective, if you had to estimate how many of those Black who say that, this process, this investment picture, whatever, I was a victim of racism. I pitched three times and I felt racism. What percentage of those cases do you feel the Black entrepreneur has done the research and the homework in terms of how the game is played? Because obviously uncle Ray Ray, our parents, obviously you’re a unique case, but a lot of us come from homes where this process is not intuitive. Right? It’s not cultural. Where in other communities, it is cultural and they’re getting family members and people in their network to help them and guide them through the process. But what percentage do you think, if you had to estimate, that when the Black entrepreneurs up to like five rejections, they’re adequately prepared in terms of the market rate, in terms of what’s average, what’s average in terms of entrepreneurs pitching, that these people do have the right homework? They do understand the game, that it may take a hundred pitches. They do have the understanding in how to do a really tight presentation, that they are at market.

Ryan Wilson: So the reason why I can’t buy that argument, or I can’t even really go that far with that argument is that it almost assumes that of those companies where there are white founders, that there’s a level of preparation and understanding of the game too, right? I’ve been in those rooms. Right. And there’s not any more preparation or understanding.

Jamarlin Martin: Yeah, of course we’re talking about estimates.

Ryan Wilson: I would say in total, I think that there’s some legitimacy to that because, this is the one thing that I will never say when we were talking about issues that have to do with race. I have not seen, right, where people of color are overwhelmingly are unprepared, not understanding. I mean, in fact, the companies that we see out of The Gathering Spot every day, I think are some of the hottest companies in the country. Right. And they’re still not able to get to the same level of funding. And part of that, yes, I think very much has to do with the race and gender of the founders.

Jamarlin Martin: You believe all the homework and the game is there for them to get the same treatment of what other folks are doing.

Ryan Wilson: I don’t believe that companies that we see getting invested in right now, all of them know all of the game either. Right. And because of that…

Jamarlin Martin: But is there a discrepancy?

Ryan Wilson: Not really. No. Not In my mind. I mean I think there are entrepreneurs of all shades and colors that don’t know anything about the process. Some are getting funded and some aren’t.

Jamarlin Martin: So If I played the devil’s advocate here, I would say, hey, the data shows that when you factor in affirmative action…

Ryan Wilson: White women benefit.

Jamarlin Martin: When you factor in affirmative action when a lot of the Black students, and not just black, but I’m just going to say Black here. But when you give the Black student affirmative action and they go to a Stanford or Penn or Harvard, what the academic establishment and data argues is that they don’t do as well as the other students, they’re not prepared.

Ryan Wilson: Two problems. So the first problem is that the largest group that benefits the most from affirmative action, this is a numerical thing, are white women, right? White women are actually benefiting most from affirmative action, anybody can fact check me. White women are the biggest beneficiaries from affirmative action programs in the country, right? That’s the first problem. The second problem is, people of color at predominantly white institutions, this is the question that we don’t ask enough. There are certain rules, certain standards that are put in place that we treat as neutral. There’s no such thing as neutrality, somebody wrote the test. There’s a point of view and a perspective behind every single curriculum that’s out there, right? And so for you to suggest that people of color are not performing as well, right? There’s only really two ways to go. They’re going to say maybe three options. They’re not prepared. They’re not as intelligent as the rest of the group. But a third, through a very real variable that we don’t pay attention to, is the fact that there’s a set of standards that again, we treat it like a bandaid that it’s neutral for people, but bandaids in and of themselves are not neutral. There’s a target customer just by the way that the bandaid is colored, a contrast that is not for people of color. And so what is the difference in that context than what you see in universities, right? I don’t believe that attending a Catholic institution in Washington D.C. That’s been around since 1789 that didn’t allow people that look like me to go for the majority of its history, even at this point, the majority of the time, Georgetown has been there as an institution. People that look like me still could not, could not attend that. That rubric is all of a sudden neutral just because I show up on campus.

Jamarlin Martin: Okay. So you’re using a term that I want to talk about. You’re saying people of color, and I know this is a popular term and I may use it selectively or sometimes, but why should Black people, where we came over here on slave ships, we’ve fought on the front lines of the civil rights moment. These laws that were broken down in the United States, that’s us. We have led the charge for everybody, even the white woman. And we have not commensurately benefited from all our struggle and banging against America and the forces that are against freedom and justice quality. So we’ve been on the front lines and so the problem I have, and it’s not you, but I see a lot of folks when we use terms like “people of color”, it’s like we’ve got a big rainbow where we’re bringing everybody in terms of talking about some of these issues. Do you feel like you see a risk that, when we’re talking about our community issues and that’s on most cases, our priority, a lot of us, that’s our priority. Hey, I can’t save everybody and this is the community that I belong to and that I’m passionate about and that needs probably the most help. Right? So you want to prioritize Black folks, at least for a lot of folks. But do you see a political issue where we may be hurting ourselves if too many of us are out there not being specific, meaning that I’m going out to rescue the Black woman and the Black man, or this is who I’m talking to.

Ryan Wilson: Yeah. So for me, it’s an interesting perspective. It’s really an interchangeable term for me. People go and say Black, African American, whatever.

Jamarlin Martin: How is it interchangeable though?

Ryan Wilson: When I’m using it, I’m normally talking about Black folks, which I have no hesitancy in saying at all. But I do think to a certain extent, in this context that for many of the issues that we’re talking about, a rising tide raises all ships in this context. And I don’t have a problem with external inclusion. I think the fallacy of some of those arguments is that, yeah, longer history here. But from a general social condition. Now, I mean, when I’m talking about folks of color and if you want to add some other folks or other groups into that bucket.

Jamarlin Martin: Well this is the situation, and this is where in some cases I know this is tough for some people probably stopped listening to the podcast, that we deserve to be on the bottom. And let me explain that. This is more of our educated folks who have access to information. They have experiences where let’s say Black people, hey we’re trying to elevate our community, elevate our people. But these political terms come in and you start seeing our leaders start using words like diversity. And so I have witnessed a lot of folks coming out of mainly the Silicon Valley establishment, but across the United States where Black folks are using the term diversity. Diversity, diversity, diversity. You can’t bang, I believe, for diversity, undefined, unambiguous diversity, when 53 or so percent of white women are voting MAGA. That you have the data and the statistics in Silicon Valley is when you’re pushing diversity, you’re really helping that white woman. In a lot of cases you’re at helping that MAGA woman. So if our situation and experience is unique, why can’t we be specific and why when you’re using diversity, everybody’s coming along. So now when the big wallets in the establishment in Silicon Valley, when they talk, they’ll say diversity, diversity. I don’t know what that means. And it’s starting to mean Black folks are just a little piece of it. This is really about white in terms of the data, in terms of what actually happened because if the white woman can go through diversity and she’s wealthy and she has connections and her community didn’t face an onslaught of mass incarceration. If you give her that benefit of diversity, she’s going to kill your community in terms of elevating hers.

Ryan Wilson: I think diversity as a word is, yeah, I agree with you. There’s not a definition that we often use or allowed to be using political context is wrong. Right? And so to me, at a basic level, diversity gets down to two really simple ideas. For one, for the community to be diverse, there needs to be an equal exchange of information and an interest in that equal exchange. Again, I don’t believe that most of the things that we call neutral are actually neutral and so I think that’s one way that I think in diversity talks is wrong. Second thing that I’d say…

Jamarlin Martin: If you think it’s problematic. This doesn’t reflect your values. I can’t bang for every other group. I don’t know your situation. I don’t know what you come from, but I know I’m connected to people who come from the projects. I know my people were enslaved. I know that we were on the front lines in the civil rights movement after the civil rights movement. I know this government came after my leaders and in some cases killed our leaders. I can’t bang for everybody else because I don’t have confidence you guys are going to bang for me. Is that wrong? Would that be a moral point of view?

Ryan Wilson: I think coalition-building is important, right? I think a mistake of any group is to not look at where there can be alliances built. Right? And so yeah, to a certain extent, I think that we have to be continually looking for new ways to, to uh, to build stronger and larger coalitions and that a lot of times the issues that we’re talking about, different history a lot of times manifest themselves very similarly, or the way that they’re treated often kind of mimics the way that we’re treated a lot of times. This last point about diversity, what I was going to say was that what we should be fighting for, I think a really easy and objective standard to look at is, does your company or organization represent the world or at least this nation’s population.

Ryan Wilson: So if you’re at a tech company and you say, we know we’re really diverse, but 1 percent of your employee base is Black. Well, I think Black folks make up 13 percent of the United States population generally. And so for your community to be diverse at minimum, right, what you should be looking for is fighting for a standard where 13 percent of of your employee base represents the country that’s there. That’s a really easy and objective way to look at the issue that that takes out all the fluff around let’s look at how those groups, how much of the population that they represent.

Jamarlin Martin: I believe you can do a lot of coalition building, but when you’re speaking about us and kind of the priority in dealing where this problem is kind of magnified, I think you could build alliances, you can be respectful of other movements. You can even speak up for other movements. But I still think that in most cases we need to be more specific if we’re thinking strategically about uplifting Black folks.

Ryan Wilson: I don’t disagree with you about the specificity, but this is another one of those like either-or situations for me. I think that you can be very specific about the needs and issues of your community while also building a coalition with other groups that may be experiencing similar, although in some ways other forms of discrimination that don’t manifest themselves the way that it happens in your community. So I agree. I mean saying that Black folks are affected by this issue specifically is never a bad way to frame an argument. But I think it’s shortsighted to not compare that statistic to other minorities that may be facing, again you’re building a stronger coalition and I think in many ways a stronger argument for why whatever it is that we’re talking about, should be changed.

Jamarlin Martin: You’re expanding to D.C. and you already mentioned that you’re profitable, you’re doing the damn thing. You have a business that’s profitable, that’ss popping. You’re expanding to D.C.. What do you have to say about entrepreneurs who have kind of trigger fingers of launching multiple product lines, new stuff, they’ve got too much stuff going on and one thing has not popped? Have you seen that in terms of just observing the ecosystem, and how did you think about the right time to take your platform to another city?

Ryan Wilson: The whole right time thing. I don’t know. There’s never really a good time to expand. Risk is risk, right? And that risk is going to be here today or tomorrow, whatever. Whenever you decide to go do it. I do think it’s important to try to make sure that you fundamentally understand your business before you start to expand. I can say that with confidence. I understand what we’re doing here and I understand how what we’re doing can translate to other markets.

Jamarlin Martin: But you don’t think there should be a process where, a lot of entrepreneurs like yourself, they’re very creative, and so you have these different ideas. You have not seen entrepreneurs saying, “I’m going to do A, B, C, D, E,” but the first business idea or product, it doesn’t have the traction it needs to have? So you’re spreading your risk out when you really want your risk to be concentrated to give the first idea a fair shot. You haven’t really seen that?

Ryan Wilson: No. That last part that you said there I actually agree with. I think that most successful entrepreneurs, if you look at how they started their business, it is about very concentrated risk in a specific area. At the end of the day, this is all about execution. Ideas are super cheap. We could come up with an idea right now at this table. So having an idea, there’s nothing to that. It’s about your ability to execute upon that idea. And I think we mistake those two, there’s a distinction there that a lot of times I think that we conflate. “Oh, I’ve got an idea, therefore I have a business.” No, you have to be able to execute upon that idea in a way that makes people understand that it has moved from pure ideation into a stage where people can buy or whatever it is that you do, they’re able to actually interact with the business. That’s the larger problem. Right? I think that we have way too many ideas out there and not enough people who are actually starting companies.

Jamarlin Martin: What’s the pitch to the entrepreneurs and professionals who want to come work at tech companies, startups? What’s your pitch? “Hey, don’t go to Silicon Valley, in most cases, everybody’s different, but in most cases, come to ATL. That stuff is old. The opportunities are now being distributed across other cities like Atlanta. What’s the pitch to, I’m going to ATL to set up my company?

Ryan Wilson: There’s no hotter city in the country right now than Atlanta.

Jamarlin Martin: Quantify that.

Ryan Wilson: I’ll look at it from an industry perspective. Right? So you have legacy companies like Coca Cola and Chick-fil-A and Home Depot, right, that have started here and expanded across the globe. All right. Some of the larger businesses that you’re going to find. You have a creative community. I mean Atlanta doesn’t get enough credit for how long it’s been creating music that the world listens to. But you’re in a cultural capital and a capital where people were producing the music, the world listens to. Behind that now, most of the films that are being shot that we all watch are being filmed down here. So you have a thriving creative community. And then as I said before, I think that we have some of the hottest startups that are in the country, here. There’s no better ecosystem to be in where the corporate community can meet the entrepreneurial community that can meet the creative community and the synergy, what happens at the intersection of those industries is unlike what you’re going to see in any other city. Plus, if you buy the argument that Atlanta’s largest expert is its culture, there’s no better place right now to be able to start an idea and have that idea scale and be taken across the country.

Jamarlin Martin: And what about talent in terms of, hey, I’ve got to hire a lot of engineers? What about talent?

Ryan Wilson: It also is a city that has more universities and top tier universities that are spitting out that type of talent than most places that you’re going to find. From where we’re sitting right now, we are across the street from Georgia Tech, down the street from Morehouse, Spelman, and Clark. Emory’s around the corner. Right. And there’s a host of universities just north of the city. Georgia State’s around the corner. So from an education standpoint and people who are here, I flip this question around a lot to people. What city can you go to where all those things are happening at the same time and there’s money in that city? There’s actually an ability in this city now to raise money here.

Jamarlin Martin: What are you going to say to that geek brother who says, ATL is a joke, because all the VCs are in Silicon Valley. If you’re you want to be an actor, you want to get in Hollywood, you need to go to Hollywood. So if I’m going to do this thing, I’m going where all the money is. What do you got to say to that?

Ryan Wilson: There’s an article that dropped in Inc. today that was profiling a number of companies that are based here. Right. And so I would just say to that person, without really much of a long argument, they’re just wrong, there are companies that have been, I mean, one of the members of the club here…

Jamarlin Martin: But it’s not wrong that there’s more investment capital in Silicon Valley than here, come on.

Ryan Wilson: Yeah, there’s definitely, but it’s just like what you see happening in the music industry and I think what we saw on film. If you want to get in early in a community that’s changing, you come to Atlanta for that same problem. Historically, you would say, if you want to be an actor or you want to become a producer, go to Hollywood. But now people are saying, move to Atlanta. Right. Because we’re shooting more in many cases than what they are.

Jamarlin Martin: Yeah. That point of view is out there in terms of my hypothetical geek question. The right way to look at it is that, hey, if Silicon Valley, everybody else, nine out of 10 people think that they have to go to Silicon Valley, they may have more capital, but it’s so crowded, it negates the opportunity out there. So ATL may have less capital, but it’s less crowded in terms of so many companies vying for the capital.

Ryan Wilson: Yeah. It’s less crowded. But if you’re Black or a person of color, whatever term you want to use, and you’re trying to raise capital, the reality is that, there’s a ton of articles written about this, but there’s a pattern to the companies with who is getting invested in. And a lot of times what people are doing is investing in people that look like the last group of people that were successful out there. So the narrative down here, if you are Black, a member of our club started a company here in Atlanta and sold that company to Amazon. I would go to a city where that type of story is being told.

Jamarlin Martin: Paul Judge.

Ryan Wilson: Yeah. Paul Judge.

Jamarlin Martin: Is Paul Judge, from your point of view, is he considered the don of Black tech in ATL or is there a figure where this person has done the damn thing and they’ve been in the game and they’re looked up to. Are there any kind of personalities or no?

Ryan Wilson: There’s several personalities down here. So I think Paul’s one of them. I work with Paul regularly. We are actually in business together for a music conference and festival that’s down here. But I think the person that I just mentioned, Jewel Burks, founder of Partpic, that sold to Amazon, that’s another entrepreneur figure down here, those are the folks that I point to for sure.

Jamarlin Martin: Thanks for coming on the show. Where can people check out you and your company?

Ryan Wilson: So you can find us online at https://thegatheringspot.club/, on social media @TheGatheringSpot on all platforms. If you’re looking for me, sometimes I’m a little something different, I’m @spotonrw on all platforms.

Jamarlin Martin: Alright. I’d like to thank Ryan Wilson for coming on the show. Let’s GHOGH! Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter, and also come check us out at Moguldom.com that’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

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Episode 44, Part 2

Feb 07, 2019

Jewel Burks

Jewel Burks discusses her M&A process when she sold her tech company, Partpic, to Amazon. She

, Partpic, to Amazon. She and Jamarlin debate whether Sen. Kamala Harris should be held accountable for policing Facebook and Google in Silicon Valley when she was the attorney general of California.  

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! We will now continue our interview with Jewel Burks from part one. So you’re one of the very few women in general that have gone through the life cycle of starting a business, raising capital, selling your business. When you meet new entrepreneurs, what is it that you observe where hey, you get the game wrong in terms of you under-appreciate certain things where of course you’ve been through the full cycle. Is there anything that you see with new entrepreneurs that they don’t get that they should?

Jewel Burks: Yeah, I think a lot of people skip steps. So to the point of raising funding, a lot of people hear my story and they hear that I raised however many millions of dollars and that’s the thing they want to talk about first. And I’m like, wait a minute. What do you do? First of all, how do you make money? Let’s talk about that.

Jamarlin Martin: Like the chariot in front of the horse. You’re not getting any money until maybe you build a prototype, until you fully understand the user acquisition model, the marketing and all this other stuff.

Jewel Burks: Exactly. There are so many pieces that you’ve got to figure out before you can go and reasonably go ask somebody else to invest in it. And then I think a lot of people just assume that other people will invest in their companies before they’ve made an investment. And like I said, I was operating my business, or at least trying to operate for a solid year before I got anybody else’s money. Meaning I had to put the first tens of thousands of dollars into it before I could reasonably go and ask somebody else to put some money into it. Yeah. So I think that’s an important piece too. And then, a lot of people aren’t thinking about the business from a perspective of just business fundamentals. What is the cash flow look like? How does this sustain after any investment?

Jamarlin Martin: They have everything figured out on raising capital, but not the fundamentals.

Jewel Burks: Right. Yeah. So I really challenge people to think about, what is the business itself? Is it something that you want to be doing for the long haul? That’s a big question too, is this idea that you have today and next year you’re going to be over it or is this something that really bothers you and you won’t be satisfied until it’s solved for everybody? That’s a big thing too.

Jamarlin Martin: Of course we saw crashes and a tech crash in 2000 and of course we had a financial crisis in 2008, but are you concerned in terms of so many entrepreneurs not caring about cash-flow and profits and kind of fundamentals where there’s going to be a reversion to the mean where valuations and and all this stuff, It’s going to snap back to where people start caring about these things.

Jewel Burks: Yes. I think that’s happening already. And like I said, I’m having a lot of conversations about how do you just build the business. Just built the business. And then you might want to think about investment to scale the business, but let’s just build a business first and then perhaps you will be able to build something that’s very valuable that you can maintain ownership of. Yes. Let’s talk about that. Don’t even worry about the investments.

Jamarlin Martin: Also flip mentality, at least what I’ve witnessed over a couple of years. There’s a lot of entrepreneurs, they don’t even try to hide that they just want to build it and flip it, which sounds like there’s a lot of froth and the market is going to correct pretty aggressively. At least, I think so. So tell me about how your Amazon deal comes about.

03:57 —Jewel Burks: So it’s an interesting story. I was not setting out to sell my company at that time. I actually was setting out to get my CTO, who I mentioned, Dr. Nashlie Sephus, some more visibility. So I was personally feeling like I was doing too much speaking and talking about Partpic and needed to be focused more so on getting more customers and building the business as I was mentioning. And I thought that Nashlie actually has perhaps a more interesting story than I do as far as her background. And she’s from Jackson, Mississippi. She went to Mississippi State for Undergrad and Georgia Tech for her graduate work. And as I said, she’s one of the most brilliant people I’ve ever met. So I wanted her to get on stages and have the opportunity to talk more about her work. And so I had started reaching out to different conferences and asking them, basically looking at their websites and seeing that they had no Black people, no women, definitely no women of color, and saying, hey, you know, I think I have someone who would help your conference. And so one of the conferences got back to me and they were like, yes, absolutely, we would love to have her come and speak. And so this was a deep learning conference in Boston and Nashlie did a presentation. She did an amazing job and Amazon corporate development was in the room during her presentation. So they came up to her afterwards, gave her a card and told her, this is great what you guys are doing. And then she comes back to the office on Monday morning, hands me a stack of cards. I’m flipping through the cards and I’m like, “Amazon corporate development, what did they want?” So followed up. And that’s really what started the conversation for the acquisition.

Jamarlin Martin: A high level executive at Facebook, a brother, he told me, you’re never going to sell your business unless you build your brand. And it sounds like, although it was one conference that fits right into that zone where people need to know about you, you need to build some relationships to improve your optionality in terms of how this plays out later on. So they email you, Amazon Corp Dev?

Jewel Burks: Yeah, we had an email exchange. I think we got on the phone maybe that next week after she got back from the conference. That was May, 2016. We didn’t at that time… So this is the interesting part of my story I think is that we were out raising a Series A at that time, trying to raise a Series A and we already had a couple of options on the table. We weren’t super happy with them. And so Amazon, it was all timing. It was like our options were continue to build the company, but give up control essentially.

Jamarlin Martin: Shady terms, dirty terms.

Jewel Burks: Yeah. Give up control. Many reasons why I think that is partially has to do with who we were as a team. As far as people undervaluing what we built because…

Jamarlin Martin: And that’s why I don’t like to talk about people accusing corporations and institutions of racism. Let’s just go to the Department of Justice and to the government, for example, Wells Fargo in terms of how they analyzed mortgage applications. The American government is busting these companies for being dirty towards us. And you’re saying as an entrepreneur that what we’ve seen in the mortgage market, you’re going to see it on the term sheets.

Jewel Burks: Oh yeah. It’s across the board. Yeah.

Jamarlin Martin: Is there a term that you use in terms of, if you get kind of, let’s call it a white-balled. Let’s reverse it. So you felt a certain way in terms of man, what’s up with these terms? This is like some sub prime mortgage.

08:14 —Jewel Burks: Totally. There would be things in those term sheets where I know for a fact they would never put it in anybody else’s. It was crazy.

Jamarlin Martin: So you have unfavorable terms, white-balled terms from investors. Then you have Amazon looking at your company. Do you start to think about, hey, it’s Amazon, but I need another bidder. I need someone bidding against Amazon.

Jewel Burks: Yes.

Jamarlin Martin: So how do you, how are you thinking about that?

Jewel Burks: Okay. So I don’t want to get into too much detail on this, but obviously if you’re going to sell your company, you need to have competition. It would be optimal if there was some type of bidding war cause then you can get more money. So the sad part of about my story is that a company like Amazon, as big as they are. If they put an offer on the table, they’re not going to leave it out there for you to go shop around.

Jamarlin Martin: Yeah. They’re not going to want you to shop their deal. They’re Amazon.

Jewel Burks: And like I said, I wasn’t in the market to sell my company at that time. So it’s not like I had people already at the table. It really was for me, okay, I can either go with the investors and continue to build the business or I can go with Amazon and say, okay, we had a great run, achieved x, y things and now we’re going to just sell the company, be able to continue working on the technology, launching technology in the app and the Amazon mobile app, and ultimately achieve the vision of getting this technology out to the masses. So that was really my decision. I personally didn’t have the ability to get more buyers to the table just because it was a short time window. I had to make a call.

Jamarlin Martin: And did you talk to any bankers?

Jewel Burks: Yeah, I did. So again, If I had more time I may have gone with a banker, but what I was looking at…

Jamarlin Martin: Based on my experience it’s a good thing you didn’t go with a banker.

Jewel Burks: Yeah, I heard mixed reviews about bankers, but I was really looking at the numbers and I was thinking, okay, I know how the pie is going to slice and I don’t want to put any more slices in the pie. And the banker’s going to take another slice, and I was already kind of far in the process. So I felt like, okay, I can manage this on my own.

Jamarlin Martin: Yeah. My experience with investment bankers that I’ve hired them is that because they’re, their hand is in the pot in terms of your overall deal, they’re getting some form of commission off of it, a success fee, that they’re pushing the valuation, they’re trying to push it too hard, higher, and where that could end you with no deal, essentially. And of course they’re over compensating.

Jewel Burks: Yeah, exactly. So because of how the timing of everything worked out, I already knew where I felt I had taken it. So a banker, in my opinion, would have been good if I had multiple buyers at the table. But given the circumstances of what I was doing, I felt like it’s not necessary.

Jamarlin Martin: Have you met people who criticized that decision where you did not go through some pricing discovery against Amazon? Because I know some very smart people like, Hey, I’m not shopping this deal against an Amazon. You can shop the deal against a different company, but if they’re ready to do a deal, I mess around and lose the bird in the hand by trying to play them and go through some pricing discovery.

Jewel Burks: Yeah. Let me just be like this. I tried to do it, but it was too short of a time window. It really was…

Jamarlin Martin: In terms of reaching out to a couple of companies, you’re going to reach out yourself.

12:14 —Jewel Burks: Yeah. Because I have relationships. I worked at Google for several years, so I knew people. I was trying to gain more people at the table. But it was just too quick.

Jamarlin Martin: Can you share what type of deadline?

Jewel Burks: It was very, very, very quick.

Jamarlin Martin: I guess they get the leverage on that. So you decide to do the deal. How long did the negotiations take with your council?

Jewel Burks: I decided to do that deal in around June. And we closed the deal on Oct. 31. So four or five months. And I would say that was the hardest, that back and forth. And just being on edge thinking, cause you never know. A lot of deals don’t work.

Jamarlin Martin: Due diligence.

Jewel Burks: There are so many things that could go wrong.

Jamarlin Martin: At this stage of due diligence when they’re going through your accounting and they’re going through your customers, were you scared that you could lose this deal and they can just walk away? This is after, of course you sign the LOI?

