Building and growing a startup is difficult, but pivoting said startup into something new and then achieving the same growth is even more difficult. But it is not impossible.
Phaedra Ellis-Lamkins, founder is CEO of PromisePay, and Jessica Matthews, founder and CEO of Uncharted Power, both have experience doing this. In TechCrunch Disrupt, they shed some light on their respective paths, though a bit similar.
PromisePay, formerly known as Promise, had its beginnings as a fundraising reform startup that aimed to reduce the number of people detained behind the net simply because they can’t afford bail. Now, it is focused on helping people pay for parking and traffic tickets, court fees and child support.
“We really had this huge existential crisis,” Ellis-Lamkins said. “We at Promise are focused on ending mass incarceration and decreasing the number of people in prison. So we started to be very successful and we sold very well. And what we basically understood is when we created the efficiency, has made the systems more efficient for incarcerating people.It has not made them more efficient at what had been our wrong assumption, which is that if the system is more efficient, it will decrease the number of people in the system. so we made a decision that growth was not consistent with who we were as a company.Then I turned to our investors, which is difficult when you earn money and I said, this is not the path because I don’t think so. that this is a long-term path ”.
She told investors that there are already people selling their technology to law enforcement, but what Promise wants to do is free people up. It became clear to her that she sold to the wrong people when she spoke to a client who said the difference between them and her was that she cared about people in the criminal justice system and they didn’t. Ellis-Lamkins told investors she would stop selling them in jail and in jail, and offered to return her money to investors.
Instead, he began to watch as people ended up being incarcerated.
“And fortunately, that has stimulated growth, but I won’t just be a society that grows on the backs of poor people and blacks and browns, because there is a better way,” he said. “But it was scary at the time to leave a market where we were making money.”
Fortunately, he said, none of his investors had a problem with his decision.
Matthews said he had a relatively similar experience with his company, Uncharted Power, which had its beginnings as Uncharted Play. Her company’s first product was a soccer ball that harnesses the energy that could power a lamp after a few hours of playing with it. He later integrated those tech inserts to power mobile phones.
But after lifting his AA series round for Uncharted Play, Matthews realized his company needed to go all-in on the infrastructure. She has thought about the ultimate goal of her company, which is to provide people with the infrastructure they need in their lives. She didn’t see a way to do that with soccer balls.
“So we’re good at doing these things and pushing and climbing out, but when you have that balance not only profit and impact but impact because you know you’re a member of the team that you’re trying to serve. For me, it was sitting down and saying this is it really solves the problem even if it happens ”.
Matthews said he realized it wasn’t. So it meant moving away from products that carried millions and had 64% gross profit margins, Matthews said.
But it all paid off. Last year, Uncharted Power raised additional funds from an investor who validated his thesis for the future of energy infrastructure.
“That moment was huge for us,” he said.
Matthews and Ellis-Lamkins also had some other gems that are worth sharing on imposter syndrome and measuring success. Here are some other highlights from the conversation.
On the syndrome of impostor and representation
It seems that technology has failed so significantly in investing in people they don’t know and who have failed in growing companies because of it. So I think our obligation is to help ensure that we are not alone.
It’s not the imposter syndrome, it’s the representation syndrome because I feel exactly the same. When we lifted our Serie A, the immediate thing I thought was, ‘Oh, man. I can’t lose these people’s money. ‘This is huge and if we don’t work, it’s not about us, it’s about all the other people who seem to me.
To measure success
I think part of what we need to measure is how technology improves our society in general, a measure of success. I think if we measure success, we shouldn’t be alone, we could make a billion dollars or have a company worth a billion dollars if the consequences are greater than the real benefit and so I think it’s really important.
Let’s get rid of the term “social enterprise”. It sucks. Enterprise is a business. One problem is one problem. We create a value system based on problems. There are some problems that are more important than others. And knowing that means we need to support and sustain the founders who get that more than others, and then beyond.