What we talked about
Jim Fruchterman is a Silicon Valley tech entrepreneur who took a sharp left turn into social impact and never looked back. In this episode, Jim shares how he started seven for profit companies in twelve years, why investors vetoed his idea to build technology for blind people, and how that pushback led him to create nonprofit tech companies that have now defined his life’s work.
Show notes
Jim Fruchterman was 21 years old when the rocket he had wired up as chief electrical engineer exploded on the launch stand in a fireball two to three hundred meters wide on a barrier island off the coast of Texas. That moment, combined with investors later vetoing his idea to help blind people for “excellent business reasons”, set the course for a career running nonprofit tech companies for over 30 years.
What we covered
- Jim started seven for-profit companies in twelve years, with only two succeeding, and observed that failures almost always traced back to management quality rather than technology. He now runs nonprofits the same way: agile development, human-centered design, customer support, SaaS pricing, all of it, just with impact as the success metric instead of profit.
- His nonprofit model targets 90%+ revenue self-sufficiency. Richer countries pay for the product, which cross-subsidizes access in Zambia or Zimbabwe. He describes it like Coca-Cola syrup pricing across markets, except the goal is to maximize impact rather than margin.
- Bookshare, his biggest project, is the world’s largest library for disabled readers. Because it is a charity, it has a copyright exception, so publishers send Jim their ebooks at the same time they send them to Amazon or Barnes and Noble, at no royalty. The result is a library blind and dyslexic people can access in Braille, large print, or MP3 for a $10 player.
- His contact center software for helplines, started for child helplines and now operating in 20 countries, eventually beat Salesforce head-to-head in that specific vertical, not because it had more features but because the 1% it had was exactly what counselors needed. The Los Angeles mental health line, which dispatches social workers instead of police to nonviolent homeless people in crisis, is now one of its biggest customers.
- Tech companies say yes to giving free licenses to nonprofits about 80% of the time, Jim said, because the marginal cost of an extra software license is near zero and engineers are genuinely proud of what they built. High-margin businesses like Intel gave him a quarter million dollars in chips, then a million dollars more, because helping blind people did not compete with any of their real customers.
- His My Karma Consulting practice offers one free hour per conversation, three to five times a week, to nonprofit leaders seeking tech strategy help. Out of every 500 to 800 of those conversations, he finds his next product idea. He calls it “anti-consulting” because he is not selling anything, he just tells people they probably do not need a blockchain or a metaverse play.
About Jim
Jim Fruchterman is the founder and CEO of Tech Matters and the founder and former CEO of Benetech, two Silicon Valley nonprofits building technology for social good. He is a MacArthur Fellow and the author of a book on technology for good covering 60 nonprofits using tech for large-scale impact.
- LinkedIn: https://www.linkedin.com/in/jimfruchterman
- Website: http://techmatters.org
Episode 134 of the PreVetted Podcast.
Full transcript
Federico Ramallo (00:00) Welcome back to the Prevetted Podcast, where we spotlight extraordinary people and remarkable talent reshaping our world. Today we are joined by Jim Fretcherman, his founder and CEO of Tech Matters, and the founder and former CEO of Benetech, two Silicon Valley nonprofits building technology for social good. Jim is a MacArthur Fellow.
a former rocket engineer and someone who’s helped create multiple world changing tech social enterprises with a mission to bring the benefits of tech to a far more of humanity, not just the richest few. Jim, welcome to the show.
Jim Fruchterman (00:46) Yeah.
Federico, glad to be here to talk about Tech for Good.
Federico Ramallo (00:51) Amazing, amazing, yes, I’m excited to have you here today.
So tell us a little bit about, you know, for people that don’t know you, what do you do?
Jim Fruchterman (01:01) Yeah.
Well, I’m a sort of a typical Silicon Valley tech entrepreneur who took a gigantic left turn at one point. so I started seven for-profit companies in a 12 year period, only five failed. And the two that succeeded were both early AI companies, know, machine learning, pattern recognition, all that. And at the time, this is quite a while ago.
that the leading edge of AI was optical character recognition and processing language. And our investors vetoed a social good idea to help blind people for excellent business reasons. And I decided to start a nonprofit on the side and it took over my life. So what I’m now is I’m still a tech social entrepreneur. It’s just the last 30 plus years, I start nonprofit tech companies working on a social problem as opposed to a for-profit tech company.
Let’s just say the companies are smaller, but they’re more fun than working for venture capitalists.
Federico Ramallo (02:01) Right, right. And, you know, the social component becomes a huge part of your life. Now you’re changing the world.
Jim Fruchterman (02:10) Yeah, and I think that when you run a charity, know, the dynamic changes. I mean, you’re still building products. You still want to do great design and great customer support. We sell most of our products, even though they’re open source. But, know, we’re a SaaS software provider. We’re selling the services of operating the software. But the difference is if you’re running a charity, the goal is make the maximum impact on the world while breaking even, which is different than when I was, you know, a for-profit.
guy where I had to make the maximum money all the time. And so it gives us a wider range. So for example, a two million or a $5 million a year break even venture in the charity sector, that’s a gigantic success. That’s not a winner in Silicon Valley.
Federico Ramallo (02:53) Right, right. I I read the book from zero to one from Peter Thiel and, you know, he shoots for the moon, right? And I understand where he’s coming from, but there’s so many lifestyle businesses that can run without the need of, know, VC money, right? And the same with nonprofits, right?
