Aug. 16, 2022

The Past, Present, and Future of Entrepreneurship in Austin. Part 1 of our Discussion with Brett Hurt Co-Founder and CEO of

The Past, Present, and Future of Entrepreneurship in Austin. Part 1 of our Discussion with Brett Hurt Co-Founder and CEO of

Brett Hurt is a serial entrepreneur, launching Bazaarvoice, Coremetrics and now Over that time, he's learned a lot about software, people, software and soul. His latest company,, is a B Corp, or as he calls it, Capitalism 2.0. Brett

Brett Hurt is a serial entrepreneur, launching Bazaarvoice, Coremetrics and now Over that time, he's learned a lot about software, people, software and soul. His latest company,, is a B Corp, or as he calls it, Capitalism 2.0. Brett invited us to his home to talk about growing up in Austin, and the tension between the creative and the capitalist class. 

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Episode 46 Brett Hurt part 1

Michael Scharf: Austin is the new innovation powerhouse, not the next Silicon valley, but the first Austin, we are adapting to the future in real time.

Jason Scharf: I'm Jason Scharf, a biotech executive, and early stage investor.

Michael Scharf: And

I'm Michael Scharf advisor and board member for multiple private companies.

Jason Scharf: You can call us optimist abundance minded up wing, and even solutionists we see a bright future ahead that can be achieved through innovation and entrepreneurship.

Michael Scharf: In this podcast, we explore Austin superpowers, the people and companies driving our growth and the macro, and microtrends that come together to create Austin today.

Jason Scharf: This is Austin Next! The Austin ecosystem wasn't built in. And neither were its leaders. Today. We have very unique opportunity to talk with native Austinite, serial entrepreneur and investor in the local ecosystem. Brett Hurt is the CEO and co-founder of, a B Corp, which is a public benefit corporation, but is also co-founded and led Bazaarvoice through its IPO follow on offering.

And two acquisitions, Bazaarvoice became the largest public SaaS business in social commerce was named by the wall street journals. One of the top IPOs of 2012, right. Also founded and led Coremetrics, which is rated the number one web analytics solution by Forrestor Research and like Bazaarvoice expanded into a global leader in 2017, Brett was given the best CEO legacy award by the Austin business journal.

He's a Henry Crown Fellow and Braddock Scholar at the Aspen Institute during our nearly three hours getting to know Brett, we covered so many topics that we started to break our conversation into two episodes here. In part one, we discussed Brett's history and current involvement in the ecosystem. What we need to do to maintain our success.

The intersection between the creatives and capitalists and innovation and corporate governance models.

Brett, welcome to the Austin next podcast.

Brett Hurt: Thanks. I'm very happy to be here. Happy to have you in our house.

Jason Scharf: Yes. And it's a very beautiful house. It is. So thanks for having us. Thank you. I'm gonna start big here. What would you say are the defining attributes or really the secret sauce of the Austin innovation ecosystem.

Brett Hurt: Yeah. So I was asked this by Jim Breyer when he was moving here and actually wrote an article on this in in a magazine called Urbanitus on what is the real ethos of Austin. And one of the things that I've noticed since I was a kid here, I was born here in 1972. I'm 50 years old now is that Austin has always had this ethos.

Of really helping each other. I've noticed that literally since I can remember some of my first memories were about that, about how we'd lift each other up. And I think that's a very uniquely Austin thing. Like you guys, I've been listening to your podcast. I lived in California for four years and a huge part of the reason that Debra and I wanted to move back here before we started having kids.

We're we're starting to seriously talk about it is that I wanted our kids to be raised in that environment that really fostered this level of love in me for helping each other and lifting each other up. And I just have to be honest that in San Francisco, when I was there and I was very successful as an entrepreneur there, I didn't see that same ethos.

It was all about, it was all about kind of like, how are you advancing in career? And everything was career focused and, oh my gosh, our kids can't get in the right school. And you know, everything's so competitive and just small things like. You know, that I'm used to as a southerner, like opening doors for people.

