Latest / CEOs and ABCs / Rob LoCascio (LivePerson, KID Company, UareAI): He Built A $6bn Business and Left To Start Over... Here's Why! #022

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Rob LoCascio (LivePerson, KID Company, UareAI): He Built A $6bn Business and Left To Start Over... Here's Why! #022 · CEOs and ABCs

• 0:00
  Speaker A: I was 33 years old when I went public. I started in 1995, invented web chat on website, then took it public in April 7th of 2000. We went from $8 a share straight down to 7 cents a share a year later. He pulled me aside after the board meeting and said, just don't bullshit on me. The lesson I've learned through macro events is don't respond. Cut time in half, slow it down to half your pace and let it, let it get ahead of you. If you are trying to go ahead of it, it's gonna, it can put you under.
• 0:35
  Speaker B: You build this company into a $6 billion business from the ground up. How does that end? With you being exited from the company.
• 0:42
  Speaker A: I never really talked about it, but it wasn't the plan. I consider it an existential threat to the business. They're bullies and they make you be fearful. So obviously you try to process that and not bring it to your family, but you're gonna bring it to your family.
• 0:54
  Speaker B: How did you reshape your life and rebuild from there?
• 0:58
  Speaker A: We pac left the east coast, came out to Silicon Valley. I realized it's not my future and nobody could take my ideas.
• 1:06
  Speaker B: Today you're building something completely different this time in a completely new industry. A Kid first AI consumer product built around safety, creativity, and bringing families back into connection. Welcome to CEOs and ABCs. Real stories from execs who lead at work and show up at home. Career moves, parenting, wins and fails, and everything in between. I'm your host, Kevin Rice. Here's today's episode. Welcome back to CEOs and ABCs. My guest today is Rob Locasio, founder of Live Person. A true Internet era builder who helped invent webchat, took his company public in 2000 at just the age of 33 and spent nearly three decades leading the business to a $6 billion market cap. But this isn't just a highlight reel conversation. Rob shares what it's actually like to carry the pressure of a public company. The leadership moments that shape his reputation and and the reality that sometimes the biggest threat is where you least expect it. For Rob, it was activist investors who took control of the company, leading to his unplanned exit. We talk about what happens after the fall. How Rob rebuilt his identity, protected his family through a high stress season, and why he chose to start again, this time in a completely new industry. A company called Kid Company. A Kid First AI consumer product built around safety, creativity, and bringing families back into connection. Rob, thank you so much for being here.
• 2:27
  Speaker A: Kevin thanks for having me.
• 2:28
  Speaker B: Before we get into your career and your business story, we just had the holidays. How was your holiday season? Good.
• 2:36
  Speaker A: It was a little, little interesting. We launched a product I've been working on for about almost two years. I was on like a 3am war. We call it the war room to handle any issues. So it was a different type of Christmas, selling a Christmas type, you know, AI product to children. But it was fun.
• 2:56
  Speaker B: Sure. I mean like Christmas, the holiday season is like the super bowl for retail.
• 3:02
  Speaker A: I'd never been involved in B2B software, so it's like this is a whole different world for me.
• 3:07
  Speaker B: It's funny, when we, my old company built software for the restaurant industry, our biggest day of the year was actually the super bowl. And it was quite the stress test every year. I, I can't wait to hear more about Kid Company. But before we do, you know, I kind of want to go into a little bit of your backstory. And 1995, you founded Live Person, which became a hugely successful publicly traded company. And so, you know, could you share with us, like, what was that journey like? Cause you, you navigated the dot com bubble, the financial crisis, Covid, and then eventually had an ending that, you know, you didn't really see coming. And so I'd love to hear kind of what that experience was like.
• 3:46
  Speaker A: Yeah, I mean, I, I started in 1995 building websites. In 1998, I invented web chat on websites. So it didn't exist. And I thought it up and you know, because I had these e commerce customers who were trying to sell online, I thought about, you know, put the human salesperson on the website and then from there built it up and then took it public in April 7th of 2000. We were, we were really like one of the last Internet IPOs of the dot com age. And we went from $8 a share straight down to 7 cents a share a year later. I witnessed 9, 11. You know, we literally watched the towers come down. I was in New York City, so there was a lot that happened. It was, it was kind of trial by fire. And I was really young. I was 33 years old when I went public, you know, so I was kind of dealing with many.
• 4:37
  Speaker B: You were a publicly traded CEO at what you said, 33 years old?
