Innovation and ideas are at the core of entrepreneurship, right? A lot of it comes naturally to us, but what would happen if we treated these things like habits to be practiced?

Today’s guest, Jeremy Utley, likes to say that innovation is a practice, not an event. Jeremy is the co-author of Ideaflow: The Only Business Metric that Matters, a General Partner at Freespin Capital, and an Adjunct Professor at Stanford’s d.school, where he teaches classes on innovation, leadership, and transformative learning. He also hosts the Paint and Pipette Podcast where he interviews the most innovative ventures shaping the world today.

In this conversation, he breaks down the art and science of innovation so that we can become better practitioners and come up with creative solutions that redeem broken parts of the world.

Episode Transcript

Rusty Rueff: Welcome back to the Faith Driven Entrepreneur podcast. It’s such a pleasure to have you here week after week. Thanks for continuing to give us just a little bit of time of your life. Innovation and ideas are at the core of entrepreneurship, correct? A lot of it comes naturally to us. But what would happen if we treated these things like habits to be practiced? Today’s guest, Jeremy Utley, likes to say that innovation is a practice, not an event. Jeremy is the coauthor of Idea Flow, The Only Business Metric That Matters. He’s a general partner at Free Spend Capital and an adjunct professor at Stanford’s d school, where he teaches classes on innovation, leadership and transformative learning. He also hosts the Paint and Pipette podcast, where he interviews the most innovative ventures shaping the world today. In this conversation, he breaks down the art and science of innovation so that we can become better practitioners and come up with creative solutions that redeem broken parts of the world. Let’s listen in.

Rusty Rueff: So, William, what have you practiced today?

William Norvell: What do I practice today? That’s a good question. I got up and did my workout this morning, so I guess I practiced some jump squats. That was the first time I’d ever done that before. Dumbbell jump squats. My trainer was like, grab 25 board dumbbells, squat down and then jump in the air. So that was a new practice.

Rusty Rueff: That’s pretty good. That’s pretty good. Yeah. I realized this morning as we were preparing for this podcast that there are lots of things that I do day in, day out, whether it’s my spiritual time, my workout time, you know, all of my work time. But I don’t really think about it as practice. I think about it as well. This is just one thing that I do. And then I do another thing. I do another thing. And if I think about it as practice, then I’m actually preparing for something for the future. And our guest today knows a little bit something about practicing something that’s really important, and that’s the practice of innovation. And we’re going to welcome in right now Jeremy Utley. We are so happy to have you on the podcast. We’ve been looking forward to this conversation.

Jeremy Utley: Yeah, likewise.

Rusty Rueff: Because you bring to our entrepreneurial audience something that everybody cares about and that’s innovation and you bring experience around innovation and your idea that, you know, innovation and creativity and entrepreneurship, you know, we can demystify it as art and help it become science if we want to. And we just think that’s awesome and we’re so happy that you’re here. And I’m going to let you just dive right into that topic and get us going.

Jeremy Utley: Yeah, practice. I mean, that’s one of my favorite topics, you know? No one would say they’re a pianist. If you said, Hey, tell me what you do. And you go, I’m a pianist. You’re really. When’s the last time you play piano? Oh, I took piano lessons when I was five, you know, Or I’m a swimmer. Really? When did you swim? Oh, I did swimming lessons when I was a kid. And, yeah, you know, we know if you’re not playing the piano, you’re not a pianist. If you’re not swimming laps, you aren’t a swimmer, right? When it comes to innovation, for whatever reason, and perhaps I’m, you know, enemy number one enemy of the state in so far as part of my life is running workshops. But for whatever reason, when it comes to innovation, if you ask someone about their innovation, what they talk about is a bootcamp or a hackathon or a sprint years ago, and that’s the proof. And they’ve got a LinkedIn badge, right? And it’s like, I don’t have a LinkedIn badge for piano or for swimming. Why do I have it for innovation. And to me, what I’ve seen is there’s this over association of innovation with events. And you know, at the d school I’m all about leveraging its brands or a hackathon or a workshop. That’s fine. But if those events are the extent of your practice, you’re in trouble. Just like Williams said, he was doing jump squats with dumbbells, which sounds superintendents. I did Renegade Rose today and I wasn’t happy about that. But, you know, just like all of us are sitting here right now, if I said, Hey, let’s do a 400 meters sprint, you know, unless Williams train doing that this morning, chances are it’s not going to go, well.

Rusty Rueff: I can do that.

Jeremy Utley: You’re ready? You’re ready

Rusty Rueff: Yeah, I’m ready. I’m a runner. And I just because.

William Norvell: I’m totally low.

Jeremy Utley: Ok. But that’s actually perfect, right? Why are you ready? You said because I’m runner. When’s the last time you ran? This morning. Okay. Yeah. So I would say we have a lot of corporate athletes, which is a generous term who are pulling [hammy], at the local track meet. Right. Because the last time they ran a sprint was in high school. Right. They show up at the track, meet in their, you know, Cheeto stained tracksuit and wonder why they’re not winning medals. But it’s because you’ve been sitting on the couch. It’s no wonder. Right. But there’s not a mindset of you’re not. I need to stretch. You know what I need to do training, you know. And for us at the d school, one of the big shifts that we’ve seen is unless you start to treat innovation or creativity as a capacity that can be built and nurtured and grown and attended to regularly, you’re never going to win the medal and you’re often going to pull a muscle.

Rusty Rueff: Yeah, that’s good, because as you said, you show up to the event and you have a practice. Don’t expect that you’re going to get great results, right? You’re just not going to get great results. Can you dive into the word innovation for us and your definition? Because I think sometimes what can happen is innovation gets sort of categorized into the tech world and think, Yeah, well, we have many entrepreneurs that are listening here who are very innovative, but they may have nothing to do with technology whatsoever.

Jeremy Utley: Yeah, I would just I would say simply, I agree it’s a bit of a distraction. It’s an effective solution to a problem, full stop innovations, an effective solution to a problem, and ideally, the best solution to a problem. Right? It could be technological, but as somebody who’s in h.r. A new, you know, recruitment strategy could be an innovation, right? That’s not a technology necessarily or even a market facing product per se. Somebody is in finance. A new expense reimbursement process or procedure could be an innovation, right. But it’s an effective solution to a problem. That’s an innovation. And a lot of times technological innovations get held because an entrepreneur has brought technology to bear in an area or on a problem that folks previously hadn’t considered bringing it to bear or it hadn’t been brought to bear as well. But I think there’s an over association of the kind of influence of technology in the realm of innovation. For me, innovation is really about effective problem solving. And anybody who’s solving problems, actually, if you realize that, as we say in the book, every problem is fundamentally an idea problem, it shifts your entire orientation to how you think about being effective at work.

Rusty Rueff: That I’m going to for our listeners, you just referenced the book, your book you talk about as idea flow, right? The book that you wrote.

Jeremy Utley: That’s right. Yeah. It came out last fall and it’s based on, you know, 12 years of leading the accelerators at the d school, leading executive programs and really seeking to build capacity in organizations all around the world and Israel and Columbia and Japan and New Zealand, helping organizations build a robust capacity to routinely develop effective solutions to problems are facing both internal and external.

Rusty Rueff: Ok I am going to turn it over to William right after this. But so you’ve got a mindset, right? You had folks who have the mindset that innovation is a practice and I got to always be practicing to get better. And then you have those who have the mindset that, well, it’s an event, I just show up. Do we learn the difference or is that innate or do we just, you know, stumble our way into it? Because clearly people have different mindsets and how do you pass that out?

Jeremy Utley: Yeah, I think ultimately it comes down to building a discipline and building attention. You know, I’ll never forget I remember very distinctly we were invited by a hardware company to do a leadership development program a few years ago so we’re working with a global leadership team. There’s hundreds of thousands of employees in this company and, you know, call it top 30 leaders, folks who report directly to the CEO are involved in this training. And we talk about foundational tools like interviewing customers, like brainstorming solutions, low resolution prototyping and experimentation, user testing, kind of foundational tools in the Innovators toolkit. And we were giving assignments to the leaders and we’re meeting every two weeks and we’re trying to give micro assignments, stuff that takes 30 minutes or less every two weeks. I’ll never forget we’re given the assignment to run an experiment. Mind you, we didn’t put any parameters around what it had to be or anything like that. Just any experiment is sufficient for our purposes, mostly because we wanted to see what does that word even mean and how does somebody go about framing an experiment and executing one without, you know, too much kind of guidance? And I’ll never forget this. A senior technology leader in Ireland, her name is Ann, it got to Ann we’re kind of going around the Zoom room and it got to Ann and I said, Ann would you tell us about your experiment? She said, Jeremy, it’s Wednesday morning here in Ireland and I’m on meeting number 32. When do you expect me to run my experiments? You know, and I really resonated with that. She had no space whatsoever. And what I told her was I said, okay, fair question. What’s your calendar look like next week? She said, It’s crazy. And I’ve got a hundred meetings, you know, all this stuff. You know, we basically got to the point where looking at our calendar a month out and I said, Now I want you to create a calendar event. She said, okay, what should I call it? I said, Run, experiment. And then I said, okay, now I want you to look a week farther out. She said, Okay, eyes wide open. I said, Great. Now block another calendar event called Review Data from Experiment. Right. And what I realized in that moment was, you know, the way I can conceive of it is like Tetris. You know, these Tetris blocks are falling. And, you know, if you think about it like they’re falling towards us in our calendars and our kind of Herculean task as managers and professionals these days is moving things around and fitting everything in. And our days are completely packed in a task like run, an experiment comes in, we go, Oh, where do I put it right? And we’re. Actively playing kind of schedule Tetris. And to me, what I’ve said is I know for sure if you take as a premise one, innovation is a low probability effort. Meaning what? Two, you need to run experiments to figure out what works. Robust experimentation requires ideation, right? Which requires three. You need time to ideate. Then therefore, it stands to reason not to be too much of a nerd here. But for do you need to wait until you know what the problem is to create space, to generate solutions and test those solutions? Because most people wait until they encounter a problem, then go, Oh, what am I supposed to do? I do not have any time to deal with this? You know, and you look at, you know, [……] Innovator’s, you know, Jeff Bezos, block two days a week in the early days of Amazon where he didn’t schedule any meetings. And by the way, people go, well, that was a startup at the time. I actually kind of checked just to make sure their market cap was 17 [x……] okay. At the time that Amazon is worth 17 times, Barnes and Noble, Bezos is blocking two days a week. So he control the Internet because he knows what innovation is only going to happen if I give it time. And I would say foundational practices. What time are you giving innovation? What time are you giving the practice of generating solutions to problems that are emerging? What time are you giving to running experiments to learn which of the solutions I’ve imagined are the best suited to the problem I’m trying to solve? Right? And that’s kind of an a priority consideration. You don’t need to know what the problem is to know that the answer is going to be generating and testing solutions. And yet most people are on their back foot, scheduling all meetings and never blocking time to kind of go on the offensive or be proactive about innovating. So it’s kind of a fundamental practice. So going back, I think I was just I like to trace the train back to the station. Rusty, you had asked about how do you shift from the mindset of, you know, an event to a practice. Part of it is becoming aware and a lot of times the pain is actually what allows somebody to realize they need to make a change. Right? And this pain of the quick fix wasn’t that quick and it wasn’t really a fix, right? Usually I encountered people like that who go, where do we go wrong? And it’s on the heels of an implementation disaster where the status quo approach to problem solving goes off the rails and they go, Well, what’s the right answer? I go, Hang on, forget the right answer. What’s the right approach to solving the next problem like this? And that’s really more of a systemic question about how are we undertaking the problem of solving problems?

William Norvell: That’s really good. That’s really good. And speaking of taking the train back to the station, sometimes some of my favorite questions, you know, it kind of goes without saying, but I want to let you say it. I feel like we skipped a little bit. Why is innovation so important to entrepreneurship? Just take us down that, in your view, for a second. So see, entrepreneurs listening like this sounds great, but is this necessary to build a business, to sustain a business, to change a market?

Jeremy Utley: Well, I would again, I think the word innovation is a bit of a distraction. And here’s what If you substitute the phrase effective problem solving for innovation, yeah, the question becomes a moot point, right? Why is effective problem solving important to entrepreneurship? Like no entrepreneur listening to this podcast thought? That’s a great question, right? They’ll go, That’s called my day job, dude. Like I’m solving problems all day long, right? And if you understand what I do, which we all do kind of anecdotally, which is you have to be a real nerd to have a favorite cognitive bias. But I am a real nerd and I do have a favorite cognitive bias, and that’s called the einsteinling effect. And the enisteinling effect is the human tendency to fixate on a solution. And here’s what happens with the Einsteinling effect. This has been demonstrated since the 1940s, even more recently at Oxford. What happens when a human is asked to solve a problem? The first plausible seeming pathway they latch on to? And two things occur when that happens. One, they cease searching for alternative solutions, and two, they become blinded to better possibilities. And so if you know, the quality of a solution has no correlation with when it arrives to you, which is to say your best ideas don’t come first. And what I would love for people listening to this podcast to take away is this simple phrase first idea, worst idea. Not that it’s actually necessarily empirically true, but our default bias is first idea, best idea. That’s actually that’s the way we all approach a problem. And whatever solution we got both implement let’s go right. And I’m an entrepreneur and I’m a you know, I do it quickly. Well, when you realize when you start reading as much research as I do, you realize there’s no correlation between when an idea arrives and how good it is relative to the rest of the ideas. There’s a fascinating paper called the Creative Cliff Illusion, where researchers studied the expectation of an individual problem solvers solutions. So they say, Hey, here’s an insight challenge or creative challenge. When do you expect your best solutions to come? And then they had them do a, you know, brainstorming activity basically to generate ideas. And one of the things that they found is most people had the expectation, what they called the creative cliff, that there’s this precipitous decline over time, that at some point your ideas become less creative, less good, etc.. And they called the paper the creative Cliff illusion, because it turns out there’s no cliff. Your creativity doesn’t decline. And in fact, many times you hit like a ramp and your creativity and the effectiveness of the solutions actually increases. If you know Asterix in the paper and if you go to the footnotes, you say, what’s the if? The extent to which someone’s ideas get better over time is primarily a function of the answer to this question. When do you think your best ideas will come? The person who says quickly has fewer and worse ideas overall. The person who says later has more and better ideas overall. And so they can have the biggest variable that affects the quality of ideas curve over time is what’s your expectation? And we realize that most of us, our default expectation is whatever idea comes to me first. That’s what I latch on to. That’s what I commission, that’s what I implement, etc. And it’s only when the wheels fall off down the line, I go, Wow, that actually wasn’t a good idea, that I realized there’s a problem with that approach.

Rusty Rueff: How much of that first idea, you know, Oh, that’s got to be my best idea is just comes down to intellectual laziness. Right. I just don’t want to push harder.

Jeremy Utley: Rusty it is a great point. It’s not just laziness. It’s actually it turns out there’s a psychologist named […..], who dubbed this term cognitive closure. And what he found is one of the most psychologically distressing phenomenon to human beings is a lack of resolution. Leaving something unresolved is deeply distressing. And so what we like to do is we’ll just settle on something, even if it’s not optimal, we’ll settle on it because we know who no longer have to act like. I don’t know the answer to that anymore. And so it may be partially laziness, but I think it’s actually reinforced by this deep aversion to the unknown. We don’t want things to be unknown.