Jewel Burks: Yeah. Yes. There were many days where I was like, yeah, it’s not going to close because the thing also is you are providing all this information. So on the one hand you’re like, okay, this better close because they have everything. So if they want to, they could do whatever they want there. And also they’re the giant and I’m the small fish. So, I was very nervous throughout the whole process.

Jamarlin Martin: How polished was your organization in terms of your accounting, audits, and stuff like that. For the audience, when a buyer shows up ready to do a deal, your price could go down or you may lose the deal if they come in and see a disorganized house. You have to get back to them in five months on like some simple stuff. Talk about that process.

Jewel Burks: Well I had a couple of things that were going right for me, which is that, like I said, we had already started the process of raising a Series A. So we already had a lot of things in order just because of that. And just because we had been pretty organized just throughout the course of the company as far as the financials and the legal work and everything. The patents we filed, everything was in pretty good order. We did have to find some stuff, but also we hadn’t been operating for that long, so it wasn’t like we were going back 10 years to try to find stuff. We’ve been a company for three and a half, almost four years at the time, when we got acquired. So we have things in order. But there were a ton of things to provide. So I guess that’s a note to companies. Keep things in good order, make copies of everything. Put it all in a Dropbox or box or wherever you keep your files so that it’s easy to access.

Jamarlin Martin: Yeah. For companies, you could find a due diligence checklist online where you’re going to be guided on what a buyer would ask for, and the due diligence checklist that you can get online, you should just keep your business, keep things in order of the due diligence checklist. So when the time comes and Amazon comes to your door or another company, you already have the stuff that’s ready to go. You may be able to respond to the buyer or investor in a couple of days, essentially, if you keep your stuff in order.

16:07 —Jewel Burks: Yeah. In our case, it wasn’t really the due diligence that took that much time. It was the stock purchase agreement. It was the paperwork. Talking about all the terms of the deal, going back and forth between the legal teams. That took a significant amount of time.

Jamarlin Martin: And how long do they want you to stay on?

Jewel Burks: I’m still at Amazon.

Jamarlin Martin: Okay. Full time?

Jewel Burks: Yes. I work in the building next door. So yeah, I’m still there.

Jamarlin Martin: Okay. Can you share how long you have to be there according to the agreement?

Jewel Burks: So it’s not even that I have to be there. I am incentivized to be there for a certain amount of time.

Jamarlin Martin: Okay. So we’re going to change gears here and talk about a very hot topic. Kamala Harris.

Jewel Burks: Oh yeah. Okay.

Jamarlin Martin: Of course, another Howard Alumni, accomplished, successful. Let’s start off by saying, speak to brothers getting out of pocket in terms of criticizing Kamala Harris on, let’s call it unfair, uneven grounds. In terms of some of this stuff sounds very sexist and disrespectful. Speak to that crowd. But there’s another crowd that may have, of course, a legitimate critique that we’ll talk about.

Jewel Burks: Okay. So the crowd that I’ve seen on social media really attacking Senator Harris. I’m very disappointed in. I’m not surprised.

Jamarlin Martin: A lot of these people, they’re going to attack anything.

Jewel Burks: There are people who, I don’t know what they do for a living, but it seems like they spend most of their time online just attacking somebody. So Kamala is the person for this week.

Jamarlin Martin: You see a lot of out of pocket stuff, that you’re offended.

Jewel Burks: Yeah, I am. I am. And I think part of it is obviously, you know, politicians, I’m sure they know if they put themselves out there, their history and past and everything is open for discussion. But I think there’s a way to have respectful discourse about someone’s history.

Jamarlin Martin: You’re okay with people criticizing her policies?

Jewel Burks: I’m fine with criticism. I think it should be more balanced. And the thing that I’ve noted is that people are very quick to jump on her and there are other candidates who have said that they’re running or we have speculation about them running and there seems to be very limited discussion about what their background and policy is. And I think that we just have to be careful given who we currently have in office about demonizing somebody who’s, overly demonizing, because I think that’s a similar pattern that happened with Hillary. And I’ll speak for myself and say I would much rather have her as president today as our current president than our current president. So I’m just afraid that people going and spreading these ideas, which some of them may be valid. A lot of them are just soundbites that are not well researched. I’m scared that that is a similar pattern that we’ve seen before and I really, really, really don’t want to end up with another…

Jamarlin Martin: Are you locked in to supporting Kamala Harris where regardless of what other candidates are proposing, your voting for her anyway? You’re riding with Kamala Harris no matter what. Honestly. I’m banging for Kamala Harris and this is my team.

20:06 —Jewel Burks: Okay. This is tough. I am going to listen to each of the candidates. I’m going to hear out their agendas, what they want. I’m very interested in just listening and hearing everyone. I will say that Kamala has a very big advantage because she went to my university. I have met her and I think that from the interaction that I’ve had with her, I believe she’s a good person and I know that I could get to her. So she’s accessible.

Jamarlin Martin: Do you think once she’s elected, she’s going to be accessible? As president?

Jewel Burks: One of my very best friends in the world is working on her campaign right now. So I have people that maybe I can’t get to her, but I know people that can get to her. I think that’s important. I want to be able to reach the people who are in power. So I say she has an advantage because I’ve met her. I liked the interaction I had with her. I think that she’s a brilliant woman. I like the way that she interacts with folks and is not scared to say what she believes. And her interaction in the Kavanaugh hearings, I felt yes, I want somebody like her who is not about the bull, but I will say I think that there are things that need to be examined and I want her to directly answer some questions regarding some of the things in her past. So I’m going to be listening attentively as she presents her ideas and as the other candidates present their ideas, she has a advantage, but I’m listening to everybody else as well.

Jamarlin Martin: So when you hear specifically brothers, and let’s say a brother brings up, hey, you know, Kamala Harris, she wanted to lock poor moms up when their kids were being truant. I don’t give her a high grade on criminal justice reform in terms of when she was in those important roles. Of course she’s moving in the right direction, closer to the election, in my opinion. But when you hear those types of critiques, are you putting these people in boxes where you’re skeptical, like agendas or do you think there’s a legitimate line of critique of Kamala Harris.

Jewel Burks: So I think the people who are so gung ho about her not being the candidate already before we even know who all the people are. I think I put those people in a box because I feel like that’s very aggressive for this point in time.

Jamarlin Martin: Okay. So you believe that Kamala Harris is gonna bang for, let’s call it, inequality in terms of, of course you have lobbyists, big corporations, Wall Street, Silicon Valley. I think that’s a big issue. Would you give her a higher grade on reliably banging against inequality then a Bernie Sanders or Elizabeth Warren?

Jewel Burks: Well, given the fact that, has Bernie even said he’s running?

Jamarlin Martin: He hasn’t announced it yet, but let’s assume that he’s gonna run.

Jewel Burks: Okay. So again, I would love to see them in a debate environment and I would love to hear each of their points as the questions are being asked to them. To the question you had about the truant parent, that’s a theme I’ve seen recently, people showing the video of her talking about that. And then I dug in a little bit more and I read an article about that policy and what were the results of it? And it said that 20 parents were arrested during that time for their children not attending school. And I would love to have a conversation about that. Personally, I know that there are reasons why the parent wouldn’t be in control, but also, what should the consequences be? Why should it be that kids can just not go to school? So I think that’s something worth talking about. I don’t think the attack of, oh well she had this policy, she’s bad. That’s just ended the conversation. I think we should dialogue. So what should we do.

Jamarlin Martin: A respectful conversation.

24:42 —Jewel Burks: How do we solve that problem? Anyway, I say all that to say I think it’s worth conversations and us not just saying this is not my candidate because x, y and z, or putting up a little snippet of a video that’s lacking context. I would just like for us to be having more dialogues about, okay, we all know there’s big problems in this country. How do we reasonably address them? And she had a certain seat as a prosecutor where she was trying to do the best that she knew in her role and position. And that’s the angle that some people were like, oh, Kamala was a cop. So I’m not voting for her, period. That’s it. Wait a minute, what?

Jamarlin Martin: I don’t think that’s a reason not to support her?

Jewel Burks: Yeah. There is a group where that is their thing. That’s it.

Jamarlin Martin: Because she’s a cop and I don’t like cops.

Jewel Burks: Okay, well how do you feel about crime? What do you mean you don’t like cops? That’s not reasonable. So I think we just have to come in with a little bit more level-headedness and just a little bit more dialogue and then we might get somewhere.

Jamarlin Martin: What would you say to the people out there that say, “Look, Obama was good for that time, but we’ve seen that stuff and Obama was a good president, but at this time we need someone a bit more radical in terms of inequality and some of this other stuff. Lobbying, big tech, Wall Street. We need somebody who’s going to go against the lobbyists, go against these powerful corporations.” Obama was good for that time, but an Obama 2.0. We need something different this time. And Kamala Harris is a little bit too close to the center, too safe.

Jewel Burks: Okay. So what I would say is, can the country sustain such wide swings in such short periods of time? Right now we have somebody in the office in the presidency who if they could have found a more opposite person to President Obama, I don’t think they could have found a more opposite person. So that is a huge swing between what we had from 2008 to 2016, and what we have now. To me, first of all, you have to think about electability. Can a person who is way more radical than president Obama or Kamala Harris be elected by the whole country. That’s what we got to ask. We can’t just go based on… We have to think about how do we get this man out? We can’t think about, we got to go totally far, far left.

Jamarlin Martin: You don’t think that that’s a privilege position where let’s say the folks in Harlem and Watts and Compton and south side of Chicago where hey, there’s a lot of issues here around the country and if you’re saying that the best thing we’re going to do this time, another four or eight years, is we’re going to go back to Obama. And we of course are not benefiting. A lot of us are getting left behind with the rise of inequality. That’s not anything to look forward to for a lot of people, if you say that we’re going to go back to a safe Obama.

Jewel Burks: Well first of all I would challenge the idea that Kamala is Obama…

Jamarlin Martin: She is close to an Obama center.

28:21 —Jewel Burks: I’ve heard her say some things that I didn’t hear President Obama say. Different time, different issues.

Jamarlin Martin: Not the same, but it’s kinda like the center of the party. You see her kind of rallying. She’s in the center. She’s not far left like I believe Warren and Sanders are to the left of her. She’s more kind of in the middle of the road where a lot more people are comfortable, including from me perspective, big corporations.

Jewel Burks: Yeah. So I think that I’ve got to go back to what I was saying about what candidate is going to win.

Jamarlin Martin: So your vote potentially, could be different if you didn’t analyze who could actually win? Is that what it is?

Jewel Burks: Well, I’m going to vote my interests. Right? So speaking from a place of privilege, I am very concerned about people who are in poverty, people who do not have healthcare, all of these different demographics. I am concerned about these folks and I do work to help these folks. I’m also concerned about taxes, or I have other things that I’m interested in and worried about as well. So for me being a person who cares about people in general, I’m going to vote for the candidate that I feel like is going to do the most good, what I deem to be good. So again, I have to listen to everybody. I think from my interaction that Kamala has a similar vantage point, so right now she’s my front runner and also I think she’s electable. And I think she is going to be able to do the best winning folks who might be Republican but can’t mess with Trump anymore. I think she probably has a better chance of getting those people on board than Bernie Sanders, maybe.

Jamarlin Martin: With your friend working on the Kamala Harris campaign, do you have any insight on her rollout of how to deal with…

Jewel Burks: I have no clue.

Jamarlin Martin: Amazon, Google and Facebook and a lot of this stuff that’s going on there.

Jewel Burks: No, I don’t get the meeting notes.

Jamarlin Martin: Yeah. What I think is going to come up is… It hasn’t come up. From my perspective, Hey, you were a cop. That’s not a deal breaker, right? You’re a district attorney. We need people in those roles. We need good people in those roles. You were attorney general, you were in those roles. That’s not a deal breaker on its own. But if I believe what’s going to play out is America is headed into a recession, possibly a crisis.

Jewel Burks: I think that’s going to happen before 2020.

Jamarlin Martin: Yeah. For sure. Okay, so we’re on the same page there, but if America goes to an occupy Silicon Valley, like they did an occupy Wall Street, people are gonna say, “Hey, you were locking a lot of poor folks up as district attorney, as attorney general, you’re the chief cop of the state, including corporations. What were you doing with the rise of these beast corporations who are monopolizing the economy and contributing to inequality? How were you policing Google and Facebook, while you were attorney general?” Of course, in New York, people expect the New York Attorney General, that is the kind of the cop for Wall Street, for the corporations out there. But I think there’s going to be attention because the what’s going on in Silicon Valley in terms of contributing to inequality, people are going to be looking for stuff to blame. Why is this economy so messed up?

32:36 —Jewel Burks: Do you think that falls into her…?

Jamarlin Martin: Jurisdiction? I think so in terms of what were you doing, at least in 2013, the consumer advocacy group, they raised the question of we want to see her bang against some of these big tech corporations in 2013, like we see the New York AG in New York. And so, if more attention, because you’ve seen the layoffs with Buzzfeed and the layoffs are starting to accelerate, is that if that attention turns to Silicon Valley where they’re the punching bag and they’re like, you’ve got to blame for them for the recession. Nobody can get a job. Robots, all this stuff. Some attention can say, look, if you’re going to be the cop locking everyone up, district attorney, AG, how were you policing these big corporations? Why no energy over there when you were in office?

Jewel Burks: Hmm. That is really interesting. Okay. I’m very curious to see if that comes up because my first thought is, well, that feels like a little bit of a stretch.

Jamarlin Martin: It sounds like you want to say that’s a lie.

Jewel Burks: I follow where are you going with it? I don’t know the exact job description of attorney general and what they police and what they don’t, but I will say that, I lived in Oakland for two years when I was working at Google straight out of college, this was 2010 to 2012, and I went outside of my personal issues, one of the things I hated the most about living out there was the fact that I felt like I was contributing to the huge gap between the folks who are from Oakland, living in Oakland, not working in the tech industry and the people that are just coming in, working at Google and Facebook and Apple or whatever. I could see it as plain as day. I was living in my nice apartment, paying way too much for rent and I was seeing the prostitution, drug use, right on my street. Every single day it hurt me so bad to see that. If I run for office in 20 years will someone say, well, Jewel, you were living in Oakland, you know what I’m saying? I felt bad about that. I don’t know what I could do to help. I mean, she was an elected official, but I don’t know. I think companies need to be held accountable for that. Why is it okay for these top corporations to displace all these people?

Jamarlin Martin: It’s just greed.

Jewel Burks: I don’t know if we should blame Kamala for that.

Jamarlin Martin: So during the election, if you start seeing specifically, let’s stay focused on Black men. If you start seeing Black men go over to folks more so on the left, more radical. Elizabeth Warren, I think she scores high in terms of her track record against big corporations. When you see people like, Hey, I’m not supporting Kamala Harris, I’m supporting Bernie Sanders or Elizabeth Warren, I’m voting white. They’re not saying that, but that’s actually what they’re doing. Do you feel a certain way in terms of loyalty where, hey, the Black voter won’t vote for the Black candidate. Do you feel a certain way? Like, Hey, you should be riding for our people in these positions, and I’m disappointed. Do you have an emotional thought when you see that?

36:41 —Jewel Burks: I do have an emotional thought just because I think people are not even giving Kamala a chance. First of all, she just announced a week ago and we’re already saying, oh, she’s not my candidate. Folks are already saying that.

Jamarlin Martin: But the thing is, not to cut you off, but the thing is, for a lot of people, and I’m not talking about the crazy folks, the disrespectful folks, the sexist folks, but a lot of people, I can’t go by what the politician, because the Black community has been abused by the Democratic Party so much. All races in the Democratic Party have abused the Black community in my view, has exploited the Black community.

Jewel Burks: You mean as a block of voters, just taken advantage?

Jamarlin Martin: Yeah. So you guys don’t have a place to go essentially. You’re not going to vote MAGA. You’re not going to vote Bush, so you’re going to vote us if you’re going to vote. So because the corporate side of the Democratic Party, the ones that are really friendly with lobbyists and corporations, because we’ve been abused and exploited for so long, in the Democratic party, our voter equity is not what we should be getting because we don’t have any optionality. There’s not really an option to go Republican. We can’t go by at the time of the election, what you’re saying now or what you’re saying in the future because of the history, the relationship between the Democratic Party and Black people here in the United States, we can only go by what has happened in the past. Politicians are going to optimize for getting votes, winning the electoral college and hooking people in. But we want to discount what you say now because of the history and the relationship. The only thing we can really go by is a track record. And so Kamala Harris, her track record is out there and that’s what folks really need to be evaluating. What would you say about that?

Jewel Burks: Okay. That’s fine, but I think people just need to be cognizant of what her position was. So you can go by the track record, but she’s never been president before. You know what I’m saying? She’s never been in this type of position. So the position she was in was to be an enforcer of the law. That’s slightly different in terms of framing than even some of the other candidates, what their background and history has been. So I think it’s fine to ask questions about certain things that she did, but it’s important to understand, first of all, what were the desired goals of those particular policies that she had in place? How does she measure up against those goals? I mean, did she achieve them? Did she not achieve them? Instead of looking at it as a wide stroke of, “Oh, she locked many people up”. Well did those people deserve to be locked up? Let’s talk about that.

Jamarlin Martin: Yeah. So what I’m talking about is not just criminal justice reform, but other things. For example, Joe Biden. And to your point, you gotta be fair in terms of evaluating the candidates. Joe Biden of course voted for the Clinton Crime Bill. Joe Biden voted for the Iraq war where hundreds of thousands of people died. Hillary Clinton voted for the Iraq war, supported the Clinton Crime Bill of her husband. So when we look at these things and if we were to evaluate each candidate, I believe we need to be looking at the fact that Barack Obama did not vote for the Iraq war. Bernie Sanders did not vote for the Iraq war. Elizabeth Warren did not vote for the Iraq war. When we shouldn’t just look at criminal justice reform and Kamala Harris’s record in California, but where does she fit in terms of the facts, evidence, and history where, is she more of the Biden and Clinton where they’re voting for mass incarceration? Because at the time it’s the popular thing, they’re going to war in Iraq. Or is she more of, I don’t really trust the establishment and I’m on another side.

41:07 —Jewel Burks: Yeah. I mean I think we should interrogate that. We should talk about that. We should see where do we feel that she ranks as far as our personal ideologies and all of that. I also think we should listen to what she has to say today because people evolve over time. She’s in her fifties, she’s had a 30-plus year career so far. What she said in 1997, she might have a very different opinion. I have different opinions about things. I grew up in the south, in Nashville. There were things I was not exposed to until I got to Howard. And then I was like, oh, okay, this is different. I have a different idea about this. People evolve over time. I think that’s something we should leave room for as well is, yeah, we’re going to look at your record, but we’re also going to look at what are you saying today and what is the policy that you have put out there that you want to make happen if you become president. How does that line up with what we believe? So I think we have to leave room for that too.

Jamarlin Martin: Good point. I want to invite Kamala Harris on the show. Hopefully we can get her on the show to answer some tough questions, like we got Andrew Gillum, but I wanted to say thanks Jewel Burks for coming on the show. Where can people check you out online?

Jewel Burks: So I am on Twitter @JewelMelanie, also Instagram @JewelMelanie. My website is http://www.jewelburks.com/ and yeah, I’m around in Atlanta.

Jamarlin Martin: Yeah. I want to thank the queen of tech, here in ATL, Jewel Burks is doing the damn thing. She’s inspiring people. She’s working on initiatives to get more entrepreneurs into this game, I’m really excited about the stuff you’re working on and what you’re doing here in ATL.

Jewel Burks: Thank you. Thanks so much for having me.

Jamarlin Martin: Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter and also come check us out at Moguldom.com. That’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

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Episode 43

Feb 06, 2019

Jewel Burks

Partpic founder and CEO Jewel Burks discusses how she developed an idea to streamline the

an idea to streamline the purchase, repair and maintenance of parts. Partpic was acquired by Amazon in 2018. On Part 1, Jewel shares her sacrifices, research process (she talked to potential customers before investing time and money in the venture) and how she raised the first $2M.  

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! Today we have the great Jewel Burks. Thanks for coming on the show.

Jewel Burks: Thank you for having me.

Jamarlin Martin: Let’s dive right in to your story in terms of where you come from and how did you get into tech?

Jewel Burks: Sure. So where I come from, I was born in Mobile, Alabama. I was there for a few years until my parents got divorced and so they moved to Nashville, Tennessee and grew up primarily in Nashville and spent summers in Mobile with my dad. And then I went to Howard University. So I was a business major at Howard, graduated in 2010 and started my career in Silicon Valley. So I worked at Google for a few years.

Jamarlin Martin: Did you go to Google right out of Howard?

Jewel Burks: Right out of Howard, yes. So actually interned at Google when I was still a student at Howard and then when I graduated, moved out there to work full time, and that was really my introduction into the technology ecosystem and industry, and I fell in love. So I was out there for a few years and was exposed to the whole idea of people starting businesses from ideas, as I had coworkers that I would see one day in the office and then I would here that they quit. And then months later I would read about them on Tech Crunch. So I was really interested in how people were just starting these technology businesses and I think that kind of planted a seed and later, obviously I would start my own tech business. So moved to Atlanta in 2012, took a good job for an industrial district…

Jamarlin Martin: What prompted the move out of Silicon Valley?

01:44 — Jewel Burks: Yeah. So actually it was personal. I really enjoyed working at Google but didn’t enjoy being so far from family. So my grandmother was diagnosed with breast cancer and my younger brother was ill. It was just a lot of family things going on. I want it to be closer to my family. And so decided to move to Atlanta. And at that time I wasn’t able to transfer with Google, so actually reached out to a recruiter I talked to when I was in college and she was working at the company I ended up working for, which was called McMaster-Carr. And it’s a big industrial distribution company, so totally different than Google as far as what they do and the culture there. But it gave me an opportunity to manage people at an early age. So I was 23 years old and had a team of 12 people working for me. And so that was great experience at that time. And also just exposed me to a totally different industry. So this was a parts distribution company, selling nails, bolts, screws, all that type of stuff. And so that’s really where I got the idea for Partpic because I was managing in the call center and was the person who got all the escalations when people got the wrong part. So a big part of my job was trying to field those calls and try to figure out what went wrong on the initial call. And so I had this kind of light bulb moment where I kept hearing the same thing where people were just struggling to recognize or struggling to articulate what they were trying to find. And sometimes they would say, “Well, I have one that what I’m looking for, is it possible for me to send in a picture?” And we didn’t really have any way for them to send the picture in and do anything meaningful with it. So if they were really great customer, we might say, okay, you can send us a picture via email or fax and we will take it to the one guy in the warehouse that knows all the parts. But you’ve got to imagine it’s like half a million parts that they were selling. So that type of knowledge, people just can’t look at a picture of something and know exactly what it is. So I started to think, why can’t there be an app for this? Why can’t you just take a picture?

Jamarlin Martin: And there wasn’t an app in the marketplace at the time? This is totally an original idea.

Jewel Burks: Yes, absolutely. So yeah, at that time, so this is 2012, 2013, there were apps where you could take a picture of a bottle of wine for example, and find where that bottle is located or the same technology that goes into taking a picture of a check and being able to deposit it, underlying technology. So I knew that existed, but there was no one that had done that type of application for the parts industry. And so that’s what I set out to do.

Jamarlin Martin: What was your process for setting up the company? Fundraising, getting it off the ground?

Jewel Burks: Yeah, so I started really diving into customer discovery. I read this book, “The Lean Startup” pretty early on. And I figured that I needed to talk to a lot of potential customers first before I built anything or try to do anything. So I really changed…

Jamarlin Martin: You got that knowledge from that book in terms of guidance and going in that direction?

Jewel Burks: Yeah. I think, I think I got that idea from the book. I’m not sure if I got the idea from the book or someone told me to read the book when I was thinking about the first steps. But that’s something I did pretty early on.

Jamarlin Martin: Yeah. My Experience as entrepreneur is there’s all these tips and do this and do that. But reading, spending just a lot of time reading is underappreciated, under-priced from my perspective. Go ahead.

05:34 — Jewel Burks: Yeah, so I would say I learned a lot reading books in the beginning. Because I come from a family of entrepreneurs. Both my mom and dad have run businesses during my lifetime. But to start a tech company is pretty different. Both of their companies have been in different spaces. So I started out with customer discovery, which was easy for me because I was working in the industry already. So what I would do is I would take extra shifts in this thing called the will call, where customers would come in and actually pick up products and I would talk to the customers just about the problems they were having. Just learning more about what I had in my mind as an idea. But I didn’t want to lead the witness. I was just talking to them about any problems they were facing. And I would hear just these recurring themes that, if they didn’t know the exact part number, then they had difficulty locating the products that they wanted to find. And so, I actually went to a program that they were offering at Georgia Tech as just a community program is, something called ATDC and they have community offerings where you can pay just a small fee and go to all these different events and programs. And so I went to that and they had this one program that was on Friday mornings at 7:00 AM and this was a customer discovery program. And so they encouraged me to interview I think like a hundred people per week and just prove or disprove my idea, the thesis that I had about folks maybe wanting to be able to have an easier way to search for products. And when I finished that program, it was very clear to me that people want an easier way to search for these types of products. And so I’ve thought, okay, I’m going to pursue this idea. And the next step for me was how do I build out this type of technology because conceptually I understood it. But as far as the background to actually build it, I did not have that. So like I said, I was a business major in school, never built a computer vision system before. So I did more research to figure out what would be needed to build this type of application or technology. And I found that Georgia Tech has one of the best programs in the country for this particular type of technology. So, artificial intelligence, machine learning, computer vision, all of those, Georgia Tech has really great programs for that. So I just spent more time on campus at Tech, trying to find people who might be interested in the problem that I was looking to solve. And then, so this is where I would say I kind of try to start building a team. And also one of the first calls I made was to one of my former coworkers at Google who had left Google around the same time I left to work at Shazam. And so from a product perspective…

Jamarlin Martin: Shazam, is that the music app?