• 4:42
  Speaker A: Yeah, I was 33 only. Yeah. And there's no like real lessons or things for how to run a public company. I was very fortunate to have some board members who had run public companies or been involved with public company stuff and had been really amazing. And I Remember this guy Bob Machlot, who's on my board, he was a pretty big guy in the business world when we were going to fire like 80% of the company to survive during the dot com. And I remember he pulled me aside after the board meeting and said, you know, this plan was to go from like 200 people down to 40. And I said, you know, we, if we don't do it, we're going to go bankrupt. And anyway, he said, look, you're a young guy and you got a whole career ahead of you. He goes, I don't know if this is going to work, like if live person will make it. It's not clear, but I'll give you one piece of advice. He said, just don't, don't bullshit him. Your investors, your employees, they're going to remember you for this moment. And your career may end here. You have a full career ahead of you. You're young. But it could end here by just not telling it the way it is. And I remember where that really came to light was when we assembled everyone in the main area and said, look, we're going to do layoffs today. And we give everyone an envelope and said, if your envelope says come back for lunch, you're staying and if not, you've got, you know, 15 minutes to leave. And I remember when we reconvened with the group that was going to stay, the first question they asked me is, will there be more layoffs? And I remember Bob's voice in my head and I said, I can't tell you whether they're going to happen or not. And you should make a choice based on that. And the normal, the normal thing you want to do is tell everyone it's going to be great. No, it's never going to happen again. Everything's okay. And the reality is you don't know. And when, when I, when we, when I saw, when we got hit with the Twin Towers and we all witnessed it, there was another. I had the same sort of thing happen there. One of my heads of sales was like, rah, rah, we gotta fight the terrorists and this and that. And I told people, you know, I remember people really didn't like him for doing that. And people were just absorbing the fact that thousands of people died and we were in New York City and I just said, look, if you have to go home or if you need to leave the company, I, we, we cannot be responsible for your person and you have to do what's good for you. But you can't. Rah, Rah. People through. You can focus them, but people know when you're bullshitting, you know.
• 7:10
  Speaker B: Yeah, yeah. I had one layoff experience in my career and we were probably at, I don't know, 40 employees or something like that, and we had to reduce about 15. And I think unfortunately a lot of companies don't cut deep enough when it's a necessity. Right. Today it seems like there's a lot of layoffs that aren't a necessity where it's actually almost become a publicity stunt where it's like we're going to lay off 10% of our staff because we've invested in AI and oh look, our, our stock price goes up. We're talking about a different kind of thing where my company was going to go out of business. We had our revenue dropping by like 50% over the course of a one month period. And so if we hadn't have done that, we wouldn't have sustained the company. But it's, it's such a difficult thing to do to go to people who you've worked incredibly hard with and tell them they don't have a job anymore because as a leader it rolls up to you and ultimately it's your responsibility to run a sustainable business. And at the time I felt like I had failed them. And it led to a lot of changes in how we positioned, how we operated, how we invested in the company and thankfully those changes, you know, our growth and eventually a successful exit. But man, that was such a tough period in my career.
• 8:31
  Speaker A: And I mean we, you know, just for people that are out there, I remember we, myself, my CFO and like my head of the kind of customer success got together one day and we made a list of all the employees names. I had three copies and gave it to each of us. And I said, there was a column said skill and the other column said will and. And we honestly went through it and you had to check both boxes and there was a handful of people we had debates on. There were three people who I was there at the beginning with me. They weren't founders I founded, but I hired them, the first employees, really the founding team. And I was like, they didn't have. Some of them didn't have the will anymore because they had a lot of money. When we went public now the stock was worthless and they were angry, you know, and so we made this list and, and it saved us because the people who stayed were people who had both columns reg of whether they were the best skilled, they had to be the best willed and, and we we said, okay, this person isn't the best at that job, but they sure as hell will fight for us. They came in early, love the company, and they'll, they'll go through whatever we're about to experience. We can't have people getting off the boat. Yeah, that, that was what we did.
• 9:41
  Speaker B: So you got through the dot com bubble.
• 9:43
  Speaker A: Yeah.
• 9:44
  Speaker B: Ultimately the company continued to grow. I think at one point you were a $500 million company.
• 9:51
  Speaker A: We're 5 billion. We were, I mean, our top was 6 billion. That was our top.
• 9:54
  Speaker B: Where, where does the story take you?
• 9:58
  Speaker A: Yeah, from there I, you know, I ended up pioneering. If I jump ahead, you know, chat became a thing, obviously. We started to sign up a lot of big enterprises. I made a huge bet in two. I've started to see that the value of the business was all this conversational data sets we had. We were thinking about automating them. Now, AI was machine learning at the time, but large language models were sort of coming about. There was some hint to what they would do. But I made this bet that we would get into the AI game and we replatformed and made a messaging platform so you could like message a brand instead of chatting on a website. That was the first part. And then the second part was building all the AI rails. So when Covid hit, we basically the contact center shot shut down and all these big brands like Verizon and T Mobile and they were all like, we need to automate everything. No one's in the contact center, so we need chatbots. And we just grew so fast and we became a company. We went from like 900 million in market cap in 2019 to I think 5 billion. 6. Between 5 and 6 billion. And we hit 6 one day. But in, in a matter of like, I think it was 18 months. It was just some weird ride and, and I wasn't ready for it in many different ways. We had become on a lot of people's radar at that time. And for many years I was flying under the radar and just doing my thing. And you know, at that point I'd already been like 26 years in, into running the company. And, you know, we're in the right place at the right time with the right strategy.
• 11:35
  Speaker B: Yeah, yeah, I had a very similar experience. We were building software for retail and restaurant. And in 2019 we did about 15 million in revenue by 2020. At the end of it, we did over 20 million. And by the end of 2021 we did 42 million. So we saw a big lift because we were the only reason restaurants were able to continue operating. All their doors were shut. People couldn't come in and get food. So it was all online ordering and delivery or curbside pickup. And we weren't sure when it first happened. We weren't sure, like, are we going to survive this? Are our clients all going to go out of business and we're done overnight? Ultimately, that's not how it played out. And we realized our value is actually even higher than it was before COVID happened.