Rusty Rueff: Yeah, I recognize that. And I read a fascinating stat once that 95% of the people who built a house, right. Designed it with an architect and built it will move out of it before they renovated. Oh, wow. Because they just can’t go back and say, you know what? We blew it. The bathroom should have been over there. We didn’t put the extra bedroom on that. We should have. And they just take off and go.

Jeremy Utley: That’s wild. Well, you know, I did an assignment in my class this past quarter. I teach a class in the spring called Transformative Design, which, you know, we’ve been talking about design as it relates to products or services in the marketplace, etc.. But you can also turn that process on yourself. You know, and Dave Evans and Bill Burnett have designed Your life, which is a fantastic book and Body of Knowledge. We have a class, myself and Bernard Roth is one of the faculty directors of the d school. We have a class called Transformative Design, and in that class we do a bunch of be turning the design process inward on the most important project of all, which is your life. And one of the things that we did this year is we assigned students what we call an idea quota, where we talk about the book. But it’s the basic premise of an idea quota is whenever you’re trying to solve a problem, instead of coming up with one idea, generate ten ideas, ten solutions, and not good ones, they can be bad ones. It doesn’t matter. Note I’ve never said good. You know, so far most people say, How do I come up with a good idea? See, that’s the wrong question. The right questions that you come up with more ideas. But we can get there perhaps later. Remind me to talk about the renowned sociologist Taylor Swift in a moment. But when I had my students do the idea, quota, I gave them I built like a very, you know, kind of scrappy chat bot that I call Triton, which is like a simple kind of it’s like a conversation partner to kind of push your thinking. I had a friend who built another one, and so I gave students a choice. You can use whatever you want, use paper, you can use Triton, you can use this other thing. But every day you got to do an idea quota. And every day I sent them a small survey, which was, you know, like, what’s your name? What was your problem? What was the best solution that you came up with and what number was the solution? Number one, two, three, four, all the way through ten and beyond. I had about a thousand responses to this survey over the course of the quarter. What is your guess as to what percent of the favorite ideas were the first idea? What percent of students said? My first idea was my favorite idea.

Rusty Rueff: 90%.

William Norvell: I’m going to go big the other way. $1 0%.

Jeremy Utley: Yeah, the answer is 3.9%.

Rusty Rueff: After they’d gone through the exercise.

Jeremy Utley: After they generated ten, I said, Which one was your favorite? Oh, I see. And 96% of the time, a solution other than the first thing that comes to mind was the favorite. Hmm. So you go wait. And by the way, you know, the first question in the survey is always what’s the obvious answer to you? Like, what would you do if you’re just going to solve this problem and move on? What would you do? So the first answer is kind of the plausible solution. And 96% of the time, by the way, the average time it takes somebody to complete this exercise is like 4 minutes. So you spend 4 minutes and 96% of the time you get a better answer. And some of these questions were like, should I continue my Ph.D. program? You know, I mean, they’re not like, what dorm room am I going to go to for dinner? Which can be an existential crisis all its own. Right? But some of these are major questions. How do I respond to my mom requiring me to move back for the summer? Right. And 96% of the time, if a student pushed beyond the first answer, they got a better answer.

William Norvell: Okay. So we’re not letting you off Taylor Swift’s look, we’re coming back to that. But I’m going to pause here, too. Is there a reverse is there a paralysis by analysis? Right. Is there hey, 100 ideas is too much. You got to move, right? You got to do something right. Is there a reverse.

Jeremy Utley: Great question. So flow is really the important operative term, an idea. Flow. Meaning what we’re after is movement. I’m not advocating an idea pond or an idea dam or I want idea flow. And so in generally speaking, what that refers to is the practice of generating and then experimenting your way forward. Right? So, you know, a statistic that generally stuns people and some of the it kind of opened our eyes to this angle into the problem of solving problems is when we show this research, if you ask yourself, how many ideas do I need to have to have a commercial breakthrough, I’m answering your question just in a slightly different way William I promise and if I don’t answer it, just push me. How many ideas do you need to have to have a commercial success? I won’t have you guys answer it, although if you want to. Or what do you think you can start with 1 to 2220, 20 billion. How many ideas do you need to have to have a commercially successful product?

William Norvell: It’s got to be hundreds. I’m going to go with 200.

Jeremy Utley: There’s actual research, by the way. So this is not like we’re not just like you. How do you feel? It’s like there’s empirical research. Yeah. Linus Pauling once said the way to have a good idea is to have a lot of ideas. And so my question is define a lot. How many is a lot

William Norvell: right? Yeah, it’s interesting.

Rusty Rueff: Yeah. If you could get into the hundreds, I would say it would be in the hundreds. But I don’t know that that many people can actually get into those kinds of numbers.

Jeremy Utley: The empirical answer is 2000.

William Norvell: Wow. Wow. That’s crazy

Jeremy Utley: So we’ve studied, you know, a bunch of different organizations from like Idio to Taco Bell. You know, the head of Taco Bell’s food lab when she was making the Doritos Locos Taco, this one product, she said she tried over 2000 different variations of that shell. Wow. Okay. James Dyson, when he was making the bagless vacuum, he made 5126 different prototypes before the 5,127th worked in pharmaceutical discovery, the number is more like 10000 to 1 molecular compounds to get to one viable compound. But the point is the kind of requisite number of ideas to get to a commercially successful product. Granted, that’s a particular outcome is enormous. Most people I ask people all over the world, most people say 20 or 30. That’s kind of the mode answer you guys had to underwrite, but it’s still an order of magnitude more, you know, which is as well. So then going back, William, to your question of how do you overcome a paralysis by analysis, what I’m not saying when I say you need 2000 ideas to get a commercially successful one is stop before you do anything, generate 2000 ideas, and don’t do anything until you come up with two. That’s not what I’m saying. What I’m saying is over the course of fits of starts and experiments and iterations and pivots and all that, there’s going to be 2000, you know, bodies, Post-it notes flying in the wake of the one success. Right. But the point is, how do you move forward? And it’s not by generating a ton and moving on, but it’s by generating more than you think you need and then scrapping it quickly, executing experiments that likely lead to more ideas and refinements and that sort of thing. And then doing it again. That’s the flow. And I love the picture of, you know, the Dead Sea versus the Sea of Galilee. You know, they’re fed by the same source. And yet while the Sea of Galilee is one of the most, you know, biodiverse ecosystems in the world, the Dead Sea is dead, nothing can live in it. What’s the difference? The Sea of Galilee has an outlet. And when you think about bringing life to your innovation process, there are actually there has to be an outlet. It’s not just about damming up a bunch of ideas and then a priori deciding which one’s the best one, which is the needle in the haystack. Here, no movement and experimentation and learning is essential to healthy idea flow as well.

William Norvell: The main lesson I took away is if you thought entrepreneurship was hard before, it’s extremely harder than you thought it was. Well.

Jeremy Utley: But it’s also it’s invigorating and exhilarating. And it’s when you get your expectations set appropriately, you start to act differently. Right. For an early entrepreneur, I mean, like, you know, launch pad, the accelerator I’ve been privileged to co-lead for a bunch of years. What we know is the most important thing is not the idea. It’s the founder’s behavior. Your idea is probably going to change and you’re going to iterate a ton. So we’re not selecting ideas. What we’re selecting is the kind of people who will succeed and the kind of people who are succeed. The fundamental behavior we’re looking for is will they take action in the face of the unknown in order to turn unknowns into knowns? Will they execute scrappy experiments, or will they come back having done something and probably failed or flailed, but at least learned between meetings? That’s kind of the singular defining characteristic of a successful entrepreneur. And so, yeah, it takes grit and perseverance, but it’s also, if you have your expectations said, I’m going to try a bunch of stuff, lots of it’s not going to work. But then when it does work, it’s really going to work well. And I’m going to be the person who’s uniquely qualified to figure out how to make it work better, because I’ve built this muscle memory around experimentation. And by the way, all of my learning is proprietary data. Nobody else in the world knows what I know because of all you know, like Thomas Edison said, right. I haven’t failed 10,000 times. I’ve found 10,000 things that don’t work. You say, what’s his competitive advantage? Well, anybody else who’s trying to solve that problem has to start from zero. And he already knows a bunch of things that he doesn’t need to try and get it right. And so to me, I mean, just kind of responding to your comment. Well, yeah, it’s hard, but when your expectations are appropriately said, you know, this is actually it’s a volume game and it’s a darts game and it’s how can I be faster? How can I be cheaper, How can I be scrappier? Then you can almost like gamify it for yourself and have some fun with it. And that’s the BBC really succeed are the people who treat that like a game and who enjoy the exploratory adventure of it all.

William Norvell: Now that’s great. And I think back to all my classmates did Launchpad. I came over and watched all the presentations numerous times and you know, you probably know the stats on this, but very few of them are still working on that concept. But what they learned was how to become entrepreneurs. And some of the most successful entrepreneurs from my class did what turned out to be a terrible idea in Launchpad, but they learned this process right to iterate and maybe it was the fourth idea they worked on that actually became the thing, right? Yeah. And that’s what I remember runs remember back. It’s like, oh yeah. Like those are some of the most successful entrepreneurs I know, but it wasn’t that specific idea necessarily, right?

Jeremy Utley: We’re choosing people, you know. I mean, I’m rereading Ed Chapman’s book, Creativity Inc, and one of the things he says is one of the biggest misconceptions about creativity is that ideas are more important than people. He said, No, if you give a mediocre idea to a good team, you’ll be far more successful than giving a good idea to a mediocre team, right? And so we are selecting a launchpad and what is the person we play them in, so to speak. We’re looking at a person’s behavior and the good news for every individual listening is it’s not about if you have a good idea, it’s about how are you behaving, you know, in relation to the market, in relation to your potential customers. And if you start to refine these behaviors, you’re going to stumble upon what works much more reliably than if you start with the immaculate conception of the perfect idea.

William Norvell: I love that. I love that the Swifties are lining up the text line here. So we got to we got to get back. We got to get back there really, aren’t they? So, you know, where are you? Bring the Taylor Swift philosophy here.

Jeremy Utley: I knew that I had you at Taylor Swift.

William Norvell: Oh, you. You have no idea how much you had, bro. You have no idea.

Jeremy Utley: So she won an award at the iHeart Music Awards this year, the Innovator Award. And her speech is worth Googling. We put in the show notes or something. That’s great. But it speaks to, I think, a really deeply held cognitive bias, which is most people want good ideas. And what I say is you don’t want good ideas, you want more. And if you say, well, how do I generate more ideas, then here’s what I say generate bad ideas. Bad ideas are. The way to get more and more is the way to get good. And what Taylor Swift said when she accepted her award is I want I really, really want young people to know that it’s my hundreds or thousands of dumb ideas that led me to my good ideas. You have to give yourself permission to fail. She said, I don’t like to fail. It’s embarrassing, but you have to do it. And I feel like one of the kind of one of the real, you know, mirages in the desert is people are wanting the good idea rather than getting in the habit of and being comfortable with sharing and making bad ideas. Kevin Kelly, who was recently on this podcast, I think hit one of his kind of bits of wisdom, is a multitude of bad ideas are necessary for one good idea. I don’t think anyone takes that seriously enough. And as simple tests, you can ask yourself if you want to just What’s my capacity for bad ideas? Write down one bad idea. Right now, everybody can do this while they’re listening. Literally. What would you just take a ten second break? Try to write down a bad idea. And for most people, it’s phenomenally hard because, like, as soon as you start running, say, well, why am I even wasting the ink? This is stupid. You know, this guy asked me right down that. What’s the point of that? Exactly. If you cannot write down a bad idea, you will not come up with a good idea. Period. Full stop, Right. Steve Jobs, You know, people go, well, what about Steve Jobs, Right? He was legit. He only released, you know, exceptional products. Well, you watched Johnny’s memorial speech at his funeral. You know, Johnny said he said every day Steve and I would have lunch. And every day Steve would say to me, Hey, Johnny, you want to hear a dopey idea? And he said, most of the time his ideas were very dopey. In fact, sometimes they were truly terrible. But every once in a while, they take the air out of the room and leave us breathless in wonder. Right. As only Sir Johnny can say. Right. But the point is, Steve Jobs knew what Taylor Swift knows. If you want a good idea, have bad ideas and share bad ideas. Don’t hide them. Share them with the world’s greatest designer, for crying out loud. And it’s that permission to have bad ideas that most teams in most organizations are lacking. They really want people to have good ideas. You know, you think back, like Williams said, like stat class, like basic finance, basic stat class. There’s this thing called the bell curve. Everybody knows it. You know, most natural phenomena are normally occurring. For those of you watching on video, you can see this is a bell curve, right? Roughly, don’t quote me on it, but it’s approximately right. And this shows how like you’ve got delightful ideas and you’ve got Dopey, as Steve Jobs would say. Right. You’re going to have some delightful ideas. You can have some dopey ideas, and then you’ve got a bunch of ordinary stuff right in the middle. Right. And what most people think is, I love the delightful stuff and I’ll tolerate the ordinary stuff. I just don’t really want the dopey stuff. So they think they’re going to chop off the dopey end of the spectrum. But you know what they do when they chop off the dopey end of the spectrum, what they end up with is a bunch of ordinary. Because they don’t realize that quality is a function of variation. And the same variation that leads to dopey is what you could say. Dopey is the price of delight. Dumb ideas are the price of delightful ideas, and if you’re unwilling to have the dumb, you’re not going to get the delightful. And so that’s a bias you have to overcome, is stopping trying to come up with good. And start trying to come up with more and bad and good just flows from that.

William Norvell: Yeah, I love that. Reminds me, the late Kobe Bryant used to say, you know, the only way to make the game winning shot is to risk missing the game winning shot. Yeah, right. That’s the only way to do it. And he missed a bunch and he said, and that’s why I had the confidence that one day they fall. Right. But it’s so profound, right? It’s the only way to that brilliance is typically through not brilliant.

Jeremy Utley: Well, you know, like, if somebody doesn’t like dumb, what? Maybe a different word that I would use that maybe is like a more permissive word is obvious. Sure. And especially the context of a team where most teams run into trouble is they say, okay, it’s our job to be creative. And one of my favorite collaborators, getting Dan Klein, who runs a Stanford improvisers troupe at the university. And he says, Don’t be creative. Be obvious. And what you find, especially if you’re working with a diverse group of people, is because your unique background and context and culture and, you know, race and religion and gender and is different than mine. What is obvious you is wildly unexpected to me. And if I take your obvious, which is not wildly unexpected to me and just say what is now obvious to me based on that wildly unexpected thing, that which is obvious to me is wildly unexpected to you. Right. And so neither one of us have to be creative. It’s like, I hear your thing. I go, okay, what’s that really smart to say? I just have to have permission in the context of a team to dare to be obvious. And if I’m willing and daring enough to be obvious and I trust that the team’s not going to laugh at me or insult me, but they’re going to take that and they’re going to build on top of that. What you find is a team where every member is just being obvious kind of spirals into totally uncharted territory because nobody is treating it as their individual responsibility to be creative.