I didn't see that it was like everybody was just, you know, out, out for themselves. It seemed like. So I wanted our kids to grow up and it was a very, very good decision. We moved back here about 19 years ago from San Francisco, our daughter is about to turn 18. And it's in our kids now. Like they just naturally are wired to lift people up to help each other.

And I think that's a, that's a huge part of the. Austin Ethos. And, and really one of the things that makes us very special people talk about it is like, you know, Southern hospitality. But I think that's very real here in Austin.

Jason Scharf: We've talked about it as well. We, the superpowers we've called it is kind of the culture of, of helpfulness and, and an open culture.

And it's funny. And I think people outside of Austin, really grasp this number. But for me, you know, we've been here 18 months. And when somebody says, I'm gonna introduce you to X, Y, Z. 80% of the time they do. And I think most people listening like that hit rate is unheard of so many times, like, I'll help you out.

I'll kind of do this, but it really is here and meeting lots of people and wanting to, and quoting actually it was at a SXSW by panel that Jim Breyer I I saw was at, he was like, you know, You can play nice and win. I think that was also taking that from Dell's book. He was, yeah. Yeah. And, but it was, it's very true that like you have that kind of growing pie and all boats of like, if you win, I can win.

And it's not that kind of you know, what can you do for me tomorrow only situation, right?

Brett Hurt: Yeah. I mean, Jim, Jim's one of our investors at and he's, he's a very good friend of mine and we're investors together. And a number of companies was the one. Got him into ZenBusiness, for example, which is one of our unicorns.

I think they're worth 1.7 billion now and led by a really good friend of mine, Ross port, or. And that, that ethos, like I talked with Jim a lot about that. And is a public benefit corporation and ZenBusiness is a public benefit corporation. And Osano is a public benefit corporation and sustainment is a public benefit corporation.

And part of the reason that happened is that we decided to become a public benefit corporation, kind of pioneer capitalism, 2.0. And then Ross asked me about it and learned about it, made ZenBusiness that. Arlo Gilbert asked us about it, made his business that et cetera. And so one of the things that Jim said when he came here is he said, Austin, that ethos of helping each other actually has led it to be in the title of this podcast, right?

Is Austin, Austin Next has led it to be the type of city that will pioneer B Corps and pioneer this new movement in capital. But it all starts with, you know, a few people making that decision and then because we're so wired to help each other, as you said, it's so easy to get networked here, which is astonishing to think about, because this is the 11th largest city in the United States.

but it's always been that way. It was that way. When I was a kid, it was that way. When I was a teenager, it was that way. When I was at UT Austin, it has always been the case that is so easy and so welcoming. If you are the type of person that's like, Hey, I'm here to help. Then people are gonna just give you a big warm embrace and say, well, let's go, let's start building.

Jason Scharf: It still has this very much small town feel. We've met people in that are teachers at the schools that my children go to. That went to those schools, as you said, like the 11th, largest city two and a half million person, Metro, that's kind of unheard of like that's, that's, it's very much a small town feel, but it, I think it creates that certain level of connectivity when you have those kind of deep seated roots, even with 150 people moving here every day.

Brett Hurt: Yeah, that's, that's very real. And I can tell you that I'm a big beneficiary of the Austin ecosystem. You know, growing up here, I started programming when I was seven years old. My parents were entrepreneurs from the time I was born. And my mom actually got me. My first computer learned how to program with me.

My grandfather taught at UT Austin, his whole career, in very advanced mathematics. And so they thought it would get me into mathematics and they're right. That turned out to be my best subject and their early programs I wrote were doing my, my early math homework. But my, my first embrace in Austin.

And you had, you had John Butler on your podcast, which I worked for John for a while as entrepreneur in residence at UT Austin when I was here. Yeah. Bazaarvoice and and After I took Bazaarvoice public, I wanted to kind of walk a mile in my grandfather's shoes and see how that felt since he had taught there his whole career.

And it was, it was pretty cool, but I decided that I really am an entrepreneur at the end of the day. But when I was 10, my mom would take me to user group meetups for programming. And this was in 1982 that had to be pretty unusual in the United States at that time. And it was very unusual that I was even into programming at all, because frankly, like the more I got into it, one bad thing that happened, but you know, it.