• 12:21
  Speaker A: Well, that was the interesting part because I'd gone through.com then financial crisis was really interesting because we grew fast there too, because as companies were looking to cut cost, we were a way to get better leverage on labor in a contact center because people could chat with more than one person simultaneously as an agent versus phone calls. So we like did really well during then. And the stock got killed because we were a public company. And I actually ended up buying a lot of stock. I'm like, man, I'm gonna. And I should. Because I realized during the dot com I could have bought the entire company for $2 million. And I did it. And we had 7 million in cash. And I just was. I was afraid. I was afraid because it looked like the whole business was going to zero. And we, we got the profitability at the end of 2001. I was like, let's just like, just hold on until. And in 2003, things picked up. But anyway, I made it through all these things. So when the, when, when the COVID hit, I sat with my team. I was like, the lesson I've learned through macro events is don't respond. Don't ever respond to the event as it's happening. You almost, you want to slow down time, like cut time in half, slow it down to half your pace and let it, let it get ahead of you. Because when the wave is coming in you. You want it to pass you and then you follow it. If you are trying to go ahead of it, it's kind of. It can put you under and what that on you. Yeah, it goes. And what I mean by that is that you'll start making a set of decisions based on fear, anxiety, doubt. Because you're looking at a wave and it's. And you don't even know what the wave is. But, but the wave had to kind of come through us. And within like two weeks, we saw volume go up by 40%. It was extraordinary. I still have the printout of it. So I often say, like, when you get hit with a macro event, stop Slow it down, just let it play out a little bit ahead of you and then you can start to respond to it. But you're not being chased by it.
• 14:17
  Speaker B: Well, I think the, it's not just a business lesson, but it's a life lesson that you really hit on the head. There is just don't make decisions from a place of fear. If you're making a decision from a place of fear, it's probably not gonna be the right one.
• 14:31
  Speaker A: Yeah, I mean, this is the thing. And you know, running a business, there's a lot of emotion in it and how you regulate that emotion, which is very hard. I mean, I got two startups now and I talk to guys who run companies and give advice and stuff, but everyone's in the same game. Like there's a lot of uncertainty, there's a lot of things going on. Uh, it's easy to react and then what you end up doing is you're in the wash. Like once you're in a washing machine of decision making, you're kind of in trouble. You know, you're going to get dizzy and you're not going to like you're just being cycled. Like you said, if you can make decisions a little bit calm, you're in a better place.
• 15:08
  Speaker B: Sure. I imagine running a public company is a different level of pressure. A lot of visibility, very high pressure. Decisions take us through like a high growth season. Like, what did a typical week look like for you? Travel, meetings. And then how did that play into your family rhythms?
• 15:26
  Speaker A: It was very interesting because when I got funded, there was a fund in New York City called Don Tretter and it was this guy, Bob Lesson, who was a banker. And all of the limited partners were, the greatest CEOs in the country were in this fund. And I got access to all these guys, you know, and I got to talk to them about their lives of being entrepreneurs and building these giant companies. And I heard the same story over and over again. A lot of it was they were divorced and they all had second wives. And I really started to think about that concept and you know, I, I, I kind of very quickly realized it was very funny when I went public. I had a girlfriend who was with me during the building years and we were at Nasdaq opening up the market and my parents were there and it was a, it was a dream of mine. Since I was a 14 year old kid. I read a book on going public and here I was going public, public and I, and my parents told me the story that she turned to me and said, like, are we getting off the bus? She asked me, are we getting off the bus? And I just ignored it. And because I was in the moment of opening Nasdaq and, and then what happened when we went through this restructuring that I talked about, she said something to me that really resonated with me. She said, what you do is not normal. Because I told her, I'm about to go through a big layoff. It's going to get hard again. It's going to get really, this will be really. And she saw me through the formative years of like, sleeping on a couch. And she said, you know, what you do is not, it's not a normal life and I don't want to be a part of it anymore. It's all about the business and there's no room for anyone else. So I kind of, I stayed single till I was 47 because I realized I traveled over 200 days a year because we had offices around the world every 90 days. I had to do it a quarter quarterly call and three day board meetings. And it just is a lot, and it's hard not to be selfish. And like I said, I, I, I heard a lot of stories about, I can understand people losing their marriages and their families for their business because it is a very selfish act, building a business. I don't care who you are. It's a very selfish act. You have to be selfish at times.
• 17:33
  Speaker B: You know, hi, Kevin here. If you're enjoying this conversation and you know someone else who's working to grow in their career while staying present at home, I'd really love it if you could share this episode with them. It's one of the best ways you can help us and help more leaders build their careers in a way that they're proud of without missing the moments that matter most. At what point in your career did you end up having. Because you have three kids right now. Right. And so where were you at in your career when you started a family?
• 18:01
  Speaker A: Yeah, so I met my wife when I was 46. I got married at 47 and we had our first child, you know, 10 months later. So I was around 48. Now I have these three kids, 7 and 4. I just felt like I was in a place in life with the business. The business was big enough and I felt I could put time into having a family and, and, you know, but also I got married later in life and my wife met me in my formation. You know, she met me in the world where I was traveling around the world and doing things. So she kind of understood to as much as a, as a spouse can about that. You know, what, what's. What it takes to build business, what it takes to run of that magnitude, you know, and be competitive.
• 18:52
  Speaker B: So you were, you were still with live person for at least a handful of years when your first child was born, right?
• 18:59
  Speaker A: Yeah, yeah. All basically through. All three of them were born while I was still a live person. Yeah, exactly. Yeah. Yeah.