Jewel Burks: Yes. Tap a button if you’re playing a song and it’ll tell you what song is playing. And from a product perspective, I wanted Partpic to feel like Shazam. So making it really simple, press a button and get an answer. And so I reached out to Jason Crane who was working at Shazam at the time and just wanting to get his thoughts on the idea and see, given that he worked at Shazam, did he think it was a feasible idea? And so us going back and forth evolved into him becoming my cofounder, eventually leaving Shazam and joining me to build out Partpic. So that’s kinda how we got started.

Jamarlin Martin: Your fundraising, are you just kind of bootstrapping in the beginning?

Jewel Burks: Yes.

Jamarlin Martin: And where’s that funding coming from?

09:18 —Jewel Burks: So I came up with the idea for Partpic on 12-12-12. I’ll never forget the day cause I sent my mom an email about it. It woke me up out of my sleep. And then I decided that day that I wanted to pursue it, but I knew if I wanted to pursue a business I would need to save money. So I started to try to change my lifestyle a little bit. At this time, I’ve just moved to Atlanta, young, having fun. And I really just decided, okay, I’m not going to be spending money on the things that I was spending money on at that time. Getting my hair done, going shopping, all that stuff. I just wanted to save money so that I could have some padding to pursue my business. So that was initially what I did. And then when I actually quit my job, maybe six or seven months after I had the idea. And I had at that time saved up what I thought was enough money to last me for maybe about a year. But I quickly realized that it was going to take me longer than a year to get the technology to a place where customers will actually pay me for it. So then are actually took out a loan and eventually, so this is like the first year I was just going based on my personal savings and then a loan that I took out. And then maybe almost a year in, I had a family friend who invested.

Jamarlin Martin: Can you share how much you pulled from family or friends?

Jewel Burks: Yeah, so my, I guess people would call it the family and friends round was $100,000. Two family friends both wrote $50,000 checks. The Singhs, that are really dear to my heart, family friends, and then someone who was a customer of my mom’s who had just seen me grow up through the years and trusted that I would build something cool. They were the first checks in.

Jamarlin Martin: Did you share your deck or business plan with them?

Jewel Burks: Yeah, I did. I did. So at that time, I also did an accelerator, which I’m always hesitant to talk about because I don’t know how helpful it was for me personally. But I will say one thing I got out of it was that I was able to really refine my pitch.

Jamarlin Martin: Who was giving you feedback to refine your pitch during this process.

11:41 — Jewel Burks: They accelerator was in New York, so I kind of used that as the destination. After I quit my job I was like, okay, I’m getting into this accelerator. I think it started Jul. 1 or something. And so I quit my job and then moved up to New York to do the accelerator. And the people there who were running the accelerator plus a network of mentors, we would have pitch practice maybe once a week and they would say, this makes sense, you should refine this, work on that, and that over the course of 12 weeks got me to a point where I think I had a pretty solid pitch.

Jamarlin Martin: I want to highlight two things for the audience is one, Jewel became a researcher and not just reading in terms of books about business customers, but she went out into the field to talk to customers before she started investing money into the idea. And I think that’s an important point in terms of becoming a researcher, talking to potential customers of your product. What type of problems are they seeing? And then the second one is giving stuff up. This is just a part of life where if you want something big in terms of doing big things like Jewel has done, she had to give up some important personal stuff. There’s no free lunch.

Jewel Burks: I completely agree. Yes.

Jamarlin Martin: You have your family and friend round and then what happens?

Jewel Burks: Yeah. So I want to say one more thing about the family and friends. When I mentioned I, I sent my mom an email. The email was to tell her about the idea and it was also to ensure that she had my back in this journey. So I feel like that’s important too because a lot of times we set out on doing things and haven’t really talked to our support systems and really I’ve had to lean on folks a lot through the course of the time that I started my business. And so I think that’s just something to say. I didn’t have a huge family and friends round as far as money that was put in. But I did have my mom rooting for me and saying, if you need to come home and if things get rough, you can, I think that’s a critical piece of it too.

Jamarlin Martin: You felt you had a buffer if you failed?

Jewel Burks:A buffer in the sense of, I had a crew, a small crew, folks that were encouraging me throughout the process. So I never felt like some people are hesitant about starting businesses because maybe their parents are saying you need to keep that steady paycheck or something to that nature. And I felt like I had some room. If it didn’t work out at the end of the day, I was young, I didn’t have much to lose. So, I knew that if it all falls down, I can at least go back home and my mom won’t be mad at me about it.

Jamarlin Martin: Your parents were entrepreneurs?

Jewel Burks: Yeah, so my mom, she’s been an insurance agent, so she’s had her own insurance agency for the past 20-plus years. So I grew up watching her build that business up and now she’s one of the top agents in the country.

Jamarlin Martin: And culturally, of course Ryan’s parents were entrepreneurs. And your parents are entrepreneurs. How big a piece of that in terms of that kind of parenting education and culture is relevant for African Americans to kind of scale success in entrepreneurship?

15:17 — Jewel Burks: Yeah, I mean for me, I can only speak on my experience. I think it’s been critical because I saw examples, I saw when I was a little girl, my dad ran our family businesses that my grandfather had started and he started these businesses in the fifties and sixties in Alabama. And so I watched my dad run those businesses when I was a kid and not just watched, but I also had to participate. So I remember as early as five and six years old being the cashier and the teller and being involved in the businesses from a very young age, and same with my mom’s business. I was knocking on doors and handing out flyers and doing all types of things for them. So I think that being exposed from the perspective of what does hard work look like, and what does it look like when things are going very well in the business. And what does it look like when things are not going very well and kind of the resilience to stay on that roller coaster throughout the years. I had that in the back of my mind when I was starting. So I do think that exposure early on to business and what does it look like…

Jamarlin Martin: At the parenting level.

Jewel Burks: Yeah. And also the sacrifice. I mean, I remember when I was growing up, my mom was just starting her business, so I saw her sacrifice and I became very independent at an early age because my mom was running her business. So I was cooking dinner at home. And I think that kind of shaped me as far as my mindset going into it. I knew it was going to be a sacrifice and I knew that I was going to have to work hard if I wanted it to be successful.

Jamarlin Martin: You raise your family and friends round. It’s time to build a team. And how did you think about that and can you highlight any mistakes you made in terms of building a team?

Jewel Burks: Yeah. So I mean, I thought about it from the perspective of what am I really good at and what am I not really good at. So I started with myself and kind of doing an analysis of my pros and cons, strengths and weaknesses, and trying to fill in the gaps with people who either were strong in the areas where I’m weak or from a skill perspective, were good at things that I’m not good at. And so that was the fundamental for the first few people was how do I find people who really can round out what we’re trying to do here. So as I mentioned, Jason, we had previously worked together, so we already had a relationship from that perspective. And he was exposed to the product side of things that I hadn’t yet been exposed to.

Jamarlin Martin: And that was your co-founder?

Jewel Burks: Yes. Dr. Nashlie Sephus, she became our CTO and she is a genius when it comes to algorithms and building technical systems. She has her PhD from Georgia Tech…

Jamarlin Martin: How did you find her?

18:12 —Jewel Burks: She has been my biggest blessing because you don’t come across… She’s one of like 10 Black women in the world that has her background as far as her degrees and everything. But I found her through talking to people, I met a couple guys and told them what I’m working on and initially had brought them on to help me and then realized over time that actually she was a better fit in terms of skillset for our team. So was able to work with her directly. So that was a process.

Jamarlin Martin: Yeah. So that’s another thing I want to highlight. You didn’t just go out and say, “Oh, I got to hire someone”. You started sharing with your network what you needed so they could be of assistance and maybe they’re close in proximity of somebody that could do a great job like you found of course.

Jewel Burks: Yeah. I think a lot of people hold their ideas very close to the chest. And for me, initially, I remember I was a little bit nervous to share, but then I was given some good advice early, which is nobody is going to drop their baby to take care of yours, which means if you have something that’s good, that you’re passionate about, most other people do too. So don’t worry about them stealing the thing that you’re trying to pursue.

Jamarlin Martin: Do you believe that could be a cultural thing where maybe that’s elevated in our community? I remember hearing about there was a time where a lot of our people would not put money in the bank. They would keep cash under the bed. And do you think that there may be an elevated paranoia of sharing ideas, but hey, this is just how it works. You’re going to have to open this up for you to get this thing going, and that’s the norm, that’s marketing.

Jewel Burks: Yeah. I think absolutely. There’s an elevated paranoia, but it’s something that we are going to have to get over because you can’t build a successful business 100 percent by yourself. You have to find people that can help you. So, especially in my case, I did not have the skill set to build out what I had in my mind. So I had to find people who could help me build it. And honestly, I shared my idea with people and I got threats early on. I remember this one guy that I met, I can’t remember how I met him, but I figured out that he wasn’t the right person. He didn’t have the right skill set for what I was trying to do. And so I said, “Oh, we can’t work together just because from a skills perspective, you’re not the right fit.” And I remember he was like, “Well, I really like this idea so I’m going to just pursue it myself.” And that happened actually a couple of times throughout the course of Partpic.

Jamarlin Martin: Were you signing NDAs though?

Jewel Burks: Yeah. But honestly I feel like NDAs are nice. But they’re not really enforceable.

Jamarlin Martin: Yeah.

Jewel Burks: But the reality is, of the people that said, “Oh, I like this idea, I’m just going to pick it up and try to do it.” None of that worked because for whatever reason, number one, it was a really hard problem to try to solve. Number two, it wasn’t their idea and they didn’t have the right story. So in my case, I have a very compelling reason why I decided to pursue the idea. I worked at Google, so I had this exposure to using technology to solve problems. Then I worked at an industrial distribution company and saw firsthand the problem. I had a personal story where my grandfather couldn’t find this part for his tractor and I wanted to help him find it. So there was a lot of different things that worked together for me to be the person to pursue this particular idea. And it’s not something that someone else could just pick up and be like, “Oh, I’m going to do this”, and not have any background in it. I say that to say, it may be that someone says, “Oh, I like decide, yeah, I’m going to pick it up.” But at the end of the day, it’s all execution. Millions of people probably have the same ideas, but the winners are the ones who actually go to work every day and try to make it happen.

Jamarlin Martin: You build your team and it’s time to raise some more money at some point. Talk about that experience.

Jewel Burks: Raising money is probably my least favorite part of being an entrepreneur that needed to raise money. And I say that specifically because I don’t think all people who start businesses need to raise money. I think that that’s something that media has made to…

Jamarlin Martin:The bubble culture out of Silicon Valley.

22:44 —Jewel Burks: Right. It makes it seem like that’s what you have to do if you want to start a tech business. But that’s not true. But for me and what I was doing, I didn’t feel like it was appropriate for me to raise more capital because, one, the computer vision engineers are not cheap to hire. So, I’m paying people six figures out the gate, I need to have some more money in the bank to be able to pay them. And then a really robust artificial intelligence system takes time to build, right? So we had to grow a database of millions of parts. We had to build algorithms specific to recognizing things like threads per inch. There were a lot of different pieces to make the system work. And so we were going to have to expand the team to be able to do that. And so that’s why we ended up raising money. And we also believed that the business model was solid. So what we were doing was we were licensing the technology as an API out to distributors, retailers, manufacturers for them to embed inside their mobile apps and put on their websites. And we were charging them lots of money to do that. So we believe that we can scale it up and build a big business that way. So that’s why I raised money. And what that looked like was… My strategy was getting investors to come to me. So I did a lot of pitch competitions, tried to get myself out there, so that they would know who I was and what I was trying to do. And just because also I didn’t have a great, huge network in the venture capital space. I didn’t know a lot of investors, so I had to figure out ways to get in front of them so that they’re would be a buzz going. And that’s really how I ended up raising about $2 million.

Jamarlin Martin: And how many investors did you pitch to?

Jewel Burks: I pitched to over 200 investors.

Jamarlin Martin: Another important point. It fits with the sexism in the industry where the successful entrepreneurs that I have talked to that have raised capital, it seems like 100 is the magic number. And then you come and say, “I pitched to 200.” With a totally original idea. So talk about some rejections that were memorable for you.

Jewel Burks: I try not to think too much about those, but, I’m trying to think. So the biggest objection I got was that we were not located in Silicon Valley.

Jamarlin Martin: Why did they take the meeting then?

Jewel Burks: They knew that the whole time.

Jamarlin Martin: It was a convenient excuse it sounds like.

Jewel Burks: Exactly. I would think, you know I’m flying here from Atlanta because a lot of times I would have to fly out to Silicon Valley or New York or wherever. I hated that reason cause I was like, you’ve known this whole time, this is where we’re located. Anyway, that was one. I did get people that were very blunt about, I’ve never invested in a female entrepreneur.

Jamarlin Martin: Just straight up. Like, I don’t see you.

26:07 — Jewel Burks: Yeah, exactly. I mean that was a nuanced thing, but sometimes investors would be like, look, I like this idea. I think you’re smart. I like your team. But I think you’re going to have too much trouble selling into the industry you’re trying to sell into being who you are. So I can’t invest in this business because I don’t think you’re going to be able to get the clients because I don’t think that the old white men who run these companies are going to listen to you.

Jamarlin Martin: And was that more of a race thing or a gender thing?

Jewel Burks: People ask me that all the time, and I don’t, I mean I live in this body and I walk in the world like this. So I don’t know. I never know if it’s because I’m Black, because I’m female or because I’m young. I don’t know.

Jamarlin Martin: Yeah. I remember talking to bankers at Allen & Company where I was raising capital and one of their media bankers, he said, “Look, your business, because it’s African American-focused, you’re going to get lower advertising CPMs”, in terms of revenue per thousand impressions for the audience. And he said, so your valuation because you do Black media is going to be discounted because you’re Black. And he was I think being honest, where as I went along, I kind of saw what he was talking about. He’s actually being honest. Yeah. I took it as certain way. Why should I have to accept the lower valuation? That that stuff is out there for sure.

Jewel Burks: Yeah. I took some of what was told to me depending on when I heard it. Sometimes I took it personally. So earlier on I would say, I think maybe I shouldn’t be running this company because I’m holding us back because I’m Black and I’m a woman and people are holding that against the company. And then later on I started to build up some armor around it and say, look, I’m the person, I have the unique experience to build this. So it’s me. I can’t put a white dude in front of it just because that might make the meetings go better. Cause I actually tried to hire an older white male as a sales lead.

Jamarlin Martin: Based on some of this feedback.

Jewel Burks: Based on some of the feedback and that turned out to be a disaster.

Jamarlin Martin: So how to you judge the feedback in terms of the white man, he’s saying, look, the realness is because you’re a Black woman, I see a lot of discrimination and that’s going to hurt my risk-reward profile, my money. I’m just being real. It’s not like I want this to happen, but how do you judge him telling you that? Are you negative towards him because he tells you that or neutral? How do you judge that?

Jewel Burks: Yeah, I mean at the end of the day he’s not wrong. It is true. The industry that I was trying to sell into is a very racist industry, very sexist industry as well. So he’s not wrong. However, now I can say, well, I sold my company to Amazon, so now what? Yeah. So next time around it’ll be different.

Jamarlin Martin: You don’t believe that that was a valid reason to kind of evaluate…

Jewel Burks: I don’t think it was a valid reason. Yeah. I think now that I’m on the other side of the table as an investor, if I were me evaluating Jewel in 2013 and 2014 I would say, okay, we’re going to pair this company with folks who are well connected in this industry to make sure that she has the right people walking her into the rooms. Because at the end of the day it’s an, it’s a matter of who makes the introduction, right? So, that’s how I would approach it if I was investing in Partpic.

Jamarlin Martin: And how did you get so many introductions? I imagine most of your pitches came through introductions, but how did you manage that process and get that type of opportunity to pitch to 200?

29:56 — Jewel Burks: Yeah, like I said, my main thing was using pitch competitions. So I knew that I could get on stage and talk about what we were doing in a way that was compelling for people. And most of the time the people that were judging the competitions were venture capitalists. So I did Tech Crunch Disrupt in 2014, and that got me in front of people from just about every VC firm out in Silicon Valley. And I stayed out there an extra week to take meetings with folks because they were coming to me after I got off stage at Tech Crunch. And so from there I got introductions. So even if they would say, “We like what you’re doing but you’re in Atlanta so we can’t invest.” I would say, “Okay, that’s fine. Can you tell me five other investors who might be interested in what we’re doing?” And so I would just use one event to snowball into more introductions and then I would also follow up with people. So maybe they say no today because location might be one thing or they might say, we want to see you get three more clients. And then I would go get three more clients and come back and say, okay, we got three more clients…

Jamarlin Martin: What are other excuses you got now?

Jewel Burks: Yeah. So I was notorious for going back and just keeping people up to date on how we were progressing. And so there are some people that I met. I remember I met William Crowder, who was previously at Comcast Ventures and now has his own fund. I met him at the very first pitch competition I ever did, which was before I had anything. It was like an idea pitch. So that was early 2013 when I initially met him. He ended up writing a check in mid-2015 so it took two years of me knowing him, sending him updates, running into him, different places for them to actually invest. And sometimes it takes building that relationship over the course of time, for it actually to come into your company as an investment. But I was just, I was on people.

Jamarlin Martin: Yeah, that’s another thing I hear from successful entrepreneurs on GHOGH, is that when they get a no, they’re not like, “Man, I’m mad. And they should’ve said yes.” After the no, there’s a post game strategy in terms I still have can work this investor, some of the investors after the no.

Jewel Burks: Oh yeah. Yeah. Cause if they give me a reason why and it’s a reason that I can control. like Go get some more customers. Okay, I can do that. That’s easy.

Jamarlin Martin: Yeah. What about investors saying this opportunity is not big enough. I don’t see a billion-dollar business. How much of that did you get?

Jewel Burks: I got that from people who didn’t understand the industry, but given that I had worked in the industry and could tell them hard numbers about it, I was easily able to say, you don’t know about the industry, but let me show you that the industrial distribution space is a hundreds of billions of dollars industry. It’s huge. It is one of those sleepy ones where every single thing in this room is put together by these parts, but nobody thinks about it.

Jamarlin Martin: So valuation runway, or business runway, that wasn’t really an issue for you. When you pitch, you’re saying that this fits into the unicorn kind of lottery ticket that they’re looking for. So that wasn’t really an issue for you.

33:32 — Jewel Burks: That wasn’t a huge obstacle as far as how big is the industry because once I showed people, okay, this industry is not top of mind to you, but if you look at the data you’ll easily be able to see that this is a huge space. So we’re really a computer vision company in the industrial distribution space. So we could come at it from both angles, and we could say, right now we’re talking about computer vision for parts, but our technology could go across multiple industries if we play it correctly. So the pitch about how big can this business be, that was never really the objection that we got. It was more about can you execute? Can you build the technology? Is your team the right team? Are you in the right location? Those are the types of things that we had to work against. But, if this industry is a big enough, usually wasn’t it, but a lot of people just didn’t have understanding of the space so they would be like, I don’t know much about that space so I can’t invest. That was one thing that we got a lot.

Jamarlin Martin: Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter and also come check us out at Moguldom.com, that’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

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Episode 42

Jan 31, 2019

Flawed Thinking in Our Community

Jamarlin goes solo and talks about flawed thinking within our community. He covers R. Kelly’s alleged sexual

lly’s alleged sexual abuse, Special Counsel Robert Mueller and the FBI, support for the late Nigerian dictator Sani Abacha and Sudan in the ’90s.

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! We will now continue our interview with Jewel Burks from part one. So you’re one of the very few women in general that have gone through the life cycle of starting a business, raising capital, selling your business. When you meet new entrepreneurs, what is it that you observe where hey, you get the game wrong in terms of you under-appreciate certain things where of course you’ve been through the full cycle. Is there anything that you see with new entrepreneurs that they don’t get that they should?

Jewel Burks: Yeah, I think a lot of people skip steps. So to the point of raising funding, a lot of people hear my story and they hear that I raised however many millions of dollars and that’s the thing they want to talk about first. And I’m like, wait a minute. What do you do? First of all, how do you make money? Let’s talk about that.

Jamarlin Martin: Like the chariot in front of the horse. You’re not getting any money until maybe you build a prototype, until you fully understand the user acquisition model, the marketing and all this other stuff.

Jewel Burks: Exactly. There are so many pieces that you’ve got to figure out before you can go and reasonably go ask somebody else to invest in it. And then I think a lot of people just assume that other people will invest in their companies before they’ve made an investment. And like I said, I was operating my business, or at least trying to operate for a solid year before I got anybody else’s money. Meaning I had to put the first tens of thousands of dollars into it before I could reasonably go and ask somebody else to put some money into it. Yeah. So I think that’s an important piece too. And then, a lot of people aren’t thinking about the business from a perspective of just business fundamentals. What is the cash flow look like? How does this sustain after any investment?

Jamarlin Martin: They have everything figured out on raising capital, but not the fundamentals.

Jewel Burks: Right. Yeah. So I really challenge people to think about, what is the business itself? Is it something that you want to be doing for the long haul? That’s a big question too, is this idea that you have today and next year you’re going to be over it or is this something that really bothers you and you won’t be satisfied until it’s solved for everybody? That’s a big thing too.

Jamarlin Martin: Of course we saw crashes and a tech crash in 2000 and of course we had a financial crisis in 2008, but are you concerned in terms of so many entrepreneurs not caring about cash-flow and profits and kind of fundamentals where there’s going to be a reversion to the mean where valuations and and all this stuff, It’s going to snap back to where people start caring about these things.

Jewel Burks: Yes. I think that’s happening already. And like I said, I’m having a lot of conversations about how do you just build the business. Just built the business. And then you might want to think about investment to scale the business, but let’s just build a business first and then perhaps you will be able to build something that’s very valuable that you can maintain ownership of. Yes. Let’s talk about that. Don’t even worry about the investments.

Jamarlin Martin: Also flip mentality, at least what I’ve witnessed over a couple of years. There’s a lot of entrepreneurs, they don’t even try to hide that they just want to build it and flip it, which sounds like there’s a lot of froth and the market is going to correct pretty aggressively. At least, I think so. So tell me about how your Amazon deal comes about.

03:57 —Jewel Burks: So it’s an interesting story. I was not setting out to sell my company at that time. I actually was setting out to get my CTO, who I mentioned, Dr. Nashlie Sephus, some more visibility. So I was personally feeling like I was doing too much speaking and talking about Partpic and needed to be focused more so on getting more customers and building the business as I was mentioning. And I thought that Nashlie actually has perhaps a more interesting story than I do as far as her background. And she’s from Jackson, Mississippi. She went to Mississippi State for Undergrad and Georgia Tech for her graduate work. And as I said, she’s one of the most brilliant people I’ve ever met. So I wanted her to get on stages and have the opportunity to talk more about her work. And so I had started reaching out to different conferences and asking them, basically looking at their websites and seeing that they had no Black people, no women, definitely no women of color, and saying, hey, you know, I think I have someone who would help your conference. And so one of the conferences got back to me and they were like, yes, absolutely, we would love to have her come and speak. And so this was a deep learning conference in Boston and Nashlie did a presentation. She did an amazing job and Amazon corporate development was in the room during her presentation. So they came up to her afterwards, gave her a card and told her, this is great what you guys are doing. And then she comes back to the office on Monday morning, hands me a stack of cards. I’m flipping through the cards and I’m like, “Amazon corporate development, what did they want?” So followed up. And that’s really what started the conversation for the acquisition.

Jamarlin Martin: A high level executive at Facebook, a brother, he told me, you’re never going to sell your business unless you build your brand. And it sounds like, although it was one conference that fits right into that zone where people need to know about you, you need to build some relationships to improve your optionality in terms of how this plays out later on. So they email you, Amazon Corp Dev?

Jewel Burks: Yeah, we had an email exchange. I think we got on the phone maybe that next week after she got back from the conference. That was May, 2016. We didn’t at that time… So this is the interesting part of my story I think is that we were out raising a Series A at that time, trying to raise a Series A and we already had a couple of options on the table. We weren’t super happy with them. And so Amazon, it was all timing. It was like our options were continue to build the company, but give up control essentially.

Jamarlin Martin: Shady terms, dirty terms.

Jewel Burks: Yeah. Give up control. Many reasons why I think that is partially has to do with who we were as a team. As far as people undervaluing what we built because…

Jamarlin Martin: And that’s why I don’t like to talk about people accusing corporations and institutions of racism. Let’s just go to the Department of Justice and to the government, for example, Wells Fargo in terms of how they analyzed mortgage applications. The American government is busting these companies for being dirty towards us. And you’re saying as an entrepreneur that what we’ve seen in the mortgage market, you’re going to see it on the term sheets.

Jewel Burks: Oh yeah. It’s across the board. Yeah.

Jamarlin Martin: Is there a term that you use in terms of, if you get kind of, let’s call it a white-balled. Let’s reverse it. So you felt a certain way in terms of man, what’s up with these terms? This is like some sub prime mortgage.

08:14 —Jewel Burks: Totally. There would be things in those term sheets where I know for a fact they would never put it in anybody else’s. It was crazy.

Jamarlin Martin: So you have unfavorable terms, white-balled terms from investors. Then you have Amazon looking at your company. Do you start to think about, hey, it’s Amazon, but I need another bidder. I need someone bidding against Amazon.

Jewel Burks: Yes.

Jamarlin Martin: So how do you, how are you thinking about that?

Jewel Burks: Okay. So I don’t want to get into too much detail on this, but obviously if you’re going to sell your company, you need to have competition. It would be optimal if there was some type of bidding war cause then you can get more money. So the sad part of about my story is that a company like Amazon, as big as they are. If they put an offer on the table, they’re not going to leave it out there for you to go shop around.

Jamarlin Martin: Yeah. They’re not going to want you to shop their deal. They’re Amazon.