Bad things also lead to you being resilient was a lot of kids started to pick on me when I was, when I was in in school because I was different. Cuz I was programming. I was like, quote, unquote, a nerd, but there was still this great community of people that my mom could take me and drop me off. You know, you're not driving at age ten and learn from other amazing programmers who were all here because of what John Butler talked about.

All of the people like George Kozmetzki and everybody else that came before that really turned Austin into the foundation for an innovation hub. And because it's geographically beautiful here in Texas and Texas has all these advantages you know, for business and taxes and so many advantages it has, and it's a very diverse state.

It really pulled in people to then stay here because they're like, okay, I'm in a city. That's very well educated. I'm in a city with beautiful geographic diversity, you know, and just, and, and just, you know, beautiful people in this amazing music city. And they stayed here and they started companies and they stayed here and became, you know, creators.

And I was born in this environment. So I didn't, I didn't realize growing up that this was unique, but the more I've traveled around the world and, and grown older. I realize that I'm very much a product of Austin and that I owe Austin a lot because of that.

Jason Scharf: Well, I like, and I wanna circle back to the, to the B Corp one, if you can explain exactly what that means and sure.

But one of the things that I like in we've noticed is the. Diversity of sector and type of innovation here. And it's not all just, you know, product innovation, you see a lot of business model innovation. You see a lot of , we're talking about governance, innovation, and I think that's also provides a lot of interesting opportunities in cross movements around.

You mentioned like you were an investor in Everly health and you know, I think that's at its core very much a business model innovation, more so than any sort of like product innovation. And so. I think that we are able to continue to lead and have different types of positive impact in the innovative space with.

Whether it's CPG Rockets, health, and then it's business models, finance, I mean, what do you think about kind of that diversity of of types of innovation, how that's affecting us and then would love to kind of hear you kind of pull the thread a little bit on B Corps what is that and why did you do that?

Brett Hurt: Sure. Yeah. So I've actually been really, really excited to see Austin diversify so much in terms of the ecosystem. Like we're, we're investors in a number of CPG companies here. and I noticed on your podcast, you had Kirsten on from SKU. We'd been involved in SKU. And you know, one of the big companies that came out of SKU was Siete , which is worth over a billion dollars.

And, you know, really pioneered this whole kind of Gluten free movement in TexMex type products. And so we're investors in credo foods, which is Vegan queso. It's paleo-friendly too. It's got almost no oils in it. Or it has no oil in it. It's, it's really just, you know, cashew based and taste really good.

And Kirby Lane Cafe and others use it, but you can buy it at, you know, whole foods. And one of our big investors in is John Mackey. He's one of my best friends. You know, he definitely gets a ton of credit for introducing the world to so many different foods. I'm a vegetarian, John Mackey has been vegan for over 17 years now.

Wow. Talk about a guy that could eat as grass fed of whatever , you know, cuz he really, really has access to the supply chain and made that decision. And he's introduced, I think John, Mackey's done more for the world to introduce it to vegetarian products than anybody else in the world. Because he's given them a chance and his original, if you know, his backstory, his original business was called safer way, which was a place on Safeway and it was only vegetarian and it failed miserably.

And then he pivoted to say, well, I'm gonna sell people, you know, meat, but do it in a very ethical way that it's ethically butchered, et cetera, to the extent that that's possible. And then I'll introduce them to these products, these vegetarian products over time. And he actually wrote the forward to my book, the entrepreneurs essentials which I think you guys have been diving into.

So, you know, John deserves a lot of credit for kind of incubating that type of ecosystem of CPG. Siete deserves a lot of credit people like Adam Solomon of credo foods deserves a lot of credit. Clark Nolan who has golden ratio coffee, which is this really cool coffee we're investors in, which is golden coffee.

It's like, it looks more like a tea and it's very easy on your pallet. Our son Levi is addicted to that. so we have that going for, of course we have, you know, the tech ecosystem going for. On the software side, we're really, really on the tech side, we're mostly a software as a service city, and that's because of Tivoli and Trilogy and big software companies who got very successful that then those exits led to a lot of people starting their own software companies.

