The art of pivoting with Phaedra Ellis-Lamkins and Jessica Matthews

Building and growing a startup is hard, but pivoting said startup into something new and then achieving that same growth is even harder. But it’s not impossible.

Phaedra Ellis-Lamkins, founder and CEO of PromisePay, and Jessica Matthews, founder and CEO of Uncharted Power, both have experiences doing this. At TechCrunch Disrupt, they shed some light on their respective, yet somewhat similar, paths.

PromisePay, formerly known as Promise, got its start as a bail reform startup that aimed to reduce the number of people held behind bars simply because they can’t pay bail. Now, it’s focused on helping people make payments for parking and traffic tickets, court fees and child support.

“We actually had this huge existential crisis,” Ellis-Lamkins said. “We at Promise are focused on ending mass incarceration and on decreasing the number of people in jails. So we started to be very successful and we sold very well. And what we realized fundamentally is when we created efficiency, it made the systems more efficient at incarcerating people. It didn’t make them more efficient at what our wrong assumption had been, which is if the system is more efficient, it would decrease the number of people in the system. And so we made a decision that growth was not consistent with who we were as a company. So I went back to our investors, which is hard when you’re making money and said, this is not the path because I don’t think this is a long-term path.”

She told investors there are already people who sell their tech to law enforcement, but what Promise wants to do is liberate people. It became clear to her that she was selling to the wrong people when she was talking to a client who said the difference between them and her was that she cares about people in the criminal justice system and they don’t. Ellis-Lamkins told investors she was going to stop selling to prisons and jails, and offered to give investors their money back.

Instead, she started looking at why people are ending up incarcerated.

“And luckily, that spurred growth, but I’m just not going to be a company that grows on the backs of poor people and Black and brown people, because there is a better way,” she said. “But it was frightening in the moment to abandon a market in which we’re making money.”

Thankfully, she said, not one of her investors had a problem with her decision.

Matthews said she had a relatively similar experience with her company, Uncharted Power, which got its start as Uncharted Play. Her company’s first product was an energy-harnessing soccer ball that could power a lamp after just a few hours of playing with it. She later integrated that tech intro strollers to power cell phones.

But after raising her Series A round for Uncharted Play, Matthews realized that her company needed to go all-in on infrastructure. She thought about the ultimate goal of her company, which is to get people the infrastructure they need in their lives. She just didn’t see a way of doing that with soccer balls.

“So we got good at making these things and pushing them and scaling them out, but when you have this balance of not just profit and impact but impact because you know that you’re a member of the group you’re trying to serve. For me, it was sitting down and saying is this actually solving the problem even if it’s successful.”

Matthews said she realized it wasn’t. So that meant walking away from the products that were bringing in millions and had 64% gross profit margins, Matthews said.

But it all paid off. Last year, Uncharted Power raised additional funding from an investor that validated her thesis for the future of power infrastructure.

“That moment was huge for us,” she said.

Matthews and Ellis-Lamkins also had some other gems worth sharing about imposter syndrome and measuring success. Here are some more highlights from the conversation.

On imposter syndrome and representation 

Ellis-Lamkins:

It feels like tech has failed so significantly in investing in people they don’t know and missed out in growing companies because of that. So I think our obligation is to help make sure that we are not the only ones.

Matthews:

It’s not imposter syndrome, it’s representation syndrome because I feel the exact same way. When we raised our Series A, the immediate thing I thought was, ‘Oh, man. I can not lose these people’s money.’ This is huge and if we don’t work, it’s not even about us, it’s about every other person who looks like me.

On measuring success

Ellis-Lamkins:

I think part of what we should measure is how does technology improve our society in general, a measurement of success. I do think that if we measure success, it should not just be, I could make a billion dollars or have a company that valued at a billion dollars if the consequences are greater than the actual benefit and so I think that’s really important.

Matthews:

Let’s get rid of the term “social enterprise.” It’s bullshit. Enterprise is an enterprise. A problem’s a problem. Let’s create a value system based on the problems. There are some problems that are more important than others. And knowing that means we need to back and support the founders who get that more than others, and then beyond that.

Startups – TechCrunch

Learn how to scale social impact startups at Disrupt with Phaedra Ellis-Lamkins and Jessica O. Matthews

Hundreds of founders have launched their startups with an aim to change the world. But uttering the words “making the world a better place,” isn’t the same as doing it or doing it well.

Phaedra Ellis-Lamkins, founder of Promise, and Jessica O. Matthews, founder of Uncharted Power, have not only launched companies that “do good,” the pair have shown how to properly and successfully scale their businesses. We’re excited to announce that Ellis-Lamkins and Matthews will join TechCrunch on our virtual stage at Disrupt 2020 on September 14-18 to offer guidance to other founders and entrepreneurial hopefuls who want to build social impact companies.

Ellis-Lamkins has a long history as a labor and community organizer, as well as a businesswoman. Her labor and community organizing experience includes a stint as the executive officer of the South Bay AFL-CIO Labor Council, an organized labor federation representing more than 100 unions and more than 110,000 members in California’s Santa Clara and San Benito counties. She was also executive director of Working Partnerships USA, a coalition working to address economic disparities in California’s Silicon Valley. She also served as the CEO of the anti-poverty organization Green For All.

Prior to co-founding Promise, Ellis-Lamkins ran revenue and operations at Honor. She previously worked with the musician Prince and led the effort to secure ownership of his masters. Ellis-Lamkins is currently a board member of the Tipping Point.

Matthews founded Uncharted Power at the age of 22. The company, which she leads, has developed technology that can interconnect decentralized power applications such as residential solar, electric vehicle charging stations and IoT sensors into one sustainable network. The goal is to bridge the power access gap between current grid and off-grid solutions. Her experience includes raising what was at the time the largest Series A round ever raised by a black female founder.

Matthews, a dual citizen of Nigeria and the United States, has a degree in Psychology and Economics from Harvard University, an MBA from Harvard Business School, and is listed on more than 12 patents and patents pending, including her first invention of the SOCCKET, an energy-generating soccer ball, at the age of 19.

Her success led to a White House invitation from President Barack Obama to represent small companies for the signing of the America Invents Act in 2012.

You may have heard that we’re taking Disrupt virtual this year, a move that lets us make the event accessible to more people than ever before while keeping everyone safe. Disrupt 2020 is scheduled to run from September 14 through September 18. Buy the Disrupt Digital Pro Pass or a Digital Startup Alley Exhibitor Package today and get access to all the interviews on our main stage, workshops over on the Extra Crunch Stage where you can get actionable tips, as well as CrunchMatch, our free, AI-powered networking platform. As soon as you register for Disrupt, you will have access to CrunchMatch and can start connecting with people. Use the tool to schedule one-on-one video calls with potential customers and investors or to recruit and interview prospective employees. If you act fast, you can even save an additional $ 100 during our flash sale that runs until Thursday, August 27 at 11:59 p.m. PT.

 

Startups – TechCrunch