• 19:08
  Speaker B: During that period, you know, how were you able to stay connected with your spouse, your kids? Like, was there a tension between the competing priority of running this publicly traded company and being available for your family?
• 19:25
  Speaker A: Yeah, I mean, Covid, Covid was, Covid was really interesting. Cause you're with your spouse and you're with your family like all day, more or less. So actually it was a very different experience and there were a lot of good things about it on that side. Cuz you weren't in work and you didn't. I didn't travel for like two years, so I was basically off the road and at home, which is a real benefit when my first two kids were really young and then third one came at the end of COVID But yeah, I think it's, it's, it's, it's still a very challenging thing. You know, I think even. I think anyone who's a spouse to someone who runs a company, I think it's a challenge. So at times when you get a lot of uncertainty, you're going to get focused on something and maybe it's not your spouse, maybe it's not your family. So I, I don't think it's a perfectly balanced life.
• 20:09
  Speaker B: Yeah, yeah. I mean, I'm trying to write a book about these sort of topics. Obviously we're doing this podcast. I don't have it figured out. I'm A big reason I started this podcast was to learn from other people who are going through the same struggle of trying to have the career that they aspire to have while still being present and available for their families. Because it is a really challenging thing. And I just wanted to create space for that conversation because some people have some great lessons and ideas and some people are honest that they're like, I'm still really struggling right now, but I think it's just such an important conversation to make available so people don't feel alone in that struggle.
• 20:50
  Speaker A: But I think that's, that's the big thing that I hear from people and you can feel is that people talk about being alone running a company. I remember my wife somewhere during the routine of running the company. I remember she said, don't you have a life coach? I kind of was like going on about something and I, I learned very early on with that first relationship I had before I went public with, I wrote, I really wrote down some rules. One rule I wrote was like, nothing, nothing ever really happens in a day. Don't take everything home with you. It was very, I call it abusive in a way that if you take your business home all day, you're kind of abusing people around you because you're taking all the garbage now you're throwing it on them and telling them. And I use that word. It's probably, maybe it's not the right word. But I think for the people on the other side, it can feel that because it feels like you're negating them as being important, that emotionally you're not available. That, that no matter what they say, it won't be good enough to solve your problem and just want them to be like, you know, Tony Robbins and Deepak Chopra and the Dalai Lama and whoever else all in one because they're your spouse and they're just trying to do their thing too. So.
• 22:08
  Speaker B: Well, your, your spouse or your partner can't be 100% of your support system. That's not fair to anybody. That's where, you know, a psycho like a therapist, a coach of a community of friends that you can share, you know, more intimate, you know, life experiences with. That's really important because. Yeah. You can't just be dumping on your, your partner all day and expecting them to hold space for that.
• 22:33
  Speaker A: Yeah. And if you have a partner that has a, you know, you married them for the right reason and they have strength and love and they make a good spouse and a good parent. They have their own strength and they have their own reason that they're, they're living their lives which are intertwined with yours. But it's not all about your life and your business. And the business can become very, very over consuming. And I've seen that over and over again. So like I, I've seen it and it's hard, by the way. It's hard. Like I'm in two startups now. It's, it's back to like that jiu jitsu thing. So it's, it's a different game when you're building businesses.
• 23:14
  Speaker B: Yeah. Well, tell us about how kind of the story of your time at Live Person ended and how you are now in kind of back in founder startup mode.
• 23:24
  Speaker A: Yeah. So it's like 2022 we got, we got attacked by an activist shareholder and my sector got really hammered. We all got attacked by activists, but we ended up all exiting. I exited in 23, but I, I ended up fighting my board because we gave the activists some seats and, and that considered it an existential threat to the business because they didn't have an understanding of the business and they were not there to be a helping hand. And today the business lost 90% of its value. It's almost half the revenue that it was when I left. And after I left, funny enough, they sold their shares and just left like a day later after I stepped down. So if you're in a business for 28 years and all, you understand what existential threats are and they come in different shapes and sizes. External things like, you know, we're saying the.com or financial crisis and in this case it was in the, in this type of a shareholder. And so I ended up exiting my own company without a transition and never really talked about it. But it wasn't the plan. And I did a lot of people because I had deep relationships with customers. You know, some people I've known for 20 years, cut and pull, you know.
• 24:45
  Speaker B: So I mean, how does something like that happen? Because I mean I hear about it, but I've never heard like the inside track or inside story of like you build this company into a $6 billion business from the ground up, being one of the top leaders in AI and how does that end with you being exited from the company? Like, it's hard for me to understand how an activist investor group can come in and completely take control.
