On this episode of Crafted, Design and Operations Lead Sonali Zaveri shares how she coaches these founders, as well as why entrepreneurship is such a “privileged sport” — and what she’s doing about that. We also discuss how Ideas42 Ventures uses behavioral science to design products that make lasting impact and why founders should be embarrassed by their first product.

Here’s Sonali Zaveri on Crafted, Artium’s new podcast.

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Sonali Zaveri: Entrepreneurship is a very privileged sport, and you've got to have the ability to leave your job, the ability to have financial backing from friends and family. It's not easy. But if you give someone resources and you give someone capital, you kind of eliminate those factors.

Dan Blumberg: That's Sonali Zaveri. She's the design and operations lead at ideas42 Ventures, a venture studio that aims to solve massive social challenges by bringing in founders with non-traditional backgrounds. Unlike at other venture studios, the entrepreneurs who join ideas42 do not need to have a tech background, they don't even need to have an idea yet. What they do need is talent and lived experience that connects them to the societal problem they want to solve. On this episode of Crafted, Sonali explains how she's helped new entrepreneurs test, build and measure their ideas, how to use behavioral science techniques to create positive change, and why at first she wasn't ready to join, but after meeting the first cohort...

Sonali Zaveri: There was just no way I could say no. When you're hearing our founders talk about the work they're doing, talk about their own life experience and what led them to apply, the first thing you say is, "How can I help?"

Dan Blumberg: Welcome to Crafted, a show about great products and the people who make them. I'm your host, Dan Blumberg. I'm a product and engagement leader at Artium where my colleagues and I help companies build fantastic software and recruit dynamic teams.

The roots of ideas42 ventures started at another behavioral science venture called Opower, where Sonali worked as a designer.

Sonali Zaveri: So I joined Opower at an interesting time. We had just been acquired by Oracle. But Opower in a sentence uses behavioral science to get people to use less energy. So if you get a letter at home that's comparing you to your neighbors, or if you go online to your utility company's website, you have some charts, some home audit stuff, all of that is Opower tools and they're branded under your utility company. But where Opower started was really just trying to test ways to get people to use less energy, identifying that comparing you to your neighbors is a very powerful behavioral science technique to do that.

Dan Blumberg: ideas42 is also founded on the principle of using behavioral science for good. Can you talk a little bit more about what behavioral science is? And you just sort of gave one example, if you give maybe an additional example of how behavioral science has been used to create good habits.

Sonali Zaveri: So there's a lot of books on this subject. I find these days, if you read a good business psychology book or just personal psychology, whether or not they're using the term, they're all rooted in behavioral science. And the idea is that we're all driven by certain psychological principles. So really, really common example is scarcity. If you log onto Amazon and you're shopping for something and it says there's only five less, that is Amazon applying the scarcity effect to get you to buy that product. Reviews, those are social proof. There's a lot of small techniques that they're just everywhere in our life and whether or not we realize it, we are absolutely influenced by them. So on a personal level, that means that you can use that to build better habits, but at a business level, that means that you can use it to influence behavior.

And in most cases what we see in the world is that's going to be people like Amazon getting you to buy more, do more, and do things that maybe you didn't really want to do or you don't need to do, but they will benefit that company. And so the Opower approach, and what we've really taken from that at ideas42 Ventures is, how can we influence you to change your behavior, but in a positive way? How can we get you to use less energy to donate more, to spend less on things that you don't need so track your budget better? And at ideas42, they're using that really in health, government, education and financial wellness spaces and they consult with government agencies, other non-profits. So kind of helping people who are really doing good things in the world to do those things better or offer better services.

Dan Blumberg: Yeah. I mean, behavioral science can be used for good or for ill. Las Vegas knows about behavioral science for sure, it's how they design slot machines and the rest of it. I see books behind you. Of course you're a designer, so they're color coded and I suspect one of the yellow ones behind you is Hooked by Nir Eyal, which is the product managers guide, the behavioral science, and a lot of it adapted from Daniel Kahneman's Thinking, Fast and Slow, which for me was a real eye-opening book in terms of the different biases that we have and how to take advantage of them for good or not for good. Could you share a little bit more about ideas42 and then ideas42 Ventures and how it came to be?

