049: Technology For the Greater Good with Reyn Aubrey

This episode is sponsored by Upside!

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Panelists:

Rein Henrichs | Jamey Hampton | Coraline Ada Ehmke

Guest Starring:

Reyn Aubrey: @ReynAubrey | PocketChange | reyn@pocketchange.social

Show Notes:

00:16 – Welcome to “For Good or For Awesome?” …we mean, “Greater Than Code!”

01:18 – Reyn Aubrey’s Background, Origin Story, and Superpower!

06:04 – Culture of a Company and Tolerance

Tribes: We Need You to Lead Us by Seth Godin

08:12 – Becoming an Entrepreneur at 19-years-old and PocketChange

10:40 – Charity Evaluation Criteria; “Wicked Problems”

pocketchange.social/charities (Coming Soon)

14:33 – Habitizing Donation

16:22 – Analyzing and Collecting Charity Data

GuideStar Charity Navigator

CharityWatch

19:02 – How PocketChange is Structured

20:34 – The Ideation of “Technology For the Greater Good”

24:28 – Reyn’s Path Into Business and Entrepreneurship

Start It Up: The Complete Teen Business Guide to Turning Your Passions into Pay by Kenrya  Rankin

28:33 – Good Business Beliefs, Virtues, and Values

34:00 – Bringing Anarchist Organizing Principles Into Business

Colin Ward: Anarchism as a Theory of Organization

The ‘Two Pizza Rule’ Is Jeff Bezos’ Secret To Productive Meetings

37:23 – Advice For Others Interested in Social Entrepreneurship

42:00 – Launching PocketChange and Reserve Your Launch Day Invite

44:51 – Gathering and Raising Venture Capital

47:35 – Advice For Others Interested in Social Entrepreneurship (Cont’d)

Reflections:

Rein: Check out Stafford Beer.

Coraline: A culture being defined by the least of something you’ll tolerate and entrepreneurs should solve for “Wicked Problems” — not pain points.

Jamey: All charities are not created equal.

Reyn: A value that isn’t acted on is at best an inspiration and at worst a pretense. Also, non-dominance based work relationships.

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Transcript:

REIN:  Hi, everyone. I’m Rein and welcome to Episode 49 of ‘For Good or For Awesome?’ I am here with my friend, Jamey.

JAMEY:  Hi. Just a reminder, even though we are both good and awesome, the actual name of the show is Greater Than Code and I’m here today with my good friend, Coraline.

CORALINE:  Hey, everybody. It’s Coraline. As Jamey mentioned, you may know me from such podcasts as Greater Than Code, For Good or For Awesome and many others. We have a very special guest with us today but before we introduce our guest, I wanted to mention that this episode is brought to you by Upside, one of DC’s fastest growing tech startups. Upside is looking for innovative engineers who want to disrupt the norm and they’re always hiring. Check out Upside.com/Team to learn more. We’re very thankful for our sponsors. If you would like to sponsor us at any level, go to Patreon.com/GreaterThanCode and you’ll gain an exclusive access to our Patron-only Slack community. If your company would like to sponsor us, please send them to GreaterThanCode.com/Sponsors for a prospectus.

Now, it’s my pleasure to introduce Reyn Aubrey. Reyn is a 19-year old student entrepreneur. He’s on five businesses. The most recent of those is PocketChange, which is a tech company harnessing social media for good. Reyn has won a variety of awards, recognitions and competitions and he’s currently the youngest competitor ever to be in the Denver Startup Week’s $100,000 Pitch Challenge as a semifinalist. Welcome, Reyn.

REYN:  Hi. Thanks so much for having me.

CORALINE:  Reyn, the first question we ask any guest on our show is what is your superpower and when and how did it develop?

REYN:  I would say that my superpower is my ability to really listen to people and understand where people are coming from on things. I think that everybody’s got a really interesting perspective and you can’t really assume anything about anyone based on what you can see. It takes a lot of time to get to know somebody. I guess my superpower will be I’m willing to spend that time getting to know people as people versus as a label or as whatever group they fall in or anything like that.

I think that definitely has come from my background. I’m originally from Hawaii. I’m a white male but I’ve always been a minority and kind of have a loose sense of the word because Hawaii is very predominantly other ethnicities and definitely one of the biggest melting pots in the US so I really been able to shift how I see people and how I view people and really come at them and come at all interactions and conversations with open mind. My ability, I think to hear people for people and listen to people for people is really, really unique in terms of the way I look at the world.

CORALINE:  It’s interesting that that was part of your upbringing. I think that learning, that ability to understand people generally develops as we mature. Was that something that you even experience in your childhood?

REYN:  Incredibly, yeah. For me, it was all about the people that I surrounded myself with. I had, I think two white friends out of all everything else and I never really understood how unique that was because that was the only frame of reference that I had. Hawaii is one of the most isolated land masses in the world and when you’re there, that becomes your whole life. Having that kind of be a part of me since I was a little kid, I think was kind of really interesting. I’m not going to come out here and say, “Oh, this is super unique. This is great,” or anything like that but I think it just gives me an interesting perspective on people and the way things work.

Now, that I’m on Denver for school and the school that I go to is a predominantly more affluent white school, it’s been a really interesting shift for me and kind of interesting challenge of how I do business and how I think about myself and who I am and all of that.

REIN:  What’s it like, I guess immigrating into a predominantly white group of people when you come from a much more diverse upbringing?