• 25:11
  Speaker A: It's very interesting because it's a very corrupted system. So what happened was, it's really interesting, the most 30% of live person was owned by passive shareholders. The Fidelities, the blackrocks, they didn't even know who we were when I first went public. And for many years I knew my top shareholders. I would go to dinners with them. I knew their families. You become friends in this and they're usually in early stage tech, they're usually innovators in themselves. Like they want to be innovative investors. And that, that all changed somewhere as more capital came into the market, especially with passive funds. So it turns out in the end that even the people who normally be close to, they're just trading you, you're one of a basket of 200 in their portfolio. It was, I don't, I don't know how many years it went over time, but the relationship definitely changed. That allows them to come in and play a game because nobody really wants to be active. And the passive shareholders are not even there. You can't talk to them. There's no one to talk to. So there's what we call a proxy contest that they can nominate every year shareholders and shareholders can vote. And that process is so busted that they could make change that could hurt a company. And the general shareholders can't do anything because sometimes the passives just vote because there's these things called proxy advisors that will say vote against the company for whatever reason. In our case it would be like. Cause we had board members who run for more than 10 years. These are great board members out there. But every four years you should refresh your board. So all these weird rules anyway, not to get too technical. It puts a threat, it instantly puts a threat in your business. Instantly. You could lose your business. And I remember just recently seeing a podcast with the founder of Whole Foods. He got attacked by an activist. They sat him down and said, look, if you don't sell your company, we're going to like destroy it. And, and it's. And every CEO I've talked to who got faced with an activist, it's like you get a scarlet letter. This I describe it. It's like you've got a scarlet letter. Now the plague came to your business and you got the plague and now you've been branded with that. And then their whole job is to discredit you, discredit the company, discredit your big board members. And the one thing no board member wants is usually I don't really want to be publicly discredited because this is kind of like not a full time job for me. So this, it's made for these people to walk in the door and take anything they want and, and destroy it. Over times now there are activists who've come in and saved companies. And I get it most of the.
• 27:56
  Speaker B: Time is the end game just to get control of the company.
• 27:59
  Speaker A: I realize there's, there's a many end game. So that's the thing you, there's, it's a game of chess in some cases. Most of the time private equity puts them up to it to get you sold. The private equity people don't want you. They're like from Harvard and they're very, they're the white gloves and they're there to be helpful, but they don't do the dirty work. But they may want a company to be sold and because it just takes you out of the market against a competitor that a private equity firm may have. And it's so far in the past, but it's, it's a very strange thing. And I'll tell you, the one thing is that I spoke to a lot of CEOs who were involved even with my activist and was attacked by the same guys. And it's always like, everyone's like, I don't want to be, I don't even want to get involved with it anymore. I'm like, I got PTSD from this thing. It's like a weird world that those, yeah, those people come from and they're not straight shooters and we, we couldn't put fake things out about anything. We have to. We're public companies and on the activist side they can write a bunch of lies and put out press releases and, and then we, we would tell em like, hey, that's a lie what you wrote about me. And then they would file a private filing saying, oh yeah, that was wrong. But, but the press release is out.
• 29:11
  Speaker B: The damage is already done.
• 29:12
  Speaker A: I ran a company for 28 years. Like, I'm not, I didn't have anything to hide. Yeah, I was, I was public since I was 33. But it was really funny. But it's just, it's, it's a different world. So I decided I'll take my exit package and leave. And I believed in God and I have a great belief that there's a higher power and that this was given to me for a reason and I'm holding out in the company. You know, this isn't my future. I know it sounds strange because if you built something for 28 years, you would think it's your future. But I was like, I realized it's not my future and nobody can take my ideas.
• 29:44
  Speaker B: When you were going through this, how, like, aware of what you were going through was your family and your, your children.
• 29:51
  Speaker A: I mean, they were very aware. They're living through this. And there was a lot of stuff with lawyers battling stuff and filings and a lot of stress and yeah, they were, they were. It's not a normal world and nobody should feel sorry for anybody. But it was, I, It's a very. These people are bullies and they, once again, if I, if, if I grabbed a hundred CEOs who were involved with this, they would say the same thing. I remember one guy told me he was on the phone with one of these people and his wife was listening to it and she was almost ashamed because he told me this. She was a, she was fearful and ashamed at what was happening to her husband because she was listening to the conversations from these people on the other side because they're bullies and they, they talk in language and they. They say words that are not. These are not business conversations. These are just make you be fearful. So obviously you try to process that and not bring it to your family, but you're going to bring it to your family and they know that. By the way, the whole idea is the whole job over there is to wear you down. Eventually you're going to get tired. To them, it's unemotional. Remember, if I come in as a third party and I attack a company, this is just a. It's a game to you. It's like existential threat. It's your life, it's your business, it's your. You know, to them it's like whatever. Like so they get on it's. And then they do their shtick. It's like a comedy act and. But it's not funny and. And on your side you're emotional about it because it's your. It's about loss of value, loss of employees, loss of credibility, loss of your who knows what. And on their side, yeah, whatever. It's like they're gonna make money. I'm making money one way or another. Yeah.
• 31:24
  Speaker B: Yeah. What, what kind of lasting impact do you think or impression do you think that made on your family when they saw you going through this period?
• 31:32
  Speaker A: You know, my wife was. My wife was pretty, like, she was pretty straight shooter. She's just like, what is this all about? You know, her perspective was like, you're on a sinking ship and whether you want to admit it or not, it's sinking. Because now you've got a crew of people who are on the board and this is not going to help keep the company afloat. So like, either you stay on the sinking ship and go down with it, or you get off the sinking ship. And what I realized, like, because I'd been through so much building live person and I've been through so much of my early life. After I left college, I had another company went under. I kind of thought I was really curious what was out there. I. I flew out to California and. And then a couple times came back and talked to my wife and said, let's go. It's time for change the power let me out. You. You said, you know, this thing's a sinking ship. You're right. I probably wasn't. I. And I. To be honest with you, Kevin, I wasn't happy for many years when the COVID happened and many of you were leading companies would understand. It's like, I don't think anybody cared anymore. Like, not everybody, but it just law. We used to be like a culture business because of our offices, and people came together, and we shared a personal connection. Meaningful connections is one of our core values. And nobody cared. Like, I went to the office in New York. Nobody showed up. It was like there were thousands. A couple hundred people lived in the. Around that office, and nobody care. So I realized, like, I wasn't happy. There was a lot of other stuff happening. DEI stuff. There was all this stuff going on that didn't have anything to do with our business, but we had to manage through it. And eventually I was like, you know, do I really love what I'm doing? And probably not.
