Investing In Social Impact For Years To Come

Episode 06 - July 16, 2020

Even during an ongoing global crisis, companies across America are finding unique and innovative ways to create a long-lasting social impact. Folks are using what they have, digging deep into resources, and pivoting priorities in light of current circumstances to help others. In this week’s episode of Onward On-Air, host Jake Soberal chats with Jacqueline Novogratz, Founder and CEO of Acumen, about her non-profit global venture capital fund and utilizing entrepreneurial approaches to address global poverty, and Irma Olguin Jr., Co-Founder and CEO of Bitwise Industries, about their efforts to support communities and creatively solve problems during a global pandemic.

Panelists


  • Jacqueline Novogratz, Founder and CEO of Acumen

    Founder and CEO of Acumen

  • Irma Olguin Jr., Co-Founder and CEO of Bitwise Industries

    Co-Founder and CEO of Bitwise Industries

Transcript

OOA Episode 06

Jake Soberal: [00:00:00] welcome to onward on air. I'm your host, Jake sober all as we begin, today's show it. It feels like there's a lot of crisis still out in front of us, but it also feels really important to begin thinking about not just how we reopened, but how we rebuild in a different and more equitable way. And for them that we're going to turn to two people that I admire deeply.
First Jacqueline Novak that's the CEO of an acumen Jacqueline's perspective is decided the macro thinking about the way that we can deploy dollars. Differently across the global economy to achieve different outcomes. And for the second portion of the show, we're going to dig in with my dear friend Irma Olguin, the co founder and CEO of Bitwise industries.
And if you don't know, Bitwise is actually a portfolio company of acumen. And so the work that you'll hear Jacqueline talk about. At a macro level is expressed at a micro level by Bitwise. And in our conversation with Irma will attempt to draw out what it's like to lead a company of 200 people in this different and challenging moment.
I really enjoyed these conversations and think you will too. Let's get started.
welcome to the show today. Jacqueline Novogratz, the founder and CEO of acumen. Hi Jacqueline.
Jacqueline Novogratz: [00:01:31] Hey Jake. Thanks for having me
Jake Soberal: [00:01:33] wonderful and worth noting here at the top that I, and Bitwise am a direct beneficiary of the amazing work that you all do at acumen. You all invested in the series. A and I, I know I haven't shared this directly with you, but.
Acumen when we first began, we Bitwise, there was, there was no horizon of we're going to go and raise a bunch of money. One day it was really, we wanted to solve the problem that felt very near to our feet. And that was creating opportunity in our city and connecting it to people who needed it most. But there was something that blipped up on our radar, a company that you guys had invested in.
And I thought to myself, if we. Ever were to raise money. I would want to raise it from an entity like that. And what you do at acumen is, is really atypical. You guys have built a, an extraordinary model that makes investments that others don't in places and people that others don't. Would you say a little bit about how you got to that and how would you describe the, the, the actionable thesis of acumen?
Jacqueline Novogratz: [00:02:31] Well, thanks Jake and fit wise is such a great example and it's a company that we could not be prouder of. Through acumen America, and congratulations, I'm going to $27 million year a is quite something. And to see that kinds of companies that acumen America is supporting, and again, Bitwise being such an amazing prototype of entrepreneurs that take takes seriously, not just making money, but more importantly solving problems and then finding the right capital and talent.
Um, to actually solve those problems in ways that create jobs and create a stronger America. And so how did document get going in that way? You know, I had worked on wall street as a young pup first job out of university, uh, mostly in Latin America during a debt crisis. So another financial crisis in the early 1980s, where I saw the power of markets.
To enable innovation and job creation. Um, I also saw their peril and how they excluded and sometimes exploited low income people, especially that sent me on a journey that landed me in central Africa, in Rwanda at the ripe old age of 25, where I helped a small group of and women create the first micro finance bank.
And there I saw. Again, the power of access to markets as a form of freedom, right? If you will, and yet the needs to accompany people so that they can actually make use. Of those markets, which again, Bitwise really stands apart in doing. And that gave me the idea as I saw that. And I juxtapose that with top-down approaches to government and aid that too often left low income people dependent and still excluded.
I got the idea that what if we saw capital as capital money as a tool rather than the end in and of itself? What if. We raised it. We raised philanthropy and we made longterm, I'm talking 10 to 15 year equity investments in Intrepid entrepreneurs and others, so that they could experience, fail, learn what it actually takes to build and extend market opportunities to people who've been left out.
And if we did that and if we accompanied those. Companies with the right kind of talent, as well as using our social yeah. Capital to connect them to other resources. Maybe we would see both our own money raising, bring in other money and real role models and businesses smiles for what's possible. And so we started in East Africa and India.
We expanded to Pakistan in West Africa, then Latin America. And then last five, six years, the United States we've invested about $140 million like that. Then in term has enabled to our companies to raise another 800 plus million and served about 300 million low income people across the world. So it works.
Jake Soberal: [00:05:37] It's amazing. And the story is, is of course, Impressive and it is impactful. And I, I remember the, the, the piece of it that was so alluring to me was how, uh, specifically you guys focused on job creation within the portfolio as a, as a, as a metric of growth, not just bottom line and returns in the light, but the thing that is sort of underlying that story is you all raise money from some of the most successful people on the planet.
Many of those people made their money. On wall street in ways that would not be categorized as impact investing. And you're up against the, uh, venture firms of the world that are, that are promising these gigantic turns, but you're raising dollars behind this thesis from that category of actor. And I know some of them and they're deeply supportive of your work, right.
How did you craft that? And, and, and there had to be challenges and stories in saying, you know, I want to do venture philanthropy, uh, and you're not going to get a return, but you should do it anyway. And here's why,
Jacqueline Novogratz: [00:06:40] well, so look how we do it now is a lot different from the pitch 19 years ago, what I realized now was more humility, although it doesn't sound like full humility is that when we were starting, I knew what didn't work and it was pretty.
Irrefutable even then that we had a billion and a half people with no electricity, two and a half billion people with no toilets, a billion and a half people with no clean water. And so I knew that didn't work. I knew there was power in the investment thesis, but again, all you had to do is look around and see who was getting the capital.
Where was it going? And where were the companies that were actually serving the poor? So at the beginning, I thought everybody was really excited by this model, even though 30 out of 31, people would say Jacqueline, understand how business works, make my money here. I give it away. There, there was this extraordinary group of early adopters, Jay that told me only later that they didn't fully understand the model.