Jim Fruchterman (03:14) Yeah, and I think the lifestyle kind of business analogy is quite apt, right? I I took my VC-backed technology to help blind people, and then I met all the people doing technology for the blind. And all of them were, they’re all business people, they’re running businesses, not a charity like me, but they were not optimizing for maximum money, because…
They cared about helping disabled people. Maybe their wife was disabled. Maybe they were disabled. Maybe their dad or their kid was disabled. So they had that personal connection. And I think any entrepreneur who has a personal connection to the product, whether that’s just deep pride or whether it’s a direct personal kind of connection, makes it worthwhile. And so many of the people I were working with, we would call them lifestyle businesses because they’re making a good small business living, but they were never gonna…
become a centimillionaire or anything like that.
Federico Ramallo (04:06) Right, right. And it took me a while to understand that, to understand that having a lifestyle business is not only okay, it’s a great way to live your life.
Jim Fruchterman (04:18) I think so. one of my things I’ve got to meet a lot of our billionaires, right? In Silicon Valley over the years. And I don’t want to be them. I mean, their life is really difficult in some very weird ways, right? And so, you know, I think that there are a lot of people who’ve made a lot of money and then they do what they want to do. You know, that could be, I don’t know, playing in a rock band again, or it could be teaching high school or, you know, could be
It could be whatever because I think people have the choice and I think that having a choice of working on something that really makes you happy and that was that was my motivation. I told my wife I was going to do this charity thing for a year and that was like 30 plus years ago. I mean I just kept going maybe another year maybe another year and suddenly it’s like okay this is what I’m doing.
Federico Ramallo (05:06) Right, right. I usually ask, you know, people about their purpose, you know, if they feel they have a purpose, right? And particularly post exit founders, right? Because you have, you you can have a great exit, you can have, you know, some additional resources that gives you the freedom, but…
Jim Fruchterman (05:07) Yeah.
Federico Ramallo (05:28) I’ve seen people in that position that they lose a sense of purpose and lead a, you know, not meaningless life, but, you know, without an earth, you know, what do I do now with all this additional time and resources?
Jim Fruchterman (05:43) Yeah. And, and you know, I look at my peers and a lot of them become angel investors, even though it’s sub-economic by and large, but they, know, they don’t really make that much money off of being an angel investor, but it’s fun to mentor up and coming entrepreneurs who have a cool idea that are, that, that, where your input can really help them make a successful business. so I see a lot of people who end up, you know,
being angel investors, joining boards. And then of course, philanthropy is a big deal. And some people choose to engage with philanthropy by just giving away their money, hopefully in a smart way. But then more people like me go, well, with my tech skills, with my entrepreneurial skills, maybe I can do more than just bring money to this field. Maybe I can build a scalable business that can help, I don’t know, 10 million people. And that’s also worthwhile.
And so, and I’m a big advocate for finding a couple of nonprofit causes and bringing more creativity to those causes than just giving to the traditional big charities in those fields. That’s not always the biggest bang for the buck opportunity.
Federico Ramallo (06:51) Right, right. And something you mentioned that I think is also important is self-sustainability, because then the endeavor and the mission can be pursued regardless of additional donations or external donations. Right now you have a self-sustained business that has a strong mission component.
Jim Fruchterman (07:13) Yeah, mean, I mean, the same thing that makes tech have great margins that, you know, can generate wealth that also generates sustainability for the nonprofit. My my goal for almost all of our nonprofit enterprises is that they be generating the majority of their budget from revenue. And then you can go raise money from donors to say, all right, Zambia and Zimbabwe maybe can’t pay what it costs to bring the technology there. So you’re going to subsidize that part. But.
here in the US or in Europe or other medium and higher income countries, well, they can pay. And so I’d say most of our enterprises get 98 % of their money from more developed economies. And the majority of our users are generally not in those economies. And that works. It also works for selling Coca-Cola syrup, right? But you can charge different prices in different markets depending on how to maximize it.
In our case, we’re trying to maximize our impact. that focus on revenue generation, it means that the nonprofits that I’m working for, they’re my customers. And the power dynamic is not traditional charity. I’m their vendor and I’ve got to do a great job for them or they’ll stop paying for my product or they’ll stop saying great things about my product, which makes it harder to sell the next person. If you want your peer endorsers to be
super enthusiastic. So these are all lessons I learned in regular business that are directly applicable to running a nonprofit tech business.
Federico Ramallo (08:38) Right, right, that’s very interesting. It’s a different way to see the world.
Jim Fruchterman (08:44) Yeah. And I know I just, you know, I just wrote a book on, you know, technology for good is the name of the book. And I think it’s the first book on how to not make money starting a tech company. But a lot of it is like, what are the great lessons that entrepreneurs and Silicon Valley, you know, the tech industry have learned over the last 20 years? Well, you know, agile, human centered design, lean, blah, blah, blah. I mean, they’re all jargon terms, but they actually work.
Federico Ramallo (08:54) Hahaha!
Jim Fruchterman (09:13) Right? You don’t want to go back to the old waterfall way of designing products because that didn’t work so well. And so the same thing is true in the nonprofit sector is like we’re directly applying these lessons. And it’s not designing just tech products. It also is like how you design your nonprofit program. It may be that your idea of what poor people need isn’t really what they need. And you should be listening to them just like they were a customer and try to figure out how you can do the most good for them. So these are all standard lessons.
So, you know, I hire most of my team from the tech industry. They’re interested in doing social good, maybe less interested in selling more advertising or whatever it was that they were working on. But many of the skills they have as a product manager, as a marketer, as a developer, as an architect, as a UX designer, these are all the skill sets that we need to do the most job in, I know, helping kids in need or working on human rights or education or the environment, farming, whatever it might be.
that it’s the same product skills. It’s just these people, they represent 90 % of humanity, but they don’t have as much money. Well, as a charity, I don’t have to care. I just want to do a good job for them.