And we're really good when it comes to B2B. But then if you had asked me to predict at the beginning of the pandemic, That Tesla was gonna move here and Oracle was gonna headquarter here and all of the things that have happened, HP, a Silicon Valley crown jewel is here. They're not headquartered here, but they are here.

I believe it's in Dallas. Right? Mm-hmm . I would've, I, would've not assumed that I didn't realize the pandemic. And that's when you, you, you moved, right. When both of you moved is in the tipping point of that, I wouldn't have guessed that. That was like gonna be the point where Austin ignited. and it's been a beautiful thing to, to witness with, you know, so many amazing people moving here and starting, you know, great projects, Joe Lonsdale moving here and then saying with Barry Weiss and others, let's start a new university and create, you know, more diversity of thought there I'm, I'm a huge fan of UT Austin and a product of UT Austin.

Bring it on. Like let's have, let's have these new business model innovations like university of Austin here. This is a great, great thing. But yeah, it's been kind of stunning to see just the level of manufacturing progress and, you know, space now, you know, moving to Texas with SpaceX and there are now more fortune 500 companies in Texas than any other state in the US. Wow. That just, that just tipped over, I think a year or two ago.

Jason Scharf: And I don't expect it to slow, right.

Brett Hurt: Yeah. Yeah. And we of course are the second largest state by GDP in the country. I think we're at 1.7 trillion. I think California's at 2.3 in new York's at 1.4. But that tipping point is pretty exciting.

And I did not foresee it getting this diverse. Now it makes sense to me that it is, if you go back in time and you think about Austin's roots and you know, so my early childhood memories going with my parents to Willie Nelson, backyard, picnics, and growing up and. Smelling in the air and saying, mom, dad, what's that smell.

Of course it was like marijuana, right? Willie Nelson was even into it back then. My parents weren't, but, but they knew what it smelled like. And just the fact that we had this amazing artist culture and we had this amazing, you know music culture and this amazing tech culture, all emerging and exploding, you know, in kind of a Renaissance type of fashion, it would make sense that that would lead to this diversity of industry.

But I didn't see that coming cuz you know, I've been an entrepreneur since I was 24 years old, very focused on software as a service and kind of saw Austin through that lens. But I love it. You know, we're investors and 125 companies now actually 126. And I think 78 of those are in Austin. We're proud to be the seed investors and some of the best, you know, Austin companies.

And really pay back and, you know, pay back to the ecosystem ecosystems it's given us so much, but yeah, the diversity you, you hit the nail on the head on that is, is, is really, really exciting that Austin's now standing in so many different sectors. Is something I would not have predicted, but makes sense.

As Steve jobs said in his commencement speech to Stanford, it makes sense when you connect the dots in reverse and you look at the roots of Austin, that that would be the case. Like, look, when I was growing up in Austin, my. Extended family lived in Dallas and Houston and they honestly thought we were the pod, you know, hippies.

That's really what they thought. They're like, oh, you live in Austin. And when, when I was a kid growing up, Austin was about 170,000 people. And last year my wife and I went to Alaska for the first time and we're walking around Anchorage and I had all these weird Austin flashbacks from my childhood. And I'm like, what is going on?

And I looked up the population of Anchorage and it was the same population as Austin was when I was a kid. So literally what Anchorage looks like right now is almost like a time capsule of what Austin looked like back then that, yeah, it's, it's been really amazing. And one thing we might wanna talk about a little bit later is that tension that has always been present in Austin between.

Kind of what I would call the creative class and the capitalist class, which I I'm very pro capitalism. I think capitalism is like the greatest invention in human history has lifted so many people around the world outta poverty and starvation. So it really annoyed me growing up that city council was so hardcore pushing against like business innovation. But I actually think that it led to a better city. It led to a much more beautiful downtown because there had to be a lot more intentionality to get things through versus like a Dallas, which is just a concrete jungle, you know, or Houston. I mean, I, I, I like a lot of things about those cities don't get me wrong, but.

I like Austin a lot better. I think because of that tension between the creative class and the capitalist class that has made this a much more intentional and, and much more beautiful city as a result.