William Norvell: I love that. I love that I’ve seen that play out so many times, right. Where you know, someone kind of, you know, what’s the common phrase? Oh, I just thought everybody saw it. It’s like, No. Right. Absolutely not. Like it just came to you because of your life experience, how God wired you, what you’ve been through, and how you see the world. But like, no, I would have never seen that, you know, And I love that point because I’ve seen it so many times, you know, and like, somebody finally speaks up at the end of the meeting, they’re like, Oh, I just thought everybody already thought of that. Yeah, Like, that was the obvious answer to me. So I didn’t even want to say it. It was so clear. It’s like, no, nobody else saw it. Like, thank you. Speaking of experiences like that. Yeah, I want to take this down into that exact place. Right. So let’s turn a little bit to how God views innovation, how God views problem solving, how God views being obvious. How do you think? The scriptures and innovation work together. How do people search for that part of themselves, in God’s Word and in the experiences that God takes them into? Just how does all that come together for you?

Jeremy Utley: One of the things that has been astounding to me is, I mean, definitions matter, right? And so if I ask you what’s an idea? I have four daughters, one of whom is five, and I hear that the five year old female of our species asks more questions than any other kind of human being. I can attest to that. And if she asks me, Daddy, what’s an idea? What do I say? What do you say? And it’s one of those things, you know, it’s not obvious. There’s like every definition. It’s like there’s big words, right? Which makes it very difficult. And for me, here’s what I found. From my understanding of the underlying neuroscience. An idea is a connection, period. It’s a connection between two things that you already know. What turns out. And going back to the question about the Scriptures and our relationship with the Lord. Most people believe that idea comes from nothing. And that’s not true. No idea. Human beings are incapable of […..] creation. Only God is capable of that. Human beings, when we have ideas, what’s happening is two parts of our brain come together in an unexpected way. But the cognitive building blocks are already there. We’re living in a world that God has created. All the material is here. All we’re doing is connecting it. You know, so you take, for example, like a buddy of mine who’s got a stroller company and he wants to break into the well-heeled market of San Francisco. And what stinks about San Francisco. But the hills, it’s dreadful, right? Imagine pushing a stroller on the hills and he’s trying to figure out, what am I going to do until you remembered. When I was in high school, my dad got me a self-propelled mower for my lawn mowing business. I don’t even have to tell you what his idea for stroller innovation is, because you already know, because your brain just put these two things just like we all had this and anybody listening just had this collective at home with self-propelled straw. Like we all just had this collective hallucination called an idea. But the point is, it’s just two things we already know and we snap them together and what are the things that we know? One of the unique things that we know and one of the unique ways in which the Lord has wired each of us, and it says that in Acts 17, He appoints the boundaries of our habitation, meaning he has decided where and when we live. And one of the interesting things I find for myself and as I study history is everyone’s boundaries have different problems to be solved, right? It’s impossible for, you know, Johannes Gutenberg to have thought of air conditioning, for example. Right. And there are so many conceptual building blocks that aren’t there. Stephen Johnson refers to this is kind of the adjacent possible. You can only kind of combine on the edge of known information. Right? But Gutenberg did what is something incredible for all of us where he took a wine press and he turned it into a printing press. Right. But the point is the boundary that the Lord had a point in his life led to a timely and needful innovation at that point of human history. And he doesn’t need to burden himself with all of that impossible so much as, say, what are the problems that are facing my society today? What am I aware of? We advocate at Stanford keeping a bug list as what we call it, and we don’t mean it’s not errors and lines of code. All we mean is write down a list of things that bug you. What bothers you that, it turns out, is a great seed for innovation because problems are the necessary precondition to solutions. And if you start to become aware of and attend to problems we’re solving. And I would say this is an incredibly empathetic way to interact with the world and awareness of problems. What are problems that could be solved? And just becoming mindful of them and writing them down and the things that the Lord puts on your heart and, you know, people that He brings into your life situations that he makes you aware of. If you just take that as kind of the conceptual building blocks available to me as an innovator, well now it’s just like, you know, just like you have a bag of Legos and you can build with the pieces that you’ve got right in every you can think about an idea as a combination of a couple of different Legos, right? You can see that our bag of Legos has been appointed by the Lord and we’re aware of the things that we’re aware of, and we have access to the opportunities and the people and the problems and the technologies that we do. And we’re given the invitation to play and to try on different combinations and to build structures based on what the Lord has given us. But to me, knowing that because I think for a lot of people, if I say, you know, every listener right now, the faith driven entrepreneur come up with an innovative idea like 99% of people go, Wait, what? Like, I can’t just do that on the spot. That’s like it’s so intimate because an idea is this kind of amorphous, nebulous thing. It’s that’s like saying, have a tiger. I can’t have a tiger. You know, when you realize and ideas, it’s a connection. And I can just, you know, grab two things like, okay, I’ve got a water bottle and a Sharpie. These are literally two things sitting in front of me. If I connect them, it’s like, Oh, interesting. What does it look like? Sharpies are always dry and annoy me. What if there’s like a water capsule that I could just like to rehydrate my sharpie? That’s kind of cool. I’ve never thought of that in my entire life till this very moment, right? Just happen to be two things sitting in front of me. I can also take the Sharpie and say, What can I do with the water bottle? Oh, like what if there was a way that I could mark my territory with the water bottle? There’s like a like an ink pad that I dunk it and I don’t know, right? I’m just making this up. But the point is, what’s available to us here, It doesn’t have to be intimidating coming up with an idea. And I think for a lot of people, maybe bringing it back full circle, switching the instinct a little bit. So a lot of people, if you say come up with an idea, most people just even physiologically look up into the right. What does that mean? They’re going to scanning what’s inside. What am I going to do? What do I think of? And one thing we advocate is get up, get out in the world. You know, Who can I talk to? What can I try? Where can I look for inspiration? You know, Malcolm Gladwell, I heard him in a podcast interview and someone said, you have a month, you can come up with any story that you want. What do you do? And Malcolm Gladwell said, I never come up with ideas. I go find ideas. I would leave my desk and I start talking to people and the story would come to me. And there’s something really liberating, I think. You know, somebody like Malcolm Gladwell, whose work product is explicitly creative in nature, knows that I taught a classroom. Lecrae Right. He said one time to our students inspirations and discipline. I think that when over 90% of our MBA students heads, because it’s like you can’t fit it in a spreadsheet. What he’s talking about, right, is like, What do you mean it’s not even on my radar, let alone a routine part of my life getting inspiration. What does that even mean? Right. And yeah, if you look at if you read kind of the history, you see, Steve Jobs is frustrated by the Macintosh team’s early design of the Macintosh. What does he do? He leaves the office, he goes to Macy’s, he starts walking the aisles of Macy’s and he stumbles upon a cuisine art food processor. He buys it, takes it back to his team. And he’s like it should look like this. And you can imagine being on a team gone like a computer, supposed to look like a food processor, Right? And yet, I mean, we all can imagine how that got implemented. Right. But the point there is simply when Steve Jobs was stuck, he had the instinct of I need to get out and go look for something. And I think everybody take any problem you’ve got and think about it as a conceptual building block. Now, the question is, I’m on the hunt for another Lego and I’m going to get out of my office. I’m going to get up from my desk to go, maybe it’s talk to somebody down the hall, maybe it’s take a walk around the block and try we call it a wonder. Wander right where you can. There are lots of tools for this, but basically it’s kind of rewiring some instincts around problem solving. You don’t only have to kind of look up into the right and scan your brain for what ideas do I have? There are other tools that you can bring to bear on the problem.

William Norvell: That’s amazing. That’s amazing. So good to think about. And if you want to invest in Jeremy’s water bottle Sharpie business, we will put a link to that in the show notes as well. We’ll put it up when we founder joins it. I’m convinced I’m just throwing it out there.

Jeremy Utley: Rehydrating the Sharpie. I mean, this is an amazing idea.

William Norvell: That’s the one I was hooked on. That’s the one I was hooked on, Not the second one. I love the first one, which is contrary to our entire podcast, but that’s okay. So unfortunately we have to come to a close. And what we love to do in the last minute of the show is talk about God’s Word and where it’s coming alive to you. And so in just kind of 60 seconds, just love to get a quick snippet of if there is story. Is there a verse that you’d love to pass along to our audience that comes alive to you today?

Jeremy Utley: Yeah, that’s a great question. I was recently reading the book of Joshua. You know, I love that. I love it whenever my reading plans got me in Joshua. It’s just such an incredible, you know, victory after victory after victory. Amazing kind of, you know, God said none of the promises I’ve made. You have failed, right? They’ve all come to pass. And it’s just an incredible part of Israel’s history. But then there’s this amazing point at the end where Joshua says, you guys have to choose who you’re going to serve. You know, you are going to serve God. And the people say, we will serve the Lord. And do you know, Joshua says, you certainly will not serve the Lord. You can’t do it. And sadly, they say no, but we will. And he says, okay, you’re witnesses against yourselves. Right? But to me, that statement, no, you can’t has really been on my heart. And the Lord is going to spoken to me in regards to resolutions I feel like I have. I won’t speak to anyone else. I have a tendency to make resolutions I am never going to do that again, or I’m always going to blank. And I feel like what the Lord, you know, spoke to me through that passage is, No, you’re not. You don’t have power for that. It stopped making resolutions and what you need. And the word that I would replace with resolution is reverence. What you need is you need a holy reverence for God. You need to fear God. And the reason for your resolution is some failure. And ultimately, then what I felt like the Lord has been speaking to me is the reason for your failure is you don’t have a proper reverence for me. You haven’t really seen. I’m always with you. And so you’re afraid or you’re anxious or whatever it might be. Right? And if you really knew I was with you and you really grabbed hold of my word, I’m never going to leave you. You wouldn’t need to be making resolutions. And so anyway, so that word, I’ve just been struck by it. No, you won’t. You won’t be able to.

Rusty Rueff: That’s good stuff. That’s good stuff. We’ve got to close. I hate to go. You’re the first guest we’ve had who’s actually brought Taylor Swift into the conversation. So I’m going to leave you with a little my own little paraphrase, Jeremy Utley. I knew you were good trouble when you walked in the door. So there you go.

Jeremy Utley: Boy, oh, boy. Well done. Full circle moment.

Rusty Rueff: All right. You’ve been fantastic.

William Norvell: So grateful.

Recent Episodes

How can Christians thoughtfully approach the topic of artificial intelligence?

How should we use it? What are the ethical considerations? Is it good or dangerous?

These are relevant questions for Faith Driven Entrepreneurs as AI continues to be a topic for conversation in both the business world and the broader culture. 

That’s why we’re excited to feature James Cham on the podcast. 

James is an early-stage venture capitalist and a partner at Bloomberg Beta, a Silicon Valley-based firm that invests in the “new world of work.” Conversations about Artificial Intelligence and Machine Learning are a big part of his day-to-day life. 

In this episode, he talks about wrestling through the ever-changing landscape of technology with wisdom, discernment, and a redemptive vision of the world.

Episode Transcript

Rusty Rueff: Hey there. And welcome back to the Faith Driven Entrepreneur podcast. Today we’re diving into a topic that’s on everyone’s mind these days, artificial intelligence. We’ve all seen the recent advancements you’ve probably played with Chat GPT or other tools like it. Some of us are excited about its potential. Others are scared. But nearly all of us are asking questions about the implications of this new technology. And that’s why we’ve invited an expert to fill us in. James Cham is an early stage venture capitalist and a partner at Bloomberg Beta, a Silicon Valley based firm that invests in the. new world of work.

Rusty Rueff: Conversations about artificial intelligence and machine learning are a big part of his day to day life. He joins us today to talk about how he wrestles through the ever changing landscape of technology with wisdom, discernment and a redemptive vision of the world. Let’s get into it.

Henry Kaestner: Welcome back to the faith driven entrepreneur podcast, William we’re here with our guest, James Cham in the house, a fellow Californian. But you are broadcasting this in from Washington, D.C., where you’re going to talk about the subject matter that we’ve brought you to talk about. And this is building, William, on some work we’ve done recently about artificial intelligence. And two nights ago we did an event for Inklings. Inklings. As a group, we get together every month, month and a half out here. James Cham has been added a bunch of folks talking about Christians in Web3. What is it looks like for Christians in blockchain? What does it look like for Christians in artificial intelligence obviously with chatGPT there’s a lot of talk to it. But William, correct me if I’m wrong, but the precipitating event for today, but the origination, the genesis for today’s podcast comes from a panel you heard James talk at at the Praxis event. Tell us more about that.

William Norvell: Yeah. So Praxis, another great friend of the movement, as everyone knows, had their redemptive Imagination summit that they call it up in Napa, California, a few weeks ago. And you know, this year there was a shocking lack of cryptocurrency panels and a shocking increase in AI panels. I mean, I’m if I could set people up to stick around for the next 40 minutes, I leaned over. I was actually sitting next to our other fearless leader Justin Forman. I said, We’re going to get this on the podcast fast. This is like the most at the moment forward thinking on not only where AI was going to go, but what should we be thinking about as believers? What shouldn’t we be thinking about? What should we be thinking about with our children? What should we be scared of with our children? Our Some of our children may be different and some should lean in to learning about this now, and some maybe should be held back from that first season. So I think it spanned just an incredible view of what God would have for this space, how we should thoughtfully think about it, and how, of course, we shouldn’t be scared of a revolution that’s coming. And thoughtful Christians need to be a part of it, or we’re going to lose the battle by abandoned the playing field. So with that, James, welcome.

James Cham: It’s good to see you guys.

Henry Kaestner: So, James, I want to ask you what is motivating the urgency and excitement around AI? Why is everybody talking about it now? And we’ll talk more about why Christians should care, but why is this all the rage now? Why are there so many panels and everybody is talking about AI, the space you’ve been in for a long time, What makes everybody focus on it now?

James Cham: You know, the great A.I. demos have always been with us since like the sixties. There’s was great demonstrations in which it’ll do this thing or that thing and even, you know, sort of as recently as like five years ago or two years ago, I’d show some amazing demo of some amazing product that will do this sort of that magical thing. And then someone would say to me, Hey, can I use this? Can I try this? I say, Well, give me a few moments. I need to prep the data. I need to do this and that. I need to change this, you know, and then give me a couple of weeks and you’ll be able actually try this out. And it might or might not work. And what’s different about now is that in the last year and then in the last six months, there have been a series of investment bets the actually paid off such that now we’re at a point where like everyone and anyone is able to use the most advanced large language models in a way that like used to be cloistered inside Google or clustered inside Facebook where only the smartest people in the world, we’re able to play with it and fiddle with it. And now, in part because of a series of both business decisions and technical advancements, this is available to anyone. And that suddenly means that these things that were theoretical questions became real opportunities. And that has implications not just for business, but also for the way that we think about faith.

Henry Kaestner: So what are some of those large language models that have now made their way out into the public? Just give an overview. I sense that a number of our listeners know what they are. Some of them might not. What is that? How is that accessible now for everybody?