Federico Ramallo (10:23) Right, right, that’s amazing. You also work as a rocket engineer, right? Can you tell us about what was that like? When I was doing the intro, I was thinking, was a rocket engineer? But in my mind, I was thinking, you never stopped being a rocket engineer, right?
Jim Fruchterman (10:44) Yeah, when people say, my God, that sounds like rocket science, then someone could say, no, we’ve got a rocket scientist on the team already. So what happened is I was in Stanford PhD program in engineering, right? And all my friends were joining startups, because that’s apparently what you do when you come to Silicon Valley and go to be a student. And we started an entrepreneurship talk series. the second speaker was the first speaker was the president of a
of a computer company, right? And the second one was the president of one of the first private rocket companies right after it had been legalized in the US because for many years only the government could launch rockets. But then we liberalized this and the first companies got started. And I got hired as the chief electrical engineer at this rocket company. Now I was 21, so you can get some idea that this may not have been the most professional rocket company. And so we got a
Federico Ramallo (11:34) You
Jim Fruchterman (11:40) You know, we went to the south coast of Texas between Corpus Christi and Galveston, and there was a barrier island on the Gulf of Mexico. And we built a rocket test facility on the coast, a stand. We got the rocket there to this barrier island. We put it up on there. And our business manager, who was a Stanford grad, but she was from Texas, so she does the countdown, know?
4, 3, 2, 1. Oh shit, the rocket blew up on the launch stand.
So, you know, and so it’s like, wow. So, you know, we got a rocket there on the electrical engineer. You know, I wired it up. Someone pushed a button. Something happened. Must have been the aero astro engineers fault. And the rocket blew up and I went, wow, I don’t think I’m going back to grad school. This blowing up rockets. This is fun, you know? And so, so I tried to start my own rocket company and no one, you know, with,
Federico Ramallo (12:29) Yeah
Jim Fruchterman (12:36) six of the other engineers from the rocket project. No one gave us $200 million. And instead I started what turned into be an early AI company in Silicon Valley as one of the companies that finally made it. But yeah, but being a rocket engineer and having your first product actually blow up in the launch pad, being a software entrepreneur suddenly looks a lot more attractive. No metal gets bent, no fields start on fire. Because the fireball was.
I don’t know, two or 300 meters big. It was a big explosion. Luckily I was a mile away.
Federico Ramallo (13:11) That’s amazing. mean, and with that you get the experience, right? I mean, even though the rocket didn’t fulfill the, you know, was not launched as you expected, but, you know, the experience of blowing it up gives you lot of insights, right?
Jim Fruchterman (13:28) Well, in my case, I found out I was good at getting things done. Right? I mean, you we had a tight deadline. We didn’t have a big budget, you know, and when you’re in a startup, you know, it’s not a question of, I’m to wait for someone to get hired for that job. You just do it, right? You fill the gap. And so I often recommend when students say, you know, I want to be an entrepreneur. said, well, you should join a startup and you should see entrepreneurs
making great decisions and making stupid decisions. And that will help you accelerate your learning about whether this is a path you wanna take. And also gives you a feeling for what you wanna see in a leader if you end up wanting to stay in the entrepreneurial area and join startups. Because, you know, I mean.
Let’s just say, know, having starting up, you know, seven for-profit companies and only five failed. The five that failed each failed for different reasons, but it was almost always linked to quality of management. It was rarely a tech failure, right? It was almost always the management team. So, so seeing a lot of bad examples and good examples is super helpful to accelerate your path as opposed to going to work for Google and being in the maw of the machine. You’ll, I mean, you’ll get paid really well.
but you’ll be one little part of a very big team. I don’t know. think the entrepreneurial experience is a lot more fun, more stressful, but you know, we’re fun.
Federico Ramallo (14:51) Right, right. I compare it with a Joyride, you know, when you get into this, you know, on the, what is the name?
Jim Fruchterman (15:00) Roller coaster?
Federico Ramallo (15:02) roller coaster, yeah. So, you know, full of emotions, right? And you feel you’re going to die in every corner, right?
Jim Fruchterman (15:03) Yeah.
One of the great things about the rocket project is that the engineers were also the pilots because we would have to fly from the mainland off to this island that was like five miles off the coast of Texas. It was a barrier island. And one of the things we would do is you can actually take a small plane and do the joyride thing, right? So what you do is you kind of go like this, you go down and then you go up. And then at the peak, it’s like zero, you know, like zero gravity.
Federico Ramallo (15:29) really?
Jim Fruchterman (15:37) And, the bugs fly out of the windshield. They died in the windshield of the plane and people float out of their seats. And we did that. And then I think once the engine quit and then we’re like, oh, shit, you know, restart. You know, we’re not high enough to be doing this thing. But anyway, but it’s so we had we had some fun. We were it was it was insane. And that just I mean, I suddenly decided that being an academic wasn’t going to be my career path. Right. So.
Federico Ramallo (16:06) That’s amazing. So we talk a little bit about why you decided to start a nonprofit, right? Instead of a normal startup. What has been the hardest part of starting a nonprofit?