But they were betting on the entrepreneur. They had seen that. I had tried things I built acumen was the fourth organization than I dealt that there was a great logic in what I was saying. But as I look back the pitch of give me philanthropy, I'm going to invest in for profit companies across the world for 10 to 15 years, some might fail.
And if they succeed. They're going to really succeed. And when the money comes back, we're going to reinvest in other companies that sort of before it's a really hard pitch, right? And most philanthropists would say it doesn't feel good Jacqueline. And I could use that same money to put kids in school or buy glasses for the sight impaired.
And I would say yes, and next year, you're going to have to do it again and again, and again now. Seven eight years in, then I was able to save, remember that $600,000 we put into the long lasting malaria bed nets to create the first manufacturing capacity in Africa as a way of fighting malaria. Well, now they have 10,000 employees and they're creating 30 million bed nets every year.
Suddenly it was a different proposition. The next phase was then, well then why aren't you a for profit, first of all, that was a really hard call. Yeah. Our big success stories are not 40 X returns. And again, you have to remember that this is over a very long period of time. This is about how do we put capital to the best use possible in a world where we are, it's such an extreme level of inequality.
That the wealthy should be looking at their excess capital in a much more ecumenical way and giving the right kind of capital to those entrepreneurs who in the early day, don't have access to the kind of R and D and friends and families, networks that many people that are operating in traditional spaces for more well-heeled markets get access to.
Jake Soberal: [00:09:50] I remember in the early days of Bitwise, I went to Irma. Really. Irma's actually slightly more experiences. Yeah. An entrepreneur than I am and much better at it. Uh, but the, in the early days, when we were looking at something and I realized that, that we, we could, as a company, one day, we could make a million dollars in a single year.
That was a possibility. And it just sort of blew him off mind and, and, and growing up in this company and growing up in the country, text of our city, a poor city in Fresno, California did not begin this. This journey, believing that there were mountains of money to be had. And one thing that has proven to be true time and time again, there's no shortage of dollars in this community and this state and this country in this world, but it's the way that we use them.
That feels, um, uh, backwards. Um, and I think that your description of them as just another resource in the mix is, is so right. What acumen began doing was certainly. As an outlier, you, you weren't joined by peers that were thinking of money in this way. And then I even think of in the impact investing space, what, what Mitch and Freada Kapor have done, uh, um, or, or what, uh, any number of impact investors around the country have done?
The Lumina foundation comes to mind. They're all extraordinary things. They all have now at 10 and 20 years of track record, my curiosity is, do you feel like we're actually moving the needle on the, the, not on the specific issues and companies that we're investing in, in that category, but on the way that we, as a society view dollars and with some perspective behind you, and I'm super interested to know where your thinking lands on?
Jacqueline Novogratz: [00:11:21] Well, Jake, I might've had a very different conversation with you six months ago. It would be blind right now, if we looked at the world of business as usual, where we allowed money, power, and fame to be sitting at the center of all of our systems, given that the end result of that in the midst of a, of a pandemic is.
The exposure of the gun gaping wounds of that system, where capitalism unbridled, it's been an extraordinary mechanism for human freedom, the world, and it has created such extreme levels of inequality that in the midst of a pandemic, we see no social safety net for our healthcare. We see disproportionate impact on low income.
People and people of color specifically, we see the interdependency of education, criminal justice, health, all broken systems. So I would say now there's actually a very live comment around. What is the purpose of money? What is the purpose of an economy? What is the purpose of business? And so, so I'm finding even in the last three, four months, Jake, much more curiosity.
About how we actually go from a shareholder model to a stakeholder model. And I find that deeply hopeful, but this is our moment.
Jake Soberal: [00:12:49] I think it is. I mean, and, and say more about that. Like the, the, the world falling apart in systems, as we understand them and have relied on them for so long breaking. Do create an opportunity.
Uh, how do you see that?
Jacqueline Novogratz: [00:13:02] I see it everywhere. What we're already seeing with the coronavirus and the pandemic is, is an acceleration of things that were on their way, but at the margins. And so prior to the pandemic, even the business round table had made a statement saying we want to go to stakeholders from shareholders alone, and I'm a real believer that narrative can drive strategy.
But you still have to break open the status quo, suddenly status quo. What I'm seeing with the, the acumen community of entrepreneurs and 750 fellows is enormous, um, creativity. And what I would call the moral imagination, looking at what you guys are doing around, recognizing that it's time to think about workforce development differently.
Real estate and distressed assets differently so that we can actually recreate as we're moving and not just put a bandaid during an emergency, but actually thinking about the future. You look at every table, which is eight affordable, nutritious, healthy, fast food, food restaurants, and how Sam Polk, another acumen, America, entrepreneur, just kidding.
They want to ban them. It sends a message up the community, you know, our purpose. Not our profits. Our purpose is to deliver healthy, nutritious food. If you can pay great, we'll deliver it to you. If you can't let us know, we'll deliver it to you anyway, if you can pay it forward, here's a link. And so literally we watched this model shift from a pure private sector play to private public.
Philanthropist individual citizen play to a point now where they're about to, I think they're shooting across a million and a half meals, a significant expansion of jobs for people that need jobs in the midst of this, that's the kind of moral imagination that is business oriented, recognizing it needs to be financially sustainable, but purpose driven and aimed at the future in Pakistan, where there has been no health.
Safety net whatsoever. Again, I'm seeing young, typically entrepreneurs that have businesses that were trying to get tech platforms into the kind of common consciousness, but for rural poor people, It's really hard to go from not having a doctor anywhere to at least then you can get to a clinic where there's a health worker, but now, because all the clinics were shut down, there's been this movement to online consultations, which is allowed for Sarah crumb, the entrepreneur to then reach out, not only to doctors across Pakistan, but across the diaspora.
So suddenly you've got doctors in New Zealand and the United States. Providing consultations to low income, rural women in the far-flung areas of the country. To me, that unlocks the world could be in the future. We cannot let that momentum go because there will be forces that will pull back into business as usual, because it's more comfortable, but.
I get to work with the community at people that for whatever reason, likes to be uncomfortable,
Jake Soberal: [00:16:21] is it, it's a phenomenal community of, of, of companies and individuals. And I am, uh, curious you work with those individuals. You're surrounded by them constantly. You support them. You are a sought after speaker.