• 33:13
  Speaker B: Yeah. When. When you were exited afterwards, like, how did you reshape your life and rebuild from there?
• 33:22
  Speaker A: I went back to. I went back to the. The foundational things that got me through that I brought into my life to help me steer through the change. And so I was saying one of those things, like Tony Robbins. When I was sleeping on this couch for two years, I went to Tony Robbins, and it really changed my life, and I learned a lot. And then I got a coach from there for many years, and then I'd stopped going because I kind of felt like I learned everything I needed. But I went back, and I was like, my God, first, I brought so much into my business, I forgot how much of the structural stuff I brought in. And then there's so much I forgot. It gave me that jolt. I went back to. You have to do a pattern of things to. To move forward. You emotionally want to be strong. And so I started to just bring back into my life. That's not the only thing. A bunch of things that I remember would help me build the next foundational parts of my. Of my life.
• 34:20
  Speaker B: Yeah. That's awesome. I mean, we talked. We're both members of Tony's platinum group, and I got my business partner to come to business mastery in 2019, and that was a big turning point for our company. You know, we set some goals that we exceeded that next year, and then it was just like, off to the races afterwards.
• 34:39
  Speaker A: Yeah. And once again, I. I have this thing happen to me or for me? Cause you can look at it. Is it for you or is it happening to you? Let's say something happened for me, and now I need to just kind of work through it. I told my wife, go, look, I got. There's nothing here for me anymore. And I'm Going to go to where AI is happening. And I have some ideas. And really packed. Packed the kids up and took them out of school and came to here and just settled in. And I just started to work out of a wework. And my EA is a virtual EA from the Philippines at 200 bucks a week. I'm like, I'm doing everything. So I tell this because you gotta get back to the roots. Getting back to the roots of what it takes to build a business, rethinking how you want to build it differently. I have a lot more experience. What are the lessons I learned, you know, over the last couple years? How do I take that into my, my future? So that's the stuff that really was interesting to me.
• 35:37
  Speaker B: Yeah. What, what were some of those lessons that you learned from the experience that you've been able to carry forward or you plan to carry forward?
• 35:44
  Speaker A: There's, there's two big lessons I learned, like, and they're obvious. They may be very obvious. And so sometimes the obvious lessons are the hardest ones. I gave people opportunities that didn't have the right to have the opportunity. And I did that a lot and a lot. And sometimes it worked for me. But I put people into positions of power that didn't have the qualifications, thinking, I don't know what I was thinking, to be honest. Who then, when they got those positions, didn't deserve them, knew they didn't deserve them. When they got an opportunity to kind of take advantage of that, they would. They don't, because they, they know deep down they shouldn't even be here. Why would give them an opportunity to get there? And then there were people who I left around, especially on the board, that really are, like, they're not really winners. They, they didn't have jobs for many years. Maybe when they came to the board, they had stuff. But over years, their careers went kind of nowhere and I left them. So why I tell that story is when something then happens, the. You're only as good as your weakest links, and those weak links are really detrimental when you're under attack. If everything's great, who cares?
• 36:44
  Speaker B: So, like, well, you're, you're under a microscope when you're promoting people because maybe they've had the tenure and like, they deserve it, but they don't actually have the skills or qualifications to be in that role. Everybody else sees it and they judge you for it as a leader, and it creates problems beyond that one role, you know, throughout the entire organization.
• 37:05
  Speaker A: Yes. And so, like, I, you know, I like said to get 28 years I had different leadership teams. I had to cycle teams and cycle people. And that goes to my second one which is that when we went from like 900 million in market cap to multi billion market cap and it happened so quick, I wasn't prepared to understand that I was now on a different radar of people in the world. And I wasn't prepared to have people around me, not even just working with me, but advisors that I have today that are used to dealing with that kind of market cap and that kind of stuff. And when I started meet with these people or there's like one or two people in particular and they, they're working with other well known people we know in the world, like very powerful people in tech. There's a thing that happens like once you get on people's radar, you're like a target. And so I, I never realized I was kind of under the radar for most of the time. Even running a public company where we weren't salesforce and stuff like that, you know, we're big, but they were, you know, they're on a different level. And all of a sudden we popped up on everyone's screen, wow, these guys are there then now a bunch of people look at you and go like I want a piece of that and I want to get that in a way that I don't have to work for it. And there are people in the world who can help you and like advise you and, and who have dealt with that kind of situation of success and be like, well this is how we navigate it and this is how I protect the business or protect you. My lesson there is be aware where you are, be aware where you are, even if it move quick. And then be aware of who needs to be with you at that point. And then be aware that the more you are successful, the more you're on people's radar, the more you're a target.
• 38:49
  Speaker B: After you know, building a company for 28 years and then getting knocked down, was it important for you to show your resilience to your family and that you can get back up and you can build something again?