Jim Fruchterman (16:22) Finding money is a lot harder. I mean, if I have a great business idea and my thesis, it looks like we might have product market fit. I’ll be able to raise the money. I’ll be able to hire the team. I’ll be able to get vendor partnerships because everybody gets that, especially like in Silicon Valley, in the tech industry. People want to partner with up and coming startups for a whole bunch of really good reasons. When you’re a charity,
People like, wait a minute, why are you acting like a business as a charity? You know, and because that’s we do, right? And money is harder to get. I mean, we often joke that rich tech people who are some of my biggest funders, right? They have two pockets. They have their their private office, their their investment pocket, and they have their philanthropic pocket. And the philanthropic pocket is about, you know, one tenth as large.
So you come to them saying, need $250,000 towards this. And then they say, oh, wait, but this isn’t a business. No, no, it’s a charity, but it’s going to be the best charity you ever saw. And they’re like, okay, here’s $25,000. And I’m like, but I needed 250. You know, the money I need is the same, but they, you know, they kind of think smaller, you know, it’s so, so it’s hard to raise money. And it’s, it’s, but
As time has gone on, more and more of the tech industry has gotten into it. So turns out that tech companies are now one of my really good funders. Sometimes they give me grants. They usually give me deep discounts on their products because, know, I’m going after a market that, you know, they’re never going to go to Zambia. And if I’m going to go to Zambia, they’re like, well, here, you know, we’ll give you our technology for the first year for free, or we’ll give you an 80 % discount or whatever it might be. So, so it’s gotten easier, but I’d still say.
you know, growing that business. Cause most of the social enterprises I start, I need to raise three to $5 million over the next five years to get it to where the majority of its budget is covered by revenue. And so, and, and it’s, but I follow a similar path to if I was doing a for-profit startup, you you start with angels and friends and family and sweat equity, and then you raise seed, you know, and then you raise, you know, a and B and C and
I know my first startup got to H, I think, in how it out that your capital fund. Yeah, it didn’t. It was an early AI company. We needed to keep raising a lot more money than we planned. know, but but in the same way, you know, we go for risk taking donors early on. know, Jim’s got an idea. Let’s give him one hundred thousand dollars to see how far he gets, see if he has product, you know, market fit. And then I have to raise a million dollars. Well, then I’ll have some people who are like, well, OK, you have a prototype. You’ll invest in that.
Federico Ramallo (18:52) Wow. Right.
Jim Fruchterman (19:17) And by the time I have a working product, then I can go to more traditional donors and say, OK, if you liked what we did in Zambia, I can take it to Thailand and I know you care about Thailand or you care about Ecuador or whatever, whatever your cause is. It’s a lot easier to commit to donor for something that’s already working to go apply it somewhere new than it is to get the money to get it off the ground. So and then, you know, by the time I’ve gotten big, you know, maybe the UN will become a partner because they’re not very
generally not very risk taking, eventually they might become one of my projects. UNICEF is one of our big partners.
Federico Ramallo (19:55) because now you have the proven track record to go and look for lower risk donors.
Jim Fruchterman (20:02) Yeah. And so, so for example, one of my current social enterprises, we, we did a contact center for, helplines. So these are like, you know, suicide prevention hotlines, but we had texting cause young people text a little bit these days and, and we’re kind of like Salesforce, but for the counseling and referral helpline. And when we started off, we were so much better in Zambia than what they were using them. Cause they’re probably using the equivalent of a spreadsheet.
right to manage their, their helpline, the national helpline for all kids in that country. But as time went on, you know, by the time the product was two or three years old, we were beating Salesforce head to head. Not, not because we’re with Salesforce is Salesforce has got, you know, a hundred times more functionality than we do at least. But, the 1 % we had was everything that you needed for this vertical. And so, and then of course, by the time we were there, when we, when we sell the national helpline in Canada,
or the US or, or I don’t know, New Zealand, they have budget. And so now we can generate revenue. And, of course, ultimately, you know, the best source of funding for your project is customers, right? And so the majority of new, new feature development on our platform is paid for by customers in the wealthier countries of the world who say, but I want this extra feature. And we’re like, well, pay for it. And everyone also get it for free.
because it’s open source. But our real revenue model is custom development, operating a SaaS platform, tech support. There’s a lot of different ways to make money off of free, and one of them is operating a SaaS platform. And that’s essentially a lot of our businesses look like a SaaS platform.
Federico Ramallo (21:43) Right, right. As a platform, it’s easier to understand and hire than everything else.
Jim Fruchterman (21:50) And sometimes we do apps, but apps are not usually the right answer. Sometimes they are, but usually they’re not. we, we have a, another of our products is the number one soil identification app. Like what is this dirt? What can I grow here? So it helps farmers. And that has to be an app because a lot of farmers don’t have great connectivity out in their field. Right. So, so you need something that works out in the middle of the rangelands or whatever it might be. And so.
So that one needs to be an app, you know, something that’s a SaaS platform generally works for most people in the world. And it turns out that most developing countries, the internets and the mobile networks pretty good. So we can actually depend on that for delivering a product that works, you know, as well in Zimbabwe or India as it does in the U S or Canada.
Federico Ramallo (22:45) Right, right. I used to work on offline first applications or websites that were… Because in the US, connectivity was super reliable, but, you know, Latin America, it’s not, right? So I used to kind of push towards, you know, can we make it offline first so people in Mexico, in Argentina, whatever, can use it, right? Now, that has been way better now. We have much better connectivity.
in those countries.
Jim Fruchterman (23:13) Yeah, but but still poor people are still badly connected all over the world. And that includes parts of the US. Right. But but if you’re business focused, yeah, it’s gotten a lot easier. But yeah. So for but we’ve done, you know, apps for environmentalists, apps for human rights groups. They all, you know, they all had some kind of need for offline. But, you know, usually it was, I think, to your point, it works offline should work pretty well. But then when you connect the Internet, you know,
Federico Ramallo (23:17) Right.