You've written the textbook in many business schools, but you are also a human being living through this moment. You've touched on the fact that we're a midst of pandemic amongst several other things. I'm curious. How you are doing and where you're at in this. I find myself in Fresno now we're up over a hundred degree days and we've got three little kids at home and the fatigue is setting in the fatigue of this sort of like never ending day almost.
Um, uh, and there is a sadness to the world around us, that alternates with what you, what, you know, as the, an investor in Bitwise of this. Okay. Now let's do something about it. Um, and that's my experience. I wonder where, where you're at amidst this and what your sort of emotional journey. Uh, journey staying put at home, uh, has been
Jacqueline Novogratz: [00:17:16] thank you, Jake.
And thank you also for bringing the human part of the three kids at home and the, and the heat and the, the loss. You know, I am so aware of what people are going through around all across the United States and also in all of the countries outside the United States, when the pandemic kit on day one. We made a commitment to raise emergency funds, both in the United States and globally.
It really gave us a deep view into the realities of this moment. And in places like India and Nigeria, Kenya, Pakistan, where there is no health safety net, the loss, the two, $3 a day job plus lockdown literally meant starvation. And so I guess holding that as a human being has been a source of great humility for me, anger, but also because I'm so privileged, I don't have children in the house.
I have air conditioning. It's also just reignited the sense of urgency. And in some ways, Jake, I was born for crisis. And I think about what it has taken and to build acumen plus having built it. An institution in Rwanda that then endured a genocide and watching people there who literally picked up pieces of paper off the ground, even though our half, our leadership team was lost and put this bank back together again, I've actually seen communities and countries go from decimation to being, you know, Rwanda, one of the strongest countries on the continent of Africa.
And so. I veer back and forth. I do know I do these poems every Sunday, not my poems. I post a poem every Sunday, and I was thinking about this Sunday and I'm feeling in the Zeit Geist and all the conversations that I'm having a real sense in people that the uncertainty is also really wearing them down that all around us.
While there's a breaking open and black lives matters is creating a deeper new conversation that should have been had a very, very long time ago, but at least it's happening now. So are we seeing greater divisiveness, greater division, greater fear of each other in many places and announcements of school, closings schools, not opening and the exhaustion that that is giving to parents.
You can feel that in us. And in my own background, that's also a very dangerous time. It's a time when demagogues can prey on our insecurities, um, make us blame each other and sometimes do terrible things. And so I feel the sense of a deep urgency that this is then therefore, our moment to be the countervailing voice force.
Jake Soberal: [00:20:27] Yeah. And, and I want to dig into that moment a little bit because there is perhaps no better voice to think differently and creatively outside of the structures that have prevailed to this point about how we deploy capital against this set of problems in the days that come in. And certainly there are a lot of very important answers to that question, but what are those that you're.
You're most tightly focused on. And if we even narrowed the lens here to here in the United States, if you had a magic wand and were able to point capital in a handful of critical directions, what are those that you're thinking the most about? And where, where would you focus?
Jacqueline Novogratz: [00:21:05] Well where abdomen America does focus is on healthcare workforce development, which is what you all do and financial inclusion.
They are the three fully interconnected. And so. We are doubling down in all three areas as which are also real models for where you see the intersection of race, poverty and exclusion. And so this is a moment as well for looking at the different financial instruments that we have at our disposal in this pandemic has taught us that if you invest in character, Which is what acumen has really learned how to do by that.
I mean, finding the entrepreneur and her team understand who they are, which is why we're so proud of Bitwise back them in a time of emergency, don't go through business as usual to create, take six months to do an equity investment. There is a role for grants to get through the emergency. There is a role for guarantee funds and for concessionary debt funds help, particularly those entrepreneurs who have a way to get through and a vision of what should be in the future and accompany them.
And so I do have examples from around the world, but on my mind is right. Kind of capital right. Kind of character. And that is a conversation that we should be having because at the end of the day, All of our sectors systems are fully entangled and interdependent. We will not solve our healthcare unless we also criminal justice, unless we solve education, unless we solve food systems.
How do we go to where we, whoever you are as an investor, as a philanthropist, um, as a government agency, what you do best. But then develop the skills to focus on the problem, not with ideology, but with what it will take to actually solve. And then I don't know, there's a lot more humility in terms of knowing what you bring to the table and what you decided they do not.
Jake Soberal: [00:23:10] You're right. That is the, that is the acumen thesis, particularly the acumen America thesis the day before pandemic and have observed that continued to be the case and powerfully. So amidst the pandemic, we've partnered directly. In addition to our core work on onward, us, that platform that is designed to help workers find a way back to work and also the resources they need along the way.
And so acumen stepped up quickly and powerfully in that moment. Um, and, and has been a really, really impactful. Platform. Um,
Jacqueline Novogratz: [00:23:40] you let, just, I don't seriously, this is so important. This is what character based investing looks like. You led. We could meet you so that you could help us see what the future could be.
And that's what we need to, you need to tell these stories. No, this is where the storytellers have a real role to play in the midst of this dynamic.
Jake Soberal: [00:24:02] Absolutely. I think there's something to be said for leading from behind there. There's, there's so much that you all do that is done with a real authentic, uh, um, humility that empowers folks like Irma and myself.
I want to talk a little bit about you, you, you wrote a book and that you intended to go on a. A massive tour and share out one of your tour stops is going to be here in Fresno. We were delighted to host you and then append Democrat. Of course, the book is manifesto for a moral revolution. If you would share a bit in your words about the book, and then I'd love to hear the best laid plans, what it's like to be ready to go out on a book tour, and then just sort of be stuck at home, doing all of this remotely.
Jacqueline Novogratz: [00:24:44] Yeah, I mean, the book was written. I wrote the book. Initially to think about it. What have I learned in 20 years of running acumen about how do you build businesses and change systems that serve the poor? The more I thought about it, what I realized is that we need more than a systems shift. We need a mind shift and that mind shift had to be okay, complete rethinking because we know that our institutions have run their course, but we don't know with what to replace them.
And so, um, the idea of moral revolution is not. Some magic set of rules prescribed from on high, but it's the courage and the grit to navigate between many different belief systems, but decidedly and importantly, move away from systems that put money, power, and fame at the center. And instead insist on our shared humanity and the sustainability of the earth.
