Gary Stewart

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Gary Stewart is the founder of FounderTribes, a startup dedicated to diversity and matching businesses or entrepreneurs with the right investors and mentors to help them lead their business in the right direction.

Impact Hustlers’ Maiko and Gary actually go way back with them crossing paths in Wayra, a technological innovation hub that they both worked in. Even before that, Gary took up law in Yale and shortly after school, he went to Spain for some time off post-graduation. He also shares how his first entrepreneurial stint, which was in real estate, began. He briefly was a professor at the IE Business School in Madrid and was then recruited by Wayra to be its Managing Director, and off to the UK he went.

Realizing that the corporate world was not for him nor was working for someone else, he wanted to chart his own path and at the same time diversify entrepreneurship, and so he created FounderTribes. For £9.99 a month, FounderTribes provides its clients with an impressive network of mentors and coaches who will then guide their clients and their companies to becoming investor-ready, by which time they will match them with the appropriate investors based on their stage and vertical.

Compared to the US where Gary could easily find investors, he noticed the stark contrast in the UK where, despite him graduating from an Ivy League university, he experienced difficulty finding investors. This, he said, was partly due to race and also due to class. Thankfully, events like Pitch@Palace helped Gary meet the right people who were willing to give him a chance.

He also gives great advice for young entrepreneurs who are just starting out on their entrepreneurial journey, and in 10 years, Gary says he envisions proportional representation, that everyone gets a fair chance regardless of race, gender, class, or whatever it may be. 

Gary’s key lessons and quotes from this episode were:

• “I think there's a point when you realize, "I'm more interested in that bit and solving that challenge," than on the day-to-day of, ‘Can I help corporates to figure out what's going to be their next big product?’” (10:07)
• “In Spain, I feel like I was more investible than I am in the UK, because in Spain, I was an American first, and I think in the UK, I'm black first, and I didn't quite realize what that meant.” (18:34)
• “Because when they talk about gender diversity, usually, they're only talking about white women diversity. They're not talking about black women diversity, brown women diversity.” (22:23)
• “If we create these economies of scale, then the price of entry is a lot more accessible for everyone, which then democratizes entrepreneurship for everyone.” (29:58)
• “Remember, you're not the first person to blaze a trail, and you're not going to be the last, so if you're going to get into this game as a black person or brown person, know that it's about blazing a trail that requires a certain level of a thick skin, but just get on with it.” (35:50)
• “All you want is equity. You don't want overrepresentation. You just want everyone to have a fair shot.” (45:40)
• “FounderTribes is about race. It's about gender. It's about socio-economic. It's about geography. It's about all of the "isms" that keep us locked out.” (46:12)

In this episode, we also talked about:

• Yale, Spain, and Gary’s first business venture (2:41)
• How Gary got into entrepreneurship (6:22)
• What made Gary leave Wayra to start FounderTribes (8:09)
• Facts and numbers on funding according to gender and race (14:06)
• Finding investors in Europe vs. finding investors in America (16:05)
• The problem with gender diversity (22:33)
• Lessons for entrepreneurs (25:17)
• How Gary worked the system to his advantage (31:42)
• The problem FounderTribes solves (37:13)
• The world in 10 years according to Gary (45:26)

Transcript of the episode

Maiko Schaffrath  00:02

You are listening to Impact Hustlers, and I am your host, Maiko Schaffrath. I have made it my mission to inspire the next generation of entrepreneurs to solve some of the world's biggest social and environmental problems. And for this reason, I am speaking to some of the best entrepreneurs out there who are solving problems such as food waste, climate change, poverty, and homelessness. My goal is that Impact Hustlers will inspire you, either by starting an impact business yourself, by joining the team of one, or by taking a small step, whatever that may be, towards being part of the solution to the world's biggest problems. This episode today is a really, really exciting one, because I got the person here that actually is the reason that Impact Hustlers even exists. So, a few years ago, actually, I worked at, it sounds very long, but not that long ago, I worked at Wayra when Gary was the Managing Director at Wayra UK. You, Gary, were actually one of the reasons, or the main reason I would say, for me to actually take the plunge and actually start this podcast. And now, we're about 65-70 episodes further down the line. And finally, we're getting to catch up on the podcast, so thanks for joining.

Gary Stewart  01:29

Thank you for inviting me.

Maiko Schaffrath  01:32

Finally, yeah. Well, you finally left Wayra, and you actually got back into the entrepreneurs, so now, it's a really good time as well to talk, I think. So, I'd love to talk about that. You got back to your entrepreneurial roots and have been working on some really great initiative and product, and we'll talk about that in a second. But first, before we do that and talk about FounderTribes, I'd love to go way back. You grew up in the Bronx, and then after school, you went to Yale Law School, became a lawyer, and then eventually became an entrepreneur. Give us a bit of an overview of how you initially started your entrepreneurial journey and what got you into entrepreneurship initially.