Jim Fruchterman (23:40) More magic happens, right? And so we’re offline first, but then you get some more value add if you get a connection at some point. You sync up with the giant database in the cloud.
Federico Ramallo (23:51) Right.
Right, and there’s a lot of features you can do only with an online, you know, connecting to an online server.
Jim Fruchterman (24:01) Yeah, if you want to do AI. Probably going to be connecting to the cloud somewhere along the line, even if even if you can put an algorithm in that will work, you know locally, you really need to have the big database out there to to make it really work well. So. To train up that algorithm.
Federico Ramallo (24:04) Yes.
Yes,
the large language models mostly works on infrastructure, but people has been working on small language models that can work locally, but you’re limited to the resources of your device, right? How many people in Zimbabwe can buy the latest iPhone or whatever, or Samsung, the flagship Samsung, right? So…
then when you provide services for those type of users, you have to think about their particular needs, right?
Jim Fruchterman (24:48) Yeah, and I think I mean in it and in the nonprofit sector, people are are worried about disclosing data of vulnerable people, right? So they don’t want to feed confidential data to open AI. They they’re worried about the environmental impact of AI. And of course, if you you grab a know the latest open model, you may be a year or 18 months behind the times, but the environmental impacts already happen and you can run these things on.
A laptop, right? mean, and do a pretty good job. I think we’re going to keep, I mean, we tend to prototype on the latest LLM, but then when we go to deployment to save money, save energy, and to reassure people about control over the data, we then move to a local model.
Federico Ramallo (25:33) Right, right, that’s interesting. So tell us a little bit more about what do you do or what does Tech Matter do?
Jim Fruchterman (25:36) Yeah.
Well, so we do multiple things. I mean, the smallest part of what we do is just try to help grow tech for good. Right. So I have a podcast where I interview nonprofit leaders and talk about the products that they’ve built. we’ve gotten up to 27 episodes. we’re actually, you we’re on our way. Thank you. And I wrote a book where I talk about 60 different nonprofits.
Federico Ramallo (26:02) Congratulations!
Jim Fruchterman (26:08) that are using technology for big impact. We have something called my Karma Consulting. Karma because it’s free, but you only get a free hour. But every week I do three to five conversations with non-technical nonprofit leaders who are out looking for tech strategy help, right? And because I’m not selling them anything, I jokingly call it anti-consulting. know, hey, you you don’t need a blockchain. No, you don’t need a metaverse play.
No one will download that app. You know, could build a giant database in the sky, but no one will look at it, you know, you know, and what are you really trying to do? And then hopefully I can help them out. And so, so, and then out of every 500 or 800 of those conversations, I find my next product. So right now we have two big product areas. One is the contact center software for, for helplines, which is, you know, operating all over the world now live in 20 countries.
You know, just helping people take phone calls and texts and supporting them with better tools. All the all the standard kind of tools that you would have in a contact center like quick answer macros, you know, doing that kind of thing. And we started with the child helpline movement, but now we’ve grown into sort of mental health. One of our new biggest customers is Los Angeles Circle, LA Circle, which is their homeless mental health line. So when someone is having mental health problem in LA,
send a social worker, don’t send a policeman, right? When they’re having a mental health episode, because sometimes policemen just shoot mentally ill people and social workers don’t. And so the idea is like handle nonviolent homeless people with social workers. And so that’s a great example. Then we have our software for what we call the local leaders on the front lines of climate change. So our soil identification software.
which, know, is used all over the world. It’s used in, the United States, it’s used in Africa and Latin America. So it’s used widely. and we also have, an open source version of story mapping. So Esri, which is the maker of all the geospatial software that most big companies and governments use, they have something called story mapping. How you tell a really compelling story using maps or drone imagery and pictures and videos and interviews and text.
And so what we did is we make it an open source version that any NGO in the world can use it. And so, so, you know, I mean, we have a partner in Guiana and, they used it to explain why people should plant more mangroves and less concrete along the coast of Guiana. Cause concrete tends to take away from your coast and mangroves tends to build your coast, right? You know, and protect you from forms, right? So, or, you know, the same software is being used in India to help.
You know, young people tell people why they should drain standing water because Bangalore got hit with a dengue fever epidemic. So they were using our tool to create this. So it’s, basically, you know, our customer is important person. They’re a local leader, but the for-profit world’s not that excited about them. I mean, Esri would probably give them the software for free, but the skills to become a geospatial software operator are pretty high.
And we’re aiming for, can you do a Google sheet? You know, or can you do a Google presentation? Great. You can, you can use our story mapping tool. That’s our, that’s our target user, right? This is the average person in the world, not the expert. So yeah, exactly. And the nonprofit sector is full of them. So, so that’s, that’s basically what I get to do. My most successful project is Bookshare, which is the world’s biggest library for disabled kids and adults.
Federico Ramallo (29:35) non-technical users.
Jim Fruchterman (29:52) And so it has basically our our our tech breakthrough is taking ebooks to disable people instead of audiobooks. And so, you know, you have an ebook. It’s 50 times cheaper than doing an audiobook. You can turn it into Braille. You can make it big. You can you can make it, you know, MP3. If someone kid only can afford a $10 MP3 player. Great. We can give them a book on a on an MP3 player. So that’s our that’s our our biggest single project. And
Because we’re a charity, we have a copyright exception. We don’t have to pay a royalty to make the book accessible. And the publishing industry has been really supportive. Most of our collection, they just give us their e-books the same time they send them to Amazon or Barnes and Noble or wherever they’ll send us those same books. you know, they’re all, know, technology, the technology exists. But this market’s not interesting. Blind people.