REYN:  It’s really weird. I think that the biggest thing I noticed that was weird was that a lot of people never really had thought about their race or their background or that kind of thing. I don’t want to generalize but for a lot of people, college is kind of the first time we’re able to have this discussions and kind of a safe area or a brave area. I just thought it was really interesting so coming into it, I really had to understand that and understand that other people were not coming from the same place that I was coming from, in terms of their understanding of all these different things. That’s not to say that I understand the struggles of all of the things that are going on right now because I definitely don’t. I’m still a white male.

But I think that coming to the school and being fair to people who had never thought about race or never thought about that privileged was really an interesting thing for me and I had to approach it with an open mind and had to constantly remind myself for that if someone would say something that was ignorant or they didn’t know something, I kind of viewed it as my responsibility to be willing to call it out. Not to have the answers but just be willing to have a conversation about something that I wasn’t comfortable with or something along those lines.

CORALINE:  That’s something that I wish more white people or more white males would take responsibility for. I think a lot of the emotional labor and a lot of the work being done to address racism in this country is being done by people of color. There’s this persistent message on Twitter that people of color cannot end racism and it requires white people of talking to their racist families, talking to their racist friends, calling out racism when they see it in public. It’s really refreshing to see that at 19 years old, you have an understanding on that. At 19 years old, you’re brave enough to do that.

REYN:  It’s interesting. I was actually reading a book called Tribes by Seth Godin and a lot of other entrepreneurs have read and it talks a lot about culture of a company and if you allow me to go down this tangent real quick. A culture of a company is defined by the least amount of something that you’ll stand for, your baseline, your cut-off point. I was actually having this debate yesterday, this conversation yesterday that in terms of when issues come up where there’s something that is not okay or you’re not comfortable with, regardless of if that situation is resolved by you saying something, setting the line of this is okay and this is not okay is fundamentally incredibly important because it sets the tone for your community and then if we can get enough people to set the tone and set the line that this is not okay and this is okay in super small ways, I think that’s how we push something forward. It’s not through big programs or in a massive marketing campaigns or viral Twitter videos. I think it comes from a whole lot of people coming together and saying, “This is not okay and this is what I stand for in my personal life.”

JAMEY:  I think I totally agree with that. I think that even if you say something in the moment to someone and you don’t change their mind, maybe they’ll think about it later and start to internalize that information slowly and even if they’re maybe not listening to you, maybe someone else who is listening is listening to you and is getting something out of that, which I think about a lot when we’re having these discussions online, that if I make a comment to someone, maybe it’s not getting through to them in the way I hope but who know how many other people are going to read that comment.

REYN:  Yeah. I couldn’t agree more.

CORALINE:  I really like what you said. I assume it’s a Seth Godin quote and it’s about how much of something they’ll tolerate. In our politics currently, we’re seeing some people calling for tolerance of ideas that are actually damaging to our society and our culture and our country and other people are saying rightly so that there is no space in public discourse for people who hold opinions about other people being subhuman but other people being inferior and it really comes down to what we as a country will tolerate.

JAMEY:  Reyn, you describe yourself a couple of times already as an entrepreneur. I’d like to hear more about how you got into being an entrepreneur and I also like to hear about your new company, PocketChange. Is that it?

REYN:  Yep. That’s correct.

JAMEY:  Tell us about it.

REYN:  Sure. PocketChange is my first foray into technology for social good. I believe that at core entrepreneurs solve problems but traditionally, we’ve been using entrepreneurship to solve pain points not problems. Anything from convenient travel to booking, email, productivity and whatever it is and we’re leaving the really, really big problems unaddressed: climate change, racism, gender inequality, LGBTQ rights. I really wanted to see if there was a way that I could use technology and my passion for business in a way that really benefited the world and left something bigger than just an IPO or acquisition or something along those lines.

PocketChange is a technology that we’re working on creating that aims to target the moment when someone is really genuinely motivated into action and remove all the barriers for that action. Right now, we’re creating a button that sits on Facebook, next to every piece of content and lights up when you see a post about a cause. Post about a cause could be anything from an article about Hurricane Irma to a video about poverty. Maybe it’s a livestream about a crisis in another country, whatever it is, any cause in any area, our button will read that post and analyze that post, determine a specific cause from that post that relates to it. For example, there’s a video about climate change, our technology will be able to identify that is a video about climate change.

Then we have a research team that analyzes all charities that do work in the area of climate change and trying to tackle climate change and the term is the single most impactful organization that is tackling that issue. Then in two clicks, we allow our users to donate 25¢ to $2 to that organization all within page. Again, in the moment, if someone really wants to do something, we remove all the barriers for that action. We’re creating a like button and actually makes a difference.

One of the interesting things we have to do is choose charities and evaluate charities. Our belief is that we don’t have to be experts on every topic. We just have to be experts on how we go about choosing charities and what makes a good charity and what makes a poor charity. We’ve spent a lot of time researching and doing a lot of work in that space.

CORALINE:  What are your evaluation criteria? I’m really curious about that.

REYN:  We do basically two things. We look at quantitative and we look at qualitative. We start by trimming based on efficiency. When you’re only donating 25¢ to $2, it’s really, really crucial that that charity is actually using the money. I think it’s always crucial that the charity is making sure that they’re using the money for a program expense, rather than purely administrative or CEO salaries. We’ve all heard the stories of these massive charities ripping people off and taking their donations —

CORALINE:  Red Cross.