Gary Stewart  02:33

Yeah, so well, thanks for inviting me on the podcast. It's awesome, and congratulations on all the success. I mean, I think, to go way back, as you said, I went to Yale College and Yale Law School. So, in the US, it's kind of like a sequential experience. I had to do four years undergrad and three years law school, and it's competing at a very high level for seven years, and I thought, "Well, I'm going to come to Europe, and I'm going to do it for a year or two," because a lot of people in my class in law school had taken a year or two off. I was like, "Okay, I'll take a year or two off I deserve it." Somehow or another, I ended up in Spain, and I loved Spain. I thought it was awesome. It was completely the antithesis of like New York. It was so slow, and everyone was so nice. You didn't make much money, but you could live by the beach. And so, there came a point where the law firm that I was working at said, "Well, if you want to stay here effectively, you have to take a local salary," because I was still getting paid an American salary, just not the full American salary, "Or you have to go to London," and I was like, "Neither of those two options sound really interesting." So, necessity being the mother of invention, I then started a business, and that first business was an offline business, offline real estate, because it felt secure, until I realized, "Whoa, this business stuff is a lot of work." And on top of it, if you don't have recurring revenue, it's really expensive. And then, I was like, "Okay, so my second business is going to be one where it's going to be digital, because I want it to be able to grow really, really huge," but I needed to have some sort of recurrence to it. I don't want to have to start every month from scratch like when you're selling real estate. You sell one property; next month, it doesn't mean anything what you sold last month, and I was like, "That's not really the lifestyle for me." So, that was how I got into entrepreneurship. I guess the second time, I'll give you that story later. It was just because I don't like to be told what to do, and when there aren't other choices, I make them for myself. That was what I did in Barcelona. I said, "Well, the choice I want is to stay here. Let's see how that's going to happen. What are the opportunities? What are the needs here that I think I can solve for?" I looked to the United States to see what were the technological solutions that were being offered, and there was a company called Trulia that was getting a lot of buzz. It was right after the Google IPO. People were looking to see how search technology would invade other spaces, and I said, "Okay, well, this looks like a good space to be in, property search engine. I had done the property bit in my first company, so I understood the space," and that was how it started, and then we raised $4 million for the business. Eventually, we would sell it to an Australian publicly listed company. But in 2010, when the economy looked a little bit shaky, global recession or whatever, the Great Recession, that was when I thought, "Time to go back to America," but then a friend said, "Well, no, don't do that. Come to Madrid and start teaching at IE Business School," and I did that for a year. And then, Telefonica saw what I was doing, the approach that I was taking, which was very much, "Let's focus on being super practical, helping people to raise money," and they're like, "We're doing something called Wayra, and you'd be the perfect person to help us to set it up." And then, they asked me if I wanted to take a job with them. I was like, "No," then they came back, and they said, "Here's a little bit more money," and I said yes, and that was how I got into the Wayra situation. So yeah, that's a journey how I went from not even knowing really what entrepreneurship was to then all of a sudden starting a company, selling a company, teaching about entrepreneurship, and then working for a large corporate with entrepreneurs.

Maiko Schaffrath  06:09

Got it. What eventually got you into entrepreneurship? Was it the opportunity or do you feel like you always had that itch since growing up?

Gary Stewart  06:21

Yeah, no. This was a thing that I realized afterwards, which was that when I was in college, there was a moment where some Yale faculty member had invited a guy named Charles Murray to come speak at Yale, and Charles Murray is famous for writing a book called The Bell Curve, at least in my eyes, which argued, among other things, that black people were genetically inferior. And I was like, "I don't really understand why you guys are inviting this person. Don't you ever feel like you need to invite some black people as well?," and they were like, "No, no, no. It's all about free speech." So, I was like, "Well, if it's about free speech, I'm going to set up an organization where we're going to invite black people that may have points of views that are not entirely mainstream to come and speak, so that we have the full marketplace of ideas, not simply the ones that you guys have decided to support," and the university supported me. They gave me some money. They said, "As long as you keep it safe, we'll keep funding you," and they allowed me to use the university,  the big halls, and stuff like that with the big churches, because some of the events we had, Jesse Jackson had like 1,200 people. And at the time, I didn't think about it as entrepreneurship. I just thought about it, "I don't like that, and I'm just not going to stand for it, so I'm going to create something that is an answer to it." And it was only years later, probably once I started at Wayra, that I started connecting the dots that, "I probably have something in me that whenever I see a problem and I don't like it, I just can't rest until I solve it, and I'm not going to let somebody else solve it. I'm solving it myself."

Maiko Schaffrath  07:52

Got it. And then, you spent actually a few years as Managing Director of Wayra in the UK and eventually left. What was the itch in you that made you decide to leave and launch what you're working on now?