James Cham: So right now it’s most accessible either through a set of services from Google or Microsoft or from Openai. And let me just take a step back to describe sort of like one version of the history of AI, which is what is AI. AI is a dream, AI is a dream that the computers will be able to do things that humans will be able to do in terms of thinking. And what’s interesting about that dream is that along the way, over the last since like basically the sixties, we’ve started to be able to do things with computers that like humans that would be difficult. And each step along the way we’ve said, Oh, this is not quite A.I., this is not quite A.I.. You know, the fact that you can beat someone in chess, that’s impressive, but it’s not quite AI. And then we’re at this point now where these large language models are flexible enough and open ended enough that for the first time, a lot of even the best practitioners are saying to themselves, Oh my goodness, this might mean that we’re close to true artificial intelligience. And this only happens because of a series of slightly crazy technical miracles. And let me just describe a few of them. Right? So one of the first ones is this idea that we’re able to represent ideas in sort of super high dimensional space that you can sort of like get some idea and the set of statistical techniques that don’t really matter right now. You’re able to represented as math, right? And that idea that you can represent as math and then do math against it suddenly meant that you can manipulate them in interesting ways. So that’s the first miracle. So that’s like one miracle. The other miracle that sort of has been surprising to everyone is then you’re able to take like sort of, you know, all of the Web, compress it down into these models and then you’re able to like, do a whole series of queries and chats against them. And then the surprising thing about that is that that will actually end up creating coherent results. So that’s the first thing you saw, but that didn’t really work that well. The thing that worked really well was when you asked the models to explain their thinking step by step, and suddenly it meant that like, you know, sort of you ask it some physics problem and it wouldn’t answer correctly, and then you’d say, to it. Okay, answer this physics problem and describe it step by step. And suddenly, like for the first time, it would start answering things much more precisely. And this was sort of shocking and confusing to a bunch of sort of people in the industry because all of their historical work around thinking about natural language processing and how people talk like that was thrown out the window by just saying, we’re going to process a bunch of text compressor down. Are we getting too technical? I feel like I’m taking you down the wrong.

William Norvell: Yeah, well, I love it. I think we needed to go there. And now. Yeah, let’s take a step back up. Right. And so I think one of the things that was really intriguing is you talked about how and no point in human history, for the most part, has a technology, this advance been able to be utilized by so many people so quickly? Right. And how that’s going to have I mean, I mean, you can just go on Twitter or LinkedIn. I mean, there are Hindu A.I. companies born a day that can build you a PowerPoint, build your website. I mean, people are taking this technology and building on it. You know, like a developer tools, right? Like, it’s amazing. And so I’m curious as you look out, I mean, I’m sure it’ll be in the interim, But, you know, let’s bring it into this conversation. You’re an investor for a living, right? You invest in venture capital. So how do you think about the space from Bloomberg Beta perspective and where you think, you know, let’s do now, you know, soon and later? Right. What do you feel like the most impressive uses are now? What do you think’s coming soon and what do you think? Hey, people are getting ahead of themselves. That’s still a ways out before that type of technology is going to be able to exist.

James Cham: Mm hmm. Okay. So the thing that is now is that most machine learning used to be built for very purpose built reasons. Right? That a lot of cases you just have to do a lot of work to get it trained to answer a question. Exactly right. And now for the first time, it’s extraordinarily flexible, and that’s disorienting to most people. And so that flexibility means that you can now ask relatively open ended questions and sort of discover sort of what the model knows or doesn’t know. And then now in terms of like short term, what’s available to it, you know, I think there are a lot of startups that are making a lot of money very quickly because they found a specific niche, right, that they figured out, oh, I can create text for this thing or that thing and I can sell it for 20 bucks and it cost me two bucks to generate and sort of like that sort of opportunities right here, right now. There’s also a whole set of like opportunities around wrapping these models with agency where they can actually then affect the world. Right. And then that sort of thing, which basically now you’ve got these models going around and sort of like browsing a website or touching this or that. Like that’s clearly the next thing. Right after having chatGPT, the next natural thing everyone wants, right, is that ability to have these things actually do something. And that part, it’s a little less clear, right? It’s a little less clear what it’s good at and bad at. And that’s sort of the thing that’s happening right now in real time that out in Silicon Valley right now, you’ve got like 50 different people, 50 different teams trying to figure out exactly when does this model work and when doesn’t it work, when it tries to click on a website or browse this or solve this problem. But that interaction with first the digital world and then that interaction to the rest of the world, that’s clearly the thing that’s just out there. And to be honest, a little scary.

William Norvell: In this would be thinking about a practical example that may not be a sexy example. This would be like me go to ChatGPT saying, Hey, I need to take a flight to Dallas. Right? I’ve got an off site in Dallas coming up in a few weeks and I need to book an Airbnb, booked dinner reservations on Monday and Tuesday, booked my flights and send the itinerary to so-and-so. And is that a query that’s going to be possible here in the near future? Words like, Oh yeah, that be taken care of.

James Cham: That’s the sort of thing that feels like it’s right around the corner and right now works very well in demos and almost works well enough that people are going to roll out. And so this is the other part of it, which is like it is a information diffusion of knowledge story where we live in a world where everything is so connected that, you know, people are able to play all over the world and thus try these technologies out and see what works and doesn’t work and then tweet about it like in the afternoon. And that cycle of innovation and try things is like both really exciting and terrifying, right? Because it does mean that there’s much more room for mischief now than there was before. And sort of our old illusions of being able to control the technology sort of thrown out the window.

Henry Kaestner: Tell us more about that. Tell us more to the some of the things that you’re it’s like, oh, my goodness, you know, this could happen in I mean, in some of this stuff. I got to tell you, as a dad or just a human being, I get really worried about what this means for the adult entertainment business and just, you know, what this ends up being in terms of just taking people down, just really, really bad places. But what are some of the other things that you look at and say, wow, the emergence of this is going to be this is the type of mischief that can happen or maybe just riff on that a little bit.

James Cham: Yeah, I mean, I think here are a couple interesting angles. So in part because these models are so flexible and because their programs are so consistent, they can be much more polite on a consistent basis or much more persuasive on a consistent basis than say, I will if I didn’t have enough coffee in the morning. And so that creates a full set of interesting opportunities. And in part because they’re cheaper to run than like, let’s say talking to me, you can end up replacing humans in conversation in all sorts of interesting, both good and bad ways. And now what’s interesting, though, is that one way to think about it is to think about it from the point of view of a consumer in which the consumer maybe gets fooled into having a relationship with what is essentially just a big bunch of numbers. Right? So that’s one side. But the flip side, which I think is much more relevant to entrepreneurs and much more relevant to people building stuff is like the actual danger of these models and of AI right now is it gives you a chance to pretend that you’re not responsible, that you could build this system that does great mischief, and then you will say, Oh no, it wasn’t me, it was the model that did it right. And I think that that sort of like avoidance of responsibility is actually going to be the big, big temptation for entrepreneurs. And that is the place where I think Christians have a lot of wisdom, right, where Christians will be able to say a lot of smart things about the responsibility we have when we create something and both for good and for evil.

William Norvell: Yeah, it’s fascinating. It reminds me. So my wife and I went back and started watching the show called Person of Interest. I don’t think I ever heard of it. Jim Caviezel was the star who, of course, played Jesus in The Passion as well. And it’s ten years ago. But it goes through the whole concept of the show is this brilliant engineer built in artificial intelligence that, of course, national security wanted to buy. Right? Because they could predict national security threats and it would pop out who’s relevant. And they’re a threat to national security. And the show takes a turn because turns out there’s irrelevant numbers as well. The system also finds people that are going to get mugged on the street, and that’s what the show goes off. And guys, But in the context of that, they talk deeply about the decisions he made while building the system. And for instance, one of the big decisions he made is ten years old. Sorry if I’m ruining it is it erased its memory every night and how that had to be true, or else it would learn at a speed that eventually, like he couldn’t control it anymore. Right. But they go so deep into these deep. And then there’s a competing A.I., of course, that comes along. That’s evil. And that’s a fun story. I think You talked a little bit about national security last time I heard you talk, and I was curious for you to take that direction and say, you know, as an example, you could build something great that can be good, that can be used for very much not good things.

James Cham: I mean, I think so. These models, right, are going to be extremely flexible, extremely persistent. And they will do things that we will consider thinking. They will have ideas that are going to be similar to consciousness. And why does that happen or how does that happen? We’re not totally sure. But one way to think about it is that they’re able to find structure and analogies that our brains sort of like implicitly do, and it’s now doing that explicitly through math. And so in that case, it might be able to do things that look creative, right? And it might also be able to do things that end up becoming very, very. But because they’re machines, they’re much more persistent than we will be. And so, for example, your ability to hack into some system, you know, like, I don’t know, I might know 15 techniques to hack into some system. I might get bored because I kind of want to read Twitter or there’s a basketball game going on. I get distracted. But these models will be very persistent and they will go through every single possible security hole and find every single possible vulnerability and take advantage of that in a way that no human will and those sorts of sort of little angles and opportunities I think are quite scary. And I think there’s a good reason why a lot of the government and governments all over the world are concerned about this. But I’d say that the hard part there is like and my thinking has evolved on this. I used to think that the solution might be some newfangled regulation. I now think that in some ways the right solution are very, very old principles around What are you responsible for? You benefit. Are you responsible for like the upside and downside of something? You know, sort of who’s liable and all those questions. And some of these are super old and super straightforward. So that’s one piece. And I think the other piece that’s interesting about this is that I think a lot of regulators and a lot of people are pursuing A.I. because they’re hopeful and optimistic, are utopian in their thinking. And I think it’s very, very clear from, you know, all of history and certainly in the Bible, right, that sort of tools are flawed. And part especially tools are created in our image because we are flawed, right. Because of original sin. And I think that realizing that these models will never be perfect, that these models will always be tragically, flawed, the same way that we are, like, that’s going to be an important truth and something that we’ll always have to think about. And that’s a wisdom that we as Christians and a perspective that we as Christians to provide that I think is unique and helpful.

William Norvell: And so where is that? So where? So as you think about a believer investing in the space, coming to the space and talking to entrepreneurs who may be thinking about building in the space, I mean, I think that is yes, I mean, these models, I assume, were always going to be a factor of us, right? I mean, since you’re in DC, you know, there was a political one, right, where it’s like ChatGPT basically won’t say any nice things about Trump, but will say nice things about Biden. Basically, like if you asked it, like, tell me, like great qualities and like, well, you know, there’s people that built this thing, right? There is bias built in right to whoever. And, you know, there could be bias built in the other way where somebody wouldn’t say anything nice about Biden either. Right. But I’m just curious where and how should a Christian think about, you know, do you need to build something new? Does it need to be on its own? Can you influence from inside a large organization that’s already working on this? And just what is the posture to make it a biblical worldview or.

James Cham: Yeah, there are a couple of angles I think built into that. One of them is the sense that as these models get bigger, they do seem like they get smarter and more interesting. But the other part about it is that there’s a bit of a power law, right? That to build the next version, sometimes it’s going to be like 10 to 100 X more expensive. And so that math around it does end up meaning that it’s critical that Christians are in some of the biggest companies in the world to influence and think through what this actually might mean. So I think that’s one part. The second part is that you notice that as you talked about chatgpt, and I think this is a little bit of a marketing thing, there is a temptation to treat it as if it is the God model, right? As is. Oh, you know, if only we can influence our great God chatgpt, then our lives would be better. And I think that’s the other temptation, right? That’s the temptation of treating it like an idol. And I think that’s one of the sort of there’s one temptation, which is to say, let’s ignore it and run away from it like a […]. And then there’s the other temptation was to say, you know what? Actually this thing is God, right? Rather than a sub creation made by humans. And the moment we treat it like God, then we have a whole set of other problems.

William Norvell: Okay, So let’s go a layer deeper into that. So, you know, I remember we had Frank Chin on a while ago, and I remember he talked about some of that. It’s like, hey, some things humans weren’t made to do. It’s part of the toil. I mean, I think we were talking about autonomous driving at the time, and he said, you know, look, all the truck drivers are upset, but like, think about that job. That’s not a human flourishing job. You’re away from your family, you’re driving all day. It’s stressful on your body like this is a good thing for humanity, actually. Now we need to help those people find new jobs and retrain them. But that job in and of itself, Frank was arguing, is. Not a human flourishing job. And so I’m curious, from an artificial intelligence standpoint, are there certain task? Is the people scared, of course, that we can talk about the doomsday Terminator two scenario at some point, but is this actually a thing we should embrace because it’s going to make us more human? Is there an argument for that that we get more humanity out of this?

James Cham: Hmm. You know, this goes back in some ways to praxis, which is that there are a set of decisions that we can make about the kinds of businesses that we want to support and the kinds of businesses that could flourish. So that’s the first part, which is it is a decision made by people around what kind of businesses we’re going to allow. That’s the first part. But the second part is like I will admit that like I have an essentially tragic view of work and of humanity, which is that it’s flawed. We’re all post fall. We try the best we can. I think that there are a whole set of jobs that are actually I actually honor truck drivers. I think it’s a great job. I think it’s really important. I think it will fulfill a bunch of important things for people. And, you know, like, I don’t know, I compare this to sort of my ancestors who were either toiling in the field, some rice field, or sometimes maybe like running money from one place to another, right. Doing things that were like. And so I feel like our question of like what is a good, fulfilling job is so contextual, right? And is so much based on like sort of our current conception. I don’t know. My great grandfather, you know, was away for like nine months out of the year in order to like, go from one place to another. Right? And that was still seen as a good job. So that’s one piece, right? But is just to say that, like, I think jobs are going to be tough and it’s super contextual. And then the other part that I’d say is like it is also important to be very, very cold hearted as we think about these models right now and the economic moment we sit in, which is to say that like if you thought about like the last big policy decision the United States made around globalization, the promise that we made to like citizens was globalized. Things will be cheaper. And by the way, you will benefit from the fact that things are cheaper and we will take care of you. And be honest, both Republicans and Democrats have not done that, in part because there was a moment where workers had a chance to influence sort of a whole set of decisions and in part because maybe you trust the Democrats a little too much, or maybe you trusted your labor union leaders a little too much. That promise was not fulfilled. And we are actually right now in a very, very similar moment where there is a lot of everyone smells the benefit and all the great things that these models can do. And at the same time, there’s a great bargain to be made between sort of all the folks who are working in sort of a bunch of jobs that might be displaced. And I think like that bargain is an entirely political thing that needs to be coldhearted rather than utopian or blinded by sort of my various startup dreams.

William Norvell: So let’s get a practical questions here. If you were an ex job, you would be wildly scared of this technology taking over your job because that’s something and all the headlines, of course, always come out with, you know, technology is always going to take all the jobs, right? Just different versions of it. I’m curious from your perspective, if you were. So let’s talk about kids in college. Henry’s got two boys in college and one coming up soon. What should or shouldn’t they study? Right? Yeah.

James Cham: White collar jobs that require people to be polite actually are at great risk that, you know, sort of there was a time ten, 20 years ago where everyone said, oh, the truck driver is going to be in trouble, or like the guy who the farmer’s going to be in trouble. That’s not really the risk here. The really the real risk and all these sort of these sort of folks like me playing with spreadsheets and emails and trying to be polite to people and talk to them and persuade them in some consistent way. And so there’s a whole set of white collar jobs that are going to be different. So I’m giving a presentation in a few minutes to like some congressional staffers. And I have this one slide of this huge floor of an insurance building. It comes out of like the movie The Apartment from the Sixties, and you had desks of people who would like have a little calculator, a little hand calculator, crank some number out, take the slip, pass it over to another desk. And what’s interesting about that work, which was like entire floors of buildings, is like that’s basically a spreadsheet that those hundreds of people on the floor were replaced by a single spreadsheet. And that’s on the one hand, terrifying, right? And it means great dislocation. But on the other hand, it’s also true that we’ve been okay, that if you look at sort of like life from the fifties on to the nineties, it turned out that like those dislocations end up being okay and being managed. But that’s like entirely, I think, a political question and less like a fit of the world question.