REYN:  Yeah, exactly. We really make sure that all the charities that we work with are spending the vast majority of their money on actual programs and are running a lean mean machine. Then we basically select charities based on diversity of program, along with a lot of other things. We look at leadership and we look at vision and we look at geographic areas and how they’re adapting and using asset-based programs and all of that kind of thing. But we understand that for the problems that we’re looking at, which are called ‘wicked problems.’

Wicked problems are essentially problems that are really, really hard to solve and can’t be solved by a simple cause and effect solution, things like climate change and racism and all of the examples I’ve mentioned before. The way to solve wicked problems according to current literature and example in testing and all of that is you solve them by tackling it from a variety of different angles. There’s no one solution to any of these problems but a variety of solutions brought together becomes incredibly powerful. We look at programs and charities that have programs in a really diverse set of areas.

Perhaps with climate change, there are definitely things that they need to do. For example, short term fixes, providing food and resources immediately but then also the really more important thing is lobbying in the government and making sure that laws are created and running educational programs so that people understand things, setting up recycling programs so that it’s easier for people to do that, marketing campaigns and awareness campaigns to really let people know what’s going on and trying to engage and tackle the problem from a lot of variety of different angles. We really work with charities that are great at a lot of different things, in terms of tackling their problem. If provided the right amount of funding, they could scale those solutions and really make a massive impact on that issue.

CORALINE:  You make the evaluation data public?

REYN:  Yes. We’re finalizing in the next two weeks. It’s been pretty crazy. We just got into Denver Startup Week. If we won, that would really speed up our development time so we’ve been focusing all of our energy on that. But in the next two weeks, we will publish all of the information on how we choose charities, specifics on why we chose each charity and our whole process and you get to meet the research team and all of that at PocketChange.social/Charities. That page isn’t up but in the next two weeks, it will be with all of the information that we need.

Then we’re also really looking at how can we make the things smarter because we fully acknowledge and understand as 19-year old students, we have some older people on our team as well. But as primarily young people, we’re never going to have all the answers to all of these things and we’re never going to be the smartest person in the room. Our power is the ability to acknowledge that.

We’re looking at trying to figure out ways to incorporate all of the brilliance of our PocketChanger community and get all of that involved in our charity selection process. Starting with a simple ‘send us your feedback,’ updates and all of that kind of stuff but then trying to figure out a smarter way to go about evaluating charities and harnessing the people that are donating through us and to us, to make that process a lot smarter and constantly improve and get better.

JAMEY:  To be honest, I think this list of charities evaluated by all of these criteria alone is a great contribution and that’s not even really — products, maybe the wrong word but your end goal, like the end goal is to actually have people donating to these. I’m really interested about the fact that it’s donating between 25¢ and $2. I feel like there was research and decision making that went into that. Is that true?

REYN:  Yeah, there is definitely a lot to it and we’re still testing. As all of you know, testing is constantly something you do as an entrepreneur when you’re building a product: launching and testing and launching and testing and launching and testing. But we set on 25¢ to $2 because our real belief, if the donation is hard and it shouldn’t be, we really want to create something that people can get behind and use without feeling guilt into it, without feeling like it’s going to hurt their wallet and they’re not going to be able to pay rent, without any of that. We really want to habitize donation.

Our belief is that — exactly what we were talking about before — if we can get a lot of people to come together in a really small way, it creates a super, super powerful and beautiful world where people can say, “Whether we disagree politically, whether we disagree about all these different things, we can agree that people are hungry and they need food and we can agree that this issue is bad or this is not something that we’re willing to stand for,” and we can bring people together. That simply doesn’t happen when you set $50 pay walls that exclude so many people. It also doesn’t happen when we’re just on Facebook, which we acknowledge. It also doesn’t happen when we’re just using technology because a lot of people don’t have access to that so we’re trying to figure out ways to get around that but we have to choose the path with least resistance for now.

We set the 25¢ to $2 to really habitize how people donate and make it something that people can donate without feeling bad about or without feeling it’s something that their guilty into doing or forced to do or anything like that so removing all the stigma and difficulty and baggage that comes along with donation and really simplify that whole process.

JAMEY:  It’s really cool.

REIN:  I’m interested in understanding how you get your data about the charities. I know that there are charity watchers and things like that that publish some information but what do you do that’s different from them and how do you analyze these charities?

REYN:  We do use a lot of the online databases out there. There are some really great ones that called directly from IRS filings that the charity is required to file legally. We use a GuideStar Charity Navigator and CharityWatchdog sometimes to really pull our data. The biggest thing that we do is we aggregate so we don’t necessarily fly out to the charities and interview them and do any of that stuff because it’s just simply not scalable for what we’re trying to do. But what we do is we make sure that we pull information and find any conflicts between information from a variety of different sources and make sure that that information is accurate.

We know all the numbers to look at, whether that’s administrative costs, program expenses. We look at percentage of executive team salaries based on donations, restricted versus unrestricted funding, where donations are coming from. Whether it’s coming from foundations or whether it’s coming from individuals, whether it’s coming from a specific area, all of that kind of stuff. We really try to look at donations and charities as honestly and analytically as possible and be as transparent with that data as possible so that any time you donate you have access to all the same information we do.

If you disagree with us, that’s completely okay. We understand that everybody’s going to have a different philosophy and perspective on things so we enable users to input their own charities if they like one better or choose one of our other options. We provide three options if you do not like your default so users really do feel empowered while at the same time, still simplifying the whole process for them and not to have you and your wife go through and see if you can figure out what charities actually going to donate the money and what charity is just going to take it and have a $40,000 launch.