Michael Scharf: It's interesting that you mention that because in a lot of ways, I've compared Austin today to where I grew up in the San Fernando valley in the fifties and sixties.

The thing that I didn't see looking back on that is exactly what you're talking about now. And that's the intentionality, because you've gotta admit that Hollywood is a great big creative class. So of course, kind of parallels there. And you had a diversity of manufacturing at the time and you had public transit at the time that worked and a feeling that you could manufacture or do anything mm-hmm , we've seen that leave the LA area in a lot of ways.

But I don't see that leaving here. And that's one of the concerns that I have looking at what's going on here. So talk more about that tension and how it's developed that forced intentionality.

Brett Hurt: Well, so, so the tension that, that, tension's really interesting and I'm, I'm not. So worried about the creative class, getting hollowed out, if that's what you're getting at.

Which I know happened in, in San Francisco, for example, I kind of saw that happening when I was there and, and, you know, really was able to learn from people that had, were able to educate me on the roots of San Francisco. When we lived out there, I don't see that happening in Austin because. There are so many people who are intentional to fight that and provide mediums for that to continue.

I mean, one of them is Gary Keller, the founder of Keller Williams. You know, he started a nonprofit. I can't remember the name of it right now, but it's a nonprofit which really lifts austin musicians, you have people like like Dan and Lisa Graham who started Notley, which Notley is an amazing incubator for all types of social business innovation.

And really lifting up people of color in Austin and, you know, he became a successful entrepreneur through the building and exit of build a and he did extremely well in that and has really been very intentional about paying back. I spent a lot of time with my good friend, Dr. Peniel Joseph, and it's in, in my book in chapter 23, really providing access.

To people of color that have a lot to contribute to the city and, and saying, I'm lucky to have the access that I have, and I need to be very deliberate about giving that access and giving people the cheat codes. Like I went with Dr. Joseph to TED. Earlier this year. And it was the first time he'd ever been.

He didn't know how to apply. I mean, like nobody had ever educated him on that. And he's one of the best authors in the entire country. And he leads the center for the study of race and democracy at UT Austin and the LBJ School. So, you have so many people here that are being very intentional about giving back in their own way.

I mean, look, it hasn't been that long since Joe Lonsdale moved here to already start a university. It hasn't been that long since Elon Musk has moved here to already start so many different initiatives here that are gonna make it a much better place. So that is very much in the Austin water. And I think it goes back to what we talked about at the beginning, that ethos of really helping each other and being very intentional about it.

And so I love that. I love that aspect of it. It is getting more expensive to live here. Of course the secret's out, but you know, it's still. So the median home price right now is about 570,000. That's up pretty significantly, cuz it was about 350,000, I think about 5, 6, 7 years ago. And my sister's one of the top 50 realtors here.

So I, I, you know, I'm really plugged into, to all of that. And right now we are in more of a time where it feels a little bit more recessionary, you know, rates are going up because of inflation and the fed fighting that. And. We've got now three months of inventory in Austin housing during the height of the pandemic, we had less than half a month of inventory, which is not a sustainable thing.

It was,

Michael Scharf: I have to be honest with you when we were looking for a home here in Austin, it felt like there were about three hours worth of inventory.

Brett Hurt: Right? Right. Yeah, exactly. And so, and there were, you know, it's common that there would be 40 50 offers. A home. So that's changed already. Now we have three months of inventory.

It's much harder to get a home sold here. You know, it's much more expensive to get a mortgage so that some of those things are changing as the economy changes. But I really think if you look at Austin objectively on a cost of living basis, it's still a very good bargain compared to many places in the nation.

And then you have, you know, a much better tax situation too here than compared to many places in the nation. So it's pretty hard to beat when you have this combination of so many creatives here. So many capitalists here so much here on the arts side, so much diversity of industry. that kind of melting pot that Austin is, is I think here to stay and, and I think we're gonna do just fine over the next 10 years.