That was the beginning, Jake. And what has been fascinating. Um, was the timing couldn't have been worse and it's been, have been better. Couldn't have been worse because suddenly you have a 14 city book tour that's gone. No media will cover you because of the pandemic. Right? There are no bookstores. It's really hard to even move books sounds up and nobody can gather.
It was just really amazing. Look at the conversation we're having. When you just look at workforce development and what does it mean to build jobs? This moment in our history has exposed that we have been, we've been allowing all of us and economy that undervalues under dignified people who do extraordinary essential work, and we call them all essential workers.
Now. But they are still underpaid, undervalued, and we cannot let that continue. After the pandemic, we need a new conversation. There's um, a way with the idea of moral revolution is to turn it upside down, start by identifying them not only the problem that you want to solve, but in the way that you want to solve it so that your definition of success ultimately requires you to be financially sustainable.
No doubt. But insists on including the poor and vulnerable, not just how the wealthy fair. And, um, I am finding a huge level of openness to that, uh, conversation. And because we don't just speak in theory nor pretty words, because we can point to examples, like, like Bitwise, like the African American companies, like DLI, which now has.
Brought solar light and electricity to a hundred million low income people that, um, we can point to the grit and the resilience and the focus that it takes to shift systems. And again, not in ways that are small, but actually that if you give them time and you get the right kind of capital at the right time to them and support it, you truly can help build me up.
And that's what this country needs now more than ever.
Jake Soberal: [00:27:56] Yeah. And you, you mentioned storytelling earlier, and I think that is so important. The company is in the acumen portfolio, whether abroad or here in America, um, are all doing extraordinary things. Um, uh, but it occurs to me that this is a moment in which it's difficult for those.
Things to find oxygen in the conversation we struggled to get beyond. Certainly the very important story of COVID, uh, um, the story, uh, you know, adjectives reserved of Trump. Uh, the, the story that is very important of our economy and it's, it's perhaps fundamental collapse. How, how do we get these things space in the conversation and the exposure that they need in a very, very crowded conversation.
Jacqueline Novogratz: [00:28:39] I think that's one of the critical conversations, Jake, that there is a well, one, I think we capitalize on this moment that a very live conversation is no, where's the capital that are going to minority entrepreneurs. You know, number one. Well, You. And I both know that they exist. They are extraordinary.
Irma is one of them. When you come from community and understand community, you are more likely to understand how to solve the problems with and for community. And so 60% of our portfolio are people of color, 40% are women. And so without self promoting, because this is not about any one of us, this is about all of us.
Where can we find those friends? In media, um, that will raise these, uh, enormous opportunities and role models, how we might, um, make change and, and, and allow people to speak in their own voices. I think it means that we also have to get better at the way. We tell stories that so often we tell them in ways that are exciting to ourselves, but not necessarily exciting to the audience, but now.
The audience is all of us in America, all of us in the world, we're looking for solutions. And so I think there's a huge opportunity and it's really on my mind about how do we lift up these stories in ways that lift others up? Because we also need examples of speaking across left and right. It's being across ideology.
Cause I also think that. We are having a really hard time finding ourselves in each other. And yet when you just, just take America for a moment, not the rest of the worlds, even though American needs a new humility and not, you know, being part of the rest of the world, the, um, this is a country that was founded on an idea, and yes, there are lots of broken parts of what it meant to build to where we are and our own brokenness today.
It's still stands for something, but it's it's to all of us to renew what it wanted to stand for. However, in perfectly, this is that moment. And the thing about entrepreneurs who are purpose driven, not ideological, um, in their way of being is that. If you need to work with government, they'll work with government.
If you see that, it's really just about the private sector. Okay. They'll just do private sector. There are so many examples. And again, I'm I, look, I look to what you all are doing at Bitwise. It's not saying, Oh, these poor people are victims and we need to help them, nor is it saying, Hey guys, pull yourself up by the bootstraps.
I did it. It's saying. We need to build a system in which all of us have a chance to participate. And that's not just about providing opportunity. That's also about accompanying people so that they can, how do they build their own capability to, to get better bandage of these opportunities? And that's why this is going to take all of us.
It's a different story, but it's a story of entrepreneurship. It's a story of individual responsibility. It's a story of belonging. It's a story of. Wholeness that encompasses the extraordinary narrate diversity that has always been a part of this country. And that's right. I think the big story is, and that's why the entrepreneurs that we get to know are so inspiring to me.
And it's a story that's not been told in a way that sits right at the heart of the best parts of America.
Jake Soberal: [00:32:34] I think it's so important. And I sensitive to time, I want to ask one last question and, and that is where do you see us in this? The, the story arc of this, you know, multiple, uh, set of chaotic moments.
We've got a pandemic, we've got an economic recession. At least we've got the racial tensions. Um, but as they are unfolding, do you think that we've gotten worse yet to come before we start to rebuild? Do you see us in a moment of rebuilding already? And what is your outlook?
Jacqueline Novogratz: [00:33:06] I think because of my 35 years of seeing some of the really ugly moments of, of our human history up close and personal, I feel, I feel keenly aware that we are sitting at a moment of unprecedented peril and infinite possibility.
And so, um, the parallel comes from continuing down a track of dividing divisiveness, and the possibility comes from taking this moment of breaking open and redesigning our systems truly in a way that puts our shared humanity at the center of them. We're ready for it. We want it. And the whole, this whole next generation is demanding it.
And so that's where my hope sets. Um, it's a hard edge to hope. It's not an easy blind optimism. Um, it's but it's a hard edge hope that is based in, um, human possibility, the recognition that we are the system. So we, it is to us to remake the system, but it means that that moral revolution idea has to go beyond.
The entrepreneurs or even the companies or even nations, it has to come back to each and every one of us, how we vote are we voting for moral leaders that are putting low income people at the center rather than, um, overlooking or exploiting? Are we, are we showing up to each other in ways that are full of respect?
Are we taking care of our neighbors? Are we insisting? That we get away from this, us and them, or, um, ideology around. I'm a nationalist. I'm a globalist, this, this moment in history is asking us to be a little bit more strategic and pragmatic that we will only solve the coronavirus globally. We will not solve it by fighting.
Like scared dogs, Nash, you know, nation by nation for our own vaccine. Because even if we get vaccinate, everybody they made over until everyone has it. There's almost something that nature is saying to us. There are problems to be solved globally, but it must be, they must be rooted locally. So this for me is a time, um, to remind ourselves every one of us.