We also believe that no one’s really done what we’re trying to do before. If we can do it well, we can really become a very trusted name in the charity space. Whether you use PocketChange or not, our belief is that if we can choose great charities and more people donate to great charities, that’s amazing for us. If we can laser focus people on donating to just the best charities, it becomes really, really impactful. Maybe PocketChange isn’t the right tool for anyone. Maybe people don’t use Facebook or whatever it is, maybe they want to donate more so we want to make sure that all of our information on charities is super easily accessible to anyone, regardless of if you use PocketChange or not.

CORALINE:  I’m really curious kind of mechanically how PocketChange is structured. Do you have a team of data scientists that’s working on that charity data? Who’s doing that work and what specialization do they bring to that process?

REYN:  Basically, what we do is we have a team of people that follow the process that we outline and then we also have an advisory board of people that go in and look at charities that are real experts in the field. Actually, it’s kind of funny. We don’t really use too many data scientists because while charities are very database, they are also is a lot of value to the qualitative side of it. We, actually on our advisory board team, have a lot of social venture capitalists and social investors. There’s a big organization here called Bettcher and there’s a lot of basically rich foundations that do a lot of investing in social good projects. Then we have a lot of their team on our advisory board to help refine the process: the head of philanthropy at Western Union, it’s a big one that we have on the team.

We have a process and we standardize that process so that everyone has access to it and can see the information that we’re working with and how we choose things. We really standardize our decision making and we really believe that that’s important for our transparency but then, we also have a team of ridiculously smart, ridiculously talented people who help make the process smarter and who can make decisions, if something goes wrong.

REIN:  How did you come to decide on this project? Where did you get the original idea? What made you decide this is what thing you want to focus your energy on?

REYN:  Funny enough, the idea came from these tiny showers we had in our freshman dorms last year and I was sitting in there and I had just seen something on Facebook and 20 million people had watched this video and shared it and everyone was saying, “This is so sad. I wish I could do something,” and I started thinking about this happens every day, millions of times a day and everyone seems to want to do something but there’s no way for us the target it in that moment. Usually, ideas don’t happen as eureka moments but this one kind of did.

Going back a little bit further than just that moment of ideation and creation was I had run a hoverboard company back home, about a year prior and it became the most successful hoverboard company in the State. The hoverboard being two-wheel self-bouncing devices that were pretty popular in 2015. I launched that company and run that company and it was doing really, really well. I remember, I was really lucky in it because I got to face a lot of things that many people don’t get to face and I have to face it when I was 17. I remember one day I was in my room and we just made a whole bunch of sales, right in the middle of the Christmas season and I was counting all this money to be deposited into our bank account and I remember thinking, “This is pretty boring. If this is what I’m going to do the rest of my life, if the end goal is to make cash that I can buy useless things with, it’s just a waste of my time.”

I think that we all have an opportunity to do something bigger than just that. I am of firm believer that we should use the things we’re passionate about in a way that really benefits the world. Now, let’s not say that other projects don’t but it’s just something that I was really lucky enough to kind of brought to my attention and face at 17. I knew that in that moment, I had decided that the next project that I wanted to do would be a social venture, without a doubt. I knew that I loved business and I was in love with the business process but I didn’t want the end goal to be profit so I wanted to launch a business that really help the world.

Going back to one of my first points was I think that over the next 20 years, it’s going to be one of the most interesting periods of time that we’ve ever seen. I think that a lot of things are coming to a point in the next 20 years, whether it’s clock-ticking on climate change or the incredible racial tensions and things that have been bubbling up in our country, all of the debates that we’ve been having like resources running low. I think that a lot of things are coming to the head definitely in our lifetime and those problems, I think there are massive opportunities for you to actually do something that really helps a lot of people, not just solves a problem for the minutiae of people who have 98% of the problems in their life already solved.

I think that there’s massive opportunity to really help others to increase social standing and bring people onto the same page and empower people all around the world that isn’t just focused on who’s the 1% of rich Americans who can afford to buy our [inaudible] product. I think that it’s really, really important that we target problems that are bigger than things that we traditionally face in business. I know that’s definitely not an easy thing and most businesses like that will fail, potentially PocketChange included obviously. But I think that there is nothing more important than giving that a shot.

JAMEY:  I’m really impressed and this big idea and it’s great but I’m also really impressed that you had the background and the experience and the resources to put this together into a real company at age 19. You talked about loving business. I’d like to hear a little bit more about your path into business and entrepreneurship and some of the other projects that you’ve worked on previous to this.

REYN:  Sure. I guess technically the very first entrepreneurial venture I did was a lemonade stand when I’m six years old, I think. A lot of people can relate to that but I vividly remember, I did one day of the lemonade stand and I remember vividly learning about cost of goods sold because I made all this money and I was super excited and my parents were like, “Now, you got to pay us back for the cups and pay us back for everything,” and I was like, “Oh, man. This isn’t fun.” I did one day of that lemonade stand and I was like, “I can do that but it’s not my full potential,” so I hired a bunch of my neighborhood friends in my community and they actually ran a lemonade stand and I was the marketer for the lemonade stand. I went to the local pool and I gave out like little pieces of paper that said, “Come outside and get 25¢ off of our lemonade,” or something like that.

I remember running around and getting the business more into a legit business and I wish I could say it turned into some multimillion dollar lemonade franchise because it did not —

CORALINE:  Lemonade.io.