Helplines in Zambia and we can fill that gap. And so that’s that’s most of what I get to do is just talk to people all the time about how technology could be doing more. And I get to design products in my head because the market’s not there. Often my idea is actually pretty advanced for this because because I’m part of the tech industry, I get to see what people are creating. I know what people figured out three or four years ago.
And I can actually apply that to the rest of the world. And it’s fun. I mean, I love designing products and solving tech problems. That’s kind of what I, I’m a nerd. like it.
Federico Ramallo (31:24) Right, right. And
it’s an important aspect of, you know, because you can build a bridge, but if nobody use the bridge, then you’re not causing an impact in the world. Right. So I think that as an engineer, the first, you know, first, what draws a lot is, hey, we can build something cool. And then once we build something cool, we we kind of ask ourselves like,
Well, but who’s using it, right? I came to understand that’s our kind of secondary purpose, right? Like, well, we build it, now we want people to use it, right? And seeing people using the bridge that you built, I’m taking the bridge as an example, right? Then that provides a fulfillment that it’s greater than building it, right?
Jim Fruchterman (32:01) Yeah. Yeah.
Well, and I mean, your point, so many people invent things that are going to help blind people or help the world. And it sort of turns out not to be a technology problem. Turns out to be a marketing and distribution problem, right? Because it’s you can build it, but if you don’t get it into the hands of people, it doesn’t matter if they build a bridge and no one uses it. Well, that was a waste of a lot of concrete and steel. Right. And so so and that’s the.
That’s the challenge that I end up trying to help people understand is, you know, paying attention to your user, figuring out what your channel is going to be. Right. And a lot of engineers don’t think about channel, but as an engineer who had to become an entrepreneur, you realize that more people failed because they didn’t make that connection to the customer, not because they couldn’t build the product. Right. It turns out that building a product of some kind is pretty easy, but, and this is
This is a real challenge. The same products get reinvented for blind people a lot. Not because they’re hard to invent, but because people don’t get that the users don’t actually want them.
Federico Ramallo (33:14) Right.
Jim Fruchterman (33:14) Yeah, but that’s why, you know, human centered design and all these things make sense because you find out what they really need and will use. And then and then hopefully you can also figure out how you can get to a thousand customers, 10,000 customers, 100,000 customers, a million customers that actually, you know, building the product is like 10 percent. Getting it to, you know, 100,000 customers, that’s the other 90.
Federico Ramallo (33:40) Right, right. That question drew me into product ownership. I would build features and then people would not use it as I expected, right? Everything happened in my mind, of course, right? But I was arguing with this user saying, why you’re not using it as I expected? I’m the smart one, you know? And then getting into product ownership.
Jim Fruchterman (34:01) You
Federico Ramallo (34:05) allowed me to start understanding a little bit more about how humans behave and how human things, right? It’s a people problem coming from an engineering. It’s interesting learning.
Jim Fruchterman (34:18) And it’s it’s hard because engineers want to build the coolest feature. And and often the engineer thinks that they understand what the customer actually needs. But the engineer is usually not in the shoes of the customer. And that and that jump is the one that entrepreneurs and product owners need to make to really either be financially successful in the case of a company or, you in my case, impact successful.
you know, making the fact that donors gave us a few million dollars to build this. Well, if we don’t, if we don’t reach scale, then that wasn’t a good investment. And so, yeah, it’s a, but you hit the core.
Federico Ramallo (34:57) Right, right, because you
measure success based on impact.
Jim Fruchterman (35:01) Yep. Yeah. Yeah. Yeah. I mean, we want to break even because we want to pay our staff, but we don’t have to make money. And what we’re really and it’s not just our donors, right? Our team, our team comes to work for us because they want to help. They want to work on climate issues. They want to work on social justice issues. And so we give them a chance to use their technical skills to make that impact. And the tech companies
Federico Ramallo (35:03) interesting.
Jim Fruchterman (35:30) one of the reasons why there’s such great partners. We don’t pay them really with money. We pay them with stories on how we used, I don’t know, Okta or PagerDuty or Twilio or or Amazon Web Services, whatever it might be. You know, we’re talking about, hey, we’re using your software to save lives or to help kids get an education or, whatever it might be. And that people underestimate how motivated tech people are about impact, because, I mean, I don’t think your average kid
decided they wanted to get into tech because they want to be a billionaire. It certainly wasn’t, wasn’t what I thought it was going to be. I, I like tech cause I like science and math and building things. Right. And so, yeah, it’s this interesting angle about, you know, make a difference. And so we’re always telling stories about how we help some minor, you know, this truckload of Zambian kids that were being trafficked. One of them escaped and called the magic number, got through to our system and the
And those kids were rescued. mean, that we live for stories like that.
Federico Ramallo (36:34) Wow, that’s amazing because you’re actually changing people’s lives.
Jim Fruchterman (36:39) Yeah. Yeah. No matter fact, you know, that was I told my wife I’d do this for a year and then, you know, that was 30 years ago. But but the reason why people come up to me and let’s say disabled people, you know, I was able to finish college because I had your technology. You know, I wouldn’t have gone through college, but because of your technology, I was able to do it. I mean, I got I got someone telling me that last week. Right. I’ve run that library for seven years. And someone said, you know,
I got my PhD because I had access to your library for people with dyslexia. And, you know, I’m a successful, you know, PhD level person now. And, and that’s great. And of course, and I, didn’t do it. They did it. I didn’t get that PhD. He got that PhD, but as a tech tool maker, the measure of your impact is what people build with the tools that you, that you provide them. And we have to be happy with that.