Henry Kaestner: So I want to take this in a slightly different direction. I just am fascinated by this and it’s less around how we invest and it’s less maybe around some of the innovations that come from entrepreneurs in the business, which is so much of our audience. But it’s more. But the one thing that unites most listen to the podcast, and that is our belief that there is a truth, that there is absolute truth. It’s not relative. You can point back to God’s Word as immutable. And, you know, as you get ready to talk to his congressional staffers, I mean, this is a nation under God. I wonder if there’s an opportunity for there to be this kind of operating. Well, it’s an operating system of which all of a brain of all AI sits on, which is every type of answer that comes out of this query that I might have of a chatGPT has some sort of biblical foundation to it. And so that I am like, for instance, you know, we invest in faith driven entrerpreneur, faith driven entrepreneur is the common element of this podcast, and there’s some sort of this belief that the thing that unites us all is to realize that there’s there real mistakes made in Second Chronicles, where the Good Kings of Judah didn’t see God out. And there’s real problems with sin in this area and pride and what the wisdom that comes from proverbs and psalms, etc., Can any you that like a coded in to this operating system in the chatGPT. So the answers you come out are actually informed by two or 3000 years of truth. Now somebody might say, well, gosh, that’s too myopic. It’s just Christian and or we take one nation under God. It wasn’t just a Christian, God, whatever, but 99% of Americans believe in God. It’s only 1% that are really atheistic. And the general concept that there is a God and that America is unique and is one nation under God is still believed in by the majority of the people in the marketplace. Is it possible that there could be one type of truth? There kind of is kind of coded in to all of these things so we can then say, Well, I actually can’t go that far off the rails because at the root code of all of this comes from Scripture.

James Cham: I think that’s partly a commercial question, right? I think it’s important not to confuse chatGPT and the work that open AI to all the really impressive good work that open AI is doing and building their own model with all the models that are potentially available. Right. It’s possible that we live in a world where opening AI end up being the only people who are able to build advanced models. But if that happened, that only really happened because of regulation. Because the truth is right now there are enough people chasing them, enough people building their own versions of models using the same set of techniques. And so my guess is that, you know, we’ll live in a world where there are a number of providers of very big models, and then your ability to either fine tune it or wrap around it, questions like, Oh, here’s your answer now. Like how does this reflect various biblical values? And then we answer this question around how it answers various biblical values like that could be done right? Sort of the other weird miracle around like these large language models is that they’re very good at self-reflection, that you can give it. You can say to it, hey, you know, answer this question, and then you can ask it, Hey, is this question biblical? Is this answer biblical? And then you could ask again, Hey, was this answer really biblical? And AI actually come up with a better answer, right? So those sorts of things you can do and they aren’t necessarily bounded into like one specific model.

Henry Kaestner: That’s interesting, so like there’s the web, and I don’t know as much about this as I speak to it, but there’s the web and then there’s the dark web. And I wonder if there’s like the chatGPT that’s informed by the world’s great religions, of which are commonalities. And so that any answer, any query, any type of pontification or reflection or theory or opinion that’s expressed by the chatGPT, undergirded by the world’s great religions comes out with something. And then anything that would be sinister, not based on these commonly accepted things would be part of like the darkGPT. And people would kind of know like, Hey, this is the origination and it this AI is a part of this overall code that has this kind of underbelly. And so it could never, ever convince me to kill somebody or it can never encourage me to lie, bear false witness. It can never encourage me to do any type of activity that would have to do with adultery or whatever, things like that.

James Cham: And so let me make one really important distinction, which is chatGPT is an application that is built by Openai. So it’s like one very specific application that’s built on top of a very big model that openai I spent a bunch of money in order to get it to work right? But there’ll be other people who spent a bunch of money to build models. And also the other slightly crazy thing about like these models is, you know, what are they really? Are they really answering the question or are they just trying to imitate what other people have done, what other people have written? And so in some ways, you know, they. Really are just trying the best they can to like generate text that matches something you tell it to do. And so you I think folks apply. Try this. One of the crazy things you can do is you can say, Hey, pretend that you are a Christian who lives in San Diego, who really likes baseball, and then answer the question in this way. Or you can say, pretend that you are a Christian who really likes socialism and answer the question this way include references to the Bible. And so these models will try the best they can in order to fulfill the sort of setup that you gave it. And so in some ways, that sort of thing is available right now, and it’s more a question of commercial adoption and sort of the economics of it than it is a question of whether it’s technically doable.

Henry Kaestner: So is it right to encourage and challenged the listeners this podcast about how might you innovate on top of open air with a biblical strain so that a consumer, you know, parents of three children and say, I’m actually going to go ahead and I’m going to buy into and pay a subscription so that my kids have questions about life’s big problems or about history or something like that, that it’s done through a biblical worldview, that AI becomes part of their teacher. And when they ask these questions that I can answer at home about evolution or any type of chemistry or anything like that, that I can have the screen that everything they ever ask of this thing is informed by a biblical worldview because that’s actually programed in the system. Kind of like what I have seen guys or any one of a number of different types of pay for services that have been screen out negative stuff. This could actually be a service that do there’s a positive screen.

James Cham: I mean, you could do that right now. And like the hard part with it is you could basically sprinkle that in the beginning of any query, the chatGPT and it’ll do a pretty good job. And then whether you wanted to make that a separate application or a separate business, that’s a good question. But you can literally go to chatGPT right now and say, pretend that you are a very thoughtful sort of evangelist who takes the Bible seriously and, you know, just went to Africa and is based in Silicon Valley, you know, and then answer this question and it’ll do an okay job. And then what even crazier is like, you can provide lots and lots of answers that, you know, that person gave and they use that as examples that it can then use to generate, you know, possible future answers.

William Norvell: It’s not going to test out. I’m going to see chatGPT 2021, but we got enough podcast out there. I’m going to see if I can train somebody to answer questions like Henry or Rusty. I think we should try that.

Henry Kaestner: Okay. Well, that’s absolutely a thought that based on what James just said and the interplay that we’ve had thus far, there are infinitely better questions that I could have asked along the way that a chatGPT is like, okay, James Cham just said this on the podcast. What should I ask as a follow up? I’m sure Chat GPT right now could come up with 100 better questions than the ones that I asked.

James Cham: And I think the opportunity. So on the one hand, like that’s going to be magical and it’ll seem so different from anything we’ve ever seen before. But in other ways it’s not different at all. Remember that sort of relationship with the Henry Bot in some ways is very similar to like your relationship to Billy Graham or David Letterman, which is say it is a relationship not with the actual person but with an image of the person. Right? And those are the things in sociology would be called parasocial relationships. And they can be very, very helpful. And they do great good until they become idolatrous. and then that sort of temptation is as old as the Bible, right? That the chance for us to treat something that is a parasocial relationship or relationship with a king who doesn’t really know us and worship him or our ability to sort of like have a relationship with like some mountain and then worship the mountain. Right? That temptation is going to be the thing that we’re going to struggle with a lot more in new and interesting ways.

William Norvell: Yeah, that’s good because that’s real. You know, we just did obviously a tribute podcast to Tim Keller, and I feel like that, you know, he’s had a big influence on my life and I’ve probably shaken his hand twice. Right. But the amount of like, did I answer questions? You know, here’s kind of what Tim Keller would say about that, right? Even though I don’t really have a personal relationship with him, like, yeah, that’s been around for a while. You read enough books by someone and you watching it. I mean, I’ve listened to a hundred sermons from him and read 20 of his books. Like, I can kind of like, here’s kind of what he would say to that.

James Cham: That’s right. And then the interesting thing then as Christians is to have a distinction between those parasocial relationships and sort of the relationship with someone who seems like would be distant and seems like it would be all powerful and all knowing and yet actually has a relationship with us, right? Because our relationship with Tim Keller might be parasocial, but our relationship with Jesus is actually social, right? That actually, like we actually have a relationship with him and an understanding. That distinction I think, gives us room to think about these questions in a way that ends up being a little bit easier than it is for non-Christians because we’ve got a model like not a machine learning model, but so we have an example of what it’s like to have an actual relationship with someone versus having that sort of Parasocial relationship was important and again, beneficial, but very different than. Having a relationship with Jesus.

William Norvell: James is a company in here. You know, we get along, foreigners listening. I’m one of them. I’m curious to hear your answer here. What should we be folding into our business? How should we be taking some of these tools, if at all? Right. I assume the answer is yes to some degree. Like, what should I be doing? I’m going to pitch you in 12 months. Right? Like, what if I haven’t done X? Are you going to be like, wow. Like, man, you got to, like, get with the times. Like, you got to. And is that statement even true? Does everyone need to be using some of these tools in their business? Is that advantageous to build a better growing business?

James Cham: You know, there are some point in maybe 1997 when people started building web applications and they didn’t have names for it yet. Right. They didn’t really know how to describe it. Everyone sort of thought Yahoo! Was the dominant thing and maybe those like we thought we’d all buy Oracle applications that were served through some Web server. And we’re sort of at that point, we’re sort of at the point where it’s clear something’s working and exactly how it’s going to work or exactly what’s to be the dominant business model. All of those questions are unclear. And so if I’m you I’m trying to figure that out right now that there’s a little bit of a race right now to figure out what are these models really, really good at and what’s going to be the thing that, as it turns out, to be really, really valuable. So if we use our web example from like the late nineties, early 2000, you know, you talked to some senior executive Yahoo! Who was the dominant company at that point. And if you told them, the most important asset you have is shared address books. They’d be like, That’s dumb. Address books is like a feature. And if you told them that, like that part that would search through the web turned out to be the most valuable part. They’d be like, That’s dumb. That’s just a feature of our portal. But of course, it turned out that Google, which indexed the web and then became like the stopping point for everyone else, turned out to be incredibly valuable. And that shared contact list is basically social. Right. And it turned out that like that turned out to be the really, really valuable thing. And so we’re still at a point where we don’t really know what’s going to be the durably valuable thing. And so we’re all playing around right now. And so if I’m an entrepreneur, I’m at least devoting, you know, sort of a few hours a day just trying to figure out the outlines of what’s possible right now.

William Norvell: That’s good. That’s good

Henry Kaestner: Wow, that’s awesome. So that is a great takeaway. Spending some concerted time thinking through this, reading up on it, because it does feel like this is a marketplace changing type of event and it’s a big deal. There’s going to be opportunities for great innovation, for inclusion in your business. And we need to be able to have answers about how this impacts our life. And so many of us are parents and we need to be thinking through this. And as we do that, I think that there’s going to be some great innovations and Lord willing, we’ll figure out what this means for translating the Bible and contextualizing the Bible into different languages and our languages, an infinite number of great applications, because it feels like this is a technology like so many others that could be used for good or for bad. And so Christ followers need to not bury their heads in the sand and just like, wow, this is this scares me. So we’re going to go away and we’re just going to be real conservative and we’re to, you know, go back and live on farms and not use phones. But we actually need to lean into this and get involved and get engaged and be serious because everybody else’s.

James Cham: Yeah, I think there are a few angles on that. So one is, you know, the biggest bargain in the world right now is 20 bucks a month to subscribe to chatGPT plus like I make no money, I have no financial interest in open AI. But I would do that. And you know how you said this is the time to read about it? This is probably the time to read about it. This is part time to read it and try it. Because the weird thing about now is that you literally can go on right now and you could get the capabilities that used to only be available to the smartest, smallest set of people inside Google. Right? And you suddenly now can play with these things and figure it out faster than they can what’s possible. So that’s one piece. I think the question that you asked about kids is just so, so important. And in some ways, we are really, really lucky because we’ve already experienced what the phone transition looks like, Right. And there’s a way in which we as parents can have a proper amount of skepticism about what works and doesn’t work. Right. That like if you were to go to 2010 and sort of think about like the phone and how your kids should think about the phone, right. You might have thought, well, this is so different from the web. It’s so different. But now we actually have specific examples, our head about what happens when these things become super, super accessible and what it means for folks to go astray and what it means for someone to be totally consumed by something. Right. And all those examples we can think about because they happened to us, right? And then we could be wiser about how we end up thinking about this for our kids.

William Norvell: It’s so good. You’ve been here before, so you know, we’re. We’re going to close. We would love to hear where God’s speaking to you today and whether that’s about AI or not. There’s a lot of other fun things he talks to us about. Where in his world are you today? And you know, what’s he telling you from his scripture and what’s coming alive to you in a new way?

James Cham: You know, the thing that has stuck with me for the last few years is this idea of old men dreaming dreams of revival. And I think that that continues to animate me and excite me, that I think that we’re at a time of great uncertainty, both from a technology point of view, but also from like be honest, like our position in the world as Americans. And I think it’s at those times of uncertainty where there’s the best chance of revival because suddenly we can’t rely on all the normal answers. Right? The things that have worked for us since, at least like, I don’t know, the mid eighties, they’re not working anymore. Right. And so this means that there’s a whole set of folks who are open to like God working in surprising ways. And I find that really encouraging. And so that’s the thing that I pray for and sort of try to dream these dreams and hope that young men and women do amazing things. And and that’s probably what excites me the most right now.

William Norvell: Amen.

Henry Kaestner: Amen, indeed. Fascinating.

William Norvell: Wait, I got something we’re going to finish with. I got something to finish with, so I just want to chatGPT while you’re here. And I told him to pretend that he’s Henry Kaestner, the host of faith driven entrepreneur podcast, co-founder of bandwith.com and Elder of the PCA church. I’d like to ask you some business questions. What are the three most important things to do as you build your business? According to Henry Kaestner AI, one faith integration pastor is a strong advocate for peace driven entrepreneurship. He believes one’s faith should not be separated from the work, but rather integrated into every aspect of it. People and culture employees are the backbone of any business, and Kaestner emphasized the importance of treating employees while fostering a positive company culture and investing in term and growth. Happy, motivated employees are more likely to deliver their best work, sustainable and ethical business practices. Number three Kaestner encourages entrepreneurs to focus on long term sustainable growth for short term gains and to make business decisions that are ethical in line with their faith and their values. Wow. We think. What do we think?

James Cham: You’re tearing up? You’re tearing up.

Henry Kaestner: While I get this stupid and I put it around my eyes. And fortunately, this isn’t a video podcast, but but yes, I am tearing up. But it doesn’t have to do with that. It’s fascinating and scary because what it doesn’t do is it doesn’t point to it talks about generally about faith as if that just kind of like a character attribute without a relationship with a living God who as sinful as I am, died for me. And our response and joy and gratitude of the gift of life now and eternal, that I can then just return to the altar with all that I am is the aroma of Christ to be a blessing and of others, and balancing the joy in the gratitude with the faithfulness and the obedience, and something as multidimensional and just spiritual in the aroma of Christ. So I would answer as a human being, I would answer those questions differently. Now, all of those things can glean different topics on the web, and yet it feels like it’s looked at it through an academic exercise versus a spiritual life, heart transformation one.