REYN:  Yeah, exactly. Lemonade.ly were now a tech startup. That was my very first venture into the business world. I was always doing entrepreneurial things but I’d never known that I was entrepreneurial until 8th grade. When in 5th grade, I tried to do a break dancing class and charge my friends a nickel, which was not super profitable. Then I tried to trade currency in 7th grade. I was always doing things that were entrepreneurial but I never knew that that was a legit path that I could go down until my mom bought me this book called Start it Up by, I believe her name is ‘Kenya Rajins.’ I’m not sure I’ll go in and get that [inaudible]. If anyone wants to read it. It’s an incredible book about getting started.

She got me that book and I remember reading about it and saying, “There’s all of these people out there that this is what they do full time. They get to run businesses and bigger than anything I’ve ever dreamed about. They get to have tens of thousands of people on their team all working together towards a goal and everyone is serving a function that’s crucial to the business and it’s beautiful.” I think business is one of the greatest art forms in the world because it’s so difficult to get two people to work together, let alone 10,000. It’s pretty incredible.

I remember reading about that and I was like, “This thing is legit,” and then I started an online business. I sold my old Legos. I figured out I had eight giant bins of Lego. I was a huge Lego nut as a kid. I made stop-motion animation videos and I love Legos. I was like, “I no longer want these Legos and I want to give that to other people because I love them so much.” I figured out that there was a missing piece in the eBay market, where if you package them up in 100-piece sets and put a mini figure in each of them, they made awesome stocking stuffers. I did that, I wrap each one and I put a sticker that said, “Love, happiness and Legos,” on it and sold eight bins in, I think a month or two. Then started needing some more supplies so I started going on Craigslist and buying other people’s lots and packaging it in a smaller lots.

Actually, I started buying my competitor sets and breaking them up into smaller sets and selling them and earning more, which is pretty funny. Then I got into a whole bunch of other businesses, buying and reselling things on Craigslist, which I found a lot of fun. Then I scaled out and eventually, built a Lego mini-figure company where we make custom mini-figures and package them in sets and we’re selling thousands of them. That was really fun and then the hoverboard company and now, PocketChange.

REIN:  You talk about having 10,000 people on your team and I think that’s a wonderful sentiment. But the traditional model of business, the way it works is it’s a hierarchical top-down, almost totalitarian structure, where people get told by the people above them who get told by the people above them what to do. I sense that that may not be how you want to do things. Is that correct?

REYN:  Yeah, that’s definitely correct. I want to put a qualifier on that. I think that 10,000 people can’t be reporting to one person, obviously but I’m a big believer that good things don’t happen by somebody telling you to do them. They happened by everyone being super invested in it. I think the best companies really, really understand that and really value every single person on the team. One thing we do at the company that a friend of mine just told me about and we adapted it in two hours was we don’t call anybody employees. We call team members or changers for PocketChange.

My real belief is that everybody has something to offer and siloing people like you’re marketing so you can look at tech or you’re tech so you can look at sales or you’re accounting or whatever it is, really misses out on some really hidden talents that people have. For example, at PocketChange, it’s obviously not 10,000 people. We’re a team of six people but at PocketChange, we were putting together a pitch for the Denver Startup Week actually and I’m traditionally the pitch person. I’ve won all the pitch awards and that’s definitely one of my strong suits.

But one of our people on our team came out and it was like, “I think you should word it this way,” and it was perfect. It was exactly what I was missing. That wouldn’t have happened if it was like, “You’re a tech so tell you manager to tell their manager and tell that manager to get it over and send an email or whatever it is.” I think that the best businesses can come when there’s a real cross disciplinary interaction that happens between people. We try and do that at PocketChange. It’s obviously real easy when it’s six people and we’re all can hop on a Skype call together. It’s a lot harder to 10,000 can hop on a Skype call together. But I want to try and build businesses in ways that that make sense for.

CORALINE:  I did some consulting for Starbucks, I guess maybe 10 years ago now, some tech consulting and I was really impressed by one of the things they did. First of all, similar to what you’re saying, everyone at Starbucks was, I believe they call them partners. They actually did a thing where regardless of your position at the company, even at the VP or CEO level, you had to work a certain number of hours every year at one of the stores doing the job. I was really impressed with how people at every level, regardless of their area of specialization: be a tech or marketing or what have you, had intimate knowledge of what happened at the store. They were super focused on making the people at the stores efficient and happy and in turn, making customers happy. I think it’s really valuable kind of baking that in your culture. Do you have any plans for how to kind of codify clarify that so that, if hopefully as PocketChange grows, you maintain that culture of cross-pollination?

REYN:  Yeah, definitely. We do a couple of things right now and I want to keep them super involved as we grow as a company. Some of this was stolen from my incredible mentor at a company called ‘Full Contact’. His name is Drew. He’s really helped me a lot and I’m like, “How you go about doing this?” We do a couple of things. One is we have every week with weekly stand ups where everyone talks about what they’re working on and everyone else can put in their two cents and they can bounce ideas around the room and all that kind of stuff, any issues that they’re coming up with, all of that.

Then also, charity selection is obviously a big part of our business. We’ve talked about that a lot. Everyone in the team, primarily head of technology to our head of marketing, all of that, we all go and we all are going to be working in choosing charities for parts of our job. I think it’s crucially important that everyone on the team can justify exactly how we go about doing that and people are a lot more unified if we can understand like, “I understand this issue because I ran into it as well when I was doing it.”