And I get a big charge out of that. And that’s what keeps me in this field. keeps me inventing new products is like come up with a new way to help people. That’s fun.
Federico Ramallo (37:47) Yes, that’s very, and not only fun, it’s very rewarding.
The way that I see, because I bring engineers to my company, I help them grow, and eventually, sometimes they stay for a long time, but then eventually some of them leave, right? And some of them went to work at Netflix and other big companies, right? And the way that I see it is, it’s their achievements. They were able to do it, right? But I’m grateful to be part of their journey and-
help them in the process.
Jim Fruchterman (38:23) Well, that’s a longer view, right? It takes some experience to get to that point. Because early on in my career, when people left, felt personally attacked that they would leave my team, But I agree with you. Over time, you realize that it’s very rare for someone to stay with you their entire career.
You need them to add value, but you also are trying to move them along their career. And one of the things that I’ve learned to get sort of comfortable with is, you know, having someone leave us to go to Google. And then going off and being very successful at Google and or someone who’s been at Google coming and joining us and have that be normal that you could go back and forth between the for-profit world, a startup.
maybe even government service. and you know, I mean, now that I’ve been around for a long time, I see all these alumni, you know, who worked for me 10 years ago or 20 years ago, they’ve gone on to do great things. And, you know, and there’s kind of a pride to have been part of helping them on their path, right? Again, I didn’t create their path, I didn’t walk that path, but I was
Federico Ramallo (39:34) Right.
Jim Fruchterman (39:39) a mentor for a period of time and you can feel great about that. And then I also have what I call boomerang people, people who come back to me again. Right. So, you know, the guy who runs my climate change project was a student engineer for me on the rocket project back in the 80s. So he worked for me when he was a college student. He went on. had a very successful career. He was a CEO of a public company.
And then after he sold his company, came to me and said, now I want to do social good. And now he’s been working with me for five years. So I figure if people will come back to you later in their career, then you’re also doing something good.
Federico Ramallo (40:20) Right, right, because they grew, they went through their journey and at one point they realized they want to come back.
Jim Fruchterman (40:30) Yeah, because they want to do social good again, you know, it’s because we’re a charity. And so, yeah, yeah. So that’s a that’s a that’s a great part of it. And and it’s also one of the challenges. I mean, a lot of people want to volunteer for us. But it turns out that managing volunteers is not free, right? It takes time. And if someone’s going to volunteer for you, you have to make sure it’s worth their while that they actually
get some benefits from actually doing the project. So you have to have a, you can’t just have a crappy job and ask a volunteer to do it. You actually have to have something that they feel good about doing and advances your cause. And so for us, it’s this, you who’s going to mentor this volunteer, who’s going to manage this intern, right? Is actually the limiting factor because we have an obligation that they get a good experience from this. And that, you know, I think it’s a,
It’s a different view of what the bargain is, right? Just like that employee helps you by building part of the product, but you’re also advancing them along their career with an achievement they can point to as part of what they’ve done. so, yeah, I know it’s an interesting dynamic, but it’s been fun having that long view of seeing all these startups, including the Rocket Project.
Federico Ramallo (41:54) Right, right. I haven’t thought about having volunteers would require a management cost, right? I haven’t thought it that way, but yes.
Jim Fruchterman (42:05) But I mean,
for a tech company is internships, right? University students want to come work for you. And I end up having to say no to most of them. I mean, we do one or two interns a year, and that’s because there’s a manager or a senior engineer or a product manager who says, will take responsibility for them. you know, I mean, and when they’re interns, you know, a third of the time, they’re incredible.
and you hope to hire them when they graduate because they’re amazing, right? They’re delivering as much productivity as a graduate engineer does. So you’re like, I want to keep track of her, right? And then there’s a person who does a good job and they got the experience of it. And then the last third, they had an educational experience. We didn’t get a lot out of it, but they learned something. And you have to be okay with all those outcomes being possible. But I won’t hire 10 interns because I can’t.
Federico Ramallo (42:53) Right.
Jim Fruchterman (42:57) We can’t handle the bandwidth.
Federico Ramallo (43:00) Right, it’s a lot of overhead to make it work and to help them become successful because you can hire, you can bring 10, but if you don’t have the bandwidth to mentor them and coach them and guide them, then you’re doing a disservice to them, right?
Jim Fruchterman (43:20) Yeah, and and of course the volunteer concept is because we’re charity, right? mean, if I was running for profit business, people don’t volunteer for tech companies. They expect to be paid and they should be right, but ⁓ but one of our biggest impact volunteer opportunities is going to a tech expert because we’re generalists. You know, so if we need someone to help us with security, we can usually get one of the top crypto people to help us with a security problem. Or if we’re struggling with.
Federico Ramallo (43:31) Right.
Jim Fruchterman (43:48) you know, applying something at, you know, with Octa’s platform, you know, we’ll be able to get someone from Octa to volunteer to spend an hour or two with us debugging what it is that we’re trying to work out. And again, we’re paying people with it’ll make a difference. So our our biggest volunteer opportunities is that magical one or two hours from an expert who saves our generalist, you know, two weeks or a month of wasted time before they figure out it’s not actually going to work. And so we
Federico Ramallo (44:15) Right.