• 39:00
  Speaker A: Well, I think it's, it starts with, it starts with you like, like you have choices at that time. Do you want to continue forward? So I think yes. Read somewhere or you know, as a parent that you, you don't teach your kids values. They, they watch how you act, right? Especially my kids are in the formative years, right? They're, they're experiencing this literally in the middle of being three, four, five, six years Old. They're. They're in those years where they're just. They're just sponges around what's going on in the world. And so here they are experiencing something with their dad and their. And their family. And they're definitely observing. And I'd learned from my family a lot of. Because I came from a family of entrepreneurs. And there were always these tough stories coming from Sicily and with nothing. And it was. I just felt like I have the ability to show my kids that, you know, it's just what it is. Move forward, build again, and you don't get down. My grandfather wrote me this great letter. He had a handbag business that he. That he had in. On in New York City during the war. It stopped functioning because he couldn't get the supplies anymore, like silk. Then after war, he never went back. He ended up working for a handbag Julius Judith Lieber. And he regretted it in many ways. He was a great man and a wonderful friend to me. And he wrote me a letter when I graduated. He wrote one line in particular. I love the letter. He said, just remember that when you get out in the world and you go to follow your dream, because I know you're going to want to follow your dreams, that there's going to be a lot of people who don't want you to succeed, but you cannot let them get in your way. And it's what I remember that my children, I wanted them to see regardless of these. Because in the scheme of life, all that stuff that even happened, that live person with all these, the activists and the board and all these people and who were. Who cares? I mean, who really cares? I mean, when you think about, like, in the scheme of things, like your kids look at you like, I didn't have a disease, you know, I just was. Something happened. So they have to understand, like, it is what it is. Move forward, rebuild. Nobody can take from you what you have, which is your ability to create, build and move forward. And that's what I wanted to show.
• 41:18
  Speaker B: Them, you know, so, yeah, absolutely. I think you're right. Like they say, more is caught than taught. And your kids have this opportunity to see you rebuild, get back up, start something new. And I imagine something that you're probably even more passionate about today just based on the way you talked about this versus, you know, building a software company. So let's move forward to today and you're building something completely different. You could have just gone back and started another software company because that's like what you've done. That's what you've known, but you're building a consumer product company in the AI space for kids. What was the inspiration to go down this new path?
• 41:57
  Speaker A: Yeah, I mean the, the inspiration was really my kids and watching them with my, with these devices, my iPhone and iPad and watching them really become like addicts to the device. And you read about it, you hear about it, but once you become a parent and you see it, it's, it's very troubling. And then, and then they're being exposed to content through YouTube and YouTube Kids. That's like giving my kids a different value set. Like that. My 4 year old says the F word because he saw it on something on YouTube. And the, what they do in, on YouTube, especially YouTube kids, is they make everything funny. So like if I hit you in the head with a baseball bat and I'm laughing and you're laughing, it's kind of funny. But, but it's the kid.
• 42:43
  Speaker B: But in real life it's not funny.
• 42:45
  Speaker A: And a kid will, will look at that and go, if I hit somebody that's funny, that's a funny thing. And they don't know any better. So I started to see these things and I said, look, AI is a, it's transformative and for children it can be really powerful if it's provided to them in a way that truly is safe and empowers their creativity, allows them to like take things out of their imagination, make an image, make art, make a story, talk to characters, make a character. So I have this whole thing like, you know, there's a whole world out there that I think children can create content. Now even as a four year old, that could be amazing. Like my four year old, if I give him the video, an AI video model can make a pretty good 30 second film, you know, so like that's, that's cool. That's Disney times a thousand. That's like, if Walt was around, he'd be like, it's not about me finding the best anime, it's about me finding the best kids to now power their imaginations through these amazing tools, which are models.
• 43:50
  Speaker B: Tell us for anybody who's not familiar with the product what it does. Like, what's your vision for it?
• 43:55
  Speaker A: Yeah, so it's a device, it's called Kid Keep It Dreaming. It's, it has characters and in the middle you can make images and stories and buddies and music all by talking to the device. It also has a whole educational area where kids can get their own AI tutors and lessons and all of that. So It. It's really packed with all the power that AI could give a child to be their best creative self. What's cool about if you. If I went to a space, like, my best friend was really mean to me. So it's built for kids. Like, it's also about connecting with parents. Like, part of it. Like, say, well, why don't you talk to your mom and dad about this? And it's not all about tech. It's about, I call building the bond back from kids and parents with devices. A lot of times it's about get your mom here, dad, or whoever's in your life and why don't we create something together so it's not all be alone in a corner.
• 44:48
  Speaker B: So I love that it kind of pushes you back to connection with your parents because, you know, other AI models that are available are really designed to create attachment with the individual, and they're designed to keep you really communicating with that model. We've had some magic stories as a result of that. So that's an awesome example of being able to use this technology for creativity and imagination, but also, like, tying back into the whole family, you know, dynamic.
• 45:19
  Speaker A: Yeah. Normally we're used to handing a device. The kids run away. The reason I wanted to do a device is so that the kids could have their own thing. It's like their own, you know, little world. Take it in their room. You don't have to worry about it, but they don't have to, like, be hijacking your phone and then you kind of rip it back. So there's something of sense of, like, ownership to it. But then it's. It's part of this, you know, overall connection experience with the family. That's my goal.