Obviously, I’m not a technical person so I can’t hop into Mark’s code — Mark is our head of technology — and try to understand everything that he’s doing but what I can do is I can have a conversation with him during our weekly stand up about the issues that he’s facing and see what I can do and how I can understand those issues better. As a team member, I can help in whatever way. Maybe there is something that I heard about that I was like, “I read something somewhere,” and he goes, “That’s perfect. That’s what I was looking for.”

Every week, we have this weekly stand up where people bounce around what they’re working on and the issues that they’re facing and everyone hears about it and puts in their two cents and debates and all of that. Then everyone goes through and does the lowest, more grind part of our business, which is the charity selection side. Then we also want to incorporate as much as possible, a roundtable discussion about vision and all of that stuff, into what we’re doing. I am the founder and CEO but that doesn’t mean that I’m the only one with good ideas at the company. By no means is that what that means. We try and incorporate that into everything that we do.

REIN:  One of the things that I’ve always wanted to try to do is to bring sort of anarchist-organizing principles into business. It’s very easy to do it when there are six people or 10 people but the harder questions are what do you do when there are 500 people, how do you organize that in a way that isn’t hierarchical and bureaucratic? There’s a bunch of prior arc here that might be interesting to you, one of the concept is a syndicalism. Basically, people get together and form temporary, voluntary function based teams and then they federate responsibility and organize it a higher level by setting delegates and things like that.

REYN:  I really, really like that and we’re still figuring out. We don’t put a ton of thought into it because we are six people but it’s something that I think is potentially one of the most important parts of the business.

REIN:  There’s an essay by Colin Ward called ‘Anarchism as a Theory of Organization.’ That was published in 1966. You can find it free online and you should read it and see what you think.

REYN:  Awesome. Thanks. I will.

CORALINE:  Rein H, I’m curious. How do you see that working in practice, say I have a tech company of 100 people and hopefully, I’m doing something for social good. How does that syndicalism actually work in practice?

REIN:  I think one of the questions always is how do you take groups of individuals and give them a common purpose and manage their work at a higher level. The answer is we don’t really know. We can barely do it in a hierarchical structure as it is, given how many companies are failing to do that. But the basic idea is that the role of a CEO in a company is a function that the company needs. It doesn’t make you the master of the people that you work with.

There are functions that are necessary to organize and provide structured of a company that don’t require you to be put into a dominance relationship with other people in the company. They’re just a function that has to happen and someone who is good at that function should be elected to do it. It could even be a small team does that and members rotate in and out. There are ways to organize that don’t just grant the privilege of royalty to whoever happens to have the title of CEO at the time. For me I think, the four fundamental principles are organization should be voluntary, it should be based on function, it should be temporary and it should be as much as possible small. When you need to build bigger things, you will let the members and you delegate responsibility in the same way for a period of time, for a particular purpose.

CORALINE:  I love that. I want to be in an organization like that.

REIN:  Me too.

REYN:  I know that Jeff Bezos has a great rule, the ‘Two Pizza Rule.’ If your team can’t be fed by two pizzas, it’s too big. I think that’s exactly what you’re talking about and it’s great.

REIN:  Yeah. Some of this goes back to human nature and tribal sizes and the number of relationships we can hold in our head with other people because it’s a non-linear thing. The power set of all of the people is how many different relationships you can form at any one time. People have said like 150 people is the most you can have in a village before people don’t know each other and things like that.

JAMEY:  I am really impressed that you have this background in business or turning a profit is such an important part of that culture in many ways. Then you took that were able to say, “Turning a profit isn’t the most important thing for me. I want to do something important.” I’m serious if you have any advice for other people that are in business and entrepreneurship, maybe have existing companies and how to integrate social entrepreneurship into what they’re already doing, if that makes sense.

REYN:  Sure. I think that one thing that’s really great that a lot of companies can do relatively easily is as much as possible, create something of a space for people to share new ideas. But then once you do that, make sure that all of your employees take maybe three days out of a year or a week out of a year to go volunteer with local organizations. If employees and team members went out into the communities and volunteered and saw problems in their communities firsthand, they could bring some of that back to the business and say, “I just volunteer at a recycling organization and for our company lunches, we use all plastics. Maybe we can convert and we’ll make that and then we become a little bit more green.”

I think one great policy that people can have is make sure that everybody at the company really gets down to the community and sees real problems that are happening. Then the other thing is, I think if it’s a shift in how a company operates, it really has to come down to the leadership team of that company, setting the example so you can’t come out and say, “We’re now a green company. We’re now a socially responsible company,” and then the leadership doesn’t follow those practices. I think it’s really crucial that leadership, not only follow common understanding and common practice around social issues but also that they have an understanding of the issues that they’re passionate about and they are wanting to solve a brand that I think does it really well.

We work with a lot of brands that are socially conscious. It’s one of the ways that we actually make money at PocketChange. But one brand that I think does it immensely well as Stella Artois, the beer company. Their founder is really, really understanding and really care about clean water so they recently just started a partnership with Water.org, on a multimillion dollar donation partnership and we could talk about charity selection and all of that for the rest of time but the core intent of that was the founders understand that this is a major issue. They understand that their business is uniquely situated to be able to set an example on the market for a company caring about clean water and they all came from the leadership pairing with Water.org.

I think a leader setting that example for the rest of their team and saying, “As a company, this is who we are. We believe that we can use our business to do good as well as make money. That’s what social entrepreneurship is. If it comes from leadership and if it comes from, also every team member who is going out to the community and seeing the problems that are there and seeing how their business might be able to help tackle that, I think then you can really set up your organization for amazing and awesome socially-conscious things.