Jewel Burks: And like I said, I wasn’t in the market to sell my company at that time. So it’s not like I had people already at the table. It really was for me, okay, I can either go with the investors and continue to build the business or I can go with Amazon and say, okay, we had a great run, achieved x, y things and now we’re going to just sell the company, be able to continue working on the technology, launching technology in the app and the Amazon mobile app, and ultimately achieve the vision of getting this technology out to the masses. So that was really my decision. I personally didn’t have the ability to get more buyers to the table just because it was a short time window. I had to make a call.

Jamarlin Martin: And did you talk to any bankers?

Jewel Burks: Yeah, I did. So again, If I had more time I may have gone with a banker, but what I was looking at…

Jamarlin Martin: Based on my experience it’s a good thing you didn’t go with a banker.

Jewel Burks: Yeah, I heard mixed reviews about bankers, but I was really looking at the numbers and I was thinking, okay, I know how the pie is going to slice and I don’t want to put any more slices in the pie. And the banker’s going to take another slice, and I was already kind of far in the process. So I felt like, okay, I can manage this on my own.

Jamarlin Martin: Yeah. My experience with investment bankers that I’ve hired them is that because they’re, their hand is in the pot in terms of your overall deal, they’re getting some form of commission off of it, a success fee, that they’re pushing the valuation, they’re trying to push it too hard, higher, and where that could end you with no deal, essentially. And of course they’re over compensating.

Jewel Burks: Yeah, exactly. So because of how the timing of everything worked out, I already knew where I felt I had taken it. So a banker, in my opinion, would have been good if I had multiple buyers at the table. But given the circumstances of what I was doing, I felt like it’s not necessary.

Jamarlin Martin: Have you met people who criticized that decision where you did not go through some pricing discovery against Amazon? Because I know some very smart people like, Hey, I’m not shopping this deal against an Amazon. You can shop the deal against a different company, but if they’re ready to do a deal, I mess around and lose the bird in the hand by trying to play them and go through some pricing discovery.

Jewel Burks: Yeah. Let me just be like this. I tried to do it, but it was too short of a time window. It really was…

Jamarlin Martin: In terms of reaching out to a couple of companies, you’re going to reach out yourself.

12:14 —Jewel Burks: Yeah. Because I have relationships. I worked at Google for several years, so I knew people. I was trying to gain more people at the table. But it was just too quick.

Jamarlin Martin: Can you share what type of deadline?

Jewel Burks: It was very, very, very quick.

Jamarlin Martin: I guess they get the leverage on that. So you decide to do the deal. How long did the negotiations take with your council?

Jewel Burks: I decided to do that deal in around June. And we closed the deal on Oct. 31. So four or five months. And I would say that was the hardest, that back and forth. And just being on edge thinking, cause you never know. A lot of deals don’t work.

Jamarlin Martin: Due diligence.

Jewel Burks: There are so many things that could go wrong.

Jamarlin Martin: At this stage of due diligence when they’re going through your accounting and they’re going through your customers, were you scared that you could lose this deal and they can just walk away? This is after, of course you sign the LOI?

Jewel Burks: Yeah. Yes. There were many days where I was like, yeah, it’s not going to close because the thing also is you are providing all this information. So on the one hand you’re like, okay, this better close because they have everything. So if they want to, they could do whatever they want there. And also they’re the giant and I’m the small fish. So, I was very nervous throughout the whole process.

Jamarlin Martin: How polished was your organization in terms of your accounting, audits, and stuff like that. For the audience, when a buyer shows up ready to do a deal, your price could go down or you may lose the deal if they come in and see a disorganized house. You have to get back to them in five months on like some simple stuff. Talk about that process.

Jewel Burks: Well I had a couple of things that were going right for me, which is that, like I said, we had already started the process of raising a Series A. So we already had a lot of things in order just because of that. And just because we had been pretty organized just throughout the course of the company as far as the financials and the legal work and everything. The patents we filed, everything was in pretty good order. We did have to find some stuff, but also we hadn’t been operating for that long, so it wasn’t like we were going back 10 years to try to find stuff. We’ve been a company for three and a half, almost four years at the time, when we got acquired. So we have things in order. But there were a ton of things to provide. So I guess that’s a note to companies. Keep things in good order, make copies of everything. Put it all in a Dropbox or box or wherever you keep your files so that it’s easy to access.

Jamarlin Martin: Yeah. For companies, you could find a due diligence checklist online where you’re going to be guided on what a buyer would ask for, and the due diligence checklist that you can get online, you should just keep your business, keep things in order of the due diligence checklist. So when the time comes and Amazon comes to your door or another company, you already have the stuff that’s ready to go. You may be able to respond to the buyer or investor in a couple of days, essentially, if you keep your stuff in order.

16:07 —Jewel Burks: Yeah. In our case, it wasn’t really the due diligence that took that much time. It was the stock purchase agreement. It was the paperwork. Talking about all the terms of the deal, going back and forth between the legal teams. That took a significant amount of time.

Jamarlin Martin: And how long do they want you to stay on?

Jewel Burks: I’m still at Amazon.

Jamarlin Martin: Okay. Full time?

Jewel Burks: Yes. I work in the building next door. So yeah, I’m still there.

Jamarlin Martin: Okay. Can you share how long you have to be there according to the agreement?

Jewel Burks: So it’s not even that I have to be there. I am incentivized to be there for a certain amount of time.

Jamarlin Martin: Okay. So we’re going to change gears here and talk about a very hot topic. Kamala Harris.

Jewel Burks: Oh yeah. Okay.

Jamarlin Martin: Of course, another Howard Alumni, accomplished, successful. Let’s start off by saying, speak to brothers getting out of pocket in terms of criticizing Kamala Harris on, let’s call it unfair, uneven grounds. In terms of some of this stuff sounds very sexist and disrespectful. Speak to that crowd. But there’s another crowd that may have, of course, a legitimate critique that we’ll talk about.

Jewel Burks: Okay. So the crowd that I’ve seen on social media really attacking Senator Harris. I’m very disappointed in. I’m not surprised.

Jamarlin Martin: A lot of these people, they’re going to attack anything.

Jewel Burks: There are people who, I don’t know what they do for a living, but it seems like they spend most of their time online just attacking somebody. So Kamala is the person for this week.

Jamarlin Martin: You see a lot of out of pocket stuff, that you’re offended.

Jewel Burks: Yeah, I am. I am. And I think part of it is obviously, you know, politicians, I’m sure they know if they put themselves out there, their history and past and everything is open for discussion. But I think there’s a way to have respectful discourse about someone’s history.

Jamarlin Martin: You’re okay with people criticizing her policies?

Jewel Burks: I’m fine with criticism. I think it should be more balanced. And the thing that I’ve noted is that people are very quick to jump on her and there are other candidates who have said that they’re running or we have speculation about them running and there seems to be very limited discussion about what their background and policy is. And I think that we just have to be careful given who we currently have in office about demonizing somebody who’s, overly demonizing, because I think that’s a similar pattern that happened with Hillary. And I’ll speak for myself and say I would much rather have her as president today as our current president than our current president. So I’m just afraid that people going and spreading these ideas, which some of them may be valid. A lot of them are just soundbites that are not well researched. I’m scared that that is a similar pattern that we’ve seen before and I really, really, really don’t want to end up with another…

Jamarlin Martin: Are you locked in to supporting Kamala Harris where regardless of what other candidates are proposing, your voting for her anyway? You’re riding with Kamala Harris no matter what. Honestly. I’m banging for Kamala Harris and this is my team.

20:06 —Jewel Burks: Okay. This is tough. I am going to listen to each of the candidates. I’m going to hear out their agendas, what they want. I’m very interested in just listening and hearing everyone. I will say that Kamala has a very big advantage because she went to my university. I have met her and I think that from the interaction that I’ve had with her, I believe she’s a good person and I know that I could get to her. So she’s accessible.

Jamarlin Martin: Do you think once she’s elected, she’s going to be accessible? As president?

Jewel Burks: One of my very best friends in the world is working on her campaign right now. So I have people that maybe I can’t get to her, but I know people that can get to her. I think that’s important. I want to be able to reach the people who are in power. So I say she has an advantage because I’ve met her. I liked the interaction I had with her. I think that she’s a brilliant woman. I like the way that she interacts with folks and is not scared to say what she believes. And her interaction in the Kavanaugh hearings, I felt yes, I want somebody like her who is not about the bull, but I will say I think that there are things that need to be examined and I want her to directly answer some questions regarding some of the things in her past. So I’m going to be listening attentively as she presents her ideas and as the other candidates present their ideas, she has a advantage, but I’m listening to everybody else as well.

Jamarlin Martin: So when you hear specifically brothers, and let’s say a brother brings up, hey, you know, Kamala Harris, she wanted to lock poor moms up when their kids were being truant. I don’t give her a high grade on criminal justice reform in terms of when she was in those important roles. Of course she’s moving in the right direction, closer to the election, in my opinion. But when you hear those types of critiques, are you putting these people in boxes where you’re skeptical, like agendas or do you think there’s a legitimate line of critique of Kamala Harris.

Jewel Burks: So I think the people who are so gung ho about her not being the candidate already before we even know who all the people are. I think I put those people in a box because I feel like that’s very aggressive for this point in time.

Jamarlin Martin: Okay. So you believe that Kamala Harris is gonna bang for, let’s call it, inequality in terms of, of course you have lobbyists, big corporations, Wall Street, Silicon Valley. I think that’s a big issue. Would you give her a higher grade on reliably banging against inequality then a Bernie Sanders or Elizabeth Warren?

Jewel Burks: Well, given the fact that, has Bernie even said he’s running?

Jamarlin Martin: He hasn’t announced it yet, but let’s assume that he’s gonna run.

Jewel Burks: Okay. So again, I would love to see them in a debate environment and I would love to hear each of their points as the questions are being asked to them. To the question you had about the truant parent, that’s a theme I’ve seen recently, people showing the video of her talking about that. And then I dug in a little bit more and I read an article about that policy and what were the results of it? And it said that 20 parents were arrested during that time for their children not attending school. And I would love to have a conversation about that. Personally, I know that there are reasons why the parent wouldn’t be in control, but also, what should the consequences be? Why should it be that kids can just not go to school? So I think that’s something worth talking about. I don’t think the attack of, oh well she had this policy, she’s bad. That’s just ended the conversation. I think we should dialogue. So what should we do.

Jamarlin Martin: A respectful conversation.

24:42 —Jewel Burks: How do we solve that problem? Anyway, I say all that to say I think it’s worth conversations and us not just saying this is not my candidate because x, y and z, or putting up a little snippet of a video that’s lacking context. I would just like for us to be having more dialogues about, okay, we all know there’s big problems in this country. How do we reasonably address them? And she had a certain seat as a prosecutor where she was trying to do the best that she knew in her role and position. And that’s the angle that some people were like, oh, Kamala was a cop. So I’m not voting for her, period. That’s it. Wait a minute, what?

Jamarlin Martin: I don’t think that’s a reason not to support her?

Jewel Burks: Yeah. There is a group where that is their thing. That’s it.

Jamarlin Martin: Because she’s a cop and I don’t like cops.

Jewel Burks: Okay, well how do you feel about crime? What do you mean you don’t like cops? That’s not reasonable. So I think we just have to come in with a little bit more level-headedness and just a little bit more dialogue and then we might get somewhere.

Jamarlin Martin: What would you say to the people out there that say, “Look, Obama was good for that time, but we’ve seen that stuff and Obama was a good president, but at this time we need someone a bit more radical in terms of inequality and some of this other stuff. Lobbying, big tech, Wall Street. We need somebody who’s going to go against the lobbyists, go against these powerful corporations.” Obama was good for that time, but an Obama 2.0. We need something different this time. And Kamala Harris is a little bit too close to the center, too safe.

Jewel Burks: Okay. So what I would say is, can the country sustain such wide swings in such short periods of time? Right now we have somebody in the office in the presidency who if they could have found a more opposite person to President Obama, I don’t think they could have found a more opposite person. So that is a huge swing between what we had from 2008 to 2016, and what we have now. To me, first of all, you have to think about electability. Can a person who is way more radical than president Obama or Kamala Harris be elected by the whole country. That’s what we got to ask. We can’t just go based on… We have to think about how do we get this man out? We can’t think about, we got to go totally far, far left.

Jamarlin Martin: You don’t think that that’s a privilege position where let’s say the folks in Harlem and Watts and Compton and south side of Chicago where hey, there’s a lot of issues here around the country and if you’re saying that the best thing we’re going to do this time, another four or eight years, is we’re going to go back to Obama. And we of course are not benefiting. A lot of us are getting left behind with the rise of inequality. That’s not anything to look forward to for a lot of people, if you say that we’re going to go back to a safe Obama.

Jewel Burks: Well first of all I would challenge the idea that Kamala is Obama…

Jamarlin Martin: She is close to an Obama center.

28:21 —Jewel Burks: I’ve heard her say some things that I didn’t hear President Obama say. Different time, different issues.

Jamarlin Martin: Not the same, but it’s kinda like the center of the party. You see her kind of rallying. She’s in the center. She’s not far left like I believe Warren and Sanders are to the left of her. She’s more kind of in the middle of the road where a lot more people are comfortable, including from me perspective, big corporations.

Jewel Burks: Yeah. So I think that I’ve got to go back to what I was saying about what candidate is going to win.

Jamarlin Martin: So your vote potentially, could be different if you didn’t analyze who could actually win? Is that what it is?

Jewel Burks: Well, I’m going to vote my interests. Right? So speaking from a place of privilege, I am very concerned about people who are in poverty, people who do not have healthcare, all of these different demographics. I am concerned about these folks and I do work to help these folks. I’m also concerned about taxes, or I have other things that I’m interested in and worried about as well. So for me being a person who cares about people in general, I’m going to vote for the candidate that I feel like is going to do the most good, what I deem to be good. So again, I have to listen to everybody. I think from my interaction that Kamala has a similar vantage point, so right now she’s my front runner and also I think she’s electable. And I think she is going to be able to do the best winning folks who might be Republican but can’t mess with Trump anymore. I think she probably has a better chance of getting those people on board than Bernie Sanders, maybe.

Jamarlin Martin: With your friend working on the Kamala Harris campaign, do you have any insight on her rollout of how to deal with…

Jewel Burks: I have no clue.

Jamarlin Martin: Amazon, Google and Facebook and a lot of this stuff that’s going on there.

Jewel Burks: No, I don’t get the meeting notes.

Jamarlin Martin: Yeah. What I think is going to come up is… It hasn’t come up. From my perspective, Hey, you were a cop. That’s not a deal breaker, right? You’re a district attorney. We need people in those roles. We need good people in those roles. You were attorney general, you were in those roles. That’s not a deal breaker on its own. But if I believe what’s going to play out is America is headed into a recession, possibly a crisis.

Jewel Burks: I think that’s going to happen before 2020.

Jamarlin Martin: Yeah. For sure. Okay, so we’re on the same page there, but if America goes to an occupy Silicon Valley, like they did an occupy Wall Street, people are gonna say, “Hey, you were locking a lot of poor folks up as district attorney, as attorney general, you’re the chief cop of the state, including corporations. What were you doing with the rise of these beast corporations who are monopolizing the economy and contributing to inequality? How were you policing Google and Facebook, while you were attorney general?” Of course, in New York, people expect the New York Attorney General, that is the kind of the cop for Wall Street, for the corporations out there. But I think there’s going to be attention because the what’s going on in Silicon Valley in terms of contributing to inequality, people are going to be looking for stuff to blame. Why is this economy so messed up?

32:36 —Jewel Burks: Do you think that falls into her…?

Jamarlin Martin: Jurisdiction? I think so in terms of what were you doing, at least in 2013, the consumer advocacy group, they raised the question of we want to see her bang against some of these big tech corporations in 2013, like we see the New York AG in New York. And so, if more attention, because you’ve seen the layoffs with Buzzfeed and the layoffs are starting to accelerate, is that if that attention turns to Silicon Valley where they’re the punching bag and they’re like, you’ve got to blame for them for the recession. Nobody can get a job. Robots, all this stuff. Some attention can say, look, if you’re going to be the cop locking everyone up, district attorney, AG, how were you policing these big corporations? Why no energy over there when you were in office?

Jewel Burks: Hmm. That is really interesting. Okay. I’m very curious to see if that comes up because my first thought is, well, that feels like a little bit of a stretch.

Jamarlin Martin: It sounds like you want to say that’s a lie.

Jewel Burks: I follow where are you going with it? I don’t know the exact job description of attorney general and what they police and what they don’t, but I will say that, I lived in Oakland for two years when I was working at Google straight out of college, this was 2010 to 2012, and I went outside of my personal issues, one of the things I hated the most about living out there was the fact that I felt like I was contributing to the huge gap between the folks who are from Oakland, living in Oakland, not working in the tech industry and the people that are just coming in, working at Google and Facebook and Apple or whatever. I could see it as plain as day. I was living in my nice apartment, paying way too much for rent and I was seeing the prostitution, drug use, right on my street. Every single day it hurt me so bad to see that. If I run for office in 20 years will someone say, well, Jewel, you were living in Oakland, you know what I’m saying? I felt bad about that. I don’t know what I could do to help. I mean, she was an elected official, but I don’t know. I think companies need to be held accountable for that. Why is it okay for these top corporations to displace all these people?

Jamarlin Martin: It’s just greed.

Jewel Burks: I don’t know if we should blame Kamala for that.

Jamarlin Martin: So during the election, if you start seeing specifically, let’s stay focused on Black men. If you start seeing Black men go over to folks more so on the left, more radical. Elizabeth Warren, I think she scores high in terms of her track record against big corporations. When you see people like, Hey, I’m not supporting Kamala Harris, I’m supporting Bernie Sanders or Elizabeth Warren, I’m voting white. They’re not saying that, but that’s actually what they’re doing. Do you feel a certain way in terms of loyalty where, hey, the Black voter won’t vote for the Black candidate. Do you feel a certain way? Like, Hey, you should be riding for our people in these positions, and I’m disappointed. Do you have an emotional thought when you see that?

36:41 —Jewel Burks: I do have an emotional thought just because I think people are not even giving Kamala a chance. First of all, she just announced a week ago and we’re already saying, oh, she’s not my candidate. Folks are already saying that.

Jamarlin Martin: But the thing is, not to cut you off, but the thing is, for a lot of people, and I’m not talking about the crazy folks, the disrespectful folks, the sexist folks, but a lot of people, I can’t go by what the politician, because the Black community has been abused by the Democratic Party so much. All races in the Democratic Party have abused the Black community in my view, has exploited the Black community.

Jewel Burks: You mean as a block of voters, just taken advantage?

Jamarlin Martin: Yeah. So you guys don’t have a place to go essentially. You’re not going to vote MAGA. You’re not going to vote Bush, so you’re going to vote us if you’re going to vote. So because the corporate side of the Democratic Party, the ones that are really friendly with lobbyists and corporations, because we’ve been abused and exploited for so long, in the Democratic party, our voter equity is not what we should be getting because we don’t have any optionality. There’s not really an option to go Republican. We can’t go by at the time of the election, what you’re saying now or what you’re saying in the future because of the history, the relationship between the Democratic Party and Black people here in the United States, we can only go by what has happened in the past. Politicians are going to optimize for getting votes, winning the electoral college and hooking people in. But we want to discount what you say now because of the history and the relationship. The only thing we can really go by is a track record. And so Kamala Harris, her track record is out there and that’s what folks really need to be evaluating. What would you say about that?

Jewel Burks: Okay. That’s fine, but I think people just need to be cognizant of what her position was. So you can go by the track record, but she’s never been president before. You know what I’m saying? She’s never been in this type of position. So the position she was in was to be an enforcer of the law. That’s slightly different in terms of framing than even some of the other candidates, what their background and history has been. So I think it’s fine to ask questions about certain things that she did, but it’s important to understand, first of all, what were the desired goals of those particular policies that she had in place? How does she measure up against those goals? I mean, did she achieve them? Did she not achieve them? Instead of looking at it as a wide stroke of, “Oh, she locked many people up”. Well did those people deserve to be locked up? Let’s talk about that.

Jamarlin Martin: Yeah. So what I’m talking about is not just criminal justice reform, but other things. For example, Joe Biden. And to your point, you gotta be fair in terms of evaluating the candidates. Joe Biden of course voted for the Clinton Crime Bill. Joe Biden voted for the Iraq war where hundreds of thousands of people died. Hillary Clinton voted for the Iraq war, supported the Clinton Crime Bill of her husband. So when we look at these things and if we were to evaluate each candidate, I believe we need to be looking at the fact that Barack Obama did not vote for the Iraq war. Bernie Sanders did not vote for the Iraq war. Elizabeth Warren did not vote for the Iraq war. When we shouldn’t just look at criminal justice reform and Kamala Harris’s record in California, but where does she fit in terms of the facts, evidence, and history where, is she more of the Biden and Clinton where they’re voting for mass incarceration? Because at the time it’s the popular thing, they’re going to war in Iraq. Or is she more of, I don’t really trust the establishment and I’m on another side.

41:07 —Jewel Burks: Yeah. I mean I think we should interrogate that. We should talk about that. We should see where do we feel that she ranks as far as our personal ideologies and all of that. I also think we should listen to what she has to say today because people evolve over time. She’s in her fifties, she’s had a 30-plus year career so far. What she said in 1997, she might have a very different opinion. I have different opinions about things. I grew up in the south, in Nashville. There were things I was not exposed to until I got to Howard. And then I was like, oh, okay, this is different. I have a different idea about this. People evolve over time. I think that’s something we should leave room for as well is, yeah, we’re going to look at your record, but we’re also going to look at what are you saying today and what is the policy that you have put out there that you want to make happen if you become president. How does that line up with what we believe? So I think we have to leave room for that too.

Jamarlin Martin: Good point. I want to invite Kamala Harris on the show. Hopefully we can get her on the show to answer some tough questions, like we got Andrew Gillum, but I wanted to say thanks Jewel Burks for coming on the show. Where can people check you out online?

Jewel Burks: So I am on Twitter @JewelMelanie, also Instagram @JewelMelanie. My website is http://www.jewelburks.com/ and yeah, I’m around in Atlanta.

Jamarlin Martin: Yeah. I want to thank the queen of tech, here in ATL, Jewel Burks is doing the damn thing. She’s inspiring people. She’s working on initiatives to get more entrepreneurs into this game, I’m really excited about the stuff you’re working on and what you’re doing here in ATL.

Jewel Burks: Thank you. Thanks so much for having me.

Jamarlin Martin: Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter and also come check us out at Moguldom.com. That’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

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Episode 41

Jan 23, 2019

The Bull Market And Why They Hate Ocasio-Cortez And Gabbard

Jamarlin Martin discusses the nasty stock market decline and why there’s trouble ahead for the

e’s trouble ahead for the global economy. He also discusses Alexandria Ocasio-Cortez’s proposal for a 70-percent tax rate on the wealthiest Americans, and why the military industrial complex and regime-change hawks hate 2020 candidate Tulsi Gabbard.

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! Hope everyone’s New Year’s off to a good start. This year on the GHOGH show, we’re going to have episodes where we don’t have a guest. There’s going to be episodes where I have so much to say, so much stuff to cover, we won’t have a guest on the show.

So hopefully you like the remixed format for this season where sometimes we’ll have guests and other times it’s just going to be me. Let’s dive right into some of the stuff that I wanted to cover. So the first thing is financial markets and trying to understand what’s going on because whether you’re an investor or not, I think ultimately it’s going to impact most of us in terms of what’s about to play out here in the United States and globally.

I wrote an article on Moguldom.com called “The 10-Year, 300-Percent Bull Market Is Over”. Essentially what I’m saying is that, after the financial crisis, the Fed slammed rates down close to zero. The Fed started printing money in what they call quantitative easing, or QE. When you hear this term, the only thing you need to know is that the Fed is creating money and pushing liquidity into the system. It’s giving money to banks at super cheap rates where the Fed injects the money into the bank. The bank has to pay it back at super cheap rates. The money is created electronically and now the banks, the financial institutions can go out there and start buying stuff. So you get the money at pretty much no cost. And I can go buy real estate, I can go buy stocks, I can go buy bonds. I can go buy all different flavors of financial assets, venture capital. And so money has been really cheap from low rates and QE or money printing.

Okay. However, 10 years into the bull market, now we have rates going up and we have what’s called QT, quantitative tightening. It’s the reverse of QE. So if QE helps you on the way up, the money printing helps you on the way up, the Federal Reserve is now doing this in reverse and the market is starting to feel the Federal Reserve taking back support for financial assets. And the market, to me, is screaming to people that this bull market is 10 years in, it’s tired. This bull market is fake. This bull market is going to have a day of reckoning, where the idea that the economy is strong, but the market will trade down if you normalize rates and if you keep QT going, in terms of removing liquidity out the system, essentially the market is screaming to you that it needs the Federal Reserve to support itself.

And that’s not a healthy, strong economy. I hear folks quoting Warren Buffet and saying, “Hey, you got to invest for the long term.” Parts of that may be true. However, this stock market is dominated by failing stocks. It’s dominated by high relatively high P/E, risky stocks. Most of them are not part of the Warren Buffett thesis. If that’s what you’re thinking, like, hey, I need to invest long term and I’m not going to try to time the market. But the issue is that the market is dominated by fame and the fame stocks, Facebook, Amazon, Apple, Netflix, Alphabet. They have led the market up and they have led the market down essentially. In Q4, the market went down so fast, 20 percent, that market participants have not seen this speed of decline since the Great Depression.

So the market is trading down fast because, I believe, smart money is realizing that my risk/reward ratios are off. Essentially 10 years in after being up 300 percent, there’s not a lot left to gain. So maybe I can gain a couple of percentage points on the upside over the next couple of years with these valuations. However, because the market is so fatigued and tired after 10 years, there’s very little you can get on the upside. Okay? So maybe you forecast, hey, maybe I can squeeze an extra five percent out of this bull market 10 years in, but you could lose.