Sonali Zaveri: Yeah, so our studio lead Marc joined ideas42.

Dan Blumberg: That's Marc Laitin. They worked together at Opower.

Sonali Zaveri: He joined them with the question of, here's what we did at Opower, we phrase it as where can we find an intention action gap? So someone wants to do something but they're not taking the action. And then, where can we find an enterprise who would benefit from that? And then, how can we build a product to bridge that gap? And so Marc took that principle and brought it to ideas42 where he worked with all of the staff and they built some pilot businesses. And working with ideas42, you really, really see the power of behavioral science in action. What they really did together was take that into the product space and eventually through ideas42, we were able to get funding from Wells Fargo to really build out this larger venture studio.

Dan Blumberg: Venture studios are a hybrid of the VC model where venture capitalists mostly provide funding and a few resources and accelerators where founders mostly get resources and advice, but not as much cash.

Sonali Zaveri: And so, I look at venture studios as really bringing all of that together at a very early point in the business. And so we see that most venture studios are either idea led or founder led. And so if they're idea led, then the venture studio is building that business from scratch, they've got a team in-house who's churning out ideas, and once something hits, they go out and they find the CEO to take it farther. Founder led means you're bringing in the founders and maybe they have an idea, maybe they don't, but you're building the business with them and they are the ones who are really creating it from the beginning. So for us, we've said we want to build a venture studio, but we have three things that we've asked ourselves. One is, how can we use this unique combination of resources to bring people into entrepreneurship who might not otherwise have had access to it?

Entrepreneurship is a very privileged sport, and you've got to have the ability to leave your job, the ability to have financial backing from friends and family. It's not easy. But if you give someone resources and you give someone capital, you kind of eliminate those factors. The second question we asked ourselves is, how can we focus on building businesses for people who haven't had tech really used for them in a positive way? And so, what we really saw with that was, well, the problem is every founder right now looks pretty similar, every founder is already in tech, so they're solving problems for other tech people. What we said was, "Okay, if we bring people with lived experience in these areas and we bridge some of those gaps for them, we bridge that hurdle of jumping into entrepreneurship, can we build businesses for people who have been typically undersupported by the tech community?"

And then the last question is, how can we make sure that all of these businesses are making positive change? And then the other half is that lived experience where if I'm bringing someone who has lived experience in a certain area and that's where they want to build, they're going to stay in that space. They're not going to chase after what is going to be maybe the highest margins or the easiest to acquire customers, they're going to focus their product on those users.

Dan Blumberg: What is your view on why there are so few founders from underrepresented backgrounds? Why are so many founders rich white men?

Sonali Zaveri: I mean, for me, growing up South Asian female, there's just an audacity that a rich white man has that no one else does. And it is this complete confidence in yourself to build something and to do something and then to be told no and say, "I'm going to do it anyways." And that is something that I think a lot of people just don't have. I mean, that's to start, you have a lot of people who are just never going to take that leap in the first place. And then the reality is you have a system that's going to beat them down when they do. We have seen with our entrepreneurs where I've seen them go with amazing ideas, and no one will say no to listening to them, but you just need to prove this one thing. Whereas you've got other people who have pitched on a deck and been able to get that.

And I think that's really the difference. It's a data-driven system, and that's great, but the problem is the data is skewed because the same people keep being invested in, and then you need to be surrounded by people who are going to be rooting for you as well. And if you come from a low income background, you're not going to have parents, you're not going to have siblings or friends who necessarily understand the world you live in. The reality is like unless you're really surrounded by people who are able to push you forward and you have that support system, it's really hard to do. So there's just a ton of reasons it's stacked against you if you do not look and feel exactly like an entrepreneur does today.

Dan Blumberg: To address a few of these hurdles, ideas42 Ventures provides entrepreneurs with a salary and benefits so they can concentrate completely on their project. And the founder focused model means that during recruiting, it's not the idea that's front and center, it's the person behind it.

Sonali Zaveri: We believe that there's a lot of time and energy needed to come up with an idea, and really it's the person that matters, it's the founder and what they're capable of. The amount of businesses that pivot early on proves that having that one idea is not really what's going to make or break your business, it's going to be that founder who really, really is championing it and able to switch and pivot and learn as they go.