James Cham: So I would not anchor myself too much on the idea that that won’t change. And I did a bad job of explaining this earlier. But these models are just based on what people have said, right? And these models are just trying to the best they can to guess what would be the next word based on the first set of words that you gave it to. And then what’s interesting is, like as we progress and provided with more words, the more data or certain types of words and certain kinds of data, then the models will say something different. And so I bet you that if it recorded everything that Henry said on a daily basis and you sort of asked that question again, it would come up with a different answer. And so the super uncomfortable, weird, like I think what’s going to be uncomfortable for us is how good these things are at like feeling human, right? And that’s going to be both a great salve for us. It’ll like make life is a lot better and it’ll also be a great temptation.

Henry Kaestner: Well, yeah. Okay.

William Norvell: Fascinating.

Henry Kaestner: That is fascinating. James. Thank you, brother. Thank you for your friendship, for your partnership. And thank you for spending time. And may the Lord bless you as you get ready to make this presentation in Washington and excited to see how God will go through you and and may He lead all of his people to being able to be participants in the new technology and lean into it and just maybe protect us all. In Jesus name, Amen.

Recent Episodes

— by Bobby Albert, CEO and President, Values-Driven Culture

I still clearly remember the day we rolled out our Core Values to our employees in October 2005. It was the most significant company-wide event we had ever held.

When people are having fun and their mouths are open with laughter, you can throw in some teaching for personal growth, and the teaching goes down really well. They get it.

Leaders understand that successful meetings result in learning, inspiration and alignment. If you want a successful outcome, you have to plan, prepare and execute when the day arrives.

Here are a couple of ingredients we learned made the day truly significant: 

Set Aside Time 

We blocked out half of a regular workday for our Core Values Day. When employees arrived that morning, they were welcomed with a ticket for door prizes and a pre-printed name-tag that also had their pre-assigned table. 

Set the Mood

We learned that by integrating elements of fun into the event, we were able to create an environment that allowed folks to connect with each other and engage with the message of the event. In our event, we set the mood in the following ways: 

• Music: We played upbeat instrumental music at the beginning and during refreshment breaks to help warm people up and to increase a high level of anticipation for the morning.

• Games: After people grabbed some breakfast and got coffee or a beverage, we kicked-off and welcomed everyone with an Icebreaker game

Share the Purpose

After people got settled in, I spoke about the purpose of the day and explained that Our Values define how we are to behave as we pursue Our Purpose, Our Vision, and Our Super Objectives.

• Share Your Process: I went on to describe the history of the process I went through to discover “Who I was” and Our Values.

• Share Your Personal Story: Throughout the event I was very transparent, and people heard stories about me that some had never heard before. I told stories going all the way back to when I was a little boy.

• Create Anticipation: Even though I shared the purpose of the day and the history of the process, I still did not reveal Our Values yet.

Allow People to Discover Your Values  

I wanted our people to discover Our Values to stimulate their thinking about the content. I found that a great way to do this is through a game and question format. 

• Each table competed to discover each value by playing the Wheel of Values game. The table that yelled out the correct value phrase first got to go and spin a game wheel for prizes.

• Then I shared the meaning of that value, where it came from, and why it was important to me.

• Afterwards, each table went to a flip chart to discuss and record how we, as a company, were going to “live out” that value.

• We wrapped-up each value with each table reporting back what they discussed.

• The process was repeated one value at a time until every value was discovered.

Distribute Ownership

I’ve learned that when I place others in leadership positions, they dig deeper, grow more and produce better results than if I tried to do all the “leading” myself. When we finished the discovery process of Our Values, I did two things:

• Give Each Person a Value: To reinforce the company-wide message we distributed t-shirts with the letters G.I.V.E.R.S. Each letter stood for a key word that composed our values. Distributing the values in this way, gave each person an easy to remember the key words 

• Appoint Leaders: I appointed Value Leaders, who took ownership of each value and were able to do a deeper dive into how we, as a company, were going to “live out” that value.

Clarify Outcomes

Near the end, we had two more discussion questions addressed at the flip charts followed by reporting from each table. The two questions were:

• As an organization, if we fail to align our behaviors/activities with Our Values, what would the outcomes be?

• If we succeed at aligning our behaviors/activities with Our Values, what would the outcomes be?

Reinforce the Values 

Reinforcing your values is just as important as communicating it. In closing, we showed a video of pictures of just about every employee from previous company events. Seeing each person on the screen emphasized Our Value Statement: People, People, People.

Additionally, I created a ‘Our Values’ plaque and placed it in our office foyer, so that we could have a physical reminder of the values we had discussed together. 

Personalize the Values

We wrapped-up Values Day with the Personal Action Plans. 

• We asked each individual employee to take the time to fill out a handout that asked them what action steps they could take to to align their life with Our Values.

• Then each employee placed their Plans inside a sealed self-addressed envelope to themselves.

• At the end of the year, we mailed the envelopes to the employees, so that as they considered their New Years resolutions they could be reminded of their Personal Action Plans.

Click here to download a sample of our GIVERS Core Values Personal Action Plan. Feel free to use it as a template for your own Core Values roll out!

Celebrate the Values

Our Values Day ended with a catered celebration lunch. The room was filled with laughter and conversation about people’s lives, the business AND our newly announced Core Values.

As leaders, we’re often focused on results and anxious to “check off” a task or event and get on with our business. Take time to celebrate big wins or important events. Celebration helps keep everyone energized and passionate about all aspects of the business.

As you can see, it takes a lot of planning and preparation to effectively roll out your Core Values to your team. But if it’s so important to your success, it is worth all the effort!

Related articles

Entrepreneurs often find themselves in positions of relative power. 

We’re leading teams, shaping cultures, and influencing others. And as those positions grow, it can get harder and harder to remain vulnerable, to lead with a limp as we like to say here. At some point, we have to make conscious decisions to choose vulnerability. That’s the story behind our guest: Tom Hsieh. 

As the founder and president of multiple airlines, Tom could easily live a life of luxury and comfort. But he and his family have felt called to something different. He joins us to talk about his choice to live with intentional vulnerability, what it looks like to run an airline, and taking thoughtful risk.

Helpful links referenced in the show:

https://www.linkedin.com/pulse/political-transformation-pomona-tom-hsieh/ (Dec 4, 2018)

https://www.dailybulletin.com/2018/05/12/pomona-faces-fiscal-cliff-according-to-the-first-10-year-forecast-its-ever-done/ (May 12, 2018)

https://www.dailybulletin.com/2023/03/22/pomona-could-see-8-5-million-surplus-by-end-of-june/ (May 22, 2023)

Episode Transcript

Rusty Rueff: Hey there. And welcome back to the Faith Driven Entrepreneur podcast. Entrepreneurs often find themselves in positions of relative power. That’s to say we’re leading teams, we’re shaping cultures and we’re influencing others. And as those positions grow, it can get harder and harder to remain vulnerable, to lead with a limp. As we like to say around here, at some point, we have to make a conscious decision to choose vulnerability. Well, that’s the story behind our guest, Tom Hseih, as the founder and president of multiple airlines. Tom could easily live a life of luxury and comfort, but he and his family have felt called to something different. He joins us to talk about his choice to live with intentional vulnerability. What it looks like to run an airline and taking thoughtful risk. Let’s dive in.

Henry Kaetner: Welcome back to the faith driven entrepreneur podcast. I’m here with William and William. We are without Rusty and we miss him. We miss him.

William Norvell: Always, always that always exciting because it’s good to see you and our guests, but always sad when we’re down an amigo.

Henry Kaetner: Indeed. So today we’ve got we’ve got a special guest on Look, there shouldn’t be a pecking order for

Henry Kaetner: Cooler businesses than other businesses. And yet there is something amazingly cool about running an airline, right? I mean,.

William Norvell: It’s factual.

Henry Kaetner: Is it something like I mean, you know, the things you have go 500 miles an hour? That’s really cool. There’s like the logistics and the scheduling, which is kind of this wild puzzle that needs to be solved. Right. I mean, the fact you can get in one of your planes in like 5 hours can be like anywhere in the country. I mean, that the adventure, the spontaneous adventure of it all, like if I own an airline. And I like, maybe I’ll go like San Antonio and get some tacos for lunch. Right. But you can you do that. So, ladies and gentlemen, we’ve got Tom Hseih on the podcast today, and he indeed runs an airline and he’s going to be talking about that. But one of the things that so we are going to be talking about how cool is to run an airline, but we’re also going to be talking about the fact that that is only one really cool aspect of the way that God is using him in his life. And we can hear about all that today. But, Tom, welcome to the program. How cool is it to run an airline? Have you ever gone back into the hangar and just like, hey, I think I’ll borrow that and I’m going to go get some tacos in San Antonio.

Tom Hseih: No.

William Norvell: That is specific, you’ve never been to San Antonio for tacos. I want to see if that specific scenario played out.

Tom Hseih: Yeah yeah yeah yeah certainly would not be a way I would use company resources. So last year. Okay, this is funny story, but last year I had my family, extended family come up and visit me in Anchorage. Oh, maybe a year and a half ago. Maybe 20 of us altogether. Anyway, I wanted to get them on a plane […..]. The Alaska plane, you know, to visit Kenai in alaska. So, you know, went down to the service desk, and I bought tickets for all of us. And the agent looked at me kind of funny, was like, You’re the president of this company, yet you’re paying full price for these tickets. Like, yeah, you know, I hear it’s a pretty good company to give money to, so I have no problem painful price for these tickets. So anyway, it’s just this kind of a back event.

Henry Kaetner: And then of course, the paper trail is like you’re not using I mean, you’re believing the product you’re buying, and it’s not like this is like your private fleet of planes. So I get that. You know, I actually think I had thought about this before, but back in the 1980s, wasn’t there a sitcom called Northern Exposure? Do you remember that? Because I’d forgotten you’re in Alaska, right? Right. So do you remember? You know what I’m talking about. There’s a TV. I do? Yeah. Yeah. An airline in, like, candidate or something like that. So what is it that draws people? Was really cool airline stories to the north. You got a particular angle about the opportunity to maybe speak to that a little bit.

Tom Hseih: Yeah, sure, sure, sure. Yeah. Well, you know, the the thing that drew me to Alaska and our management team here was both a need and an opportunity. So what happened were great in Alaska, which is the airline we run is early in the pandemic, April of 2020, the airline declared bankruptcy and they shut down all service. But what that did at that moment was a stranded dozens of communities. The dozens of communities could no longer see a doctor, buy groceries, get US Postal Service. We at that time, you know, in March of 2020, had just launched another airline, a different airline in Southern California called Float Shuttle. And float stands for fly over all traffic. And the idea was to use the 40 general aviation airports in Southern California. That’s like more small airports than train stations in the L.A. area to get people to and from work, reducing their commute from like 3 hours down to 15 minutes. And we had about 4000 people express interest in subscription service. We launched in March of 2020 and had a great first week and then we hit the pandemic, had to put that on pause, at which point, you know, our teams to back and ask, well, where’s the need? Where’s the opportunity? And, you know, we were drawn to the Raven because we saw a need and then we saw an opportunity. The 30% of their business was medical related. You know, Medicaid subsidized, 20% was cargo and mail. And we said, hey, you know, the numbers crunch out. If you even if you just did half the business throughout COVID, you get to service the need and have a sustainable business to COVID. And so we were really fortunate. I mean, I think we were blessed to have won the bankruptcy auction for Raven out of the bankruptcy courts and able to restart service. When we took over the business in 2020, most aviation industry said it would take us about a year to get back up and running and operational. Kudos to the team. That first month we rehire 300 employees. Everyone got to work. We got it up and running in three months and began servicing these communities in three months and it was really amazing, heartwarming the first time. So, you know, planes landed in some of these communities. The whole community come out and just applaud, you know, seeing that connection back to, you know, civilization coming back in to their communities. And that’s just been a beautiful thing to be part of.

Henry Kaetner: That’s super cool. Okay. So you have ended up where God has you right now and running an airline. But that’s not the beginning of the story. And as you were talking about before we went online, you and I had connected a long, long time ago. And that must have had something to do with your time at EarthLink.

Tom Hseih: That’s right.

Henry Kaetner: And you’ve come out of the telecom world. Who are you? Where do you come from?

Tom Hseih: Well, you know, so my early career. I got started at JPL. NACA actually got to work on the Galileo and Cassini despace probes projects, you know, So my my education is in physics. And then when I got to do was manage these networks of supercomputers that were computing the trajectories for the deep space probes for the Cassini, […..] and for the Galileo. And those are, you know, very like massive computing, heavy efforts. And so I managed the computer networks that managed that and, you know, did that calculation, which is why I was recruited by EarthLink. If you remember EarthLink back in the day, EarthLink networks, early ISP. And when I joined the company, the engineering team was just ten other engineers and myself. We were working out of a converted dentist’s office at that time. In that first month, we had to knock down the wall to the lawyer’s office next door to expand our servers. So I knew of the company. VP of Engineering. Help me with that.

Henry Kaetner: For a very interesting day in the attorney’s office where a bunch of telecom guys I talked to one of their having some sort of staff meeting and all of a sudden all these engineers like, like knocked down the wall.

Tom Hseih: Yeah, yeah, yeah. Now there’s a little more planned out than that. We actually had to buy out their lease, but that would have been very funny.

Henry Kaetner: Yeah. All right. I’m sorry. I guess I’m pretty sure that whole episode will end up on the cutting room floor. But continue on, please.

Tom Hseih: Yeah. So I got the other team to grow. That team from the ten engineers I joined to 450 engineers nationwide network engineers, systems engineer, software engineers and for ten years and to IPO. So we were, you know, one of the early dot coms, $1.2 billion IPO on the Nasdaq exchange. And when the company went public, you know, that’s a bit of a life changing event for a lot of employees, particularly, you know, early employees and executives and even, you know, just early employees. I mean, I remember, you know, there were mailroom clerks showing up in their new Mercedes Benz, you know, next day. And it just you know, it was quite an event at that time. I think we had mentioned earlier living in a two bedroom apartment in Pomona, California. And it’s in a neighborhood. You know, when I first moved in, there were five shootings on my block that first year. So it’s a community that seen a lot of hardship, but it’s also seen a lot of transformation. Anyway, my wife and I are living two bedroom apartment and she turns to me at that point, you know, my colleague, other executives and company were up scaling their home and moving to nicer places by the beach. And my wife turns to me and says, Well, we’re not moving. You know, our call and our mission is right here. And not only that, she said, you know, the median household income for the nation at that point was $38,000 a year. So she says half the households in the nation live on 38,000. More and half the households live on 30,000 less. So she drew up a budget for us our rent, our gasoline, our groceries, our date nights, Date nights was a very important splurge category. It’s very, very important. And so to say, she said, this is a 36,000 a year budget that’s led to this budget so we can give the rest of our income money away. Wow. And that’s just been a really joyful experience for us ever since. So median household income is closer to 80,000 these days. So we give ourselves a little bit of a raise. So here’s a little bit above some years.