CORALINE:  I would argue that you cannot be a green company, you cannot be a socially-aware company because these sorts of things are not things that you are but they’re things that you do.

REYN:  I love that.

CORALINE:  I think it’s easy to make claims and claims require certification and certifications require bureaucracy. I like to say that a value that you hold but don’t act on isn’t really a value. It’s at best aspirational and at worst, it’s a pretense.

JAMEY:  I think, also people sometimes get very attached to these words that they’ve used to describe themselves, such that even if a value is, like an aspiration something they want to do, people are sometimes too quick to be like, “I did a good job and now I’m done,” rather than continuing working on that and valuing it and devoting yourself to it in your life.

CORALINE:  Ethics and awareness, they shouldn’t be nouns. They should be verbs.

JAMEY:  I agree.

REIN:  There’s a concept in systems thinking called, ‘the purpose of a system is what it does.’ The idea there is it doesn’t matter what you claim the purpose of the system is, what you actually have to look at is what it’s doing and then you’ll know what it’s designed to do. You can be a company with all of these values and Coraline is saying, “If you don’t act on those values and that’s not the purpose of your company. The purpose of your company is something else.”

CORALINE:  Reyn, I’m curious, how far along are you in launching PocketChange and is there a beta program that people can take advantage of now? If so, what’s the process for that? How do they get that button on their Facebook feed?

REYN:  We just launched a real close beta and we launched that in mid-June, actually in the end of June and gather a lot of awesome feedback about it but realize that we have a lot more work to do as we’re just talking about. We don’t currently have a product in market that people can download. What they can do is they go to PocketChange.social. There’s a ‘Get PocketChange’ button, right on the home screen. They can click that and put their email in and we should have a product in the next few months.

We’ll do everything that we really wanted to do. We will be launching early access beta in the next few days that won’t really do what we wanted to do but will allow users to create PocketChange accounts and get the process started. If anyone out in the Greater Than Code community is interested in doing that, just go to PocketChange.social and click ‘Get PocketChange’ and we’ll let you know when we are ready to have some people to hop on the program, start testing it and giving us awesome feedback.

CORALINE:  Yeah, please do let us know and we’ll share with our listeners when that goes live because I think that’s really worthwhile. It’s definitely something that people and our listening community would be very interested in. As an implementation question, not technical, don’t worry, are you in collaboration with Facebook on this or is this something that you’re adding on in a third-party plugin way?

REYN:  We’re starting as a Google Chrome extension because not only does that allow us to over land on top of Facebook but once someone has a download and once we have our technology built, we can instantly go over to Twitter, to any news sites, to Google search results, to email, to anywhere that someone browses. We’re starting as a Google Chrome extension because integrating with Facebook is real difficult but once we prove ourselves, we’re also trying to get mobile by making mobile extension.

Then also integrating with a lot of other areas that people see content that inspires them. We’re currently talking with Flipboard and Pocket — two big news apps — about integrating our platform there and then a couple of other smaller social medias that would be perfectly situated for it. We’re also in discussions of how to get that naturally embedded into their platforms but we still have a lot of work to do on our product. We’re starting as an extension just because it allows us to super easily and quickly over land on top of everything. But the end goal is to integrate into as many platforms as possible.

We’re still going back and forth between whether we would want to get acquired by Facebook and be Facebook exclusive or whether we want to remain cross-platform which is the real distinct point for us. We go back and forth but right now, we’re a browser extension.

REIN:  I want to ask as a company whose goal is not profit, first are you structured as a nonprofit or are you structure as a corporation?

REYN:  We’re structured as a public benefit corporation.

REIN:  So a B corp?

REYN:  Actually, it’s a separate entity. B corp is a certification that you get. It’s really expensive and there’s a lot of great B corps but many companies will just get that certification to look good but a public benefit corporation means that you have a dual focus of profit and for your stakeholders and then also social capital.

REIN:  The question I want to actually ask is what is it like trying to get money from VC and other investors as a company that structured like that and doesn’t have a strong profit motive as some other companies? Also, what advice would you give for other entrepreneurs who want to move towards doing stuff for social good?

REYN:  In terms of gathering VC, I can’t speak super and up about it because we’re not currently actively raising. I’ve talked to a lot of VCs and we have a lot of interest but we’re keeping the door shut on VC money right now. I think venture capital can often kill a company before it really gets off the ground because you don’t know what you’re doing yet. But in terms of actually raising venture capital money, I think investors do want to do good but they also care that their money comes back and it comes back more.

Social entrepreneurship is beautiful because you’re not a nonprofit. You’re a for-profit company that just understands that there’s other problems to be solved out there. In terms of raising that money, it’s pretty similar to traditional for-profit companies, in terms of having really good financials and having a plan that makes sense. But then it’s also comes down to reaching out to the right investors. In Colorado, we have a lot of social venture capitalists that want to invest in these types of companies so we can harness them.

Then also for social entrepreneurship, there’s a lot of grant money out there and grant money is pretty awesome because you don’t have to give up any of your company to get it. There’s some pretty incredible things out there for companies that are trying to do good. I would say just Google it and reach out. Oftentimes, grant writers will write grants for free and take a percentage of whatever grant you get so it makes total sense to reach out to any grant writers in your area and see if there’s any Angel groups that are socially focused. In Colorado we have a couple. Back home in Hawaii, we have one. There’s a pretty decent chance that there’s at least a small community somewhere, wherever you’re located that will allow you to raise money in that way and have investors that understand that your business plan is not to IPO in five years or to get acquired in five years. It’s to do something bigger and also make money.