That it is in the difficult times that we have the chance to find our best selves, that, um, how we behave now, how we show up. Now we'll define who we are in the future. And, um, and I try to remind myself, and this goes back to your question about where we each are, that, um, discomfort is, is a proxy for progress.
And so when it feels really hard, really uncomfortable, Ask what, what that discomfort is teaching us and stretch into it. And therefore out of it
Jake Soberal: [00:36:15] shared about the, the investment thesis of acumen and it is unique and embedded in that is supporting entrepreneurs of color and, and, and women. And what are the strategies and experiences that you can share about how to both find and then empower those entrepreneurs that have been left out of opportunity for, for really, for history.
Jacqueline Novogratz: [00:36:37] One is to recognize that they are all over the place and that it often comes down to finding networks of people who are connected to other entrepreneurs like themselves. My grandmother used to say, show me who your friends are, and I'll tell you who you are. And if you look at Silicon Valley so often, um, well intended people find people who look like them, speak like them, et cetera.
And so, um, Early on at acumen, we actually would hire what we will call circuit riders, um, who would get into communities that we might not have as much access to. Once you have a few, those entrepreneurs leads you to other entrepreneurs. And so I would say, first of all, there are many organizations like acumen, America.
You mentioned the Kapore's, um, that are. Specifically working in solving problems of poverty in this country. And, um, that's a good start point because companies like Bitwise, like can say how Sano in Los Angeles, um, that works as a platform for healthcare. That is just extraordinary, right? That is finding a way of.
Dealing with the epidemic of depression and anxiety that young people have. These are companies that actually need more capital. And so let's build up some of our great opportunities as we also create networks of people who are looking for this kind of capital. Also take more breaks that on, um, as angels, uh, that go beyond our, um, family and friends network.
I think it took me too long. Jake. To really understand the power of one's own social networks. And that's, that was a big piece of vacuums work was to extend our social network to people who might not otherwise have that opportunity because it's all there for us. And it's a much richer material, powerful and much more effective journey.
When you actually work with people who understand and know communities and can not only solve problems, but then can be role models.
Jake Soberal: [00:38:53] It is so important that we underestimate the tool sort of box that we bring out of privilege to, to any problem, uh, and what it must be like to not even be aware of the tool set.
And I think that you guys have really powerfully, uh, um, uh, extended the power of your network. To those who have not known, uh, that sort of reach before. So, um, uh,
Jacqueline Novogratz: [00:39:16] to say thank you, and we're still learning. They all learn from each other.
Jake Soberal: [00:39:21] I think that is an important and humble reminder. Um, uh, so I think that that, that covered the last loose end.
I'm so thankful that we got to visit him even over video, um, and thankful to you and your team. Uh, amen. And Eliza are amazing. Oh, they're so good. Um, and one of the first investors that we met, we were introduced by a mutual friend, uh, and they said, this is the, this is the smartest in, instead of investors that I know.
And this was like a Silicon Valley sand Hill road, uh, investor that was, was praising Ayman and Eliza. And they they're just. Fantastic.
Jacqueline Novogratz: [00:39:56] Well, they love you. And I was so depressed and I want to do something with the book in Fresno with you guys, and really think about how do we start to tell these stories in different ways.
Um, I've never met Irma either in person. And, um, but I've been reading up about you guys and talking to Catherine and Amy and the, the work you do and the, um, The imagination of looking at distressed assets and the opportunity you have right now, because God knows what's going to happen to commercial real estate, right.
That they're like, how do we think about what it actually means to revitalize places? And we may not be going to work and what are the skills that are needed and what I also love about it. And you guys is, it's not just upskilling, but it's also about dignity. It's also about career paths. And I think that those are two piece, which I wish I had said in this, but those are two real pieces that are missing when we talk about jobs or we talk about, um, workforce, uh, and it's a little like acumen at the beginning.
Some of our younger people thought it was so hard to do a deal and sexy that when the deal was done, we're like, you know, and that's why we moved from. At one point, I was like, I don't really want to hear a post-investment ever again. We have an accompaniment model. So we literally use that language at acumen of accompaniment.
Jake Soberal: [00:41:32] We've lived the benefit of that. Eliza serves as an observer on our board. Um, and Ayman is always, uh, extremely helpful as well. Uh, well, we we'd certainly love when the lights come back on, uh, um, to have you in here. Um, uh, let's hope for sooner and later. Um, and if in the interim there are opportunities to do things.
Um, they're all screaming. My ear let's do a virtual book event. Uh you're you're if there's are opportunities for us to collaborate, we would love to do that. And so, yeah. And we'll follow up and get some information to share out some, our impact report and a handful of other things that I'll get over to you.
And we'll follow up on maybe some, some next things that we might collaborate on.
Jacqueline Novogratz: [00:42:08] And, you know, ironically, we've been in America five years, but I have spent, I think partially of the team was early on, but I normally like immerse in our companies. So I really like, I know the stories of the customers, et cetera, and I haven't done that.
And, and, and yours would be a place. That I'd love to know more. So I'll look at all that. And at one point we might just want to have another call conversation where you guys really educate me because I am getting more and more. I'm speaking. And, uh, we're in this together. We're all part of this. Now.
Jake Soberal: [00:42:42] I think that is such an important word, Jacqueline.
I thank you so much for making the time to join us and share your voice and heart and for your work. Uh, it is both inspiring and I think important in its daring, uh, nature. And so, uh, thank you for making the time today.
Jacqueline Novogratz: [00:42:58] Well, Jake, I thank you. And. For being a storyteller and for having these kinds of conversations, I thank you and Irma for the day to day work that allows you to be a gritty storyteller because you know what it means to be on the ground.
You know what it means to work with people who are striving, um, to take care of their kids health, to go to school, to know that their efforts have some corollary in terms of output that they can count on. And that, um, for me, you, you guys are the heroes and the role models that we all need to be more like.
So I thank you. Um, for this chance. And couldn't be prouder to demo that acumen works with. That was I
Jake Soberal: [00:43:47] so appreciate Jacqueline's voice and leadership in saying challenging things from the biggest of stages that call us to do things differently. But those ideas she's sharing are so important to rebuilding in a better way than we left behind before the pandemic.