Dan Blumberg: I'd love to get into the weeds a little bit of how you've coached some of these founders and experiments you've run and things like that.

Sonali Zaveri: Yeah. So I'm going to talk about LaToria. She is one of the most phenomenal people I've ever met, and she is one of those people that you're like, "Yes, this is why we're doing this." This person was meant to lead a business and just needed that push that we were able to give her to really do it. And so, LaToria is the daughter of a young single mother, and what she really, really wanted to do was build something to support young single mothers. And one of the things we really found is that young single mothers need flexibility in their work schedule, and the 9:00 to 5:00 today does not work when you need to pick up your kid at 3:00 and you need to be home with them. And so what happens is, despite having degrees and completely amazing qualifications for a lot of well-paying jobs, those jobs are not structured for those young single mothers and they end up in gig work or service work where it's difficult to really build a long-term career or there is no career path.

Dan Blumberg: LaToria Pierce explored the concept of job sharing eventually founding a company called Team Handoff. Jobshare systems are more common in Europe, essentially it's where two people work part-time on what would ordinarily be one full-time job. Good communication is essential.

Sonali Zaveri: So we said, "All right, this is where technology can make a difference. We can create a company that's focused on placing young single mothers in jobshare roles, and then we can create the tool that will enable their success and enable that communication between them." It's not how most of us would imagine our job being done, but when you think about how many women quit the workforce over the pandemic and how many still haven't come back, you start to see that like, "Okay, this isn't going to work the way it is today." And there is this perception of a young single mother that just is not true, and that young single mother will carry with her for the rest of her life despite her accomplishments. And so, that is just such an example of why having LaToria being the one to build this business was so important because she knows it's wrong, and she will go out there and she will tell the world about how amazing these women are.

Dan Blumberg: How have you coached LaToria or others in terms of identifying this opportunity, looking at the various assumptions that are being made and proving whether those are good assumptions or risky assumptions? I'd love to understand a little more of your process.

Sonali Zaveri: The way we work as a studio is we've got a few roles that are broad and work across all of them, and then design and engineering will typically be embedded onto a specific team. And so, LaToria basically has my time 40% to 50% of the time, and my role is to really help her shape the product. But what we have found is that design tends to be the person who's involved the most, and we're involved very early on thinking about the product, and then we stay involved as that sales pitch starts happening. But one of the things we believe at the studio is that as a founder, as the CEO, early on you are the head of product. So we've intentionally not hired product managers at the studio because we believe that the most meaningful part of that work really needs to fall on the shoulders of the founder.

And so, what that means is the designer is you're sort of a product coach earlier on and thinking very, very heavily about product strategy. And the design part of it and the UX details, those are sort of the things that you slap on later once you've really nailed down the rest. But I would say the major, major part of our work is thinking through who are we building for, helping them with understanding what it is they want to build and why they want to build it, and then scaling down to an MVP, scaling down to really testable solutions. I think the biggest thing is they're building for audiences that mean so much to them that are really, really very important to them, and trust is such a huge factor. So how do you help them maintain that trust and really believe in what they're putting out there while still focusing on testing and focusing on small imperfect solutions?

Dan Blumberg: When we first chatted, you said that you should be embarrassed by your first product, and I'd love to hear more why you say that.

Sonali Zaveri: Yeah. I think the reason you need to be embarrassed by your first product is because if you're putting something out there that you're not embarrassed by, that you think is absolutely perfect, then frankly you've done way too much. When you're building for an audience that really means so much to you, you're so worried about losing their trust. And if you are the child of a young single mother and you're building a tool for a young single mother, you want to do everything to make her life better. And that is why these founders are so perfect to lead these businesses because they will stay so mission-driven and so focused on what is best for their customer or their user. But what that means early on is that there is a fear of putting something out there that's less than perfect. And so, one of the things that we've really done to help with that is kind of shifted the focus to what are the outcomes you want to create.

And shifting all of our focus to outcomes is the biggest thing that I think the studio can do to help entrepreneurs think about their business differently and think about it in a more positive way. Early on when we shifted that conversation to say, what are the outcomes we want to create for people? With that, suddenly we had three to four different things we can test, and all of them feel like they're going to make a really, really positive impact, but it keeps us thinking more broadly and more importantly, it allows us to really see how each of those things can make a positive impact. Even if they are not this perfect solution in the end, we're still getting to something that is going to improve the lives of the people that we're trying to work with.