Gary Stewart  08:06

Well, I think it was two factors. One is that was the first time I had ever worked in a corporate. I mean, law firms aren't corporates, and I've worked only in a couple of law firms. And other than that, I've been in entrepreneurship or academia, whatever. It was really interesting, but then I started to realize that you're not really able to chart your own path. Again, it's not really dependent always on what you're able to do or what you want to do. Usually, there are other factors at play. And going back to what I said before, I like to do what I like to do, and if I see that there's a problem and I can solve it, that's the direction I'm moving in. And so, it became clear to me that my long-term future wasn't going to be working for someone else. It would have to be working for myself and focusing on the problems that I felt compelled to solve. The problem of "How do you ensure that the playing field is level for entrepreneurs?" was one that had always interested me. It's part of who I am, part of my DNA. Even at Wayra, it wasn't only about race. The other day, someone tried to call me out on social media that I hadn't invested in black or brown founders. And then, I went through it, and I had never looked at it before. I must have invested in somewhere between five and 10 black founders, which apparently is more than a lot of other people have done. And then, I had invested in probably the same number or more brown founders, Indian founders, Muslim founders, whatever. So, I realized that I was always pushed to, "I'm going to make this happen." And then, at Wayra as well, we then tried to extend it beyond central London, because I also felt it wasn't right that everything was only in central London, so we expanded Wayra to Manchester, to Oldham, to Tottenham, to all these different places. So, again, that was the part that was in me that said, "Okay, this is what's really driving you." I think there's a point when you realize, "I'm more interested in that bit and solving that challenge," than on the day-to-day of, "Can I help corporates to figure out what's going to be their next big product?" And so, there was a moment where two big events happened. Stacey Abrams, the US politician, came to visit and at the end, I organized a visit for her and just took her around to some of the stuff I had been doing and she's like, "I see what you're trying to do. If you ever need my help, let me know." And I was like, "Well, that's really cool." And then, because I was like, "What is it that she's seeing that I'm doing?," because I hadn't really connected the dots. I was just doing. I wasn't strategizing. And then, the second was I was talking to a guy named Daniel Korski at Public and he was like, "Well, what do you want to do?" And I was also talking to another guy, Orio formerly from Now the Capital and he was basically like, well, again, some people have asked me, "What do you want to do?," and I was like, "I don't really know," and they're like, "But you seem to really like this diversity, democratizing entrepreneurship thing," and then I realized, "Okay, well, you're right. That is my passion." And then, when an opportunity came to leave Wayra and to start this new company, I jumped at it, because I was like, "At the end of the day, I didn't see myself spending the next 20 years helping corporates to figure out how they're going to find the next iPhone." That wouldn't be the legacy that I wanted to leave behind. Being the person that solved the problem of how to diversify entrepreneurship and making it open to everybody, regardless of race, gender, and all of the other legitimate factors, irrelevant factors, that was something that would justify my time and attention a lot more. So, that explains a bit about the shift. It was, one, "I'm not a corporate person," I realized that, and then two, "If I'm not a corporate person and I have to do something else, what would that be?," and I realized it'd be something I was passionate about, and this is the thing that I'm passionate about.

Maiko Schaffrath  08:11

Got it, yeah. I think everybody that knows you and the London technical system, like Daniel was saying as well, what you just said is you were a huge advocate for diversity, and through your work at Wayra, you actually made it happen rather than just talk about it. Some of the numbers are really daunting, and I think over the few last few years, a lot of the diversity numbers in the startup ecosystem, especially if you look at the UK, but pretty much anywhere in the world, they are not really improving much. Sometimes going up and down. Some factors are improving. But overall, I just had a look again at a report that Atomico does every year, and they looked at the total amount of venture capital funding going to black and multi-ethnic communities, which represent 14% of the population in the UK, but they get about 1.5% of venture capital. So, it's completely unevenly distributed. If you go into mainstream funds websites and go to the team page, you see some of the least diverse teams you can imagine. I mean, I don't need to tell you these things, but just for people to refresh. And then, actually, last year, you wrote a piece for Forbes. You're a Forbes contributor after the murder of George Floyd was taking place, and you also talked about the metaphorical knee in the neck, not just in the specific case of the killing, but also for black people in general, but also specifically for black founders and black people in the tech ecosystem. Can you tell us a bit more about that? What's the knee in the neck for black founders? What does that look like right now? What's the experience that founders typically have in this unequal ecosystem?