If this bubble, if this economic cycle is going to end like 2008 and 2000, where market’s traded down 50 percent, then I’m taking 50 percent or more risk, for possibly five or 10 percent if I’m looking at the big picture. And so for long-term investors, it doesn’t mean you have to sell everything. Essentially, your investments could go into different gears. So in an environment where assets look like they’re going to trade down and market valuations are high, P/E ratios are high, people have stopped respecting cash flow and profits, and they don’t care about this stuff at the end of economic cycles.

So if you’re in that environment, then maybe you change gears in your portfolio and you have a bigger allocation of bonds and gold and cash, and impossibly hard real estate. I’m not saying that, hey, it’s time to sell everything, but it’s time in terms of where America is going, where the global economy is going. This thing is going to collapse. You’re going to see this thing most likely trade down very, very fast. If you have a lot of risks on the table then most likely you’re going to get cracked 30, possibly 50 percent over the next few years as the new financial crisis begins.

Some people will say, hey, because the market traded down at the end of 2000, I would be very diligent in thinking about what environment we’re in and how can I downgrade my risk at this stage in the economic cycle. And so, in the article on moguldom.com, “The 10-Year, 300-Percent Bull Market Is Over”, I talk about looking at gold as an investment where in times of crisis and times of risk off, where folks are taking risks off the table, at least smart money is taking risk off the table, that gold, I think, is going to be a very attractive investment. It’s not correlated with stocks. And I think most people should have a piece of gold as an investment. You can invest in hard gold bars or you can invest into the GLD ETF which holds gold investments. That’s GLD and you can start investing for about $150.

The bull market is over and this thing is going to continue to crash down. You saw markets trade down fast and then it traded up real fast. Does that mean that things are gonna go right back? No. Market professionals who have been through boom and bust cycles understand that what’s going on right now is a bear market rally. Essentially, a lot of people get short, markets go to the extreme on the downside. They overshoot and the bear market rally goes up really fast. That doesn’t mean everything is going to go back, and things are gonna go up another 30 or 40 percent.

Long story short, the bull market is over, China is rapidly slowing. Europe is rapidly slowing and what you’re going to see in Q1, the United States is going to start to rapidly slow and it’s going to surprise people and everyone and their uncle who are investors, they are famed up, leveraged long and so when people start running for the exits and they start to try to get out of this market, you’re going to see what we saw in Q4, that trade down 20 percent, you’re going to see more of that. And of course, Donald Trump with trade war, the government shut-down, he has all this stuff going on at the wrong time.

There’s too much risk in the market at the same time. So no one thing will crash the market, but everything added up, it’s a big risk bomb. So right now, I don’t think it’s time to get famed up. I don’t think it’s time to put a lot of risks on the table. I would be strongly looking at gold as an investment, for the long term.

The next thing I want to touch on is Alexandria Ocasio-Cortez. She made a lot of press over the last couple of weeks by coming out and saying she advocates for a marginal tax rate of up to 70 percent, and the right wing media, who hate her, right away, they’re going to hate a young woman and they’re definitely going to hate a young vocal Brown woman. A lot of them just by default, before you even get started into the socialism, there’s going to be a high probability of bias against someone banging so hard, going as hard as she goes, being so vocal. Her starting point is she’s a young Brown woman and she’s not scared of them, that she bangs harder than a lot of these other Democrats against them. And that shakes up the political establishment and you’re seeing this, and you’re gonna see her most likely become a bigger star on the left.

She’s not shy about the fact that she’s a democratic socialist, and so what got a lot of folks attention is that she’s saying let’s consider taking marginal tax rates up to 70 percent. The right wing media, they try to mischaracterize it, put out some misleading stuff. But what she was talking about was after the first $10 million of income, the income after that $10 million would be taxed up to 70 percent. So that’s important. It’s not just a blanket 70 percent, but after the first $10 million of income, the tax rate could go up to 70 percent. It is essentially a tax the wealthy play.

And I believe we need higher taxes, personally I believe that. But I have a problem with this. Here the situation is, America has record debt, trillions and trillions of dollars of debt. America is bankrupt, it doesn’t have money. It’s a credit economy. The country is living way beyond its means and has been for a long time, and the country has been printing money, and the Ponzi scheme has worked. Essentially, we’ll print money, and we’ll be fine until it’s not fine. The problem I have with this idea is that if you were to tax Jay-Z or Oprah for an example, at 70 percent on the federal level, they still are going to have to pay taxes most likely at the state and city level. And so the thinking among the socialists is that, when they run their spreadsheets and say, hey, we need more money, we’re just going to take it from the wealthy and take more of their income, 70 percent and they can worry about state tax.

Maybe in California, once the state and city tax goes up to 80, 85 percent on their income, and the belief or the assumption is it’s an easy fix and you just take the money from here. You just take it from Jay-Z, Oprah, Robert Smith, the black billionaire private equity investor, you just take it from them, so we’ll just get the money from them. So the assumption on the spreadsheet is that once you change the tax policy, all the money, everything stays mostly the same. But the problem is that your Oprah, your Jay-Z, your Robert Smith, they would adjust. And so they’re not going to be doing everything the same. If their income is taxed federal, state and city up to 80, 90 percent, if I have to go to work and the U.S. government is taking 80, 70, 80, 90 percent in terms of state and city taxes, those people are so sophisticated, they’re not going to stay there, they’re not going to keep on doing the same things.

There’s also a risk where if somebody is able to create something extraordinary and they’re able to generate a lot of income, they don’t want to work for the government, essentially. So if I’m able to bust my ass and really make a lot of sacrifices and get lucky, and I’m able to generate a lot of income, if I have to give away 80, 90 percent in federal, state, city taxes, are these people, these entrepreneurs, are these people going to stay in the same place? Are they going to keep working at the same rate? Are they going to be just as productive once you start taking $8 to $9 out of $10 out of their paycheck? So I think it’s unrealistic in terms of the economics of this. So I did not support the Trump tax cut, particularly with allowing Google and Apple and Microsoft to bring hundreds of billions of dollars cash to the United States tax free.

I do believe that higher taxes are needed in the United States, but going up to 70 percent even on a marginal basis is extreme. And I think, impractical, meaning that some of these policies you see politicians talk about, they sound good, they’re easy. Hey, let’s just take 80, 90 percent of the income over here and we’ll fix these holes. And our calculation is, the foundation is going to stay the same when we start taking 70 and 90 percent of the income once you factor in other taxes. That doesn’t make sense to me. It’s on the extreme side. But when I look at talented political leaders like Ocasio-Cortez, that’s one issue I don’t agree with, but I’m looking at the political leader in aggregate. So she has a lot of other stuff such as, she doesn’t want the lobbyist money. That’s another thing that scares the establishment. She won’t take the foreign interest and lobbyist money. When she speaks, no one owns her. She is an authentic politician where the corporate interest and special interest groups do not control her. She owns her platform. When you look at the other corporate democrats, they can’t say that. They’re owned by lobbyists. The big money that backs them, they got to take care of those people.

And another thing that came up relevant to Ocasio-Cortez’s tax policy… Tulsi Gabbard, out of Hawaii, a congresswoman out of Hawaii who’s Hindu, the corporate democrats, the usual suspects on the corporate democrat side, they started to attack her yesterday. As soon as she announced she was running for president, they’re ganging up, attacking her, the corporate wing of the Democratic Party. And let me tell you why they’re attacking her. One, she is a war veteran. She fought in the Iraq war. She was about that life. She actually had to see and fight in a war, and so she doesn’t support the hawks in Washington and their lobbyist friends. She doesn’t support looking at all these countries around the world and looking at what leaders do you want to remove, like a chessboard. She is not for going into Syria and taking out a side and let’s gamble and see what happens next.

Okay. Another thing they don’t like is that, there was a report that Assad used chemical weapons. She said, wait, we know what happened with Iraq with Hillary Clinton voting to go in and start murdering a lot of Iraqis and putting a lot of Black and Brown troops at risk that a lot of these corporate democrats, when you start talking about war and, hey, somebody’s doing this over there, let’s go, let’s go. They’re very easy to pull that trigger on war. The regime change wars. She’s not with that stuff. And so she was looking at, in my understanding, is that, hey, let’s wait and not try to overthrow another leader in the Middle East, where if you get this wrong, you’re going to be looking at another Iraq situation, another Afghanistan situation.

And the attacks on Tulsi Gabbard relates to, I believe though, Ocasio-Cortez’s tax policy, because on one hand, if the socialists are talking about, we want free healthcare, free education, we want to reduce the military budget in the United States. But we also want regime-change wars every couple of years. A third grader can understand that the math does not work on that. So the Corporate Democrats, they love going into wars. Something looks bad over there. Let’s get the troops ready and let’s go into unlimited wars forever. But the problem is they also want more and more free stuff. Free Healthcare, free education, regime-change wars. The message is we can have all of it at the same time and even a cut the military budget. And so one of the things they don’t like, of course, is Tulsi Gabbard, who has fought in a war, is against regime-change wars.

Another thing they don’t like is in 2004, she made some insensitive comments relating to gay marriage. She made these comments in 2004. So they’re going to attack her and bring those issues back up. They haven’t done it yet, but you can expect that. They’re going to go back in 2004, the corporate democrats and their lobbyist friends. They’re going to try to dig up as much dirt as they can and use that against her. So when they try to undercut her and her running for president, which I think is good, I think it’s healthy for America. It’s good for America to see more women step up and run for president. But the next thing they’re going to attack her on these comments relating to same sex marriage. So when they attack her, keep in mind, Barack Obama was against same sex marriage, particularly in 2004. He was allowed to evolve in terms of his relationship with the LGBT community. He was allowed to evolve.

When they bring these comments back up from 2004, keep that in mind. How can you guys embrace Obama, who was against same sex marriage and was fundamentally against it? He evolved on that issue. You embrace him, but you want to go attack everyone else who at the same period was against same sex marriage as well. So that’s one of the issues they’re going to try to attack her on. So another one is the prime minister of India, Modi. He’s considered by many to be far right. He’s a Hindu and they take him to task and his political party in terms of their relationship with Muslims in India, 20 percent of India is Muslim. Tulsi Gabbard is a Hindu. And so she’s been friendly with the prime minister of India and so, the corporate democrats, they say, “Hey, why are you so friendly with Modi”, who we perceive as kind of the Republican, far right guy in India. They have a problem with that.

Evaluating this issue, the first thing that I think about is, why are you giving Tulsi Gabbard a hard time for being friendly with the leader of India, who’s also Hindu, her faith? Why are you giving her such a hard time? You may have valid criticisms, but at this day and hour, people want to see consistency. And so it doesn’t make sense to attack her on being friendly with Modi and his political party in India, but you won’t attack U.S. politicians who are crip walking for Netanyahu in Israel, who a lot of people would consider the Donald Trump of Israel, the MAGA of Israel, that Netanyahu is far right. Yahoo can be counted on banging against the Palestinians, like Donald Trump is banging against Brown people, here in the United States. The corporate democrats will say that it’s okay for all of our politicians to be very friendly with Netanyahu and praise Netanyahu and the far right in Israel. But we don’t want Tulsi Gabbard to be friendly as a Hindu with the Modi political party in India, and show you see this hypocrisy where the Corporate Democrats lack consistency. You will see them.

It’s politically popular to talk all day about Donald Trump and attack Donald Trump. It’s really popular to do that. It’s safe to do that within the Democratic Party establishment. So they’re going to keep on doing it in the frequency, and they should. But the problem is, if you’re really about that life, that anti-MAGA life based on your values and principles, it shouldn’t matter where you see these types of things. So whether it’s in the United States or whether it’s an Israel or whether it’s in Zimbabwe, if you see themes, patterns and things that look similar, you should be against it all, you should be consistent.

So the problem I have with corporate democrats, lobbyist-friendly democrats, is they’re against MAGA and Donald Trump here where it’s politically safe, you’re not going to lose your support for banging against Donald Trump, you’re going to gain on that front. But when they see Donald Trump-type of white supremacy or racism in Palestine, against the people of Palestine, you’re not going to hear them speaking out against Netanyahu. You will not hear that from a corporate democrat, that the only MAGA they’re allowed to be against is here in the United States. And I think in this day and time people want to see consistency.

Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter, and also come check us out at https://moguldom.com. That’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

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Episode 40

Jan 16, 2019

Jade Martin and Victoria Jordan

Jamarlin talks to Jade Martin and Victoria Jordan, branded entertainment producers for Urban One (NASDAQ: UONEK). They discuss their work for

scuss their work for Toyota, P&G and Coke, and the cultural impact of reality TV on Black America. They also discuss the business prospects for REVOLT TV and Diddy becoming more pro-Black.

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! Today we have Jade Martin and Vicky Jordan. They are branded content all-stars producing content for brands such as Toyota, Honda, Nissan, all the big Fortune 500 brands, they’re producing content for them. How’s it going ladies? And for the audience, Jade is my sister.

Jade Martin: Yes.

Jamarlin Martin: For our audience out there, how did you guys get into the game and what are you doing now?

Jade Martin: This is Jade. For me, I started when I first came to Moguldom. I was working in entertainment before that, I was interning at all different types of regular labels. That was my initial dream to become A&R, which quickly shifted once I got my first internship at a major record label and saw the way things worked inside. Then I had the opportunity to work at Moguldom. Then I learned how to be a production coordinator. Then I became a self-taught producer as well as like a cameraman, editor and so on and so forth.

Victoria Jordan: For me, I was a graphic designer and I was working in entertainment and publishing and after a while when marketing design became digital and then started to move into video, I wanted to do more branded content. I felt like my aesthetic would also resonate on screen, so I kind of started to move into production on my own and then I had a random meeting with a friend of mine, and she was like, “I have this producer role”, and I was like, “I would like that role please”. And she hired me. And so I’ve been doing strictly branded content since then.

Jamarlin Martin: Okay. As you know, there’s many flavors of branded content. How would you define branded content for the audience? The specific type of branded content you do for clients, how would you define it?

Victoria Jordan: Well, for our team, it’s either we’re planning an event for you or we’re planning some type of video. No matter what, there’s always video content even if it’s an event, we’re capturing some kind of content so that it’s living digitally and bringing you an audience to your platform, but what we try to do is do something multi-platform, like we’ll do articles that are sponsored by Toyota and talk about some kind of theme that Toyota is working with. We’ll do a video that kind of goes along with that theme as well, and taps the talent that they really like. And then we’ll do an event along with that as well. We also have TV properties and radio properties, so if a brand is interested in that, sometimes we’ll partner with the cross platform team and also do radio drops. Do cut-downs on some of the videos that we create for digital to run on TV. We’re usually trying to come together with a nice integrated program that will boost whatever theme or advertising campaign that client is coming up with.

Jamarlin Martin: How often is it, hey, this is just your idea and the brand is taking your idea versus a collaboration on the idea.

Jade Martin: I would say a lot of the times it’s more so our idea because our integrated marketing team creates custom ideas specifically for our brands, because we know our audience better than the brands know our audience. So they come up with custom ideas and then Vicky and I can tweak them based on our expertise. We’ll be like, hey, we won’t be able to produce this in enough time, we won’t be able to produce this within these budget parameters. So you need to change the idea this way. Or we feel like our audience would like something different so you should alter the idea this way, and then the client will buy that idea that our team creates.

Jamarlin Martin: And then how often does the client mess stuff up? Meaning that, they come to you like, hey, we want to know the hot stuff. We want to know how to create content for the urban African-American community. We’re coming to the experts, people who are in culture for the idea. But then you guys present the idea and they want to come in and deebo their own ideas and mess this stuff up. Then it performs poorly and then they’re like, “man, what happened? We got a bad thing.” But the problem could be you tried to mess up our original idea, so we had to run with it. How often does that come up?

Jade Martin: For me, the two reasons where clients mess up the most are product placement and talent. So in terms of talent, they don’t let us push talent that we feel will work better with our sites. They might not be as brand friendly as some of the talent that they will want, but they might want more cookie cutter talent to be featured…

Jamarlin Martin: And they’re like an old head.

Jade Martin: But nowadays the millennial audience, our urban audience, we want people that are relatable to us and that we see on TV. They might have messed up, they might not be as brand friendly, but that will resonate with our audience more. So a lot of times we feel like the talent that we are forced to go with might not perform as well as the talent we would naturally want to put in the video. The second reason I feel like they mess up is product placement. So we have issues all the time where we want to push less product, because we want it to be organic, but especially automotive industries or other clients, they want to put way too much product where it doesn’t fit within the storyline. And then that defeats our whole purpose of branded content, because we don’t do commercials, we tell stories.

Jamarlin Martin: Sounds like there’s just a lack of trust with brands, where hey, we’re trying to tell you who we know are the hot people that young people want right now. You’re not going to know them at the agency side, but you gotta trust us. But they come and they’re like, “I want Christina Milian, I know that name. Let’s use that.”

Victoria Jordan: Absolutely. Well, there’s this chain, right? The agency gets the creative brief from the client. They send it to us. If we come up with the ideas, there’s this whole chain of people that have to be satisfied and if the people at the agency don’t get what you’re saying and don’t trust you and don’t have that rapport with you and know that the type of content that you put on your platform works for your audience, then they’re going to be hesitant. And then if they’re reporting back to their client and their client is like, “hey, I don’t know, Lil Duval, I only know Anita Baker. Can we get Anita Baker?” And then you’re like, you’re targeting a whole different audience. I think that it’s an understanding of the audience that’s lacking sometimes. Part of our job is to always be pushing back respectfully, saying, you hired us to do this because we do this, because we know who’s clicking and we know why they click. And they’re going to watch this if they don’t see Nissan Logos and car shots every two seconds. They’re going to watch it for the story because they want to see this person that resonates with our audience.

Jamarlin Martin: Are you generally making a higher margin on the campaign in terms of a profit on the event site as opposed to video? Is there a clear kind of, hey, this bucket over here, we’re gonna make more money when you factor in all the costs? Is it clear cut that events are better than video?

Victoria Jordan: That’s a tough question because they’re usually packaged together for us. There’s never going to be an event where we don’t capture content and put it out somewhere. I would say, to me, content is king still.

Jamarlin Martin: Yeah. When you get a celebrity, what range have you paid out to the celebrity? In terms of, “Hey, for this program for Toyota, we need to get this celebrity, Kevin Hart or whoever.” What’s the biggest amount that goes into the pocket of a celebrity?

Jade Martin: I feel like we might tell too many secrets if we disclose the numbers.

Jamarlin Martin: You could just not necessarily…

Jade Martin: I will say it’s not as much as you think.

Jamarlin Martin: So like, $50,000, $100,000, you’ve seen like checks like that? To be a part of your program, you may have to pay $50,000, $100,000 to a celebrity?

Victoria Jordan: One thing that really dictates what we’re working with is what African-American agencies get nowadays. They get a lot less money than they used to get. So the budgets in general, the buys that they’re making are smaller. So we only get a percentage of that to actually produce content with. So we’re working within smaller parameters. So on my end, because I’m on the digital team and we don’t always have these cross platform buys that are larger than ours, I’m usually working with less money. So I’ve paid people from $200, to someone who’s really hungry and on the edge of breaking, up to like $15,000, $20,000, to somebody who’s really established. But it has so much to do with how many posts they’re doing, how they’re boosting the content, how many videos they’re going to be in, what we’re actually asking them to do in the video, how many followers they have and how much engagement they have. There’s a lot of formula that goes into trying to calculate that number, but I mean it can range. For somebody like Kevin Hart, I wouldn’t even know where to start for his fee.

Jamarlin Martin: We partnered with the agency but Kevin Hart had partnered with Ford, but I imagine that had to be a really big number back in the day.

Jade Martin: For us where we catch a break, on talent fees, is the fact that our brands are known. So we garner really good relationships with talent based on our brands. So if we’re like, hey, for this project I can only pay you 10K for a couple of social posts, but you typically usually get 30, 40k for something like this. But because it’s going on a Bossip or MadameNoire or Hello Beautiful, they’re willing to be like, “okay, we’ll do it for this because we know you guys, we know your brand, we agree with what you guys are doing, and we support it 100 percent” -even though there is a brand tied to it..

Jamarlin Martin: What would you say to this person who would say, hey, branded content is everywhere now. It’s crowded. It’s like a bubble, where it used to be five or six years ago, we offer these branded content programs, “Nice, we love the custom stuff”, but nowadays so many folks are in that bucket. It becomes much harder to differentiate. Can you talk a little bit about how competitive it is now? Because a lot of people are doing branded content.

Jade Martin: I definitely think it’s everywhere, but I also feel like there’s still a lot of room for improvement because there’s branded content out there now even on IG stories and on Facebook that’s not even intended to be branded content. There’s Youtubers that are just literally telling their daily stories about what products they use on a daily basis. And someone like me goes out and gets a curly hair product because I see my favorite Youtuber. She’s not even making money off of that video. So I definitely feel like it’s everywhere, but there’s still a lot of things that we need to do to where we can basically get better at the way they’re targeting everyone in terms of branded content.

Victoria Jordan: So we, I don’t know if it was yesterday or the day before, but there was a really great thing that happened on social when T-Pain was saying, “Y’all have to stop playing the same songs as you’re boarding the airplane” to Delta. And they saw it and they tweeted him back, and they played his song on his plane the next time he got on a plane and he recorded it and put it up, and there was all these tags, and it was like the best branded content by accident, earned branded content. It was so great, and I feel like for me, the way to do it better is to really pay attention to where your audience is, what they enjoy. Be in your group chats, look at the things that people are sending and make that kind of stuff. It doesn’t have to be super high production value. Although I think as producers we really want to do stuff that looks good and we invest in. But I think it’s really about just accepting that this is where the audience is, this is what the audience likes and trying to do that. Not necessarily overly brand that thing, but get the personalities that people like, let them be themselves and let them somehow subtly brand it so that they’re like, “Oh my God, Delta is so cool. Look at what they did with T-Pain just randomly.” They played his song on a plane, they got so much play off of that and no checks. Right?

Jamarlin Martin: Who have you worked with, where you just love working with them. Good professionalism. They’re moving fast, they’re responsive. They’re not trying to micromanage. Is there a brand that stands out in your portfolio over the years? Like, man, I love working with this company.

Victoria Jordan: Can we say it at the same time?

Jade Martin: Yeah. Who we’re you going to say?

Victoria Jordan: McCormick

Jamarlin Martin: McCormick. The seasoning company?

Jade Martin: Recently we did a campaign for Larry’s, and Vicky and I were like, we love this client. They understood the story. They understood product involvement in the story. They didn’t want us to put product everywhere when it doesn’t make sense. They didn’t want the talent to interact with the product when it doesn’t make sense. If the talent doesn’t say, “Larry’s Seasoning Salt”, and they didn’t want the talent to say “Larry’s Seasoning Salt”. They wanted the talent to just say “seasoning salt”, and we were like, we love you because this is what people normally would do, and the content came out so great. It was so energetic. The conversation was great. Another client that I personally love working with Mcdonald’s. They really just let you do whatever you want with the content, but also figuring out a great way to integrate the product.

Jamarlin Martin: When you say Mcdonald’s, are you working with them on the corporate level or their agency?

Jade Martin: Agency. Same with McCormick.

Jamarlin Martin: Same with McCormick. So can you really talk about the brand or is it the agency. Who has that account for Mcdonald’s?

Jade Martin: It’s more so the agency. We’ve never directly dealt with the client, but for McCormick the actual client was on set, and when we talk about how great it was working with them, we’re talking about the actual client because she was the one on set being like, “No, we want to do this”, or approving this and not approving that. So I felt like with having clients on multiple sets, she was the best or one of the best clients that we’ve ever dealt with on set.

Jamarlin Martin: Yeah. So I had the Urban One CEO on the podcast, Alfred Liggins, and he said that Facebook has never reached out to the company. And you know, you guys are a big monster across radio, across TV, across digital. You guys are really in the industry. But he said that they never reached out for a conversation. And I’m aware, based on the folks that I know, that Facebook were building a multicultural team in secret, and they had picked off some of the salespeople here at Urban One or before Radio One. And so Facebook is going after the Black money on the low. They’re saying, hey, we’ve got to hire these people out of the industry and we want that money too. So they’re going into the Burrells, the UniWorlds, the MediaVests and they’re saying we want that Black money too. And they’re educating clients, they’re taking all the game they learned at the Black media companies from here and then Facebook is putting more resources behind it. And then people are like, “Man, there’s no more money left.” Well, Facebook is starting to direct the Black money, the multicultural pot, to them and so the response was, hey, they can’t really do custom stuff and more creative stuff, but now Facebook is bringing on Jada Pinkett, is hiring more shows. So now if they want that Black money, they gotta get more weapons. How do you feel as professionals work hard, and there’s some things out there where people have big wallets and a lot of resources, but you guys have to go compete with these other folks with all these resources.

Victoria Jordan: I mean that’s the game, I feel like. We’re in this crazy time time where Black agencies are turning over into multicultural agencies and as the country changes, the game changes, digital changes so fast.

Jamarlin Martin: How do you feel about Facebook trying to pick off the Black pot too. They just got to make money their business.

Victoria Jordan: It’s their business but there’s this weird give and take, right? You’re happy that people finally take Black dollars seriously, but then at the same time they’re taking Black dollars for themselves.

Jamarlin Martin: Yeah. Essentially, we’re on Instagram, we’re on Facebook hard. Lots of engagement and Facebook is getting all that data, all that money, and then the money that they don’t get they’re arming up to go get what’s left. So what doesn’t go to the robots in their systems, they’re going to go after what’s leftover. I just think that, in capitalism, in our society, you can’t fault a business for trying to make money or profits. But we’ve got to start thinking about this. Hey, if you have monopolies, big monster corporations trying to pick off all the little stuff that we have in Black media and not respecting Black media and just gobbling up the data, gobbling up the money, not leaving anything left, using all these advantages, what does society look like in 10 years? Do people need to be thinking about that? That if these big companies are gonna start attacking and targeting Black businesses, how does that re-engineer society in terms of outcomes?