Dan Blumberg: When it comes to figuring out what the MVP should be or the V1 and sometimes MVP, you want to put something out there quickly, which to learn, you want to have a very clear hypothesis of what you're trying to learn. And then you also said that trust is so important with this audience, and so I'm curious how you look at that through the lens of a first version of a product or early versions of a product, and even as a designer, how that manifests aesthetically, if that's relevant here, how do you create that V1 that is slim down but trustworthy?

Sonali Zaveri: So I think the biggest tool that we've found within the communities that we're typically working with is storytelling. In LaToria's case, for example, she's got no problem going out there, she is the most amazing storyteller, and really having her at the front of the business talking about what she's doing and why she's doing it. And so to have our founders and their faces and them saying, "Hey, this is why I'm building this. This is what I'm doing. I'm doing it not just for you, but for us because I believe in this." I think that goes a long way to really establish that trust. To see someone doing this who looks and feels like you and clearly cares about you makes a big difference, and it makes people much more understanding of, this is an MVP, it's not going to be perfect.

A lot of our early users, almost all of them, pretty much end up going through research sessions with us because we're trying to learn and they're such advocates for what we're doing. They're so ready to spread the word, they're so ready to help us become better. And so, when you really tell that story and you really bring people into the process of creating the MVP, you're able to maintain that trust and it's a lot easier to scale down.

Dan Blumberg: Yeah, for sure. It sounds like you're not doing the, I don't know, Casper or Oscar or Seamless. I can just picture the ads on the subway or the Bart in your case like Samsara fonts and cartoon people, every startup aesthetic. It sounds like that's kind of the opposite of what you're doing. Is that fair?

Sonali Zaveri: Yeah, in fact, it's funny. I feel like one of the things that I've always been amused by is I will kind of default to illustrations when I'm building a landing page, and I've learned how wrong that is. Every single founder I've worked with has been like, "Can we get pictures of real people on there?" And it makes sense, we see these illustrations and we think prettiness, but we don't associate ourselves with them. And I think that doesn't matter in a world where you know that products are built for you, but if you're not used to having stuff built for you, you really, really need to see someone who looks like you on that website to be able to think, "Hey, maybe this is for someone like me."

Dan Blumberg: ideas42, it's a really unique organization. Tell us more about what the appeal was for you to join.

Sonali Zaveri: I've worked at social impact companies for a while now, but there is a difference when you get to scale where you start thinking more broadly, you're less focused on the user specifically, you're more focused on money, frankly, as a business should be. And so, I was really excited about diving into that smaller scale and really, really being focused on that early stage, honing in on who is this customer? What are we doing? How are we solving this problem? But of course, more than anything, it's the studio and the founders.

Marc had actually approached me with the offer earlier and I wasn't quite ready for it at the time, and he came to me again when they had found their first cohort, and he was able to share with me their profiles and their interviews. And after that, there was just no way I could say no. When you're hearing our founders talk about the work they're doing, talk about their own life experience and what led them to apply, the first thing you say is, "How can I help? What can I do to make you successful?" It's a very unique place to be. The work we're doing is not really being done by anyone else.

Dan Blumberg: Amazing. Thank you so much for joining us.

Sonali Zaveri: Yeah, this has been fun.

Dan Blumberg: Sonali Zaveri is the design and operations lead for ideas42 Ventures. This is Crafted from Artium. If you're looking to define your MVP to level up your design, dev or product chops or to hire great talent, let's talk. At Artium, we build incredible products, recruit high performing teams, and help you achieve the culture of craft you need to build great software long after we're gone. We, artisans, love partnering with creative people to build their visions of the future. If you've gotten opportunity you'd like to discuss or just want to learn more about us, check us out at thisisartium.com or drop us a line at hello@thisisartium.com. And if you like today's episode, and hey, you've made it this far, please subscribe and spread the word because once you listen for the first time, subscribing is the only option.

Sonali Zaveri: After that, there was just no way I could say no.