Gary Stewart  14:06

Yeah, so I mean, I think just to refresh the numbers, it's something like black founders in the US get 1% of funding despite being 40% of the population. Women-led companies get 2% of the funding even though I think women are about 52% of the population. In the UK, black founders get 0.24%, and I think they're somewhere between 4-5% of the population. So, the numbers are pretty dire. There are other characteristics that are also treated with suspicion like class as well. If you went to the right schools in the US, it'd be like Harvard, Yale, Stanford. Here, it would be Oxford, Cambridge, or a prestigious business school, then you're fast-tracked in, even though when you look at it, and this is a big difference between the US and the UK, it's something like 92-96% of VCs in Europe or the UK have never created a startup and never worked in a tech business, but yet these are the people that are supposed to tell us what we're doing incorrectly and evaluating our pitches in less than five minutes and telling us that it's garbage and it's uninvestable when the vast majority of them have never actually backed successful startups. So, this is the context that we're inhabiting, and I think that's unfair for founders across the board. I think that it sucks to be a founder in many parts of the world. It's a really terrible and a very difficult experience and you only do it if you love it and are driven by a passion to solve a problem, or because you're somehow crazy. But in general, it is the passion that's driving you, and a lot of these folks are obstacles. The only thing that happens is that when you're black, you just have an additional obstacle. And if you're a black woman, then you have an additional two obstacles. Maybe a black lesbian has an additional three obstacles. But, the point is that there are additional obstacles that are thrown up beyond the traditional difficulty of being an entrepreneur. What I found is that in Europe, people don't really want to invest in black founders. I mean, even people who I thought of as friends or I had supported in one way or another when I was at Wayra, I know who they've invested in, I know the caliber of companies and the ability that they have to invest money, whatever, and I could tell you, honestly, that some of these people I went to and I was like, "Hey, I'm raising money for my startup," and they would change the topic. I wasn't entirely sure, because I'm like, well, I knew the stage that they invested up because remember, I would be co-investing with them on a lot of deals. I knew their track record. I knew everything. And so, I just couldn't really understand what was going on. And then, one black VC said it to me this way, or a black person working in VC said, "The difference is that in America, people like to win, so if they see that you're a winner, you went to Yale, you have a good track record at Wayra, blah, blah, blah, blah, blah, then they're really excited to support you. In the UK, they don't value winning. They value class and some sort of metaphysical notion of your place in society and you're just not at that top class, regardless of where you went to school. You're black, and so you're just not the one that they're looking to. They don't care if you win or lose, really. It's just about some other value system," and that really opened my eyes. When I was in America for the last two months, well, it was November, December, I just saw how really different it was, because I just started to reach out to them, my friends at Yale, white people as well as black people but a lot of black people, and I started to realize that people were funding me. I would just talk to people and they were like, "This is a really great idea. Can I send over $10,000? Can I send over $25,000? Can I send over $100,000?" I was like, "Whoa, this is really quick," and I didn't have to jump through a whole bunch of hoops to get it. They were like, "You're really credible. Your track record in the space speaks for itself. You get stuff done. You're the kind of person we want to invest in," and the question I kept asking myself was, "So, why am I so investable in America even though I haven't lived there in 20 years, and then in the UK to be specific, it doesn't seem as if I'm that investable?" In Spain, I feel like I was more investible than I am in the UK, because in Spain, I was an American first, and I think in the UK, I'm black first, and I didn't quite realize what that meant. In Spain, it was like people were eager to give me money, it felt like, because, "Oh, he's an American and he went to Yale, so he's good." In some ways, the Spanish people have proven to me to be less racist than the British people just in the sense that my skin color doesn't seem to play as big of a role in terms of their ability to believe in me. It is complicated because at the same time I'm saying all of this, there were people that you wouldn't expect to have been very supportive of me that were, like Prince Andrew was very supportive with the Pitch@Palace. That really opened up a lot of doors for me. Most of the doors that I've had opened for me in the UK are largely thanks to that relationship with Pitch@Palace, and Amanda Thirsk, and the Duke of York, so I will always be grateful to them, because otherwise, I can only imagine what it would have been like for me here. And yeah, that's the way I think about it. I don't think that the UK is a really great place to be a black founder. Not sure it's a great place to be a founder, full stop, but I think that to be a black founder here, it feels like a very, very limiting experience. I think that part of what the article was saying is to first address the problem. Stop pretending that there is no problem, so if I'm telling you that this is my experience, and it's worse than Spain, and it's worse than America, and I can give you two counterpoints, like I raised more than a million dollars in Spain, and it seems like I'm raising more than a million dollars in the US, and it doesn't seem like I can raise more than a million dollars in the UK, but I'm the same freakin' person, so what is going on if not the system? Don't then tell me, "No, no, no. We don't have those issues here." I think that what happens in the UK a lot is that people try and silence you, because they prefer not to talk about it, and they think that you're a rabble rouser if you talk about it, which is the reason why now, on my LinkedIn, I'm always talking about it, because I'm like, "No one is going to silence me." The issue is there. The British Business Bank did a report that acknowledged that it's there. The question is, now that you know that there's a problem, what are you going to do about it? Because if all we do is keep saying that there are problems and to go back to your point, we never get solutions, and we never get changed, and I'm sick of that.

Maiko Schaffrath  20:52

Let's talk about that, and let's talk about their problems and solutions. I think one quick thing I want to focus on as well that you mentioned in the same piece as well is the problem with existing diversity initiatives. Like in the last few years, you've probably seen a lot of diversity initiatives pop up, some of them probably better, some worse. But what's your issue with a lot of the existing diversity initiatives that are out there, especially in the UK? 