And you heard from Jacqueline that so much of the work of an acumen is expressed through its portfolio companies. And one of those is Bitwise industries. So we thought this would be a good time to take a deeper dive even to the work of Bitwise and introduce the show to Irma old. When my cofounder and co CEO at Bitwise.
The interview we wound up taping was quite long if you know, Irma and I, we enjoy laughing and telling stories. And so, uh, we've got a sliver of it that we'll share here and we're going to release a longer form version of it as a bonus episode in the coming days, let's get started with them.
So. We we found Bitwise in, in 2013, uh, um, and in 2013, Fresno.
So Fresno, uh, for context is a city with Metro population over a million people. Um, it is, I think 30th, 31st largest city in the United States. It is a large, poor city. Um, and in 2013, we were also in the pits of the great recession as it was, uh, um, uh, although we might have to alter great here. Um, but, uh, we w unemployed, it was double digits.
If I remember correctly, it was 16, 17% still here in Fresno, even while others had started to recover in other places. We had a housing market that was decimated, which is easy to think about in terms of, you know, Oh, that that segment of the economy is not doing well, but literally we all knew somebody who had lost their home.
It was, it was really, really bad, but we believed that that was the exact right. The moment to do something like Bitwise and, you know, fast forward seven years now, but wise is in four California cities. Right? It, it feels, uh, like we have, we've been able to have a profound and positive impact in those places, but it does feel like we are, um, uh, sort of living in Groundhog's day in that, that the world around us feels like that again.
And I know for me, Amidst this pandemic and we'll come back in a moment to the health sides of it, but amidst this pandemic and this economic collapse and the racial inequities, light Bayer, I am alternating between, uh, like a deep sadness and lament for the world around me and its failures, uh, and hurts and this like, all right, I need to put on my armor and we've got to go to battle.
How are, how are you experiencing that? And what specifically does it cause you to. Want to do next with Bitwise
Irma Olguin Jr.: [00:46:24] to do next with Bitwise is like, if we are in fact going to level up human beings that don't otherwise get invited to these pieces of the economy to whether it's home ownership or the technology industry, or 401k's like, you know, choose a thing you fix it when it's broken and it's broken, like it's broken right now. So I thinkthis is an opportunity to. Take what is broken and to layer on the things that we know work from our experience in doing this for the last seven years, um, uh, so that we can change those outcomes. The next time we climb out of this hole and that feels super, incredibly difficult, lit also like, what else are we going to do with this time?
We don't want to remake the world we were living in before it was an equitable, it was, uh, unfair. It was, I mean, any number of. Of things that bring me true heartache. Aye. I think that this is the moment where we get to, we get to say that way didn't work.
This works. We can do a lot more of it. If we lean in, so pandemic recession, you know, economic collapse, like whatever it is that we're ultimately facing, there are set of tools that we know
can work and that we can use to dig ourselves out of this.
And it's in such a way where everybody participates.
That's what I think we ought to be doing with this time. Um, in terms of how it's hitting on a, like on a personal level, I, I. Feel attacked. Uh, I feel angry. I am extraordinarily disappointed in, um, leadership, uh, at all kinds of levels. There isn't a day.
I don't think that goes by there's this just an anecdote I think to highlight, um, there is down the road from where I live this street, that was, they used to be a pedestrian mall and they, you know, a couple of years ago they tore it all up and they put a street there. It has been empty. Uh, it's not been revitalized.
It's not sort of coming back to life the way that we hoped it would now there's this pandemic, but pre pandemic, even there was, there started to be this gathering that would happen there every Sunday. Of folks who want to do like a car show. And it's really, it's not like a formal thing. It's just people show up with their cars and they cruise down the street and other people sit on the sidewalks and they bring their own chairs and they watch this car show the place that I'm from, the people that are there don't bother me, you know, largely Spanish speaking or Latin X.
And in my mind, they're just having a good time. This is a Sunday night and I'm out walking the other day. I noticed, and it didn't start out this way, but I noticed that there's a large police showing, uh, now, um, at that gathering and for the full 30, 45 minutes that I was out there, there was a helicopter circling, just that street, just up and down that street.
And for all I know, they're there for good reason, but I can tell you that the climate of today and the way that it feels like everything is just so incredibly twisted and, uh, it feels very personal.
It feels aggressive like the, the, the police force and the circling helicopter, it feels aggressive. And this thing that I understand to just be this gathering, that's, don't get me wrong.
If you lived on the street, it would for sure be obnoxious it's loud, but it just feels like it's aimed at people.
And I think that, that, that is a really common, um, theme lately is that it feels so targeted. And so aimed at people who.
You know, are not being given in many cases, the benefit of the doubt.
And you just see that there isn't a single day that goes by where I feel that where I don't think to myself. So we're not giving them the benefit of the doubt. And you just become exhausted with that.
Like, you're, I'm weary with the idea that we don't do that as people, um, these days, uh, yeah, to be fair.
Neither am I giving that. Show of force the benefit of the doubt. They may be there for good reason. I don't know, but I'm led to believe that they're not,
Jake Soberal: [00:50:28] we've talked a lot about, uh, um, the murder of George Floyd here on the show over the course of the last couple of weeks, we visited with Ollen Douglas from Motley fool who, you know, well, um, we visited with DJ Criner, uh, from st rest Baptist church who, uh, um, uh, you know, also, um, uh, and.
Um, both, I mean, Ollen shared this story of he needing to talk to his kids about the game plan. If they, his sons now a young adults, uh, but the game plan for if they got pulled over before he talked to them about sex and DJ talked about, uh, the sadness in his community and, and, and the varying responses I'm really specifically interested in hearing.
You talk about experiencing from, uh, the Latinx community, how, how you have experienced, how you have these last several months in black lives matter and the murder of George Floyd. And before that to many others, how you relate, how it feels different, how it feels like a, your, your, your directly. Uh, involved in that community and how, you know, how, how you feel a little bit separate.
How do you feel like the experiences might be separate between the black and Brown communities?
Irma Olguin Jr.: [00:51:38] Well, I think they're definitely separate and, and I don't think it's fair for the Latinx community or the LGBTQ community, which I am a part, um, to pretend as though the struggle is exactly the same. Um, because it's for sure not.
I do feel attention. I feel targeted. Um, I, I worry for my personal safety in a way that I never have before. And I'm not, um, I can't say with any authority that one specific group has it worse than another group. I'm not willing to say that either, but I do think that they're very specific, very different.