Jade Martin: I also feel like using Facebook as an example that brands in larger companies need to realize our spending power earlier, because with Facebook they’re putting money in Black dollars now, even though they’re late to the bandwagon when it’s like essentially, we made Instagram popping. Facebook does the same thing, basically. I felt like they’re now getting shows with Jada Pinkett and all that stuff when they should have done that a long time ago.

Jamarlin Martin: But if they did that a long time ago, does that just weaken Black media even more? In terms of, they’re going out using Jada Pinkett and going to get all these ad dollars and it goes into the big beast. And then when you look at the Ebonys, the Black Enterprise, the Urban One, the Essence Magazines, I believe part of the issue is that we’re really hard on ourselves in terms of man, you know, Ebony, they didn’t grow to be bigger, they didn’t have a better digital program. Or Black Enterprise, or Jet, or BET, but the Black media companies are competing with these big monsters that have run over everything else. And I don’t know if that would have been healthy, if Facebook entered into targeted multicultural advertising earlier because they’re just going to take more money out the pot, and our media companies become weaker as they get stronger. I don’t think it’s like, everybody rises together. No. Facebook is trying to crush everything, take everything, whatever happens left, y’all just figure it out.

Victoria Jordan: I feel like there’s always gonna be that Goliath somewhere, and in general, our country and our community needs to be more focused.

Jamarlin Martin: When you say “our country”, you’re starting to sound like MAGA.

Victoria Jordan: No I’m not.

Jamarlin Martin: Who are you really banging with? Come on now.

Victoria Jordan: No. I feel like, when I think about people who can fight those battles, starting things like Tidal and taking these distribution portals and putting Black dollars behind that and owning our own content is all super important. Building Black wealth in general in this country is super important, because why wouldn’t a seller here go to Facebook, for a bigger check, and also think that they are contributing to telling better stories from a more authentic perspective for this brand, that is saying, hey, we finally see that we should be talking to you guys in a different way, not just from my perspective. So I think just in general across the board, it’s about building Black wealth opportunities for people to come in and create these platforms that can take over the world, can go get VC funding and do what you did.

Jamarlin Martin: Early in your career, Jade, you moved to New York a long time ago from LA. Did you move to New York from another city?

Victoria Jordan: Oh my God, yes. New Jersey.

Jamarlin Martin: So just the train. Yeah.

Victoria Jordan: Yeah. Culture shock.

Jamarlin Martin: What would you tell your professional self five years ago that you know today and you didn’t know then in terms of navigating your career and in life? What are some things that you feel like you didn’t know or you missed five years ago in terms of being successful?

Victoria Jordan: I think for me the most important lessons are that flexibility is key. And that’s on the ground as a producer, that’s working with clients, being able to integrate their vision with our vision. Maybe not always getting exactly what you want out of it, but understanding that they’re, hopefully getting what they paid for. And then don’t be scared. I’m not the type of person to not push back on things. I’ve always, I think, as a graphic designer and creative director prior to producing, my job was as a brand steward. You know what I mean? I was supposed to protect this brand that I was making this creative for. And I still have that in me. So when we do get into those battles with clients about, but we really need another car shot, or it’s like this “make the logo bigger” thing, but now in video, and I do feel like it’s my responsibility to respectfully protect the platform that we’re putting this on. And I think, don’t be scared to do that. That’s been really important to me.

Jade Martin: For me, I would say it’s probably two things. The first thing will be to manage your connections better. Back then I didn’t realize how important this industry is when it comes to who you know. So now in my career, a lot of people that I’ve known over the years since I first started have helped me in my current role in terms of booking talent at the last minute or helping us secure locations within 24 hours, because this is what happens in production. So definitely manage your connections better. And also don’t be afraid to make your presence known. I’m often the youngest person running a lot of these productions. So being a female director on set, being a producer on set and being the one in charge and being so young, I used to hide back and not voice my opinion on certain things and when I watch it in the edit I would have been like, man, I should have spoke up about that, but because I was always intimidated by the whole production crew and all that stuff. But now, just make your presence known. Everything comes out better because at the end of the day, this is your production, this is your project and your show. So you have to just say what you want to say.

Jamarlin Martin: Being in this business as a black woman, do you feel like, Hey, I just had similar chances as a black man in this field?

Jade Martin: I would say, correct me if I’m wrong, our industry on the production side, not on the corporate side, dealing with agencies, our industry on the production side is very male dominated. So oftentimes we’ll be the only woman on set, let alone being the one running the show. Right? So I feel like we’ve even talked about these experiences where we have certain clients, certain production companies that would treat us different if we were a male director on set versus a female director, and we’ve seen the switch when they see a guy running the show versus a woman running the show. And that just speaks back to what I was saying, make your presence be known. At the end of the day, you’re the client, you’re in charge of the production. So whether you’re a man or a woman, and we’re very knowledgeable about a lot of aspects of the production which a lot of men in production don’t expect from women. I’ve even had issues going to equipment rental houses in LA and they would treat me terrible because I’m not a man coming up there asking for equipment and a lot of women don’t deal with equipment because it’s heavy and so on and so forth. But I feel like it’s not necessarily a Black woman thing. It’s more so a woman thing in general, just because of the production and all aspects. You see that now with Ava Duvernay and Shonda Rhimes, that’s why they’re soaring like they are because there’s not really that many women behind the camera in production.

Victoria Jordan: I’m trying to think in the opportunities realm if I feel like I lost anything.

Jamarlin Martin: In terms of promotions and…

Victoria Jordan: I feel like for a long time now, because I was out on my own before I came here, so I feel like the mentality, and even before then I worked at Bad Boy, which is a place where you learn that if you don’t push you’re not getting anything.

Jamarlin Martin: How long did you work at Bad Boy?

Victoria Jordan: Three years between Bad Boy and Sean John. So I feel like from then I never expected anyone to give me anything. It was like, you’re not going to get it if you don’t push for it. So I don’t even know if I noticed if I was missing things because I was always, I’ve gotta do that. I’ve got to do that. I’ve got to ask this person. I’ve got to network over here, because it was always pushing, always pushing, and it wasn’t just about being a woman or being a Black woman, it was just like, this is a very small space and I need that. So one of us is gonna get it, you know what I mean?

Jamarlin Martin: Yeah. What was the culture at Bad Boy and Sean John, what was that like?

Victoria Jordan: I think a lot of companies, I think I’m going to get in trouble on this one. At that point, it was a long time ago. I think a lot of companies were like when you were a kid on the playground and you’re like, “When I grow up, I’m going to be president, you’re going to be vice president and you’re going to be treasurer.” You know what I mean? And I think a lot of people were there because they came up with Puff and they weren’t good right away at what they did or they didn’t understand the business. And he’s a genius when it comes to business. He’s great at making deals. He’s changed hip hop, he damn near made reality TV. But it was…

Jamarlin Martin: It didn’t have the systems and the structure in place that you felt needed to be there at that time.

Victoria Jordan: Yeah. We were all still figuring it out. They weren’t at the beginning when I was there, but they were still relatively young and they were still figuring it out and it’s very different now. It’s a lot more corporate from what I hear from the people that I know that still work there, but at that point it was like, the executives got paid a ton, everyone else got paid a little. We were like a weird, dysfunctional family. We loved each other like crazy, but we were bonded in fire.

Jamarlin Martin: How do you see the REVOLT TV playing out? Of course, he got a deal with Comcast. They announced that they’re going to do, I believe up to five Black and Hispanic new channels. REVOLT was one. But how do you see it, do you watch REVOLT?

Victoria Jordan: No. I thought this was a great idea for him. It made sense and it was really on brand for him. I think, from the stuff that I’ve seen and from people I’ve talked to you, it doesn’t feel like it’s found its place yet, what it’s gonna do really well and what people are going to tune in for, but I don’t think it’s impossible for them to do that, you know what I mean? I just don’t think it can be a music video channel because you can see them on Youtube.

Jamarlin Martin: I feel like sometimes we get into stuff right before the end. Not necessarily with Diddy, but let’s say Comcast, they find multicultural religion at the end, they want to do a deal for NBC and so they hookup with the Congressional Black Caucus and they say that we’re going to do all these great things and the regulators approve the merger. And so part of that push to get the merger approved, they throughout that, hey, we’re going to come out with these Black and Brown channels and we’re going to help fund them and get them started. But Comcast gets the religion. But in my view, in terms of market cycles, it’s kind of too late because the TV market had just started to turn. So one thing I think REVOLT and Diddy are facing is that they showed up at the party, but they showed up at like 3:00 AM. The cable market was a good business, right To that point, a little bit after REVOLT did the deal. So it’s gonna be tough.

Victoria Jordan: But I still think if they play in the digital space the right way, I think they could still do it. It’s just you got to be real smart about it.

Jamarlin Martin: It needs to be engineered to a digital platform, you’re saying. And how would they do that?

Victoria Jordan: I don’t know. I feel like one has to be always driving to the other. It has to be complimentary content all the time and move away from the linear programming that we kind of are stuck in the 23-minute shows and this many commercials and dah, dah, dah, dah. To me, I think Vice does it really well on their channel. I sometimes just keep it on just because like random weird stuff comes up and I’m like, oh my God, that’s so cool. It’s just random cool stuff and I feel like they could do that. But they really have to have a really good strategy and a really good authentic voice.

Jade Martin: I also feel like with REVOLT, they didn’t have a clear strategy from the beginning because you knew it was a music channel, but first of all it was limited, so a lot of people I know didn’t even have REVOLT. Then when I did watch it, it was like, you have these types of shows and these, there was no cohesive strategy from the beginning. So I feel like if they can’t even get that together, then utilizing digital more won’t even help.

Jamarlin Martin: And looking at Diddy’s Twitter feed, it seems like he’s grown more conscious, more Black over the last few years. You guys are laughing. You think that’s a joke.

Victoria Jordan: No. I think that, and I don’t know him to be talking, but he’s a lot older now. I mean he grows like everyone else grows. And I think that he has a family of older kids now and I think he’s more focused on building a legacy, and I know that he’s always wanted that to be a positive legacy, you know what I mean?

Jamarlin Martin: What do you mean when you say that? What do you mean by that?

Victoria Jordan: His legacy. I know that he wants his legacy to be very positive. I know that he’s always wanted that. And there’s a lot of stuff that you can say about him. He’s done a lot. He’s been through a lot of ups and downs, good and bad. You can look at him in a lot of ways, but I know that at the end of the day he’s always wanted to be remembered as someone who was positive and did a lot of good stuff. And I will say, I have seen that in his interviews, his more recent interviews that he’s more focused on that. And for my part, I have not always been the biggest fan, but some of the things that we learned there, are things that you’re only going to learn with someone who doesn’t sleep. Someone who pushes you really hard, someone who doesn’t take no for an answer, even if you’re telling them it’s impossible. I walked out of there and a lot of us walked out of there knowing that the things that we thought were impossible yesterday where possible today. And I think that’s why so many entrepreneurs came out of there. They were like, you know what, I can do that. And I think that’s a really good thing to have learned. And if there’s another Black person who is visible and who built an empire, who changed the face of entertainment, that’s not such a bad thing.

Jamarlin Martin: Yeah. You mentioned some entrepreneurs came out of the duty empire. Give me a couple.

Victoria Jordan: Well, Dao-Yi Chow. He has the brand Public School. They won a CFDA award. He came from the Sean John family. Amazing person, amazing designer. I remember when he was starting his tailoring classes when he was at Sean John, so he could really learn how to make a piece of clothing, even though he had already been a designer and marketer and been in fashion forever. But that’s a person who just took every lesson and made it an opportunity, you know. I have a friend, Lenny Hernandez who started his own hot sauce line. It’s just like, it doesn’t have to even be like some major thing. It’s just the fact that you would take the moment and say, I can package this and sell it. Not everybody’s going to do that. You might have a recipe from some whatever. You would never take the next step. I think there’s a level of fear taken away when you find out that all this stuff is possible.

Jamarlin Martin: I wanted to get your views on part of the problems in Black culture, here in the United States. It’s the media. The media is putting out a lot of reality TV, sisters and brothers fighting and all this bad stuff. A lot of people don’t have close relationships with Black folks and this is all they see, and it’s the media companies fault of putting out all this trash. And then Black folks, we want a couple of dollars here. We want money. So they’ll go on the show and act the fool on a lot of the reality TV. How much of the problem could be put on white folks? Are they to blame because of this programming.

Victoria Jordan: I’m gonna let you take this one.

Jade Martin: I feel like the media issue is a surface issue. I feel like the deeper issue of reality TV and how it escalated like crazy is the perception that when people watch it, they feel like I can emulate the people on TV. That’s where I feel like the issue is, and I feel like you can’t blame anybody for that issue, but people in the household and how they grew up. That might not be where you were looking…

Jamarlin Martin: So you don’t see it as like, hey, this is some big conspiracy or these white folks are doing stuff that’s very damaging to the culture? It’s their fault.

Jade Martin: I don’t see it’s their fault. Do you know why? Because I guess a lot of people who are driving these shows behind the scenes are white, but they’re just gravitating towards where the money is. They see an opening, they see we’re eating this stuff up. They can make a lot of money off of it. I don’t think…

Jamarlin Martin: But people make money. You blame drug dealers who are making money, they see an opening selling crack, right, but you’re still going to hold the drug dealer accountable.

Victoria Jordan: You will, but I also think that fixing it is deeper than the drug dealer. To me, the issue with reality TV…

Jamarlin Martin: But how can you fix it if the media is just all over the place? You’re programming that stuff.

Jade Martin: The media can push out whatever they want, but if you have a certain mindset and know not to feed into it, it doesn’t affect you and I feel like that’s where the deeper issue comes with reality TV. Like for me, I love reality TV but I watch all types of reality TV, not just the ratchet Black reality TV or the the bad white reality TV.

Jamarlin Martin: You like the reality TV where they’re tearing off someone’s weave?

Jade Martin: It’s entertaining but me as a person and how I grew up, which a lot of people didn’t. They can’t watch reality TV the way I watch it. I just watched it as pure entertainment. I don’t watch it and look at it and be like, I now want to marry a basketball star and I now want to live this life and I want to do whatever I can to live my life like the people on reality TV. And I think that’s the bigger issue because the media can put it out there, but what you do with what they’re putting out there is the big issue.

Jamarlin Martin: Let’s say folks have studied this stuff and I say this is very damaging for a lot of folks in the Black community. Okay. Do you believe, let’s say the research showed that this is very damaging to the people in the community, are you inclined to say that, hey, it’s more the Black folks who are consuming this stuff being the problem and the actors in it who are playing along, than the media companies trying to make a buck?

Victoria Jordan: My theory, and I’m not sure, I don’t think you can place blame on any one segment, but I think reality TV just plays on human issues, right? It’s like you want to feel better than somebody. You want to feel like that person’s crazy and I’m not, and I would never be with that guy. How could she be with that guy? People like to gossip. I think there’s like all these things that are just inherently human things and reality TV has picked up on some of them and created this thing, this entertainment style. Now I’m older. So I grew up knowing TV was not real. Mr Rogers’ neighborhood is not real. The Cosby show, I didn’t see any families like that, two Black professional parents. I saw it there and it was nice to see it there, but I didn’t see a lot of that. And I was from a privileged town, whatever.

Jamarlin Martin: So it wouldn’t bother you if the writers for Oxygen said, “Hey, we need you to coon a little bit more”.

Victoria Jordan: If anyone told me to coon, I would be upset.

Jamarlin Martin: Not using the word coon, but you know what I mean.

Victoria Jordan: So we’re seeing how you feel about reality TV.

Jamarlin Martin: No, let me finish. So there was an entertainment company, I’m not going to say their name and we had started exploring doing something, but the people who were involved, the Black folks said they want us to come into the office and start fighting, and the white folks wanting us to do all this coon stuff and no, we’re not doing it. We’re not doing that. Now, if we’re going to talk about reality in terms of us doing business, us working with each other, us having fun together, us solving problems together, we can give you that reality. But the white folks were coming in and saying, no, we need some fighting. We want you to start fighting with that other employee and this and that. You don’t have a problem if the entertainment industry is doing that at scale, meaning that to get the ratings we want, we want desperate Black celebrities and actors to come get a check and we just need you guys just to start fighting, start pulling weaves off heads, cheating on each other and we need you guys to really mix this up.

Jade Martin: Of course you have a problem with it, but the question is why are they wanting you to fight? Is it just so they can make money off of you or is it so they can destroy the Black community?

Jamarlin Martin: No, I’m not saying they’re trying to destroy. They’re just trying to make money.

Jade Martin: Right, so they would do that if you were white and they know that’s going to make money and they want white people to fight, they would do that if you were Asian and they want Asians to fight. I feel like their agenda is money. Whether you’re Black, white, orange or whatever.

Jamarlin Martin: I agree. Even if their agenda’s money, do you have an issue though?

Jade Martin: Of course. Because nobody should be able to tell our stories aside from our people. They’re the ones behind all of these shows, but they can’t tell their stories better than we can.

Victoria Jordan: But also reality TV isn’t necessarily our story. It’s one piece of a lot of things. And I think to me that’s the problem. It’s like the saturation. There are so many more Black voices out there now than there were even a few years ago. But this is so prevalent, you know what I mean? And it’s like being in the theater watching a Black movie or a movie from a Black perspective and not knowing if that white person next to you is laughing at the same thing that you are. It’s that kind of like, are you laughing at me or with me at this thing? And I feel like that’s the thing, they’re on cable networks, they’re always on, every night there’s a reality show and it’s totally saturated. But that doesn’t mean that it’s the only thing, and I think that’s the problem. A lot of white people may see a lot more of that than the other Black things that are telling all of our other stories because this is a tiny little fake story that you’re seeing, staged story that you’re seeing.

Jade Martin: It’s all scripted in a way.

Jamarlin Martin: Where can people check you out online?

Jade Martin: On Instagram. I am @thejmlife and then our properties and all of our content can be found on https://urban1.com/vtq-portfolio/ione/.

Victoria Jordan: Have you heard of Friendster? I’m on Friendster. I’m just kidding. I’m @visfordonuts on Instagram and yeah, all our platforms. Hello Beautiful, Global Grind, Cassius, MadameNoire, Bossip, Hip Hop Wired, check us out.

Jamarlin Martin: Thanks for coming on the show. Let’s GHOGH! Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter and also come check us out at https://moguldom.com/. That’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

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Episode 39

Dec 19, 2018

Tunde Ogunlana

Jamarlin talks to family wealth advisor Tunde Ogunlana, CEO of Axial Family Advisors, about estate

ate planning and Snoop Dogg’s comment that he doesn’t need a will (“I don’t give a f— when I’m dead. What am I gonna give a f— about?”). They also discuss the growing college debt bubble, whether more free tuition will help solve the problem, and why MBAs are like the bachelor’s degrees of 30 years ago.

This is a full transcript of the conversation which has been lightly edited for clarity.

Jamarlin Martin: You’re listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let’s GHOGH! Today we have family wealth advisor, Tunde Ogunlana. We’re going to change it up today and talk about wealth. So you have 17 years of experience as a financial advisor. You’re running your own advisory practice, creating wealth for families, managing wealth for families. Share with the audience what you do.

Tunde Ogunlana: I’d like to say this, we help to create peace of mind in a nutshell. What that means for everybody is going to be different. And I don’t mean to sound cheesy or cliche with a quick answer like that, but the reality is, what I’ve learned over my career is that money is psychological. So at the end of the day, my job is to get to know the family I’m working with and how they relate to money, period. After that, investments, services, things like that to me are all tools that help them meet those goals, whatever those goals that they have as it relates to money might be. So that’s really what I do in the end.

Jamarlin Martin: How often are you thinking about kids within the family and the college planning in terms of the age group 21 to 35?

Tunde Ogunlana: I would say if that age demographic is in within the family that I’m working with, then it’s a thought. Clearly if I’m working with a young family that has a two year old kid, then I’m not thinking about that age range in that particular scenario. But we work with families. A lot of the families we work with are entrepreneurs, either first or second generation business owners. So where we find that age range might be either the children or the grandchildren of the owners and maybe their interest or lack of interest sometimes in getting into the family business, and how that’s going to then relate to the family’s overall wealth plan and strategy.

Jamarlin Martin: Okay. Got It. Are you familiar with the Jay-Z’s lyrics on 4:44? I believe the track is called ‘Legacy’, but he’s now putting gems in his music about wealth creation and some mistakes that he’s made. But it’s interesting that you’re starting to see that injected into hip hop.

Tunde Ogunlana: Yes, I am familiar with the album and several songs, not only Legacy. I was impressed with certain things that Jay-Z alluded to in ‘The Story of O.J.’, when it came to talking about art, for example, as an asset class. We rarely hear art talked about in general in the financial community, unless you’re really dealing with the ultra high net worth, but even less so in environments like hip hop and more traditionally maybe the African-American community. So to hear not only things like art being discussed, real estate ownership, I believe in legacy talked about wills and estate planning. So yeah, it’s great to hear Jay-Z talking about those things. And you know, I’ve heard different artists throw in some gems here and there. I think there was a song in the nineties by Busta Rhymes where he talked about mutual funds and money market accounts. So you could pick that up over the years, but you’re right that Jay-went a little bit deeper than most in that album.

Jamarlin Martin: I guess after Prince died, reportedly, he didn’t have a will and his net worth was $300 million, estimated net worth. And so Snoop Dog comes out, who I’m a big fan of. He comes out after Prince died, and he says, ‘I don’t give a fuck when I’m dead’. And he says he doesn’t have a will. Let’s talk about this thinking specifically within Black America where, hey, you only live once, spend it while you’re here, or in Snoop’s case, why do I care about money? I’m going to be gone. Who Cares? What’s that about?

Tunde Ogunlana: Well, I never knew that he said that, so I’m a little of disappointed to hear that actually, but it doesn’t make me look any different at Snoop as a man or an artist. Again, going back to how we started the conversation, money is psychological, period end of story. So clearly Snoop has a feeling about his money and his wealth, and I guess the transfer of that wealth to whoever, whether it be his kids, a nonprofit or charity, that he doesn’t seem to care about the direction of that wealth after he’s not here. That’s his prerogative. Like I said, I’m a little disappointed to hear that, but I think to the bigger picture, from my experience in the business, there are cultural nuances about wealth, and it’s not just African-Americans, it’s not a white Americans just, it’s every group. And I think living in south Florida, and it’s even more so for the purpose of this conversation, working in this industry in south Florida has been very interesting for me as someone who was born and grew up in Washington D.C., more of a traditional American environment to now we have a true multicultural environment in south Florida. Looking at a culture, like a lot of the Latin American cultures from South America. Early in my career, when I dealt with from that region of the world, there was a high mistrust of insurance and part of it when you got down to it, it wasn’t about insurance or not trusting the insurance company. It was really about the idea that people didn’t want to talk about their death in that culture and deal with that conversation specifically. I’ve dealt with other cultures where they feel like things like life insurance is someone profiting off your death, so they didn’t want to talk about or deal with life insurance in that type of way. And the interesting thing is, like everything else, those cultures come to the United States, but in the United States we have a legal financial framework that I wouldn’t say requires certain tools like life insurance or trusts or wills, but life is a lot smoother, and death I guess is a lot smoother, if I can say that, if some of those things are applied. And so that’s where the challenge becomes taking someone that has a certain mindset and trying to show them and educate them that, ‘you may feel this way, but here’s what your family is going to deal with regardless of whether you think someone’s profiting on your death or not’. I’ll give you an example. Years ago we had a meeting with someone who had that mindset and this is back when the estate tax limit was lower. In a real quick caveat, for those that may not know, an estate tax is a tax at death when you die with a net worth or assets over a certain amount. Right now, as of last year, that amount was raised to $11 million per person. Prior to that, it was $5.6 million. When I started my career, it was at $1 million. So back then, 17 years ago, if you died with an estate over $1 million, basically the IRS at the time was going to tax anything over that amount at 55 percent. Certain tools like trust planning and life insurance can help one’s family avoid those taxes after death. So trying to explain to someone why they need life insurance when they come to the conversation, looking at it as if someone’s going to profit off their death, but as an advisor you’re trying to educate them and show them, look, it’s not about profiting off your death, it’s about the IRS wanting tax money nine months after your death, and if your family doesn’t have liquidity from a life insurance policy, they may be forced to liquidate real estate, liquidate your business, maybe liquidate a stock portfolio when it’s 2008 and market’s down 40 percent. So that’s where tools like life insurance can come into play, but culturally some people need to be brought to the table to see that.

Jamarlin Martin: Alright, so let’s go back to wills. Why would Snoop want to keep the courts out of this in terms of, hey, I have to plan that if I get hit by a bus, or if I have a stroke or whatever, why would Snoop want to keep the courts from managing the distribution of the fruit of his labor?

09:10 — Tunde Ogunlana: So the first answer that I’ll give you is because he’s Snoop and I’m sure he wants to keep the courts out of everything. But that joke aside, that’s a very good question. So I’ll break that answer up in a couple of pieces. You’re right that a will by itself will go through the probate court, which is a court system. One reason why someone like Snoop specifically, maybe more so than someone like me, for example, would care about not having his records going through the court is because everything in the court is public in the probate court.

Jamarlin Martin: Confidentiality.

Tunde Ogunlana: Correct. So people at Snoop’s level, a lot of the high net worth folks out there, just like confidentiality, they don’t want people knowing what they had or what they didn’t have maybe, because maybe when he dies, maybe he won’t be worth as much as we all thought, for example, or maybe he’s worth a lot more. So that’s the one reason why a lot of people don’t want their stuff going through public record. Now the way to get around that is by transferring the title of one’s assets from an individual name, so from Snoop Dogg, I think his name is Calvin something.