Gary Stewart  21:18

Well, if you go back to the analysis that I just gave, which is that at the end of the day, it's not about whether I'm a winner or loser. It's about whether or not I belong to the right class, do I have an Oxford and Cambridge degree, do I speak with the right accent, did I go to certain schools or whatever. Then, the system benefits women from those backgrounds much more than it will ever benefit women who are not from those backgrounds as well as minorities who generally didn't have the opportunity to come from those backgrounds. So, the diversity systems that you have right now reinforce the status quo, because what it does is it really privileges white women from upper class backgrounds. If you went to Oxford or Cambridge, if you speak with a certain accent, if you went to certain public schools or whatever they call them, then you are a part of the system and then, of course, you're "the daughter of," you're "the sister of," you're "the wife of," so it makes sense that you should also get some benefits, maybe not as much as the white guy but definitely more than the brown people and definitely more than the brown women. Because when they talk about gender diversity, usually, they're only talking about white women diversity. They're not talking about black women diversity, brown women diversity. So, the problem that I have with diversity is that it's been co-opted by a group that is largely a beneficiary of the existing system, and so all of the benefits are going there. You hear people talking about the Gender Diversity Code or Investing in Women Code or whatever they call it. Why can't there be an Investing in Black People Code or Investing in Brown People Code or Investing in BAME, if that's the term that they want to use? But to say BAME is controversial, but to say women is not, some of the same people who are making the claims that we don't need to focus on race are people who have been the beneficiaries of systems that have been trying to promote women in politics, for example. So, I don't really understand the dissonance or the disjunction. It doesn't make any sense, except that the system is willing to, and that's what I learned here, which is that the system here operates by different rules. It's not America. It's not Spain. And the rules are, if you belong to a certain social class or you're close enough into it, then you have certain benefits, and everyone else is meant to serve, and I'm just not really meant to serve anybody. I think, over time, it really does make me question, at some points, I'm like, "It would be better to go back to Spain or to go to America. I don't really see the purpose of being in the UK as long as I'm part of a system that I'm never going to be allowed to win in, and I can't even talk loudly about it, because that seemed to be rude."

Maiko Schaffrath  23:54

Got it. Well, now, since leaving Wayra, you've actually launched, or you're launching FounderTribes as we speak. I think next week, you're having a series of event to launch it. What's your approach on diversity and actually not just talking about it, but actually bringing about change? And how does FounderTribes and the product app that you're developing actually help overcome some of these challenges that you just talked about?

Gary Stewart  24:20

Okay. I'm going to get to that one little caveat that I'm going to make to a statement I made before is that the only thing I've seen is that the only people in the UK willing to invest in me are brown people or black people, definitely not upper class white people. So, I want to put that out there that none of my investors are what I would call establishment Brits. It's all been minorities who made a little bit of money and are willing to invest in me, and I think that's because they understand the problem that I'm going through and they see the solution as being one that they want to support. But that was a very interesting thing as well, because you would say, well, some of my angels are just normal middle class people; they're really putting their money where their amounts are. But the people who have presumably more money are just like, "Let's talk about diversity. Let's celebrate it. Let's do an article where I'm featured in it, but let's not actually do anything about it." I think them to go to what FounderTribes is trying to do, or what we are doing, we understand that there are three real buckets that entrepreneurs, especially people who are overlooked or underestimated, that they need help in. One is, you need to know what the rules of the game are. And if you didn't grow up in it, if you don't have really ready access to it because mommy and daddy were entrepreneurs or uncle Bib or whatever, then you need someone who's going to be able to sit you down. Are we playing chess or checkers? And if we're playing, what are the rules? What's the way to win? How do I hack the system to win? And I feel like a lot of entrepreneurs don't know that. They only find it out as a post-mortem after their businesses have failed. And on top of it, the journey is going to be even more difficult for them, so the likelihood of failure is even greater. That's the first bit. The first bit is, "Can we give people access?," because a lot of the terminology that we use, it's meant to confuse as opposed to meant to be accessible. Customer acquisition costs, lifetime value return, there are ways to explain this in really simple terms to anyone that they will be able to understand. I think that's the first part. We want people to understand what we're talking about, what are the rules of the game, and then we want to give them feedback about where they are in terms of being able to satisfy those different criteria. So, do you have a very clear problem definition? Is the market size really appropriate for this sort of a risk? What's your business model? What's your marketing strategy? Is the timing right? All of those sorts of questions that I think you learn once you're in entrepreneurship, that you don't necessarily need to know if you're not in entrepreneurship, we want to make sure that people have access to that and that they get the feedback from people who know what they're talking about and not from people who just want to opine for a living. I think the second bit is, then, we want to give people access to mentors and coaches, and we don't want it to be based only on their own individual networks, so what we're creating is a database of mentors and coaches. Coaches, we mean people whom you might have to pay to help with a marketing strategy but that we've vetted, so that you have access to those folks, and it's curated, and you don't have to waste a lot of time on the internet, and quality is more or less assured. So, that's the second bit. And then, the last bit is that we want then, once you have proven that you've done the work, you've mitigated the risks, you've met with the mentors, you've met with the coaches, then, if the community says that you're ready to be introduced to investors, then we'll introduce you to investors, and we'll curate a list of investors so that you know who's the right investor for your stage, for your vertical, and also some feedback about each of the individual investors. So, we can make the whole system a lot more transparent and also a lot more accessible. We don't take equity. The whole point is that entrepreneurs have very limited time. We don't want to waste your time. We don't want to take your equity. We just want to help you. It costs £9.99 a month, so it's very accessible for anyone that wants to get the service, but we also then give you access to everything that, right now, the system works to keep you from having.

Maiko Schaffrath  28:06

Got it. So, you're basically putting a lot of support into the palm of people's hands through an app that otherwise, very often, the support that you're talking about is the type of support that we would organize at Wayra, that accelerators would organize, early stage accelerators. But even there, obviously, there's limited places. There would be cohorts of 10-15 startups. There's limited impact you can have, because you just can't have hundreds and thousands of startups at the same time. So, it's a really interesting approach to make this more scalable through an online solution.