REIN:  And then what would you say to someone who maybe doesn’t have much experience with entrepreneurship or maybe does but only in the more for-profit areas that wanted to get into this sort of thing, instead?

REYN:  I would say, speaking to first to people who have done entrepreneurship before, one of the biggest things that you’ll probably have to face is that it’s harder to get honest feedback from people. People don’t generally like to ‘hate’ on social ventures so it’s a lot harder to get real, honest critiques. One way to go about doing that well is to really set up conversations in a way that’s like, “We want you to tear this idea apart and that will get better.” That’s one thing that a lot of for-profit to more social enterprise companies have to face.

But in terms of people who have never really done entrepreneurship before or are more in that boat and want to build something socially conscious or something along those lines is in my opinion, I think it’s pretty equally difficult to launch a for-profit company and a social entrepreneurship company. A problem is a problem so definitely there are problems that are easier to solve than others. But a lot of social entrepreneurship, if you can spend the time to understand the issue and talk to the people that can understand the issue, a solution is a solution. Whether that’s applied to rural agriculture or whether that’s applied to email, it’s a very similar process in terms of talk to the people that really understand it, talk to your customers that would use it or your users or your clients or how will you break it down and then go out and start building it. Entrepreneurship is hard but there’s no reason why people can’t spend their time and their energy trying to do something in a more impactful way than just more traditional entrepreneurship.

REIN:  As you may know at the end of the podcast, we like to talk about our reflections on what we’ve just discussed and anything we may want to leave with our listeners or what’s been really meaningful for us. For me, I’m really interested, especially in these social good entrepreneurship businesses. I think there may be an even more of an opportunity there for actually functional horizontal organization. One of the places I would suggest to go to look into that is there is a socialist who was also a management cybernetician named Stafford Beer and he wrote about organizing companies and businesses like they were neural networks, for instance. Some really interesting stuff.

CORALINE:  A couple of things that struck me while we’re talking. I love what you said about a culture being defined by the least as something that you’ll tolerate. I think that that applies in all cultural contexts, whether you’re talking about a startup or a group of friends or a conference or an organization or a Slack community. I think that’s a really interesting of turning idea of values on their heads and not just saying, “We believe in these things but also we stand united against these other things.” I think that’s a really valuable thing to think about.

The other thing, I’m not a big fan of entrepreneurship because I’ve been on the receiving end of bad entrepreneurs way too often but I love your idea that entrepreneurs should solve their problems and not pain points. I think one thing that the business-minded among our listeners should consider and even the non-business people among our listeners can consider is identifying what you defined as wicked problems. Maybe we don’t need another startup for food delivery but maybe we need to work on some of the larger issues that are facing our communities and our culture. I think identifying those wicked problems is a really valuable first step in actually doing some good in changing well for good. I thought that these points are really, really interesting and thank you for sharing this.

JAMEY:  I was really struck about this idea that all charities are not created equal. When we want to donate to a cause that we care about and give our money, it’s because we want to make an impact on something that we think is important. I think there’s a bad feeling associated with realizing that you gave your hard-earned money to a charity and finding out that it went to something that you disagree with. That could be high CEO salaries that we’re talking about or it could even be a charity that is then taking money and giving it to something you actively disagree with.

There’s been a lot of stories about, for instance like the Salvation Army supporting anti LGBT stuff and if you don’t know about that, you might be giving money to something that you don’t want. I think this idea of going through, finding out which charities are using money efficiently, which charities are using money to the things they say that they’re using it for and which charities are really making a difference is like a huge service.

Even on its own, I think that something that really struck me as amazing and needed and why don’t we have this before and I’m so glad that we’re going to have this. The fact that that’s only part of what you’re doing is so amazing to me. I think that you really hit on a really important thing that had been floating around maybe in a lot of people’s heads but you were able to bring it into a concrete problem and a solution. I’m really impressed by that and I thank you for doing that and for coming and telling us about it.

REYN:  Of course. I think it was actually you, Coraline that said this but a value that isn’t acted on is at best an inspiration and is at worst a pretense. I thought that was a really, really interesting concept and something that I want to go back and reflect on with the team because every company obviously has or should have a set of core values. But I think that it’s very easy to let those slip in the day-to-day operations of something. I really want to go back and talk with everyone and see how we can go about making sure that everything that we say we do, we will do. I think that’s crucial for trusting an organization.

Another idea that I really, really like was this idea of non-dominance based work relationships. I think that it’s something that’s really crucial and I don’t really know how you implemented it at scale but I think it’s something that we need to be able to figure out if we want to be able to grow in a way that makes sure that we value everyone who is a part of the company. I want to go back and talk with everyone and see how we can go about figuring out how to implement that into all parts of our businesses.

If anyone has any ideas or wants to brainstorm or help on a Skype call or grab coffee if you’re in Denver or something along those lines, whatever you would like, I’d like to open up the dialogue and conversation around those ideas. You can e-mail me Reyn@PocketChange.social. I’m sure Mandy can put it in the show notes or something along those lines. Those were my two biggest takeaways that I really got out of this.

CORALINE:  Reyn, it has been an absolute delight talking to you. I think you’re very inspirational. I’m very impressed with your acumen and with your devotion to doing some good in the world and I think we need a lot more of that so thank you so much for coming on.

REYN:  Thank you. It’s been a pleasure. Thanks for having me.

CORALINE:  With that, we will wrap up. Thank you everyone for listening and we will talk to you again in a couple of weeks.

 

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