• 45:46
  Speaker B: Yeah. I mean, you've been in the AI space, you know, for a while now, and I'm curious, like, do you have specific, like, boundaries or guardrails around Esafety? Do you have, like, advice that you could share with other parents when they're thinking about, like, how to expose their kids to AI and tech, but, you know, not exposing them to some of those, like, potentially harmful platforms and channels?
• 46:12
  Speaker A: It's the reason I created the kit, because I found that, yeah, you can try different things, but it's almost like you're crossing your fingers because they're adult models and they can hallucinate, they can say weird things. They could make weird imagery. I just think, you know, I didn't see it, so I felt like there. There isn't someone who really took the care and time to just Create an AI only experience for just kids. They most time using these big models and trying to, trying to kind of get them down to be semi good but you know, you have to construct them in a certain way. For instance, if a kid says I'm having an issue, it'll off ramp them and even if they say it's I'm afraid of mom and dad, then it off it puts them back into why don't you go to a teacher, go to school. So it tries to find a path versus those models are kind of always trying to just tell you how great you are in a good, you know, like take you down. That's where we see kids have problems with them eventually because they could hurt themselves and these AIs could, could help them do that. So I, I think it's, I, you know, I think it's, it's challenging. So that's why I want to create something.
• 47:17
  Speaker B: Yeah. Amazing. Well, I love the product and looking forward to getting some for my children and I wish you like the most success with it because I think you know, you are starting over in some respects but you're also starting from a lot of experience and a lot of you know, networking connections and, and probably a lot more passion this time around. So I'm just excited to see where you take it.
• 47:40
  Speaker A: Yeah, it's, it's been a great experience and, and it's exciting. You know, the, the moral to the story is no matter where you are in your career, your life, you, you just gotta, as Winston Churchill said, never, never quit and just keep moving forward. And it, there are no deck of cards. That's perfect. I, and I think the majority of people would say my life's good enough, I have the things I need. There's a lot more people that are suffering in the world that, that we, we know are out there. And so with that knowledge you kind of just have to keep moving forward.
• 48:18
  Speaker B: Yeah. Last question and I'll, I'll let you go here. A lot of our audience are kind of up and coming executives. You know, they're aspiring to be in the position you leading a large organization and an executive role. If you look back on your career, is there any advice that you would give to them or like even your younger self as you were starting out?
• 48:41
  Speaker A: Yeah, I would say people talk about this like imposter syndrome, you know, this saying. Right. And I would reframe that a little bit. And what that means that you don't think you're the right person for the job. You don't think you're good enough. You're not smart.
• 48:53
  Speaker B: You don't think you're ready.
• 48:54
  Speaker A: Not ready, you know? Right. That's. That's that thing. And. And I. I would. I kind of would reframe it a little bit. And to say that when you have that feeling, it's really like. It's like your inner child. You have the ability to tap into that thing. That's a child, and that's what it is. When we start something new, we're like, back into our child self. And at one point, that's so exciting, and it's creative and it's that excitement, you know, like, my kids, they run everywhere. My kids don't walk anywhere. They just sprint everywhere. Daria, she's like, you know, they skip. They skip and they make sounds when they walk like it's the funniest thing, because you realize, I don't skip anymore. I don't bolt some place to go. But they're always in that energy of, like a kid. And so that feeling, you can look at it a very negative way, or you can look at it as. That's your inner child. That's that part that can be so fun and so scary. And that thing where kids at night, they think the darkness can hurt them, you know, like. But we don't anymore as adults and think of it like that. It's. It's a beautiful thing. Not. It's the imposter. It's your inner child. And that's the part that gives us our, like, fuel.
• 50:03
  Speaker B: Yeah.
• 50:04
  Speaker A: That's what can keep you around to well into your hundreds. That's what can keep you in the game. Being older. That's what keeps you alive. And looking at like that, then I'm not. I'm a child because I don't know things. You're the child that has a new way to look at everything. That's the goal.
• 50:21
  Speaker B: I think if you. If you don't have at least some level of imposter syndrome, you're not challenging yourself enough. You're getting complacent, because that just means that you are pushing yourself and you're a little uncomfortable. And so I think it's probably good to have a little bit of imposter syndrome. Otherwise, maybe you're not growing as fast as you should and you're not putting yourself in a position to grow.
• 50:45
  Speaker A: That's correct. That's it. I often say, like, nobody has a mission statement that says, I want to be comfortable. Nobody wants the luky, warm life. Aspiring for comfort is asking for trouble because power to be out there, whoever that is, is going to like kick you out of that zone pretty quick and put you in a place of feeling like, oh, back to your inner child. Back to the unserved.
• 51:10
  Speaker B: Absolutely. Rob, thank you so much for this, like, amazing conversation today. Your just honesty about leadership under pressure and integrity and telling the truth and not reacting from a place of fear and understanding how quickly the game changes when you're on the radar. It was really impactful. And as a dad, I appreciate the reminder that kids don't learn values from what we say. They learn from what they watch us do. I'm truly excited to see where you take Kid Company next. Thank you so much for joining us and sharing your wisdom with our audience.
• 51:42
  Speaker A: Thank you. Thanks a lot, Kelly. I appreciate it.
• 51:45
  Speaker B: If you're enjoying this conversation, make sure to hit subscribe so you don't miss future episodes. CEOs and ABCs is all about helping you grow in your career and show up at home. We've got many more amazing guests coming up, so tap, follow and stay tuned.