Gary Stewart  28:42

Exactly. You nailed it. I mean, I think the numbers are something like there are 33,000 companies per year that get funding anywhere from pre-seed to IPO. There are about 32,000 that are in incubators or accelerators in the UK and US, but there are 4 million startups, tech startups. In the US and the UK alone, there are about 30-something million entrepreneurs, or 37, if we don't only focus on tech, and remember that tech is actually only a very small portion of all businesses out there, because the other thing that we are trying to do is not only focus on tech businesses. We want all businesses to feel supported. And then, when you look at the global number, there are about 582 million entrepreneurs out there. So, look at the numbers: 32,000 that get funded from pre-seed to IPO, 582 million entrepreneurs. What we're saying is, if I don't have to go to a movie theater anymore to watch a movie, if I don't have to go to a travel agency to be able to buy a ticket, why do I have to go to a physical space in order to have people help me at their disposal at a location that may or may not be convenient to me and then take 10% equity for the benefit? We can do this in a lot simpler way by using technology to create economies of scale. And then, if we create these economies of scale, then the price of entry is a lot more accessible for everyone, which then democratizes entrepreneurship for everyone.

Maiko Schaffrath  30:06

Got it. For entrepreneurs that are starting out, I think it's really interesting to hear from your journey. I mean, you're somebody with some really good entrepreneurial experience and as you shared, even you struggled to raise funding, not because you don't have the credibility, but actually, because there seems to be systemic issues. What's your advice to entrepreneurs that are early on in their journey, maybe they're starting their first company, they come from a diverse background, they're hearing this and they're like, "Okay, Gary can't even raise funding, what am I going to do?" Obviously, FounderTribes is one solution for them, but what else can they do to navigate the ecosystem?

Gary Stewart  30:51

Well, I'm going to take back one thing I said, because as I was thinking about it, I was like, "No, there have been a few white men that have let me in," and these are usually, I think, white men that kind of feel that they also aren't part of the system, even though they are part of the system. Because I think that when we say white men, we assume all white men are created equal – not necessarily. There are people who also feel like the system isn't really working 100% for them, even if they've been beneficiaries. They understand both sides of the coin. So, people like Chris Topman who, I think he didn't go to college, but he did really well and then he's now the managing partner or general partner, one of the two, at Notion. There's another guy named Alex Johnson, who I actually met at Pitch@Palace, so he's very, very elite in that sense, but he's also still really, really down to earth. He was another one that helped me to get funding. So, I think the first thing is remember that even though this system sucks, you can find really good allies, and if you can work with them, so you can't really broad-brush it and say everyone's evil. It's really understanding and pinpointing where the harm is, but then also remembering that even though it's really difficult, there are people out there of all races and backgrounds that are willing to support you. It just might be a little bit more difficult to find them, and you need to be open to having them help you. So, I'm going to take back a little bit of what I said, and I'm going to say that the system definitely is ingrained. But even within the system, there are always these pockets, these allies that, for whatever reason, decide that they want to help you maybe because they understand what it feels like to be not fully embraced. That's number one. Number two is the lesson from the story is I still raised the money; you know what I mean? We're going to end up raising more than a million dollars, and I've done it more or less in two to three months. I just had to find the people who would believe in me and know that it might not be the traditional route that everybody else would have to go through. I couldn't just go to all the VCs. Even the ones that I knew, they weren't going to believe in me, so I had to then create my own way, and it is possible. And in fact, most minority people know it's not just possible, it's necessary to always chart your own path. You can't depend on the traditional pass when you're black, or brown, or otherwise minority. And three is just to say, just don't give up because the thing is, what I found is, yeah, it's a little bit more difficult, but as long as I held myself true to the rules of the game, which is I'm solving the real problem for a large market, and the time has come to solve this problem, and I have a way to monetize it, then, yeah, it might be a little bit more difficult, yeah, there might be a little bit more noise, but I'm still going to do it, and I'm still confident that I'm going to knock it out of the park. So, I just think the last message is, you know that you have to work twice as hard anyway, so get used to it. This is just another space where you have to work twice as hard. Don't come into this game thinking that the rules that apply to maybe a white upper class person is going to be the rule that applies to you, but let's be honest. It's never been a rule that applies to you. So, try and find your tribe, try and find mentors, try and find investors, try and find allies that are sympathetic to you and operate from that base. And just remember that you have to know the rules of the game if you're going to play it. If you don't know the rules of the game, there's no chance that you're going to win.

Maiko Schaffrath  34:09

Got it. So, you're saying basically seeking out allies that do have a position of power or privilege that can help you support your open doors along the way, but I guess what you're also saying is leave those behind that don't want to support you. Don't try to convince those that are still stuck in the past in some way. Go ahead and do it.