Jim Fruchterman (44:16) We get a lot of expert tech help. we also get a lot of, I mean, one of things that people are surprised when I ask a tech company for a free license through technology, they say yes, like 80 % of the time. And people in the nonprofit sector are, but I thought these were the greedy guys. And I’m like, no, they’re really proud of what they’ve created. They’re never going to Zambia. So if I go and ask them for their technology for free to take it to the developing world, they usually say yes.
An interesting dynamic is the tech industry overall. mean, yes, there are certain venture capitalists. There are certain billionaires that are very self-centered, but the average product owner entrepreneur is really proud of what they’ve created and would like to share it with more people. And especially if I can promise not to gray market it into their bona fide market, then they’re usually willing to say, sure, here’s my stuff. Go off and help disabled kids or whatever.
Federico Ramallo (45:07) Right.
is one of beauty of the technologies. The additional cost of the additional unit is almost zero. yeah. Right. Right. And for them to do it from the beginning as a charity is a lot of effort that diminishes their bandwidth. Right. So if you come in and say, well, we can support this group of people with your technology.
Jim Fruchterman (45:17) Yeah, Joe Marshall Cost is our friend.
Federico Ramallo (45:34) Are you willing to give us at a cost or zero or whatever? And I can see how they would be very open to say yes, because now they can be part of the social impact activity at almost zero cost for them.
Jim Fruchterman (45:50) And because we’re technical and know what we’re doing, we’re not going to waste their time because they’re also worried about the tech industry just sucking up all their time. Nonprofits not knowing what they’re doing, but we’re like, no, no, we’re like you. We know how to do products. So when and when you get a question from us, it’s going to be a good one. I remember we bought like for a while we were like customer for about 1 % of Hewlett Packard scanners because we were making reading machine so blind.
and the HP scanner was the scanner part of it. But our customers use scanners 10 times more than the average scanner customer, because they were scanning all the time, right? Because they were using our reading machine. And so even though we were only 1%, the people at Greeley, which is where HP was making these scanners, they were always happy to talk to us because we were seeing failures that other customers weren’t seeing because of the duty cycle that we were using. And so…
It’s always, it’s, you know, it’s, it’s, is sort of exciting thing. And some of these things are actually pretty high margin. So like my first startup had a up and comer from Intel on our board. was, you know, an executive and he ended up becoming CEO of Intel later in his career, but he was running the chip area and we needed, you know, CPUs to run our reading machine. And, and, you know, the high end CPUs were costing like 500 bucks. And I asked for.
you know, some, and one, they gave us a quarter million dollars with the chips. and then another, another time they gave us a million dollars with the chips. And, and the reason was chips are really high margin. The marginal cost of the next chip is actually quite low compared to the cost of building the fab. Right. And so, so they were willing to give us all these chips. But when I tried to get Michael Dell to give us computers for disabled people, he’s like,
Federico Ramallo (47:32) right.
Jim Fruchterman (47:40) You know, the majority of the cost of a Dell computer is not mine. It’s the hard drive. It’s the Intel or AMD chip. It’s the memory. I can’t give you that stuff, but go ask Intel for those chips. They’ll say yes. It really was kind of an interesting angle on the high margin businesses were the most generous because they could afford to be because that dynamic of the low marginal cost worked for a lot of them.
software chips.
Federico Ramallo (48:11) Right, right. Yes, yes, I see what you’re talking about. And I think that’s why the tech for good becomes such a force multiplier because you can help so many people at a very small additional cost per unit, whatever you want to measure it, right?
Jim Fruchterman (48:15) Yeah.
Yeah. And another thing on your zero marginal cost angle is there’s a movement called Pledge 1%. And people pledge 1 % of their stock when they’re when they’re a startup company to charity. And a lot of them also pledge 1 % of their employee time, 1 % of their product, 1 % of their profit. But the idea is that 1%, you know, 1 % of our stock when we’re not worth very much, not worth that much.
And now a whole bunch of those companies that gave away 1 % of their stock, they’ve gone public and companies like Okta and Box and PagerDudio and Twilio are all pledge 1 % companies. And so not only do they have great nonprofit deals for people like me, they also give out grants and, you know, and they’ve been big funders of my work and their tech. they, so not only do they have, you know, a foundation to give away money,
but they also like to take risks. So I’m just, you know, glad that a lot of these people kind of did that. Hey, you know, when I’m starting up a new company and I give away 1 % of the stock, that’s worth like $10,000 or something. But, you know, eight years later, it’s worth $20 million or more. So, yeah. So it works out. think, yeah, I’m pretty, pretty excited about this.
Federico Ramallo (49:49) you
Jim Fruchterman (49:56) ability to work with the tech industry and help them bridge the gap between what’s possible technology and what’s sufficiently profitable that they would do it themselves.
Federico Ramallo (50:07) That’s amazing.
Jim, we’re running out of time. I truly appreciate you being here today. know, the hour went by super quickly. Any final remarks before we wrap it up?
Jim Fruchterman (50:20) I think just talking to your tech audience, be thinking about technology for good. Think about how to make these things possible. Not that your company is necessarily going to do it, but when you have a product that can help people, be open to licensing it to a nonprofit or a tech for good entrepreneur like me, because there’s now lots more of us. again, we always joke, we used to call it the sleeves off your vest, It doesn’t cost you anything.
to give it to the social good, just be open to that conversation because the tech industry has got so much power in our society and that power is growing. It’s not hard to imagine how it’s going to help address the needs of people without money, people in trouble, people in need. so, and it’s, as you could probably tell, a really enjoyable thing to do with technology. So I hope more people get that joy.
Federico Ramallo (51:11) Amazing. Jim, thank you very much for joining us today.
Jim Fruchterman (51:15) Glad to be here, Federico.