Henry Kaetner: You run an airline hold on a second, just make sure I am catching up, you ran an airline. Yeah. And you have elected to live to keep your family budget at the median family income and then give away all the rest. And with that household budget, you’re still paying full price for airline tickets, as we’ve already established.

Tom Hseih: That’s correct.

Henry Kaetner: Wow. That’s amazing. That’s unbelievable. How do people react to that?

Tom Hseih: You know, with their eyes, it varies, but. Yeah. Yeah.

Henry Kaetner: What are the things you miss? So do you. Look at this. You’ve had great business success. What are the things, walk us through that a little bit about? What does that really mean? And did you feel it’s been a sacrifice? Just, you know, is that it’s been a burden that you’ve carried on yourself like, oh, I guess we can’t do more than 80,000 because we made this commitment. I guess we got to do it. How is that lived out?

Tom Hseih: Yeah, no, that’s a great question. I mean, well, there are there’s some sacrifices, so and so I’ll just go back to our very first year of marriage, share some testimonies along the way to our encouragement, you know, very first year, you know, as we were getting married, we made this decision. As we were getting married, we realized that our budget wouldn’t afford us, you know, an overseas honeymoon trip. Right? And so but we did something nearby. And it’s really nice. We celebrate our honeymoon in San Diego just a couple hours away. But here’s an amazing part of the story. So a year later, we get a call from Target. All right. So Target gives a call. My wife gets this call and she almost hangs up on them. They say, Congratulations, you’ve won the Target Calphalon giveaway thesis. My wife said no thank you. You know where we were You registered you did your wedding registry at Target and you registered for a telephone pan. That arm entered you into the target telephone. You know, honeymoon, when you’re with see steaks and this is real, you don’t have to pay taxes on this, but you win a seven day all expense paid trip to Tuscany, Italy. And that was an amazing confirmation, an incredible. And then my wife turned to me at that moment, said, this is God’s confirmation to us. It’s his encouragement saying, you know, I will provide for you. I will bless you with good things. And I think that’s been true. And I can tell a story after story, but that just even from the start, that’s been true practically what that meant. So I was there dinner party just a couple of weeks ago, and people were surprised to hear that we’ve never bought a new car in our marriage. We never buy a new car. And people are like, What? How can you do that? In fact, actually currently driving a 2006 Camry, I just got a return because we lent it to a friend. You had a friend in a neighborhood. Guy in the car accident and car was banged up. They’re fine. And that them the car actually turned out to be for several months. And so we’re down to one car, a family, which can be a little stressful in L.A., But someone in our church said, Hey, we hear you down to one car. We have an extra car. You know, once you just use it. We’ve been in. So we been using this other family’s car, you know, for a couple of months. And so the dependency we have in our wider community really has also been part of the blessing. Right. So our interdependency, right in our community has been a great blessing for us. So I don’t know. I don’t think I think in terms of sacrifices, I think in terms of, you know, for the amazing things that we’ve been experience. Well.

William Norvell: Amen. Amen. Tom, William here, good to see you again. We’re going to do a quick plug. Tom is in one of my faith driven entrepreneur groups right now. That’s right. So gotten to know him over the last seven weeks. It’s been really fun if you don’t know about those yet. They’re 8 weeks series and they’re just really fun to get to know people and hear people’s stories in a deeper way. And we were doing one specifically myself and Mark Washington, another friend of the program, did one for MBA students. So wherever you are, however you think about life, we like to think that there’s a group for you, so we hope to be able to help you do that, to go to our website and check it out if there’s not one for you. Start one with your affinity group and who you want to be and we’ll help you start it. But it’s been really fun to have a bunch of like minded people coming around again. It’s been really fun to get to know Tom and his story, and I did not know, however, that you’re driving a 06 camry because I drive an 07 camry. So now we’re even closer than we were before. And that’s why we come on the Long Form podcast. That’s right.

Henry Kaetner: What do you get to know? 07 camry versus 06. What do you have the CD player or the eight track player.

William Norvell: Who.

Tom Hseih: We have six test. Wow. No, I don’t.

William Norvell: Just the one. Yeah. Once you get 07, they get the special stuff. Dual temperature. Dual temperature control.

Tom Hseih: No way.

William Norvell: Yeah, yeah. No fun stuff like that. I was actually my wife’s car. I inherited it when we had a bunch of children and had to get a minivan. But I don’t want to belabor this point, but I want to go one layer deeper here because there’s a lot of entrepreneurs listening and they may have an event in their life that is life changing monetarily, right? Yeah. And I know you’re part of a great organization. We love here, too, called Generous Giving. And I will give you the mic for a few minutes and say like, oh, a little deeper on how you consider that decision and how you might you mention some testimony. How do you encourage people and I’ve heard you tell your story because I know you’re not saying everyone should do exactly what you did. However, I never forget John Piper gives these sermons about missionaries every year and he says, Look. I’m not telling everybody to go to the middle of nowhere and be a missionary. But there might be five people here, and that’s exactly what you should do. And so all I’m asking you to do is consider it deeply and put your hands out in front of God. Yeah. And so I want to hear a little bit about how that decision was made, because there may be some people listening that need to do that, that their heart is too wrapped up in the success or what that and I may be one of them. So I’m here to listen to. Could you tell us a little more about how you and your family prayed through that decision and what you might share as an encouragement to others thinking through it?

Tom Hseih: You know, I think we were fortunate in that for us, the decision actually was not very hard. And part of what that made this decision easier for us was, you know, you use the word missionary. But, you know, we were already active in missions. You know, we thought of ourselves as missionaries in Pomona. Right. And so, you know, a big part of it just, you know, I think how successes get defined in our lives is determined by where you live. Right. I mean, that’s a big portion of it right there. And so in some regards, you know, we had quite an advantage, you know, living in Pomona, living in South Pomona, where, you know, it’s in LA area, but rents are low. And then because we’re a part of, you know, a ministry, we had a very, you know, different priorities in life focus already very well. So as peers, I mean, you know, in our two bedroom apartment in South Pomona, you know, before we had kids, everyone knew we were rich. Right then you are we were rich because, you know, they would knock on the door. The kids would knock on the door and say, who lives here? And so it was just the two of us. And that was surprising because all of our other neighbors would have two or three families in the same two bedroom apartment. Right. So then you were rich, right? Yes, the two of us. But this kind of resets your like you know, your level resets your peer group. Whereas I think, you know, we we’re living in a more suburban place like where I grew up as a kid. You know, you have a very different peer group and you have a different sort of expectation of, you know, kind of lifestyle. Then the second part about being a missionary or, you know, working for the Shalom as they are, Pomona is, you know, we’ve had to build this interdependency, you know, through our community, with our neighbors, but also with our church. And, you know, I mentioned the story about the car, but that’s not the first time we’ve had to be dependent on others for our needs. Times when we’ve, you know, lent money, borrowed money. But that kind of interdependency has freed us from each of us having to have our own stash of security. Right. So instead of each of us having our own stash of security for the what ifs, you know, we have this shared interdependency and that free us, that’s all. And, you know, for us, it’s been a beautiful experience of seeing the body of faith coming together, you know, to support each other, but to actually work actively in this community and see God’s shalom and in his work in the city.

William Norvell: Mm hmm. Amen it reminds me of a I’m doing Bible in a year right now. I’m just just getting two acts, six months in, acts 2:44, the all believers were there, and they had all things in common, and they like nothing, right? Because they came together. And that’s such a beautiful picture that I don’t hear very often. Right. And of course, in the Old Testament, too, you see the Jewish people continually come around each other in that communal format, whether it’s rebuilding the wall with Nehemiah or just taking care of day to day needs of, you know, the 12 tribes. So so we jumped out a little bit. And Henry, I know a lot of your story. Take us back to the decision to live in Pomona and how you have decided to make that a place that you have dedicated so much time and your family have dedicated so much time in. What was that decision like and how has that played out over the decades to root yourself in a specific place?

Tom Hseih: Yeah. Yeah. So for me, it started in college. When I was in college at Harvey Mudd, I got involved with InterVarsity Christian Fellowship and really delved into the scriptures in a way and God opened up the scriptures to me in a way, and kind of we brought me into an adult faith. Right. And then some of the things that God opened my eyes to in Scripture I didn’t really wrestled with or saw before, but by the time I graduated, God convicted me primarily two things. First thing that he convicted me of is God really has a love for the poor, and it’s all through out scripture. It’s just there. But I’ve never really kind of, you know, wrestled with it or acknowledged it before. But I also just really convicted, you know, God’s love for the poor through out scripture. The second thing that God convicted me of is that I don’t have a love for the poor. And I really felt like God challenged me at that time at the point when I graduated. Like, you know Tom here’s where my heart is. This is where I’m focused. This is where I’m working. Where are you going? What are you doing? And so I ended up turning down a couple of job offers, some aerospace and entering, choosing a two year internship with a Christian missions organization called Servant Partners. Servant Partners works in urban slums around the world, and they had a two year internship where they were training folks who were going overseas. I just happened to be placed on the team that was located in Pomona, California. And so at the end of the two year internship, most of my teammates end up going overseas, which is what the training is for. But in my heart, at the end of two years was someone had to stay and work for the transformation of the city of Pomona. The all the reasons why the City of Pomona was a good place for this internship, right. For preparing people for overseas slums was one of the reasons why it also needed, you know, God’s light and shalom and his people continued being committed and working for its betterment. So that’s how I chose to live in Pomona. Felt like there was a calling for me to be invested for the long term in this city. My wife, my wife was involved InterVarsity Christian Fellowship as well in Iowa. So for Grinnell College in Iowa, she graduated in there, moved to South Central LA be part of a team there, you know, with servants partners. And so we met in L.A. And so, you know, I like to joke that, you know, when she married me and moved to Pomona, you know, she actually kind of moved up. It’s actually kind of a step up in terms of neighborhood communities, but.

Henry Kaetner: You know, not say anything bad about Grinnell, Iowa.

Tom Hseih: No, no, no, no. I was talking about South Central from South Central. Oh, yeah. She was working in South Central L.A. and, you know, she married me and moved to Pomona from South Central, you know, And in some ways, I mean, they were similar type communities. But, you know, South Central had a much more notorious stigma or, you know, associations with it. And Pomona was probably less known. But anyway, that’s that was the joke I was trying to make. Now about Grinnell, Iowa, actually, you know, I didn’t mention that I actually lived for a couple of years in Iowa. So, you know, I was born in Taiwan and immigrated to us with my family when I was five. And the first place we lived was Ida Groves, Iowa. We lived in a small community and Ida Groves had just got their first signal light installed when we moved in. And so, you know, a couple of years of my childhood in Iowa before coming to our area.

Henry Kaetner: Want to be clear, we love faith driven entrepreneur in Iowa and we also love faith driven entrepreneur in south Central L.A., maybe not as much as we like the ones in Pomona, but now God is doing a great thing. There’s been revival that’s been going on in L.A. some amazing things, some great innovation there. And back to the story, it’s very clear that you’ve been really actively involved in the community promoting that you’ve been called their your place there and you didn’t really originally have a heart for the poor, developed one at a time. And as an entrepreneur, what does it look like for you to work with your employees? Because you’ve got several hundred now about how to help them to develop a love of community as well. What does that look like? How does it become their thing rather than just your thing?

Tom Hseih: Yeah, yeah, that’s a really good question. And you know, I’ll meet a friend that that’s something I feel like I’d love to grow in. I love to learn more how to do that well, but I want to give that question a little bit and talk about how I’ve been blessed to see that happen in my kids. Right. So, you know, when we bought the airline in Alaska, we actually moved up to Anchorage for a year. And so one of the practices my wife and I have in our life is before we make any major decisions, we gather that kind of our spiritual elders together, folks in our church and our wider community who are believers, and we ask them if they trust. So before we bought our house, you know, we had them pray about that decision going from renter to owner before I made major life decisions. When I took on the role of volunteer campaign manager for our current mayor, when we were trying to bring about a political transformation in the city, you know, gather that group together. You know, the consensus there was, yeah, this is something you should be committed to before we started the airline, you know, gather that group together. Knew that would in some ways take my attention away from the city a little bit right as we were starting this airline. And and the consensus from that group is you need go do this. We all know why. But, you know, go do this airline. There’s enough leaders here in the city moving things forward, but you need to go. And at that point, the words, you know, one of the folks received as they were praying for me was, you know, the time is urgent and the opportunity is going to be global, global, global. I’m like, we’re doing a regional, regional, regional airline but little that I know you know how this is going to in the developing. But at that time we actually so we bought the airline. We moved our family to Anchorage. Initially, the intent was just to be there for three months. So restarting the airline is during the pandemic. So extended, you know, become a full year. You know, after three months, we were still in lockdown. Our kids were still enrolled in their Pomona Unified Public Schools, but they were zooming in from Anchorage and, you know, they weren’t going back in-person. So we end up staying a full year there and then moved back until kids were allowed to go back in-person. Then we moved back. But when we were in Anchorage, my kids came to me and my daughter particularly was like, you know, this has been amazing, you know, to be in Alaska. It’s beautiful. We just had this amazing routine. We love the outdoors. She said but we’re going back to Pomona, right? Like, yeah, it’s just no, please, you know, we need to go back. And I was reflecting on why was that so important for her? Well, you know, it was the thing. And then realize that, you know, our mission in Pomana wasn’t just my wife and mine, it’s hers as well. You know, when she was in third grade, one day after school, she came home and she asked my wife and I says, Mom, dad, why do we live here? It’s kind of dirty, it’s noisy. There’s, you know, police helicopters overhead every night. We lived two blocks away from one of the grittiest intersections in the city. So there’s a lot of gritty stuff on the streets, and why do we live here. And, you know, we had a chance, as you know, we’ve had other times. But, you know, it’s just kind of explain again, our sense of calling, you know, to see and our prayer and our work or what is God doing here. And when we said, yeah, this is we sent a call, but, you know, this call has to work for our whole family. And so any point that doesn’t work for any of us, we’ve got to take it to the Lord and ask him what to do. And she said, Oh, okay, well, that’s fine. Yeah, thank you. And then a couple weeks later she comes back to me and I was starting to read the mayor’s campaign that time, she just said, dad can I go with you? Can I go with you? You know, to these meet and greets and these campaign rallies? And the strategy means I’m like, absolutely, you know, come along. And she came with me to this [……………………..] . Like, Yeah, well, she ended up like also helping my wife run the place, making workshops on the weekends where, you know, they would gather up to 80 people, would get together on weekends and pick a particular alley or a corner and say, What can we do? What’s the cheap light there to make this block just more friendly? A place where community can gather and, you know, build community rather than a place of blight. And so she helped run those with my wife for a couple of years after mayor Centreville was was elected. Two years later, there were three other council members that ran and that we supported because they had, you know, the same kind of community minded, you know, servant leaders. And one of them was Nora Garcia, who was a schoolteacher. And my daughter Kadence worked on her campaign. And she was such a critical part of that team that when she won and she was sworn in, she asked my daughter to stand up on the dais with her when she was sworn in. Right. And it reflecting on that made me realize, oh, this isn’t just our city, right? This isn’t just our ministry. This is our kids city as well. And so it’s been [……] to see that be part of their lives and then back to the money thing. So one of the things that were helping the kids on, you know, every now and then and then, you know, this happened, you know, as we’re coming back from Alaska, I was like, well, you know, every now and then as an entrepreneur, you know, there are equity moments, right? Liquidity moments. And I said, you know, if this airline does well and it also we had launched a cryptocurrency company and of course, you know, crypto markets kind of crazy, right? So. Well right now. But you know, we had launched a cryptocurrency company, raised 33.2 million as a three seed, right to launch fly coin. And you know, my question in my kids, really, if any of these does well. How would you think about you would imagine like that could change what we did with our lives or and my kids […..] like, change. What would change and my daughters? You know, like. Yeah. Dad I think would give us an opportunity to think about more places to give. Anyway, that is just beautiful.