Gary Stewart  34:34

Yeah, my whole thing is like Beyonce said, you know I'm a big Beyonce fan, "Always stay gracious. The best revenge is your paper." The reason I like Beyonce so much is she's now one of the biggest artists in the world, but it didn't start out that way. There are a lot of people that underestimated her. They said she was too fat, too black, "Let's focus on Britney Spears, Christina Aguilera," whatever, and she just kept working hard and not falling into other people's games and then just doing what she knew she had to do until now, she's one of the biggest artists in the world. I think that's the model for success that I try and follow which is, yeah, there are people who are naysayers, and they don't want to support you and whatever, I'll prove them wrong. I've been proving them wrong my entire life. I'll prove them wrong again. And at the same time, there are a lot of people who've been super supportive of me, and I'll reiterate, of all races, allies have been among the best supporters of me. My black community as well has supported me, the gay community, all of them, but just have a home base, people that you know are going to support you no matter what, up or down, sideways, they're always going to support you. Understand that you may need to be a little bit creative in the way that you seek funding. Understand that the list that maybe someone else uses might not be entirely applicable to you. You have to create new lists. So yeah, but at the end of the day, remember, you're not the first person to blaze a trail, and you're not going to be the last, so if you're going to get into this game as a black person or brown person, know that it's about blazing a trail that requires a certain level of a thick skin, but just get on with it.

Maiko Schaffrath  36:05

Amazing advice. I think what you seem to be doing or what's so exciting about FounderTribes is, really, everybody can access this. Anybody, whether that's somebody that's just coming out of high school but has been entrepreneurial their whole life, they can download the app and actually start working on the business, educating themselves. And what you're doing for FounderTribes, it seems you're really building up this funnel of data as well where everybody has the chance to be on it and use the platform. But you're then collecting the data, obviously, on how successful they are, and you then can use that to showcase their success to potential investors and resources that they can access. Is that maybe a good summary of how you're trying to bring about systemic change by giving people the opportunity, but then actually showcasing, "Hey, look. You're missing out if you're not going to invest in these people coming through this initiative or program?"

Gary Stewart  37:13

Yeah, it's that, but it's also, going through the questions that I think you have to ask, it's also realizing that the market has shifted and right now, there is a tremendous demand, more so again in the US than in the UK but I think it'll get here as well, to support diverse entrepreneurs. Everyone kept saying, "There's no pipeline. There's no pipeline," so part of what I'm doing is I'm showing that the pipeline does exist. Maybe sometimes, you've got to brush it up a little bit. But you know what? At Wayra, we had to brush it up for lots of people. It's not just the issue that's for minority entrepreneurs. All entrepreneurs come in a little bit rough, and you have to clean them up. That's why they go to accelerators, or get angels, or whatever the case may be. But minority folks don't always have the luxury of being imperfect, so part of what we're trying to do is to say there is a huge pipeline. We are going to work in terms of helping people of all different backgrounds, at scale, to get access to the resources that they need to then be able to compete. We're going to teach them the rules of the game. We're going to give them the mentors and the coaches that they need to be prepared to compete. And when we think that they're ready, then we introduce them to the investors, so the investors don't have to worry about saying, "Oh, my god. I'm going to all of these events to support women, or minorities, or gay people, and the companies that I'm getting are just not good, but I'm doing it because I really am trying to be a good person." No, that's not we're trying to do. The companies that we're going to show you are going to be amazing, because we've been working with them at scale again, and I think that the big difference in what we're doing, someone basically said, "What you're doing is you're creating an accelerator in your pocket." Yeah, the same way that Amazon created a retail store in your pocket, or Spotify created a music library in your pocket, or Kayak created a travel agency in your pocket. What I'm trying to do is I'm trying to say the world that I believe exists. It still exists mostly offline. And if every other industry has understood that it needs to go online, what are we waiting for? And since no one else seems to be ready to take this industry online which, to me, has been the attendant benefits of democratization, by making it more accessible at scale at a lower price point to more people, then I'm really happy to be the first person to do it. And it's a mission-driven startup, to go to the point of your podcast, but there's also a lot of money because you know what? Finding a way to help 582 million entrepreneurs, even if I only get a percentage of those, and get them to pay me a subscription fee the same way they would pay Spotify, that's a lot of money. And so, I'm doing it because I want to change the world, but let's be clear, I'm also trying to make a lot of money.

Maiko Schaffrath  39:48

That's the sweet spot that I'm most passionate about. I've got two more questions for you before we wrap up. One is, let's say, for people listening to this that are in a position of power, that they can influence things, maybe they're investors, maybe they're part of the tech ecosystem, and they listen to this, and maybe they're familiar with some of these issues or they don't really know where to access this deal flow and stuff like that, what's your advice to them? How can they be part of this? Maybe concretely with FounderTribes, but also more broadly, how can they make a change to the industry?