Jamarlin Martin: Calvin Broadus.

Tunde Ogunlana: Yeah. So from Calvin Broadus to the Calvin Broadus revocable living trust, for example. Just that simple switch means that those assets now aren’t owned by him at his death, meaning his social security number isn’t going to be run through the probate court and them seeing all these assets. The assets are now owned by an entity, a trust, so almost like a corporation. So what happens is the probate court would almost see that Snoop Dogg is worth zero at death and all the assets would be piled into his trust and then his family and everyone else or whoever the trust is left to will know what’s in that trust. But none of us will ever know. So that’s one reason why I guess Snoop wouldn’t want the courts involved. A lot of high net worth people just don’t want that type of attention on their estate, and to their defense, there’s a whole kind of shadow industry out there of people defrauding estates. They look in these probate courts around the country and if they see an estate worth over x amount, they start throwing stuff at it. They’ll throw a lawsuit at the estate to try and make money. They’ll start bringing up that there were kids out here and there, so a lot of high net worth people just don’t want their families dealing with any of that. However, you have to have a will as part of the trust component. And, I’ll just keep going a little bit. The reason why one would always want a will anyway, even if you have a trust or don’t have one depending on if one is needed for that particular family, is because people only think of the will as death. I’m dying and here’s a will to say who gets what. The important part of a will, or a will package I should say, that is often overlooked, is the living will. And I’m going through that in my practice right now. We have a family, good clients of ours, and good not just their wealth, but their close relationship and we build good relationships over the years with our clients. They were vacationing in Italy this summer, just four months ago, and I get an email from the wife that the husband basically had a brain haemorrhage while they’re on vacation, not too old, he’s in his early sixties and today he is in a hospital here in Florida, basically brain-dead. I believe they’re giving him about a year from the time they admitted him to the hospital back here in Florida and at that point she’ll have to make a decision if he doesn’t really wake up, whether she needs to pull the plug or not. Right now, where you just got done with submitting all the powers of attorney to the various financial institutions that his name was attached to. So something like his IRAs, individual retirement accounts. You can have a jointly titled IRA. So for her to act on his behalf or to know what’s going on in the IRA, we needed to send a power of attorney to the companies that have custody of the IRA. With regards to the life insurance contracts, for her to be able to access and talk to the insurance companies directly, we needed to send a power of attorney over there to them. So what happens is the living will is important because God forbid, let’s say that happened to Snoop Dogg, whether he had a stroke or the guy obviously travels a lot and is all over the place. God forbid he’s in a plane crash or a car crash, but he didn’t die, but he’s incapacitated. I’m sure he’s got such a big estate that someone needs to be able to have access to manage that and if you’re legally incapacitated, how’s that going to take place? The other thing that’s important with the living will is the healthcare directive. In the event that Snoop Dogg again is in a car accident or something and he’s rushed to the hospital and there may be decisions made about pulling the plug or not pulling the plugs. Someone’s going to have to have that authority, if not the hospital has the authority and who knows what decision they decided to make on your behalf. So those were all things that come into play with a will. It’s not just the assumption of I’m going to die and this is…

Jamarlin Martin: It just sounds like the message is that you want to plan ahead because when you pass on, you want to leave your family a guide in terms of direction on how you would want your legacy distributed and handled. With most things in life, if you don’t plan, it increases dramatically the risk profile for your family, for your kids, where all this stuff was not thought about. Now everyone is scrambling and trying to figure out what’s wanted. When you don’t leave a will, how does that create stress on the family?

Tunde Ogunlana: There’s a lot of ways, probably too many for us to get through just on the podcast here, but I would say probably the first ways that it can create stress is it really doesn’t provide a guide for the family, the heirs, as to what to do with things. So what happens is things just build up in families over time and we never really know who wants what. For example, we have three kids, my wife and I. Let’s say we have a painting on the wall, we’ve got some books, I read a lot. One of my kids might really just like one of those items more than another because of just how it made them feel when they were young growing up, so on and so forth. So if I don’t have everything documented when I pass away as to who I think should get what and who gets this piece of jewelry and mom’s wedding ring and all this kind of stuff, there’s a chance that they could just start fighting over it. And we’ve seen that a lot, the painting on the wall, the vase, the family heirlooms, those are actually the things a lot of times that caused brothers and sisters not to talk, more so than bank accounts and investment accounts, because those are the things that are really emotional. So that’s part of the issue that can come up with not leaving a will. It can leave a vacuum as to instruction as to who gets what. And what I often tell our clients is, by leaving the direction in writing through a will or trust planning, it doesn’t mean that someone’s not going to be upset about maybe being left out or being left out over a certain amount, whatever they feel their grievance is, what it does is it just helps everyone else continue to move on because at least one thing they can do is bicker and fight and come up with the works. If you and I were brothers, let’s say, and our parents pass, and they decided to leave you 90 percent of their estate and me 10 percent, I could be mad all day, but I can’t really stop the legal process of you getting that 90 and me getting that 10. What happens if they didn’t leave anything, now you and I can actually start having a fight in the court about who gets what.

Jamarlin Martin: Is it a fair statement to see that the difference of folks without a will and folks with a will is that folks without a will, they’re letting judges and the laws decide how their legacy is distributed, but the person with the will, who has thought this through, they allow themselves to guide the distribution of their assets?

17:54 — Tunde Ogunlana: 100 percent correct, and you’re right, it’s about empowering yourself and to make those decisions that will affect your family when you’re not here. One thing to say because you made a very good point about the judges in the system. We often see this and advise on this in blended families. So I’ll just give you a quick example. Let’s say that husband and wife, they have kids from two different marriages and let’s say they have one child together. Well, I’ll pick on myself. If I was the father in that example, and I had two kids from a prior marriage and I had one child with my current wife, for example. With no trust or will planning, the court, at least in Florida, will do what’s called per stirpes. They’ll just look at my immediate lineal descendants and go a third, a third, a third. I may not have wanted it that way, not because I don’t love all three of my kids, but let’s say my ex-wife, who I had the first two kids with married a business mogul or an NBA player, someone who’s doing okay financially. And let’s say I’m a regular guy making $50,000 a year and my wife’s making $50,000 grand, maybe I would’ve wanted to have more of the resources go to my current family and the child just because it makes sense financially. So you’re right that the court won’t start looking into all those details. Okay, well let’s see which family is doing better. And they’ll just say, okay, well when Tunde died, who are the three lineal descendants? Okay, these three boom, they just get it all equally. And what happens too is, let’s say my ex-wife, not in that example of the wealth, let’s say the reason why she got divorced is because we had her Baker Acted, and she had a history of issues, maybe not to the point where she is in a facility or something. She’s legally capable, but she’s someone I don’t trust with money. Let’s say she’s just going to blow through. If the kids are minors, when I pass away with nothing in writing and she is their legal guardian because they’re not age of majority and they can’t handle money yet, what happens is the assets that will be left to them by the court are left basically with the guardian. So what happens is if my goal was not to have my ex-wife have her hands on my assets because I don’t trust that she’s going to do the right thing with the money. Let’s say she had a drug problem. I mean, this is the real life stuff that we see, and no matter what the wealth of the family is, something like drug issues happen in high net worth as well as low net worth families. But if she were to have those kinds of issues, again, if they’re not documented in the court and all that, the judge is not going to know that and the judge will say, okay, well these two kids belong, so 66 percent of Tunde’s estate is going to go to these two kids and the guardian is his ex-wife, that’s great. And then everyone moves on. Maybe I wanted that money to be there for future education costs, maybe a down payment for the house. And then next thing you know, in a year or two, the money’s squandered. So that’s another risk that can happen in the event that we don’t have anything in writing and the courts are making the decisions.

Jamarlin Martin: Okay. Let’s talk about student debt. I believe, and many other folks believe this is a big bubble. As you know, tuition is skyrocketing across the country, but wages are not keeping up. Robots and automation, of course is going to put more pressure in the future in terms of that gap. How should folks be thinking about changing culturally or thinking about the value and the ROI from a college degree, meaning that the economics have dramatically changed, but in a lot of cases the thinking has not?

Tunde Ogunlana: I think we, meaning you and I specifically, because we’re right around the same age, I think we’re kind of that last generation that we were able to kind of go to school and all that and if you had to take out student loans, it was still decent. Maybe you had $20,000 in debt when he came out, that type of thing. It’s amazing nowm I work with someone in their mid thirties that is either a medical doctor or a lawyer, I mean I’m looking at literally $150,000 to $300,000 in student debt. And what I realized is, that’s a massive drag on someone’s life. It’s also an economic drag because these are all people that in prior generations that’s the perfect age where you’re buying houses or you’re kind of starting to really spend money. And unfortunately a lot of these professionals that have those advanced degrees aren’t able to see their money circulating around the economy like it should be. It’s going off to pay this massive debt. So you’re right about the potential for a bubble. I’ve thought about that when I looked at recently, a chiropractor who we recently onboarded who has over $300,000 in student debt and is 36 years old. I thought about it and I was thinking, what is that degree really worth? To your point, could you have made the similar income as a chiropractor, not taking on that kind of debt. And that’s why there’s no perfect answer because I’m not going to sit here and tell people not to go to school, but I do agree that we’re probably around some inflection point where people really need to start looking and saying, is it worth me paying $100,000 for an MBA? Because I think at this point, MBAs are like bachelor’s degrees 30 years ago. They’re a dime a dozen.

Jamarlin Martin: When we look at the subprime crisis in 2008, and the buildup to that, the most dangerous debt for society is debt that’s easy to get, meaning that people behaviorally get into a lot of trouble when we have easy access to debt, right? And of course, America and other parts of the world experience a lot of pain from that easiness of getting a mortgage, no documentation loans, 500 FICO score loans. I read about a worker who picked strawberries buying like a $400,000 house in California. And in this case, the government is holding over a trillion dollars of debt in their portfolio. The Education Department, at least in 2016, had a $1.2 trillion student loan portfolio, and that excludes of course some private student debt. But because students can get hundreds and hundreds of thousands of student debt without credit or without a job, and so everyone could borrow this money without any credit check. We’re not paying enough attention to the risks that are being added, tuition inflation, in the run up to this debt. It sounds like we’re going to be facing a crisis pretty soon, and the Wall Street Journal reported that 40 percent of student borrowers aren’t making payments. And this includes most of these students have graduated college already. That’s 40 percent of student borrowers aren’t even making the payments and we’re in a bull market, meaning that the recession, you’re going to have to experience that. What’s gonna happen with this trillion dollars plus student debt, in the next recession or financial crisis?

Tunde Ogunlana: Well, you made a good point, I didn’t even think of it that way, that we’re in a bull market when you’ve got 40 percent according to the Wall Street Journal of student debt, not even being paid. So what happens when things are actually bad? I’d say this, just to kind of stay on that point really quick because luckily it’s only a trillion dollars and I know I say only and there’s a T there and it’s a lot of money. But what I mean is, we’re at this point, there’s an economy where we’re producing $19 trillion per year in GDP in terms of our output. And we’ve got a federal deficit of almost $22 trillion now, we’ve got a budget deficit now back up to around $800 billion. So my point is, I’m not saying that lightly. I actually am concerned about the debt all in our country, but I think this is going to be a drop in the bucket compared to some of the other bubbles that could burst, that could have a much bigger effect. So because if you look at the $1 trillion, probably there’s a lot of it that’s performing, people are paying back those notes. So you’re probably talking around $300 billion that might really be at risk of default. And I would say this, fortunately our economy is big enough that even if we had a $300 billion scare, we’d survive it. It wouldn’t be like the collapse in 2008.

Jamarlin Martin: I don’t think the student debt bubble in itself would collapse the economy, but most likely if you have a build-up, a massive build-up of the student debt and you don’t really have the employment support for it and wage support for it, most likely there’s other pockets of issues. And so when that stuff all comes together, that’s when the experts say, oh, we haven’t thought about how this stuff.

27:46 — Tunde Ogunlana: They’re all intertwined, like fingers of instability, almost like an avalanche, right? It’s one little thing kicks it off and then 10 minutes later half the mountain’s falling apart. That’s definitely a possibility and I think it’s the way that the last great recession started, right? It was that little department in AIG somewhere with 400 people that were messing around with some of these subprime mortgages and all of a sudden Lehman Brothers collapsing a year later. So, I agree. Now going back to some of the things that you alluded to because they are very important. One of the issues with student debt versus something like a mortgage and why it’s a little bit more of a dangerous type of debt for the system is it’s unsecured. At least a mortgage is secured by some hard asset. So that means there’s always going to be some level of value there. That’s what happened during the financial crisis. All these mortgages went default, all that. But then you had hedge funds, private equity groups, business development companies that could go in there, they bought the debt cheap. They were able to go and fix up buildings and fix up homes and eventually the system starts correcting itself because there’s still value there and people start moving back into homes and buildings and wealth starts getting created again. The problem with a student loan is, if I default on a student loan, whoever lent me the money really has nothing to gain from it. They’re not taking back a piece of property that can then be resold so that can be a little bit more painful than when there’s a default on a hard asset. But a lot of this, and you make a great point in the way you lead it into about debt being easy and cheap, so this really gets back to, again, behavioral finance and psychology. I mean we’re all humans creating all of these different things. Money and all, it’s all human inventions. So this goes back the way the brain works and chemistry, and there is a certain percentage of humans, a large percentage, 35, 40 percent of human beings can’t think past 90 days. Their brain isn’t made up that way. So when they’re being dangled these carrots of easy money and all that, their mind isn’t thinking all the way ahead to what is this going to mean in four or five years, or they might be deluding themselves that somehow they’re going to be able to pay this off through some scheme. So the point is, I think what we saw going into the financial crisis, and this is where I’m going to be very careful in how I say this because I love the capital markets and I own a business in the financial industry, but because of human behavior, that’s where I’m a fan of certain types of regulation in the financial industry. For example, not allowing somebody with a 500 credit score to borrow 100 percent against the property because they will do that, and the fact they have a 500 credit score means that they don’t have the track record to pay it back. So in order to keep the system solvent and functioning well without these massive booms and busts all the time, that’s where we should continue to promote an environment where people that are responsible have access to credit, people who have shown that they’re irresponsible, maybe not so much. And that can only be done if you have a regulatory system for the financial industry that can look out for those kinds of risks.

Jamarlin Martin: How does that relate to the student debt bubble though?

Tunde Ogunlana: Well, I would say I don’t know where the exact correlation is directly. I would say indirectly, I’m sure they correlate, meaning, I know that a lot of people can get student loans, and I remember when I was in college, I mean for pell grants and things, I was just signing stuff and all of a sudden I had five grand.

Jamarlin Martin: You get some extra money.

Tunde Ogunlana: Exactly. And when I was 19, 20, 21 years old to get an extra $3,000, why not? And I wasn’t thinking about when I’m 35, am I going to pay that back or not. So should I have been allowed to do that? We’re looking back, probably not. I mean, I didn’t do anything productive with the money.

Jamarlin Martin: Some Democrats, probably some Republicans too. I just haven’t heard them. They’re pushing for free tuition, more free tuition in the academic landscape in the United States. And the problem I have with that, and I think free tuition is good in theory, free tuition is great, if people can get a quality education and not be loaded with a lot of debt, that’s great. But knowing American culture, how many students, if you give them the option to go to a free in-state university, to get a quality education. But no, I don’t want the Honda Accord education. I want the Ferrari. And so even if government provided for free tuition, I see a significant, possibly a majority choosing not to go with their free option because they perceive the other alternative, a $150k tuition over a four-year school as kind of the bling degree. Hey, I’m going to get a better job. I’m going to have more prospects if I go to the more expensive school. So I’m not just gonna think about free. I’m really going to go towards the quality. And then if I can borrow without resources, they’ll let anybody borrow money, then I’m just going to go to the more elite school. And so I feel like the politicians can only do so much, in terms of even if you have free tuition, there’s a lot of people like, hey, I don’t want to drive a Honda Accord, I want a BMW. There’s nothing a politician can do to fix that mindset.

34:08 — Tunde Ogunlana: Well, I do agree that, with the way our culture is, you’re right, sometimes the things that cost more automatically are perceived to be better. I agree with you that free tuition for everybody probably isn’t the answer and it’s just because I’m not a big fan of free stuff because what happens is when people get stuff for free, they don’t appreciate it. So I’m more, my attitude would be more of if everybody just got free tuition for secondary education because I am a fan of public schools for K through 12. I think that it’s important for our society to have most of it’s citizens literate and having a general knowledge of just basic stuff that we all kind of are educated in a similar way, so we function similarly as a society. However, once you start getting into the university level, I mean I just look back at myself when I was that age. I wasn’t the best student. I wasn’t the worst student. I was a regular kid that was not totally as mature as I am now, of course, when I was 18, 19, 20, and I get the feeling that if I just had a free university with nothing out of pocket, no cost to my mom and no obligation of anything, I might’ve just dropped out in the first semester because there’s nothing really holding me. I didn’t have to earn anything and do anything to get it. So I think the idea of having some sort of commitment to a university, now what does that mean? You know, that could be that you get a free tuition in terms of financially, but you need to serve in the military for four years after or something like that where you’re kind of paying back, whether it’s paying back society through service, or paying back through money. But the idea of just free college for everybody, I don’t see that as a viable answer for accomplishing the educational goals of the country. The other thing I’ll say is, kind of looking at this with a ‘start with the end in mind’ mentality, I would say if I was a politician, I would say, look at it this way: What are we looking at from our society? Right? Is it that important that we have everybody getting masters degrees in liberal arts or whatever. Or is it important that we just have a population that is occupied, working and gainfully employed because I think something that our society and our culture specifically as Americans has moved away from in the last few decades, definitely my whole life I’ve never really seen much of this, but other cultures, when I lived in Australia they did this and I know in other parts of Europe they do this a lot, which is apprenticeships. I remember when I lived in Australia in the nineties, they had a system called the university system, and they had a system called TAFE, which I can’t remember what it stands for, but TAFE was basically electricians, plumbers, auto mechanics apprenticeships and there was nothing wrong with that. And guys went and they did two to four years directly out of high school in those systems, and by the time they were 22 they had a plumber’s license and they were earning great money, and I’ve learned since coming back home to the U.S. going to college and all that, that our university system isn’t for everyone. Not everyone wants to just sit in a classroom when they’re 20 years old and I have to learn about Voltaire and Shakespeare. Some guys are hands on people and they just want to be under a car under a hood or they want to be servicing computers. Why not create a system where right out of high school kids that don’t want to go to college can at least go earn some sort of professional license or designation that they can still earn an income and a living.

Jamarlin Martin: I mean it’s not just the higher income parents, where my mom, she didn’t have a lot of money, but she didn’t want me to go to public school. She always pushed private school and she was willing to come out of her pocket to make sure I go to a Christian private school. And I just think it would be hard for politicians to do something about that. That’s just how the people are thinking. Okay. So let’s move to younger professionals, they’re out of college for a couple of years. Hey, I want to start building wealth. I have a job and I want to start building wealth. How should I think about prioritizing things like home ownership, owning stocks, owning bonds, paying for a life insurance. How would you kind of think about prioritizing those things out of college?

Tunde Ogunlana: The question about a house and all that depends how young that someone is.

Jamarlin Martin: Let’s say 24 to 30.

Tunde Ogunlana: Okay. Because I would say things like the home ownership side and all that, I would almost lean more towards, again, where do you see yourself over the next five to 10 years in terms of your career, but also geography? Because one thing that we know is that people that are at a college, I will say prior to 30 years old tend to move a bit. So sometimes I would say don’t get bogged down with a house just because you don’t want to buy a house and then in two years the best opportunity comes for your career and you have to move three states away, because having the overhead and the burden of a house and having to sell it, that might create more headaches than you intended. If one knows that they’re going to stay in their city for a long period of time and maybe they’re having a family at a young age and they’re already settling down in that way, then maybe home ownership, maybe makes sense at that age.

Jamarlin Martin: Let’s say I plan to stay in this city for three or four years. I’m trying to reconcile that with a lot of smart parents, what they’ll do is, hey, why would I pay all the money to the dormitory or for you to rent over four years. I remember parents buying properties for students to live in for four years. Not a guarantee, but possibly gain from the appreciation, I don’t want to give money to a landlord or the school for four years when I can just buy something and possibly get some appreciation. Let’s say, I plan to live in this city or area for four years. How would you prioritize those things?

Tunde Ogunlana: I would say it’s a very unique to the geographic location we’re talking about. So I’ll give you an example of working with a family. Their son’s at a university in a school in Kentucky. Now, Kentucky is not south Florida in terms of real estate pricing. So what they were looking to do was buy a single family home there for $125,000, so that their son could live there while he’s in school, but after he were to graduate, they could rent that house out to other students going forward. So for them it was really a long-term investment, which made sense. It was, I think, two miles from the campus. And the price point made sense, $125,000 taxes, insurance in that part of Kentucky, were going to be less than $1,000 a year. Now let’s translate that to south Florida. If you are going to have a kid at Florida International University or University of Miami, both schools being within probably 20 minutes of each other down in Miami, you’re not buying anything for $125,000 in Miami. So you’re looking at probably the equivalent home in that part of Miami is going to be $250,000 to $300,000.

Jamarlin Martin: So at a lower or moderate price point, you’re saying, hey, I would really crank up the home ownership.

Tunde Ogunlana: Well it’s just about what’s your level of risk? If someone has $50 million dollars in cash laying around then I guess $250,000 is nothing. But most people don’t. And then, what I was going to go with on the Miami side is the carrying costs. In Miami, because we don’t have a state income tax, you’re going to be looking at about two percent of the purchase price in property taxes. So if you’re looking at $300,000 house, you’re looking about $6,000 a year in taxes and then the amount of hurricanes and all that stuff we get, you’re probably looking at another $2,000 to $3,000 a year in insurance. So now you’ve got carrying costs in Miami on a $300,000 property of about $8,000 to $10,000 a year. But if you can only get $1,000, let’s say $2000 a month for rent at best. You see what I’m saying? Is that the smartest thing financially? Whereas if you can get $1,000 a month in rent from the house in Kentucky and you’re able to pay cash and you’ve got just $1,000 a year in carrying costs. That makes sense.

Jamarlin Martin: If home ownership is within the range, you do believe it should be top of the list.

Tunde Ogunlana: Owning an asset is always preferable to renting the asset.

Jamarlin Martin: Reading from the Silicon Valley entrepreneur investment set, they’re smarter than anybody else. Some of these people, what they’re saying is, home ownership is for losers. When you calculate the taxes, the maintenance, the fees, you’re better off putting your money in a diversified stock portfolio and I can show you the past returns and prove to you that when you factor in the taxes of real estate, the cost and everything, you’re better off putting your money in the stock market. And to me that is ridiculous. Before are a little bit after the financial crisis, if you had invested in the stock market, you were looking at dead money, meaning that there was a period where your returns were flat over a 10-year period, right? I think you want to have both, but one underappreciated point about real estate that these Silicon Valley folks, who are suggesting this is one underappreciated point with real estate is, it’s a saving mechanism. Meaning that if you’re sending a check against your mortgage, obviously a big piece of that is going towards interest, but if you’re paying your mortgage every month, right, you’re paying down some principle, right? You put a down payment on a home, that equity is in the home. So it’s a saving mechanism. These Silicon Valley, they may be right, but they’re not factoring the behavior of folks, meaning that a stock portfolio is more liquid. Right? And so, hey, I need some money to go on a vacation. I’m going to sell these shares in Apple and Facebook. Meaning that it’s much more difficult to pull the money out of the real estate. And so I think that’s under appreciated.

45:21 — Tunde Ogunlana: I think you’re right. That goes back to the behavioral finance and then some of the stuff we alluded to earlier. I think people who have those assets already, like stocks and investments out there. Folks like us don’t appreciate that mindset that that person who can’t save and who can kind of think past a certain period of time.

Jamarlin Martin: But that’s most of them, if you look at the credit card usage.

Tunde Ogunlana: That’s what I’m saying. That’s why when I talk to most of my peers and even my clients are like, oh, well, I don’t understand how someone can do that, but I think you’re right. One hundred percent and I think that’s where when I hear this type of thing, like you’re saying to Silicon Valley guys’ advice and all this, I think what they’re doing is they’re projecting their own self and trying to say that everybody should just be like that because you’re right. Maybe that’s great for that person in Silicon Valley that is earning a certain amount of income. You also have property values in San Francisco, and the Silicon Valley area that are astronomically higher than most of the country. I mean, going back to my example of Kentucky, that is a very affordable area to live and it doesn’t have high carrying costs. And to your point about the stock market, I think a lot of us give ourselves too much credit for being smart, when really we’re lucky, because you alluded to something that was very important, which is timing. There was, I remember that period because I remember looking at charts of the S&P 500 when the market was bottoming out in 2009, and I think the S&P at one point was equal to where it had been in 1997, it was 12 years. Had you just bought the index, I’m not talking about reinvestment of dividends and all this stuff, but just point to point, 12 years the market had collapsed, was so bad that it went right back to where it was. So technically, if that’s how you’re looking at money and you had 12 years, you’re invested in 1997 and let’s say you were going to retire in 2009. Well technically that’s bad timing. Doesn’t mean to stock market’s bad, it just means that it didn’t work out for you. So the thing could happen with real estate and that’s where I think that a diversified approach to it all makes sense. But I do agree with you that for most of us in our society owning a home, you know this has been proven over again, is the number one way to build wealth because, to your point, most people have a certain amount they can spend every month and at least if the bulk of that’s going to a mortgage or something that is going to create an asset for you, it makes a lot of sense. And that way, like you said, you can’t just decide in two years you’re gonna sell a piece of your wall to go on a cruise. But you can decide if you have a $200,000 built up in your stock portfolio that you are going to take out 10 grand to go on a cruise. So you’re right. That is the difference.