Henry Kaetner: Yeah, that is. How old are your kids again?.

Tom Hseih: So my daughter’s 16 now, is going from junior to senior, and my son is 11. He’s going from fifth to six grade.

William Norvell: I had one more question before we come to a close. You mentioned calling a few times. Right. I’m curious, you know, a lot of entrepreneurs, I mean, most entrepreneurs feel some sense of calling before they go off on this journey. You know, there’s a lot easier ways to live in the world, right? Those calls are probably from a spectrum of I see a great business opportunity to you know, I heard a word from the Lord audibly. Right. That big of a spectrum. But I’m curious, how do you reaffirm or reassess, you know, did you hear something 20 years ago? And you just know that that was so clear that you’re never going to change? Or do you continually do it? And if you do continually reaffirm it, what does that process look like?

Tom Hseih: Yeah. Yeah. You know, I think for me is that later, right? Is it’s been a continual process. I don’t think it’s kind of like, oh, I’ve got this one calling and it’s been clear ever since. It hasn’t been that way for me. I mean, first I thought I was going to go into, you know, be a physicist, go into aerospace, and God said, no, you know, I want you to work of where your heart is at and grow this, you know, love for ministry. And then, you know, he, God continue to advance my career in the meantime with JPL and then with EarthLink. And then, you know, there was a little bit of time where, you know, really my focus was steered away. So, you know, like I mentioned, you know, when I took on the role as being a [……] Campaign manager for the mayoral candidate and current mayor, I mean, that took my attention away from business for a little while. You know, there were still businesses that were running that I wasn’t actively managing that had started, but I wasn’t. I mean, my focus was the campaign. My focus was, you know, building up the momentum of a citywide movement transformation. But, you know, in terms of the process, in terms of the client, how’s that calling been renewed for me, I’d go back to this group of spiritual elders, you know, in our lives where we, you know, we sit and listen and, you know, my wife and I continue to submit ourselves, you know, both to the Lord’s calling, but also to the wisdom of the believers around us and to their accountability. Right. So it’s a lot easier, you know, when you have a group of peers who, you know, commission you into something, you have that kind of you’re like, okay, it be just like something I heard and I’ve got [……]. Like, you know, you know, there’s this community of folks around us supporting us, encouraging us, holding us accountable. And before, you know, and every major change or different times of checking in like his calling shifted or is it morphed or is it, you know, pivoting? And, you know, we want to remain open and responsive to the Lord’s direction.

Henry Kaetner: Now, I want to hear from you about what you’re hearing from the Bible, maybe something this morning, maybe something this week. Before we do that, though, 60 seconds or less just gives a quick view of what the transformation has been like in Pomona since you’ve been involved. It looked like this and now it looks like this. This give us a 60 seconds overview and then bring us to close by sharing something you’re hearing from God through his word.

Tom Hseih: Yeah. So one of the reasons why we feel called to be involved in the political transformation is after working in the city for 20 years with help, started a number of different nonprofits, educational nonprofits, afterschool programs, Bible clubs, environmental justice, nonprofit workforce development, etc. realized it was like pouring water into a leaky bucket right there. And we realized that there was a layer of political corruption that was really sabotaging the future of the families in our city. So when my friend Tim Sandoval, who is a community servant leader, stepped up and said, I’m going to run, we felt like, okay, we need to get behind him. You know, City at that point had pretty significant kind of homeless dwellings, tent cities, if you will, and, you know, major blocks, including the civic center. So we’re going to have to see how I’m going to turn to the library. This is a huge encampment, but throughout the city there was just in numbers and numbers of encampments. You know, since then, we’ve been able to build shelters for them to build, you know, programs. We had people graduating from those programs into, you know, more long term housing, sustainable jobs, etc.. That’s a beautiful for transformation. But also, I mean, just kind of highlight, you know, it just is just the fiscal health of the city. You know, five years ago, you know, the city was projected to be insolvent. We’re running, you know, $10 million deficits and it was heading towards insolvency within two years. Just this year, the city is projected to have a $8.5 billion surplus now. And so, you know, praise the Lord for that. So that’s a bit of kind of a very high level. Right. Some indicators of some of that transformation in the city. We were talking about just a change in the attitude. The spirit of the people, which is the most important, I think is a sense of hope, right? I think the most difficult thing to combat in a troubled community is the sense of hopelessness. I sense that, you know, the best thing you can do is just get to get out versus, you know, how do we actually change this community and have it be a place that’s worthwhile to invest in and be part of for a long term? And that change has been significant. And I would love to. I mean, they won’t fit in a 60 seconds or less so that lots of stories about what that transformation and helpfulness looks like.

Henry Kaetner: So, Tom, thank you for that closes out. Tell us what you’re hearing from God in his word. Doesn’t necessarily need to be this morning, but maybe it is it is something recently because we have this belief, of course, in the community that God continues to speak to us through the Bible.

Tom Hseih: Yeah. Yeah, he does. You know, praise the Lord for that, you know. So one of the things that I’m sure this as an entrepreneur, so let’s take us back to the entrepreneurial journey is is when running an airline, when there’s two parts of our airline, there’s the established service in Alaska and then there’s this entrepreneurial venture part where we’re expanding to create a new Trans-Pacific airline called Northern Pacific. Right. And then starting an airline is very capital intensive. It’s you know, it’s the Richard Branson quote, You know, this way to become a millionaire is you start with $1,000,000,000 and then you buy an airline, right? Yeah, very capital intensive. And it’s it’s a very challenging journey for us as a startup, right, As a start up. So that’s very much in startup venture mode right now. And sometimes it’s very difficult. You know, it’s very challenging to think about, you know, looking at our cash runway and looking at what needs to happen to keep the business operating, you know, into next week, into next month. And as I also reflected on this, you know, in this scripture, so this is coming out, you know, where this is scripture speak to me, I felt the Lord led me to a passage in Exodus where he’s leading a Hebrew people out of Egypt and they’re at the shore, the Red Sea, and the Egyptians are closing in. They’re caught. You know, one side cut off by the Red Sea, the other side with the Egyptians advancing on them and they they’re stuck. And that’s where I felt like I was at, like, you know, hey, I don’t know where to go here. And I’m sure the entrepreneurs can relate with this feeling. But as I was in prayer and as I was studying this passage, I felt like, you know, Lord saw me. Like he said, No, you’re not on the shore, you’re not on the shore. You’ve got the wrong perspective on this. You’re in the tunnel of water. You’re in the tunnel of water. You know, I’ve already done this miracle, opened up this way right where you are in this process, miraculously. And that’s true. And then the only reason or even where we’re at, it’s been a miracle. And so you’re in the middle of the tunnel water. You’re not through it. You’re not in the shore, You’re not at the other end, you’re in the middle, you know, and that maybe you feel more terrifying, right? Because not only are you, but you still have the sea around you and the Egyptians are still advancing. But, you know, your options are limited. You know what you going to do? You’re going to sit down. You can’t go back. No, you go. You just got to go forward. And I was such a both challenging and encouraging word.

Henry Kaetner: Tom, thank you for sharing your story. Thank you for being with us. Looking forward to tracking the progress of the growth of the airline. We all need to go ahead and do a field trip down to Pomona and see what God has done down there. Thank you for the example you set for how you think about the biblical message of generosity and community involvement, engaging our children and just grateful for you.

Tom Hseih: Thank you.

Recent Episodes

— by Scott Boyer

After more than 28 years in Big Pharma working for the likes of Abbott and Bristol-Myers Squibb, Scott Boyer felt God leading him to launch a new kind of business – a Pharmaceutical Social Enterprise®. Scott is the founder and president of OWP Pharmaceuticals and the board chair of ROW Global Health, which together form a hybrid social enterprise that is transforming the lives of people with epilepsy and associated psychiatric disorders in over 35 under-resourced countries. The blueprint for this unique business model is outlined in the new book, “Powering Social Enterprise with Profit and Purpose: The Tandem Hybrid” (Routledge Publishing).

I had been hearing the “whisper” for years but hadn’t yet responded. It was 2014, and after a long career in the pharmaceutical industry, I found myself at the Halftime Institute in Dallas, trying to discern God’s calling for the “latter half.” I had a clear vision of what I should do but hadn’t had the courage to walk in faith that God would provide what was needed to make it happen. With the encouragement of like-minded peers and mentors at Halftime, I decided to take the leap and start a new enterprise, one God had been nudging me toward for years. 

Later in 2014, I launched OWP Pharmaceuticals and the ROW Foundation to address the lack of access to life-changing treatments in under-resourced countries. It’s a model that has now produced over $22 million for medication, diagnosis, and training in low- and middle-income countries, including grants for over 170,000 prescription-months of medication for the poorest of the poor. I’ve learned a lot through both failure and success over the last decade. For a mission-driven venture like this to thrive, I think there are four essential characteristics. It needs to be:

·      Driven by a compelling social mission

·      Financed by commercial success

·      Structured to retain control

·      Scalable and sustainable for the long haul

A Successful Social Enterprise is Driven by a Compelling Social Mission 

Later in my Big Pharma career, I noticed something that piqued my interest while doing market analysis. On the pie charts, the most common markets were the U.S., Japan, the wealthier countries in Europe, and sometimes China and India. The other 180 countries would be lumped together in the last column, always the smallest, titled ROW—“Rest of World.” Companies would focus on the major markets where profits were the greatest, and the rest of the under-resourced world would be neglected. It made business sense, but it became harder for me to rationalize that most disorders and diseases that could be easily treated by available and even inexpensive generic medications went untreated. The cost to human life and human potential in these situations seemed staggering and inexcusable.

I wanted to find a way to do something about “ROW”; to find a way to equalize the graph when it came to medical care. This stirred my sense of justice from a medical and pharmaceutical perspective. It says a lot about us as humans if we’ve developed cures and treatments for diseases but consciously or unconsciously choose not to deliver them to all those in need. Futures could be radically changed by a pill that costs a nickel or a dime. My background uniquely prepared me to start two social enterprises: OWP Pharmaceuticals and the ROW Foundation. We envision a world where all people receive the best level of medical and pharmaceutical care regardless of who they are or where they live – this is our mission.

A Successful Social Enterprise is Financed by Commercial Success 

The old axiom is still true: If there’s no money, there’s no mission. I knew that to accomplish our mission at the scale of the problem, we needed to harness the financial muscle of business. Without the business “flywheel,” we wouldn’t be able to close the global treatment gap. But where to begin?

We determined our target would be epilepsy and (later) associated psychiatric disorders. Over 65 million people in the world suffer from epilepsy, a neurological condition known for causing seizures. In many low- and middle-income countries (LMICs), a lack of understanding of seizures – the belief that they are contagious, or worse, caused by demon-possession – keep people from education, employment, and even marriage. Eighty percent of people with epilepsy live in LMICs, and the vast majority go untreated. Seventy percent of people with epilepsy can have their lives completely transformed with proper diagnosis and medication. The potential for life change was huge.

From a business perspective, one report estimated the U.S. market for epilepsy drugs at $1.3 billion in 2020, with the worldwide market reaching $5.8 billion by 2027. We entered the market with our antiseizure drugs Roweepra® (levetiracetam) and Subvenite® (lamotrigine), with the goal of running a profitable business in the U.S. and funneling profit to ROW to fuel our mission around the world. We continue to innovate our social enterprise to compete in the U.S. market, and our development pipeline has six oral liquid drugs widely used in neuroscience, several with patents already issued. The success of the business means success for the mission.
 

A Successful Social Enterprise is Structured to Retain Control 

If you want to keep control of your mission, you need to think about structure from the beginning. Your angel investors will push you to venture capitalists (VCs), and your VCs will push you to private equity, who will push you to venture debt, who will push you to structured debt. At each step, you give up more control to people who are likely not driven by the same goal. These are normal business transitions when it comes to capital, but they’re not necessarily positive for mission-driven enterprises. 

To retain control in a private company, a founder must retain at least 51% of the equity or voting stock, either personally or in an organization. You need a plan to protect the mission (and founder) from being forced out or bought out. Our tandem hybrid model – which utilizes both for-profit and non-profit entities – guards against these outcomes. My co-founder Bruce Duncan worked with our attorneys to (eventually) come up with an elegant solution that allows ROW guaranteed funding while OWP controls the business assets. To achieve this outcome, we formed an IP Holding Company (LLC) – owned jointly by OWP and ROW – which contains all OWP patents and other intellectual property. OWP pays licensing fees and royalties on product sales to the Holding Company, which automatically funds ROW at its percentage of ownership. We’ve structured this model so that approximately 50% of OWP’s profits can go to ROW – an unheard-of percentage of corporate giving. While there are other structural options that can produce similar outcomes (see Patagonia’s recent restructuring as an example), the goal is to find a way that locks in your mission for perpetuity.
 

A Successful Social Enterprise is Scalable and Sustainable for the Long Haul 

In his TED talk, “The Case for Letting Business Solve Social Problems,” Michael Porter from Harvard says:

“What’s the fundamental problem we have in dealing with these social problems? If we cut all the complexity away, we have the problem of scale…Why is that? Because we don’t have the resources…So, if it’s fundamentally a resource problem, where are the resources in society? I think the answer is very clear: They’re in business.”

Our tandem hybrid model leverages business; as OWP’s profits increase, ROW’s global impact increases. While many non-profits struggle with inconsistent revenue streams and difficult decisions about investing in “overhead,” our model bypasses those challenges. We’ve already built the pharmaceutical infrastructure that will allow continued growth. And as OWP grows, so grows ROW. While ROW Foundation (a private foundation) benefits from the profits of OWP, we don’t want to limit the scope or scale of resources we can put toward the mission. So in 2021, we launched ROW Global Health, a public charity, to attract philanthropic dollars from individuals, donor-advised funds, and foundations to diversify our funding sources and add more fuel to the engine. 

Sustainability and scalability are especially important to the work we’re doing globally in epilepsy. We can’t start a treatment plan and then tell patients we’ve run out of money and therefore run out of medication. We need a sustainable way to help educate, diagnose, and treat people for the long run. A consistent revenue stream provides a sustainable solution, and the future growth potential of the business allows for a scalable solution. Yet the impact is measured by each individual life transformed; each child of God whose human potential is unleashed. 

While we’ve come a long way in the last nine years, in some ways, we’re just getting started. We’re developing new products, building new partnerships, and structuring our model so that we continue to serve “the least of these” long after I’m gone. 

What “whisper” have you been hearing? How might God be leading you to respond? It could be that the rest of the world is waiting for you to take the first step. 

This article includes excerpts from the new book “Powering Social Enterprise with Profit and Purpose: The Tandem Hybrid” (Routledge).

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