And, and just like full of fear. Uh, the black lives matter. A lot of the protests were taking place during the month of June.
June is also historically pride month. There that's usually a time of Jubilee and that wasn't really, that didn't happen. And you just, you feel a sense of solidarity. Honestly, I do at least.
And, you know, being, being in the queer community and saying. Keep the month of June and let's actually talk about Juneteenth and let's actually like, look at ways to be supportive of the black community. I think that we need to be supportive in that way and have that sense of solidarity without trying to overly identify with it reminds me actually a lot of, of grief, like after a death of somebody that, you know, like, you know, did you have a family member who dies.
It is the most insensitive theme to me, just for me to say, Oh yeah, my, my uncle also died. I was like, that's not what you need to hear from me right now.
Right then, you know, and so there's a time for me to grieve. There's a time for you to grieve and we can do that in solidarity with one another, but we don't have to make our experiences the same in order to know that the other person is hurting.
And that's really, for me, what it really comes down to is like how about some recognition that these folks are hurting and how about taking that seriously in a way that doesn't make it about you?
That feels really important to me. I might be, you know, with all of these different scenes and all of these different communities that I belong to, but it's still not going to be the same as say, the Asian American community, especially in the days of the coronavirus and, uh, or, or the black community in, in the days of, uh, the black lives matter movement and George Floyd and beyond Taylor and on and on, um, I have my own.
I hope that people stand in solidarity with me. I hope they feel a sense of support, but I don't need you or anyone else to make it yours.
Jake Soberal: [00:54:00] Yeah, in our, our position at Bitwise, by virtue of our team first, and then by virtue of our, our ambition and heart second, um, uh, we, we wind up connected personally to so many of these issues that, that are not based on our.
Specific experience walking in that, in that sadness with others and walking through that process with others has felt delicate. I want so badly for you to know that I'm here, uh, that I'm hurting for you and with you, and that I see you hurting. But we don't have a playbook for any one of these things by themselves or, or for all of them together, much less.
And so that's felt particularly challenging and heavy. I think at least from, from my seat, one of the things that in, you know, that this is where my mind races, that I've been spending a lot of time thinking about is that whether it is. The murder of George Floyd, uh, or the inequities of our economy, uh, that are exposed even further in a dramatic, profound, abrupt recession.
That's being caused by our poor reaction to the pandemic. We, these aren't outcomes that happened on accident. We designed systems to specifically cause these outcomes. And that becomes relevant to this conversation here. I think because we, we will often have the conversation about Bitwise and say, we think there are these three pieces to an ecosystem that can create a more equitable and a generative economy in, in underdog cities as we call them.
And people will often say like, That's complicated. There's so many, there's so many things going on and, and we'll say it's, it's, it's three things. Do you think about the journey for a white man from privilege that has like, think about it. They've got to maybe get the scholarship in sports or, or, or academics.
And then they've got to choose between these, these colleges. They pick a major, they're going to take several classes related to what they are interested in several classes related to what they are not interested in. Maybe they go to grad school, maybe they don't, maybe they enlist the peace Corps, like the journey to becoming a software developer for somebody coming from privilege is exponentially more complex than the, the journey that we're proposing for folks from communities of color and systemic poverty.
And it's met with this reaction though, this new idea, this reaction of that's that's too complex. And I think it, it betrays this. Underbelly of, we don't want it to be different. That is something that, that truth is something that we've, um, uh, sat with a lot. Um, and I would love to hear you talk about how you stay motivated in the face of that.
Uh, um, uh, in a really, really challenging moment.
Irma Olguin Jr.: [00:56:39] Well, first of all, we see that everywhere we see that, you know, every time we attempt to do something new, we're met with that answer.
This is, this is complicated or that sounds really hard, or wouldn't it be easier to get rich a different way, you know? And, um, a hundred percent, it would be easier to get rich about 25 different ways, none of which we're currently doing.
But I think that that's not the point. How do you stay motivated? What else would I do with my time, my life? What else would I do with my life? But this, um, It feels if the story that I told at the beginning is true, where I landed in the seat by accident, and I get to enjoy the fruit of all of those accidents, sort of combined and sure.
Yes, there's hard work woven in there. I'm not denying that, but if I get to enjoy that fruit, who am I, if I don't share that with other people, like who am I, if I don't. Figure out a way to give other folks that same feeling of choice and agency or power that I get to enjoy. Every time I make a decision to have a pizza delivered, you know, these are not at the different levels of opportunity.
You have to have somebody who's reaching back to pull more people into that level. It doesn't happen any other way. Right. And that's why we were, that's what we're constantly looking to leadership at all levels of government and business to do something different because that's how you're going to change it is by those folks pulling, uh, other, uh, other people along, along with them.
That's the responsibility that I haven't seen in being, that's what I, the responsibility that you and I share as leaders of our business and hopefully whatever is beyond this, to be able to do that more and more often, I think we have to normalize that that is not something that feels obvious or common
to people who typically make headlines.
Uh, that they are dragging other people with them or giving folks behind them that same opportunity.
Jake Soberal: [00:58:40] Yeah. And I think that that intentionality is easy to miss, but I appreciate the, the, the way that you use you act as that conscience in our organization. I want to, uh, zoom in tightly on the pandemic and there are lots of facets to the pandemic, but one specifically is how.
We as a company and you talked about our responsibility to our people. We view ourselves as, as directly, certainly maybe responsible, at least influential. Uh, but, uh, and certainly like in love with the 200 people that make up our team and the, uh, supporting them is, is new and different. How have you, uh, um, uh, I think it come to that.
And, and, and how is it, how is it different than it was. In February.
Irma Olguin Jr.: [00:59:31] The thing that is loud artist is like, is re understanding my job. That's probably the most difficult part of, of the PA for me in my life was relatively simple, was made even more simple, honestly, by the pandemic. I was traveling all the time before and, and now I get to be home and sleep in my bed and, you know, like drink my own coffee and not rely on the hotel, you know, curated or whatever.
So my life was simple. Simplified. Everyone else's became feels like infinitely more complicated, but in reflection on that, like understanding how to support those same people and help them feel good at something is an entirely new set of facts to sort of pretend to know. Every day I was actually we're giving employee reviews.
I was giving an employer review recently, and I said to the person, your work is phenomenal. But it, all of the things around your work that I'm now much more aware of, do those become a factor in the way that can we talk about this now? Is that the, I mean, do we talk about whether it's distractions with children or home life or your internet connection?