Jamarlin Martin: Can you talk about, and I think this relates to some of this stuff with this new money Silicon Valley crowd that’s bashing real estate home ownership and they’re projecting on everybody, but you don’t compare returns on real estate versus the stock market because we know that smart investors, they don’t look at just the number of returns. ‘Oh, it’s a 50 percent return versus a 10 percent’. You’re looking at the risk adjusted return. Can you explain that to the audience?

Tunde Ogunlana: Well, and let me say this because I know when we first got on this topic of kind of that younger crowd, the one thing I don’t want to forget that I would recommend for everyone that is working right out of college is, max out your 401k. Let’s get back to that and I’ll explain why, but to allude to what you just asked, risk-adjusted return versus kind of just total returns overall. I mean, that’s a great point. Let’s look at the stock market. Today is Nov. 14, starting on Oct. 10, the market started really gyrating, and I think from top to bottom, the Nasdaq went down 14 percent and if you look at some of the stocks like Amazon and I think Facebook, and to a lesser extent, Apple, I think they’re all down over 20 percent over the same period. So to your point that the market has good, better returns in real estate, but the risk is a lot higher. Real estate’s a little more boring, but the risk is a little bit lower.

Jamarlin Martin: There’s no free lunch.

Tunde Ogunlana: In general. Now real estate can be risky if you make a bad real estate investment. But I’m just saying in broad generalities, just like a savings account, right? Has the one of the worst returns.

Jamarlin Martin: Real estate generally is a lot safer than holding Facebook

Tunde Ogunlana: And here’s something else that I’ll get to besides safety and returns. Here’s where I do advise a lot when it comes to real estate, the tax benefits. Remember, let’s not forget the use of the tax code as almost an investment vehicle. We advise clients to do that regularly. If they have a little bit, if they have the means to do it to buy investment properties, for example. Why? Because you can do things like use accelerated depreciation. You can write off certain expenses, depending on if you’re actually incorporated as a real estate business. If you own several properties, you can start writing off your gas mileage for driving to look around and collect rents. You can write off your cell phone because they’re taking calls from tenants and you’re using that to manage your business. So there’s a lot of creative ways through the tax code, that real estate provides us that can offset other things that might be generating income. So for example, I might buy an investment property, depreciate it, but because of the depreciation on my real estate, it offsets income tax that I might pay from an investment I made in the stock market or a capital gains tax or, or just my regular income from working. So that’s an example of, if someone just had hypothetically $100,000 laying around per se, and you asked me, let’s just say it made sense for them to buy the real estate. Maybe because they’re a high income earner, it makes more sense, we’re actually gonna put more money back in that person’s pocket through the long-term growth of real estate plus because of the depreciation, if they’re earning a high income on the other side, they’re not paying taxes on that income versus if we put that hundred grand in the stock market. Well if it went up 10 percent in a year, okay, great. We made 10 grand, but we didn’t offset income tax and other things that real estate provides.

Jamarlin Martin: Before we move on, I just want to tighten up how to look at a risk-adjusted return where if you see somebody and they say, man, you’ll get better returns in the S&P 500 or in stocks than real estate. So let’s say stocks give you four times the return compared to real estate, right? So the right way to think about it, it may give you four times the return of real estate, but it could be 20 times the risk or 15 times the risk. And so that’s what we mean when we talk about a risk-adjusted return. Are you being compensated for the risks you’re taking?

53:02 — Tunde Ogunlana: I would say in our industry, the measure to look at would be what’s called standard deviation. The standard deviation of a portfolio and individual security or even something like real estate can be measured. Normally in the investment world, they go back one-year, three-year and five-year standard deviation. So what does that mean? Let’s just say hypothetically, over the five years, the stock market has averaged 10 percent annual return, but it’s had a standard deviation of eight. It’s a broader way of measuring risk because that tells us that over that five years the market has deviated eight percent up from the average. So the high point was 18 percent or eight percent below the average. So the low point would have been two percent. So it’s a quick way to say, okay, I could average a 10 percent return in that investment, but I’d be watching maybe my portfolio swing between two and 18 percent. Again, that goes back to someone’s emotional situation, some people can take those kind of swings, some people can. Now I might look at a similar investment in a real estate portfolio, let’s say, and maybe we’ve had a good run in real estate in Florida in the last few years, maybe their real estate portfolio has averaged eight percent return. But the standard deviation is two. So that means over the last five years, the real estate has returned anywhere between as high as 10 percent and as low as six percent, averaging eight. And it’s a good question you’re asking because that gives us a comparison of risk-adjusted returns because just looking at the rate of return of eight and 10 percent, someone might just jump at the 10. But once someone like me sits down and explains, okay, this maybe has a better track record, but look at the experience it takes to get there, the large swings. That’ll allow them to say, okay, well maybe I’m comfortable with that and maybe I’m better off with real estate because it’s more of a tighter, narrow standard deviation. I can kind of predict a little bit more where I see things going. Also, I think liquidation and timeframe are important in that discussion because again, from my legal disclaimer, past results are no predictor of future results, but let’s assume that the next five years look exactly the same as the last five years. In my example of the market having a 10 percent average return and an eight percent standard deviation. Well, if you are sitting across from me and you were saying, ‘Tunde, I want to invest this money, but I want to pull the money out to go buy a condo or something else in two years’. That’s where, again, we could look and I could say, ‘okay, Jamarlin, I know that we think we can average 10 percent over the next five years’, but knowing that we have these massive swings, you may have to be prepared that if you tell me in two years you need the money, it might be one of those negative standard deviation periods where we’re not making the return we thought we were going to make. We’re making a two instead of a 10 percent. So that’s where timing comes into play because if you told me, Tunde I have 20 years to worry about this money and we can just invest in the market, that’s when things like standard deviation and all that they tighten over time and they become less of a concern, the longer you have.

Jamarlin Martin: I’ve heard this from quite a few folks, they’ll say that our people, African-Americans don’t really have life insurance, and that we’re not thinking right about life insurance and the benefits. There’s a big disparity. But professors, Timothy Harris and Aaron Yelowitz, they came out with a study this year, where when they adjusted for income and education, they said that African-Americans have more life insurance, not less than whites. They said two percent more when they adjusted for those factors. Would you be surprised at that or were you with the consensus that, hey, African-Americans, we need to step up our game in terms of how we’re thinking about life insurance? We don’t have enough.

Tunde Ogunlana: I would say this. I would say a bit of yes and no. So I’m not surprised when you adjusted for things like income and education because I think that’s just a human thing. Once you’ve got some means and you start getting educated, you realize the risks that are there and you have more to protect, more of a reason to protect those risks. So obviously life insurance is a risk play. You’re protecting against the risk of premature death. So that part doesn’t surprise me. What I would say that I am not surprised about, I guess is not on a risk-adjusted return that African-Americans own life insurance. Sorry, not risk-adjusted but not adjusted for those factors you mentioned, that African-Americans have less life insurance. And again, without getting too far in the weeds with some of this stuff, a lot of this just has to do with history. I saw this early in my career. I started my career in 2001. So at that point, someone that was 70 years old, maybe even 80 years old, was born in the twenties. So dealing with that generation and how they related to money was much different than dealing with someone maybe born in the fifties and sixties and later. And that’s just because the history of our country, there were things like redlining. I know that the African-Americans weren’t allowed probably until the 1960s to own more than $10,000 of life insurance. So there are actual legal impediments that were promoted by the U.S, government. I mean, the FHA promoted redlining, in neighborhoods in America.

Jamarlin Martin: So the government was involved in, hey, we don’t want these people to get life insurance.

Tunde Ogunlana: It’s just the way our country was. None of us should be surprised at any of this history. I guess fortunately for us, we’re starting to get further removed from that. But I think that a lot of it, and we see this with a lot of things in our society, culture takes a long time to change. So you have a culture. I mean, let’s really take it back, right? Slavery ended in 1865. You had reconstruction for a couple of decades, that went backwards in the south with Jim Crow. So what happens is you had a couple of generations of black people in this country that just were not allowed to participate in the system at all, until the sixties when legally the participation was allowed again. So that’s why in our communities you see huge disparities in terms of how money is approached based on honestly, when people were born. The older generation doesn’t have the exposure to financial literacy and other things that maybe someone who’s 25 today does.

Jamarlin Martin: It looks like this study that said that African-Americans own more life insurance when you account for income and education, those factors. They say that more than 12 percent of African-American males who reach age 50 die within 10 years, double the rate in the entire population. And so, my understanding is that the life insurance companies, they can’t factor in race. They’ve had a discriminatory history and so the laws prevent them from using race as a variable and they have to charge people the same rates. Right? So it’s highly regulated now because of the discrimination and racism in that industry. But when I read this and say that, hey, we die a lot faster. When you look at the race, we die a lot faster. It sounds like if the life insurance companies are forced to price this stuff the same, that we actually have an advantage, meaning that we may be getting a big hidden advantage when we buy our policies, because the statistics show that we die a lot faster, but they cannot use that in their risk models because of the past discrimination.

Tunde Ogunlana: It’s an interesting way to look at it and I never thought of it that way. I think that, unfortunately in our country we tend to draw things so much just on literally color lines, race. Again, living in south Florida has been an interesting experience because if you look at it, I was always just exposed to African-American as a black American in a sense. But living in south Florida now for 20 years, I’ve learned that there’s Haitians and Jamaicans and people from Brazil that are black and so on and so forth. Do they die at the same rate as African Americans after 50? I don’t think so. I think a lot of it goes back to lifestyle, socioeconomic status and the ability of access to good food and good medical care, honestly. So is that something that an insurance company, is it really a racial thing or is it, again, more of a socioeconomic thing in our country that is unfortunately the way that our country just is for a fact, is that more people that are on the bottom end of that socioeconomic ladder statistically have been unfortunately African-Americans. So it might be reflected in those statistics, but from an actual genetic point of view, is what I’m getting at. If you look at someone’s DNA and their bloodstream, and that’s where the life insurance companies, remember they’re doing a blood and urine test…

Jamarlin Martin: I don’t think its DNA but…

01:03:26 — Tunde Ogunlana: Well, I don’t either. That’s kind of my point.

Jamarlin Martin: Hey, you guys like to eat soul food…

Tunde Ogunlana: You make a good point.

Jamarlin Martin: You guys have a lot of stresses in society in terms of on the job and financial pressures. There’s a lot of different factors, but the data says we die faster and let’s say even if you account for education and income, it just sounds like there’s an advantage there, to use the past discrimination against the life insurance company.

Tunde Ogunlana: I agree there’s an advantage if you look at it from that perspective. I would say similarly, because I saw a very interesting article where the life insurance industry is trying to get access, that what they’d love to do more than anything else from the underwriting perspective, which I can understand from their perspective is getting access to the information from these DNA companies that everyone’s been using, 23andMe, Ancestry.com. Things like that. Because when you’re doing your DNA test to find your heritage, there’s a lot of good information about health and all that kind of stuff. So I would put it as a similar example of that, that if I got an Ancestry.com result back and it said that I’m susceptible to this type of cancer or this type of whatever, technically a life insurance company right now in the way the regulations are, they can’t get that information from that company. Lying on a life insurance policy is against the law. I mean it’s a material misstatement, but if I had a policy I just got last week and then a week from now I get back my Ancestry.com information and it says I’m susceptible to this and that type of cancer, but I came back as a preferred nonsmoker on my life insurance thing, it’s kind of a similar thing. I got away with a standardized underwriting, but my individual position means that I’m probably better off having this life insurance because I might have a shorter life expectancy.

Jamarlin Martin: Okay. Can you quickly share with the audience, the difference between whole and term life insurance, just really quick in very elementary terms?

Tunde Ogunlana: Okay. That’s hard for me to do quickly, because now you’re getting into stuff that I do for a living, so I could go on. But to be quick, there’s a way in the industry that we’ve learned to explain it. So think of term insurance as exactly like it sounds. You own it for a certain stated term, a period of time. So it’s like leasing or renting. Generally terms are offered at 10, 20 and 30-year blocks. There are one-year terms or a five-year term, but those are less common. So I’ll just pick on the one in the middle, which is 20-year term. So imagine I’m just renting insurance for 20 years. I’m paying premium for auto insurance, car insurance or homeowners insurance. Meaning if I get in a car accident, my auto insurance does something, it pays out.

Jamarlin Martin: To help people who are not familiar with life insurance. You’re saying like, Hey, this may help you think about it if you compare it to car insurance.

Tunde Ogunlana: Correct. Meaning that something has to trigger in order for the insurance to pay out. So in the car insurance example, it’s getting a car accident or something happened to my car. In the term insurance it’s basically I have to die. So unfortunately it’s a little more morbid. But the thing is, just like with auto insurance, if you had a 20-year term and I either missed premium payments during that period or let’s say my contract anniversary was today, Nov. 14 and I pass away on Nov. 16, God forbid, after the 20th anniversary of the policy. Then my family gets nothing. The policy no longer really exists. It doesn’t pay out. Just like if I missed my car insurance premium and then I got into a car accident and I’m no longer covered, the insurance company is not going to pay. So that’s why we kind of equate it to renting because it’s like you’re renting an apartment for 20 years. Once you give the keys back to the landlord, you don’t really have anything, you didn’t build equity, you don’t have anything to show for it. Whole life on the other hand. And also there’s another type called universal life, but to stick on the topic at hand, whole life is what we call permanent insurance. Unlike term, most whole life’s now are designed to last past age 100. The original whole lives from 100 plus years ago were usually designed to last to age 100. So the idea is that it covers you for your whole life. So for that reason they’re priced a little bit differently, because the industry on average pays out about two percent of term policies. In 98 percent of policies, usually the person lives past the term. So I own term insurance, I bought my first block of term insurance when I was 32. It was a 20 year term, there’s a high probability I’ll be alive past 52. So the insurance companies can price that in. And what happens is they can price turn very inexpensively. So it’s a great way for a young person, let’s say, to start owning life insurance.

Jamarlin Martin: So generally, if you’re in your twenties and thirties, we usually want to go with term?

Tunde Ogunlana: I’ve done for some of our families when their children are doing some planning for them, if they’re getting married in their twenties, I’ve run like 20-year terms on some people in their twenties where it’s literally like $600 a year for $1 million of coverage. I mean it’s so cheap that I just tell them you might as well get it.

Jamarlin Martin: Repeat the kind of pricing that you’re seeing.

Tunde Ogunlana: Definitely. Again, for the legal and compliance folks out there, this is just back of the Napkin math. But I’ve seen definitely stuff for under $1,000 in term insurance for people in their twenties when you’re talking about seven figures, let’s say a $1 million in coverage. So what I’ve told them is, this is so cheap, $800 a year or $600 dollars, depending, remember this is preferred rating, depending on where they’re at. I mean obviously someone 24 is going to be slightly different than someone 29.

Jamarlin Martin: I see ads online sometimes, and they’ll be like $50 a month.

Tunde Ogunlana: Yeah. Well it’s interesting. And those are kind of teasers when you look at it. I mean they’ll say, a 40 year old can get half a million dollars for under this per month. And you look at the fine print, that’s usually a 10-year term at a super preferred rating. You’ve gotta check a lot of boxes off to get that rate. But if someone can check them off then they’ll get that rate. Term insurance is great. It’s a very inexpensive way to leverage money. Let’s call insurance what it is, you’re leveraging a risk. Again, if I want to get car insurance, I’m leveraging the risk that if I total my car, for a little bit of premium, I can now get the value and have a whole new car. If I have homeowner’s insurance and the hurricane blows my house away, I paid a little bit of premium, and getting hundreds of thousands, maybe even millions of dollars to build a new home from a company. So life insurance is no different. I’m paying a little bit in premium that in the event I pass away, my family or whoever I wanted to leave as a beneficiary gets this boatload of money.

Jamarlin Martin: How fucked up is this person’s priorities if they have an iPhone XS that cost over $1,000 and they have a BMW, but no life insurance?

01:11:17 — Tunde Ogunlana: It’s as messed up as Snoop Dogg’s comment about not having a will and how messed up is it for a guy that’s clearly worth probably eight or nine figures at least to not have a will that will cost them probably less than $20,000 with the right law firm. So it’s the same type of mentality. I think a lot of it honestly is ignorance and if people were educated about what all this stuff really means and how it can help their families and all that, I think they probably would choose a different path, but because they haven’t, and I don’t bash any of their own advisory team because I’ve had people in my circle like this too, where you’re trying to explain the right thing to them. They just don’t want to listen. They’re just not in a place at that moment in life. But let’s finish up real quick on the whole life side. I don’t want to forget that because just the main difference on whole life being permanent insurance is there’s also a cash value component. So, I’ll give you an example. I showed a 39-year-old yesterday. That’s why this is fresh in my head with one insurance company at a preferred rating for $2 million of 20-year term, it was gonna cost $1,700 a year, but for $300,000 at the same preferred rating of whole life insurance, it was going to be $10,000 a year in premium. Now that’s a huge difference. And someone would say, well, why would you spend $10,000 on a $300,000 of death benefit when you can buy $2 million for $1,700? And again, there’s not necessarily that one’s better than the other. They both work different ways and one needs to be educated as to how, what the benefits, pros and cons are. Clearly, if it’s someone that’s just on a certain type of budget and their main goal is protecting their family, the best they can, term makes all the sense in the world in that example. But the reason why we were considering the whole life for this gentlemen is he’s got some entrepreneurial stuff going on. Life insurance, whole life insurance, and when you’re building up cash value can offer several great benefits. One is asset protection. In the state of Florida and many other states as well, but definitely in the state of Florida, there is a statute by the Florida House and that says that all life insurance and annuity cash value, with this conversation about life insurance, is 100 percent exempt from creditors. So bankruptcy, litigation, all that is protected. Now that’s not if you’re shoving money into life insurance after you’ve committed a crime. There’s still ways that, I want to be very clear about that. But in normal circumstances, if someone were to be funding a life insurance policy for 10, 15, 20 years, they’ve got a million dollars in cash and then if someone sues them for something random, by Florida statute, that money cannot be touched. So that’s one reason why people find value in cash value life insurance. The other is, as far as whole life, the company we were looking at yesterday, their current dividend rate is 5.4 percent. I think the 10-year treasury right now is around 3 percent. And the Fed fund rate is 1.9 maybe, or 1.75, I think. So in any case, the dividend rates, at least over the last 20 years, if not traditionally longer, of whole life companies on average, because they’re like every other type of institution, some pay more, some don’t. But the dividends are highly competitive in terms of what other alternatives out there that are considered safe. Because remember whole life insurance is considered a safe or a safer investment vehicle.

Jamarlin Martin: So explain that. So the person decides to get whole life insurance and it has value whether you die or not.

Tunde Ogunlana: Correct. So that’s equity.

Jamarlin Martin: Can you explain to the audience, how are they receiving their dividends?

Tunde Ogunlana: They’re receiving it annually. Most companies just pay one dividend annually and they pay it into the policy cash value. So it’s almost like if it was an investment account, it’s like getting a dividend on your stock, just goes into the account, just kind of mixes back in with the cash. There’s all kinds of different ways that that cat can be skinned. Some dividends can go to buy and pay for buying more life insurance, so your death benefit actually grows over the years. Some don’t. They can cover other things. So that’s a little bit separate. But going back to this, the 30,000 foot angle of the conversation, that’s why whole life and cash value insurance in general, unlike term, is not seen as renting. So just like I said, a 20-year term is like renting an apartment for 20 years. After the 20 years you turn in the key and you don’t have anything to show and the cash value example in whole life, it’s almost like buying a home. You’re building equity, that’s the cash value. So in 20 years you may be able to stop paying the premiums, but you’ve got to a bucket of money basically in that policy and the and the reason why you may be able to stop paying the premiums if the policy’s designed in the right way is because the dividends are large enough to cover the annual cost of insurance inside the policy, so you no longer have to pay out of pocket.

Jamarlin Martin: Okay, got it. So if I understand you correctly, whole life insurance is going to weave together asset protection, investment, savings, life insurance, all in one.

Tunde Ogunlana: And there’s a couple more areas that I’ll add in there. Tax Benefits. So II want to be careful how I say this. It’s life insurance first. I always say that. It’s not the cheapest investment and it’s not the best place to just get a high rate of return. You’re never going to get 30 percent a year and a life insurance policy is going to be nice and boring like the tortoise, not the hare. Now, what it can create is similar to a ROTH IRA. I just want to be very careful how I’m explaining this. You put money into a life insurance policy policy after tax. The money grows tax deferred, so you’re not paying. Under normal circumstances because there is a way that a life insurance policy can be taxable. It’s called a modified endowment contract, but that’s now starting to get too much into the weeds. So under normal circumstances, you’re not paying taxes on those dividends as your funds grow. So for example, and that’s why a lot of high net worth people like life insurance as an asset class because I have clients that have seven figures in cash value in their life insurance policies. And what happens is, let’s say you have $2 million in cash value in a whole life policy and they’re going to earn six percent as a dividend this year. That’s $120,000 in dividend income. The top tax bracket is 37 percent. So if that was six percent paid on a bond portfolio, let’s just say hypothetically that was in a non retirement account, just kind of someone had at a brokerage firm, that income from that interest or dividend would be added to the person’s overall income for that tax year. So if that person was, let’s say a doctor or a professional executive somewhere and they were already earning two, three, $400,000 a year. Now they just had another $120,000 dumped on top of that. They’re going to be paying a lot of taxes on that. So having that type of income inside of a life insurance chassis avoids that current year taxation. The other advantage of life insurance then is if one is operating the policy properly, can be strategic and pull money out of the policy in a tax-free way through loans up to basis, and then once you return your own principal, you’re not paying taxes on that. So what happens is, one of the things I talked about with the gentleman yesterday was, and projecting out his whole life, if he keeps it for let’s say the next 15, 20 years, he could do a concept which is called ‘bank on yourself’. People that have accumulated a lot of cash in their life insurance can borrow from the insurance policy to do something else with the money. So for example, we talked about, you know, down the road he might be able to borrow, let’s say $100,000 from his policy, use that as a down payment, let’s say on a piece of real estate. He can rent that out and have the tenant basically paying back his life insurance cash value. That’s a way to basically become your own bank. So a lot of wealthy people end up using those kinds of tools and techniques, because like I said, the example of someone who had $2,000,000 in their life insurance policy, now that’s a lot more you can borrow and do something against and you’re not going to a bank, you’re not having to get qualified. You’re not getting your credit affected. You don’t have to wait two, three months to close a deal and all that. You can just immediately move, borrow the money and have them slowly pay back your policy. And a lot of policies are designed where, I don’t want to say you don’t have to pay him back because the purpose of a loan is to pay it back, but the dividends may be credited in a way that the dividends pay the interest of your loan. So that’s where you start getting into the nuances of life insurance.

Jamarlin Martin: I want to go back to into wills. So the scenario is the person is 30. Their situation is pretty straightforward. They have maybe one or two kids. Let’s say the couple is making 75K each. They have investments, a small amount of investment, but hey, we want to do some financial planning and develop a will. What range of cost can they expect, in terms of what type of investment?

01:21:23 — Tunde Ogunlana: Someone that straightforward. They can probably at least get some sort of basic protection through something like a LegalZoom which might be $300, $500.

Jamarlin Martin: So you’re saying it could be okay depending on your budget to just use a template to get started?

Tunde Ogunlana: Think about it this way. I don’t recommend that to my clients because they’re a little bit more complex than the example you gave, but remember something’s better than nothing. Meaning, even if it’s a template, cookie cutter, but if you’re incapacitated and you show up in the hospital, a healthcare directive is a healthcare directive, so at least it’ll give someone authority to make decisions on your behalf in that example, or a power of attorney. I’m just talking in the example you made of a young couple that’s 30 years old. Just having that basic protection makes sense.

Jamarlin Martin: A starter will.

Tunde Ogunlana: Yeah. Now the other thing which is interesting and I think I did this early in my career when I was young and and I was working at a big corporation. A lot of big companies, if you’re 30 and you’re working for a large corporation through your group benefits, you might have some sort of prepaid legal. So what happens is, I remember in my example, I think they paid up to $500 or something, the group benefit towards a local attorney that was part of the prepaid legal network for me to go get the will done and I think they just did it for that price. So it didn’t cost me anything out of pocket. So for young people that are in a big company that might have prepaid legal, that’s something else to look at. But now if you’re looking at generally going to an attorney to do this or private attorney or an attorney at a law firm, and I would say this for where we are in south Florida, I know the pricing can be different in different areas, the country. But in south Florida for that type of will, you’re probably looking at anywhere from maybe $1,000 to $2,500 for just a basic will. You start adding trusts in there, you might add an extra thousand. So now that you’re maybe looking between $2,000 and $3,500 for that type of work. I highly recommend people sitting with an estate planning attorney though to do this. Don’t be cheap. I’ve seen too many bad examples of people being cheap and costing their families a lot more than what they would have spent on the attorneys, and also make sure that one goes to an estate planning attorney. Not my cousin who’s a real estate lawyer and who’s going to do our wills on the side because they’re a lawyer, or not my auntie who’s a contract lawyer who does insurance defense and now because she’s a lawyer, she’s going to do our wills. There’s always holes in that. You want somebody that does estate planning. Just like, I don’t want my estate planning attorney showing up to my real estate closing. I want a real estate attorney showing up for that.

Jamarlin Martin: If someone wants to contact you about your advisory practice, how can they reach you?

01:24:13 — Tunde Ogunlana: The best way is email. Our office line is 9544537919, and our receptionist will direct traffic from there. But our website is http://axialfamilyadvisors.com/, and we have our contact information there.

Jamarlin Martin: Yeah. I want to thank Tunde for coming on the show and dropping knowledge.

Tunde Ogunlana: Appreciate it.

Jamarlin Martin: Let’s GHOGH! Thanks everybody for listening to GHOGH. You can check me out @JamarlinMartin on Twitter and also come check us out at www.moguldom.com. That’s M O G U L D O M.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let’s GHOGH!

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