Gary Stewart  40:26

So, we divided our users or stakeholders into four categories. I would say the first thing is to realize this is going to happen. I think that when you have US corporates putting $35 billion behind us and the US government putting $30 billion behind the ideas specifically supporting black founders, we're not even talking about gender and everything else, this is just black, mainly brown founders, by which in the US, I mean, well, it's basically Latino. This is a huge thing that's going- there's a transformation that's happening. The US will become majority minority, and that means that all of the policies are going to be very different in the way that we address diversity. I think that has a trickle-down effect on the rest of the world. So, what I would say is that if you're in the UK or in other markets, realize that this is a trend going forward that's not going to go backwards. You can try to stay against it or go against it, but it's going to happen. That's my fundamental belief, and I find myself at the vanguard of it, because I have been at the vanguard of it for a long time, and I can see exactly where it's going to end up. And what I'm saying to everyone else is get on board or if not, it's going to happen with or without you. It's really that simple. Second thing that we're seeing, and you can see this in the event that we're organizing for next week, we've seen that there are four different buckets where this change is happening, or four different areas. The VCs, it's happening there, because in the US, there are a lot of LPs, pension funds, large universities that have stakeholders who are minority, and they're increasingly feeling the pressure or just the moral imperative to diversify, that are now saying that they will not invest their money in funds that are not diverse or that do not invest in diverse portfolio companies. So, that's number one. That's where the pressure is coming. Part of it is this whole ESG thing. Part of it is as a response to the George Floyd stuff. So, that's number one. If you're a VC and you're not doing it for the moral reason, you should do it for the economic reason which is that, increasingly, this is going to become a condition of funding, at least if you want to get money from big institutional investors that are primarily based in the US, and we're seeing that a lot of VCs are moving in that direction, because they understand how this is going to play out. I think the second bucket that we're seeing is, in universities, a lot of universities are realizing, my alma mater is Yale, but big universities like Yale are realizing that if they don't get on board the tech movement, they're going to lose a lot of their best students to universities that are really focusing on entrepreneurship. And if they want to attract diverse founders or diverse students, then they need to deal with that intersection, so the second is the university bucket. The third, I think, so we're seeing diversity there and initiatives there and universities really making a very clear push both towards diversity and entrepreneurship. I think the third that we're seeing are governments. So, among the partners that we're talking to are nonprofits or governmental agencies in places like- in countries in Africa, in India, in New York City, and in London, because at the end of the day, people realize that something needs to be done here as well, and it needs to be done at scale. It's no longer acceptable to say that we're going to support 10 entrepreneurs a year at the cost of a million or 2 million dollars and hope that one of them becomes a unicorn. The question is, particularly post-COVID and post the macro economic disruption that we're facing with rampant unemployment, is how are you going to upskill and make a whole lot of people prepared to be able to compete in a digital economy? And a lot of the jobs aren't coming back, so you have to prepare people to create the jobs for themselves. And I think the last group that we're working with are the corporates. The corporates, basically, what they see is that they are missing out on a market opportunity. Again, in the US, there are a lot of black people, let's say, for example, that won't go with big traditional banks. If the banks show that they are now willing to reach out and support minority communities, maybe the minority communities will feel more comfortable banking their money with these banks, so it's a win-win solution. I think my larger message is, with FounderTribes, we're already working with each of those different groups of partners. We have partners that are governmental partners, partners that are universities or student associations at universities, partners that are VCs, and partners that are corporates. This is happening. One thing I will say is that most of them are American-based, and I think that over the next year or two, we'll see it happening in the UK. So, if you are an institution that falls into one of those four buckets and you happen to not be in the United States, I would say the writing's on the wall. Don't continue to think, "Oh, that's an American problem. It's never going to happen here," particularly if you depend in any way, shape, or form on an international market or on investment communities that are largely based in the United States. That's what I would say.

Maiko Schaffrath  45:14

Got it. My last question to you would be, if you think about the next 10 years with FounderTribes, how does the world look like in 10 years if you succeed on your mission?

Gary Stewart  45:26

That all you're really trying to get to at the end of the day is something that looks like proportional representation. If black people are 14% of the population in America, there's no reason that they should only be getting 1% of the venture capital funding. So, all you want is equity. You don't want overrepresentation. You just want everyone to have a fair shot. You don't want anybody to be given a handout, like that's not at least the way I approach it, but you don't want people to have unnecessary obstacles. Because if even someone like me that has, in some senses, I grew up in the Bronx, but I have lots of privileges, finds the system so difficult, imagine people who don't have all the privileges that I have. And I feel like that's not the way the system can operate much longer. And again, going to the idea of inevitability, because I don't think it's only about race. FounderTribes is about race. It's about gender. It's about socio-economic. It's about geography. It's about all of the "isms" that keep us locked out. And you can just see that if politicians don't want to listen, if corporates don't want to listen, you're going to have more insurrections on the Capitol in the United States. You're going to have more things like Brexit. You're going to have more populism, because people aren't going to continue to allow elites to lock them out of the system and then expect them to just smile and say, "Thank you." Over time, the best thing that you can do, if you are an elite, is to try and make sure that the system is at least palatable to the majority of people within your population. The moment that it becomes clear that, as they are used the Trump elections, the system is rigged against us, that's the moment that I think things turn potentially ugly. So, my message is, let's make sure that people know that they have a fair shot, because if we don't give them that possibility, they're going to try and take it, and that's when things get ugly.

Maiko Schaffrath  47:11

Got it. Thank you very much for joining me today. It's been inspiring to catch up again and also to see what you're working on with FounderTribes. I'm excited to join one or two of the events you're doing next week as well and just listen in and see your launch this and get this off the ground. I can only imagine how far this will come in the next few years. So, all the best with it and thanks very much for making the time today for recording this.

Gary Stewart  47:40

Thanks for the interview.