You know, how much of that gets woven now into how, what we think of as work and your productivity and whether or not you're good at it. And how does that change? My expectations. Of how I want you to produce and what it looks like for you to be good at that. Um, and, um, I don't think that we have gotten anywhere near the bottom of that, that question.
I think that the, the pandemic. Then the work from home slash shelter in place. I think we're going to do that on and off for a long time. And we're going to really need to figure out what we expect from parents.
Uh, what it looks like for children to learn in this, this period of time, like checking with grade level learning, I think is a really needs to become a thing of the past, at least for a period of time.
I, it is, but that traces all the way into your job and what we expect. Um, your work week to look like, uh, or what we expect performance to look like. And I don't think that we're anywhere near the bottom of that. I think what is happening right now, and I think it's detrimental to society as a whole, as folks are trying to take the 40 hour work week that existed before and move it to zoom.
And that's a really great way to cause a lot of mental and emotional damage. Have you asked me? I don't think anybody feels like this is close to what they had before.
And I don't think that anybody feels like this is as life-giving even this interview is not as life-giving as it would have been where we sitting on in two chairs on the stage inside of one of our buildings.
And, um, that's everywhere. Every decision is layered with six additional things. We're not even taking into account right now.
Jake Soberal: [01:02:12] Yeah, it feels heavy. It feels more tiring. Um, um, we spoke for the first part of today's session. So to Jacqueline Novogratz, the CEO of acumen, somebody that we know and admire and, uh, Jacqueline Jacqueline hangs with the masters of the universe.
Um, uh, the folks who have made wall street and. Many of the companies that, that, that our largest and most well known on the planet. Um, but does really, really deeply thoughtful and impactful work and ask her. Okay, so like where are you looking for the solutions to what we're living through right now?
What gives you hope? She, you know, in a way that was a humbling and terrifying looked back and said, um, I'm looking at you guys. Like I'm, I'm looking at Bitwise. And so many of the other companies in their portfolio and similar portfolios, it feels to me like we are experiencing such deep failure at the federal government level.
Uh, and so many of our state governments and so many of our local governments that it is up to us. How does that mean leave you feeling? As we, we think about enduring, what is a continuing, uh, crisis and coming out of it. What is it that you want to create? Uh, on the other side of this, whenever, whenever that is,
Irma Olguin Jr.: [01:03:29] I don't know if this is going to be surprising, but, um, I feel like this is what I was made to do. I think the, the extraordinary failure at the federal level, it does not, it did not have to be this way. Like if we had listened, whether to your better angels or to science or to experts, or like, you know, the, the, the litany of folks we could have listened to, we'd be done by now. We'd be, we'd be back to work.
And there were ways to do that. There are ways to do that.
Now we could, we could do things starting this month that put us all on a track to having relatively normalized by Thanksgiving. That could happen. And I don't think that it takes an extraordinary mind necessarily to come up with what those things are.
It means we have to abandon what we knew as normal and really solve for the problems that are real today. And if you get rid of all of the shit or all of, if you get rid of all of the stuff, keep it or dig it out. It's up to you guys.
But if you get rid of all of the fluff that goes into the emotional cloud, that is this moment.
And you really like, if you, if you can get rid of all of that and focus on what the actual problems are, there solutions to those problems, and you could, you can mobilize an effort to make this moment bearable so that we could see the light at the end of the tunnel. And I feel made for that kind of work I feel made for.
Getting rid of that cloud and saying, what are the real things?
And like, let's the execution of those things would be really hard, but the design of them wouldn't would not be a Herculean lift. So
I feel frustrated more than anything else. I don't, I, yeah, that we don't yet have the power and authority to move on those things.
Um, or the, the, the sort of, uh, federal level resources to move on those things. I feel frustrated by that.
I think the hardest part of this moment, because, because I, I can't act on what feels true to who I am at this moment is that there is no real light at the end of the tunnel. Like we're literally waiting for a scientific breakthrough at this moment.
That's not a great position to be on a BN. Uh, I think we do need to give scientists more time to work, but to just have to wait and see what happens next. And who's going to make the wrong decision with, you know, schools or, uh, and they're reopening or beaches, or, you know, local bars to have to wait to watch that play out.
That light moves further and further away.
Um, and so that fills me with a sense of frustration, not hopeless, but frustration and probably more frustrated. I'm probably carrying more frustration in my body today than I ever have in my whole life for the inability to make these decisions on other people's behalf.
Jake Soberal: [01:06:26] It does feel heavy, uh, but it does feel like a call to action. And, uh, I think that folks have seen pretty clearly, uh, over the course of our conversation. Why it is that I tell my story first and then you go second, last question. It's a heavy one. Or if you were to have to choose from among my characteristics, you know, handsome, funny, charming you choose, uh, which is your favorite, uh, feel free to pick multiple.
Irma Olguin Jr.: [01:06:54] You're funny. This is people don't know this about you. I don't think. And I don't think it's assumed about you either, especially on like first meeting, but you're actually really, really funny. It's just not always when you wanted to be funny. Um, which is the best
Jake Soberal: [01:07:06] That feels like a backhand compliment.
Irma Olguin Jr.: [01:07:11] Yeah.
Jake Soberal: [01:07:12] Uh, uh, Irma, Auguin co CEO, co founder of Bitwise industries on every top 10 list in the world.
It feels like right now. Uh, thanks for taking a couple of minutes to hang out with.
Irma Olguin Jr.: [01:07:22] It's been a good time. Thanks for having me
Jake Soberal: [01:07:26] in both Jacqueline and Irma. I see two individuals that have crafted for them. A form of leadership and a path that is decidedly unconventional, and it has made them uniquely valid to our world in this moment, voice uniquely important to this time.
And as I reflect on where we're at in the world, and what's next, these are two people who I'm looking to, whose leadership I'm following, who I look forward to rebuilding with. We're grateful for them spending time with us. We're grateful for you. Joining us. You can find this podcast and onward on air.com or wherever you get your podcasts.
We hope you'll join us. Next time.
Take care.
Onward on air with Jake Soberal
Produced by Bitwise industries. In association with studio to beat this episode was directed by Gordon Howell and produced by Randy Guera. The associate producer was Rigo Aguilar. The executive producer is Joaquin Alvarado. This podcast is edited by Chloe Ben.