There will be blips along the way. I mean, I've already lived through many cycles in Austin, you know? I mean, I grew up in the seventies, right. That was during the oil crisis. I've I've, you know, I've been through, you know, 9-11, and I've been through the great recession and you know, I've been through lots of periods where things slowed down, but I can tell you since I was a kid.

there have been times where things have flatlined here. I can't ever even think of a time where things really went down here. There, there are times where things became kind of plateaued and then went back up. Definitely the pandemic was the most kind of hockey stick time I've ever seen. I've never seen home prices set would go up like that.

The medium home price, it's still pretty affordable. And my sister was telling me yesterday that she's seen for the first time in five years, you know, a hundred thousand dollars type incentives being offered on homes. And she's like, yeah, that's very unusual. And she said, we haven't had this kind of inventory in Austin in well, over five years.

Jason Scharf: I wanna take the flip side to the tension between the creative class and the, the capitalist class, but the, actually the, the intersection, right? One of the things that we've talked about, again, as a superpower, we we're calling it. We're cool. We have SXSW, we have F1. We have all the music, there's been lots of articles and books written about, you know, having a strong creative class leads to innovation.

We had a, an episode a few weeks ago with Casey McPherson the musician. His daughter was diagnosed with a rare genetic disease. Started up a foundation around that became basically a life science entrepreneur and advocate. And so it was really interesting to hear kind of having someone who's really outside of that world you know, coming in.

But where have you seen like that positive intersection? Playing out between the creative class and the technology capitalist


Brett Hurt: Yeah. I mean there's well, there's, there's, there's lots of examples of that. The Austin City Limits Festival, that's the shirt I'm wearing today and Debra, and I've been donors for a long time to to KLRU and we go to the music taping.

So KLRU is the one that created the Austin City Limits brand. The TV show. It's longest running TV show in the history of the, the world when it comes to music and it's syndicated all over the world. That's been a part. The very first taping was you guessed it, Willie Nelson. And there's actually supposedly a balcony in the ACL theater called Willie's balcony where that's, where people go and smoke, smoke weed.

I'm, I'm not kidding. So you have, you have a lot of the technologist and the capitalist class that has gotten very involved. It's part of what they love about Austin. And that led to the creation of the Austin City Limits Festival, where they licensed the name. And that's obviously become a big hub SXSW came along after ACL.

That's become. A big hub. And obviously the, the capitalist class got very involved in that and, and said, look, we're building the future of the world here in Austin. You need to have a technology track. And Hugh Forest really embraced that. And they've got an amazing technology track. And of course we all know the stories about Twitter launching at SXSW kind of interesting that happened.

And now Elon Musk is, you know, Was gonna buy Twitter now he's not, but it's just interesting, like Austin intersectionality that I actually didn't even think about until we're talking about it here. So there's been, there's been a lot of intersections between that creative class and the capitalist class that have led to these, you know, explosions of just working together.

And then you've had, like, you know, you were talking about Hollywood earlier. You've had people like Robert Rodriguez and others, you know, really. Start the, the, you know, kind of the whole film movement here. And I would say that, that one of the things that makes him really unique is he's one of the most technically adept filmmakers.

Like he's very good at making film with pretty low budget. That's like kind of blows your mind from a technical standpoint that happen here. You've, you've got things like the Alamo draft house. It could have been just any other movie theater. That Tim and his wife like really wanted to be very creative.

And that's like example of capitalism and creativity really coming together. And I really think that it's very obvious that the Alamo draft house model is the model post-pandemic, we're still in a pandemic, but you know what I mean? It's much safer time with, with vaccines and boosters and Paclovid and everything else for people to go back out to a movie.

And if you wanna go back out to a movie, do you want to just sit in a theater or do you wanna have a whole experience where you can have great drinks and great food and Tim league and, and his wife, they really pioneered that that, that happened here in Austin because of that intersectionality. There's just so many examples, that we could talk about on that front. I mean, you know, I talked about whole foods for, for a moment. John Mackey is an unabashed, you know, capitalist. I used to serve on the board of directors of conscious capitalism. He co-wrote that book with rod Sisodia and really created that whole movement. I think John is very much a product of the Austin ecosystem in that let's, let's apply a lot of creativity to the grocery store model and have a whole different level of products that.

That get a chance in the world to survive where it's organic or, you know, all, all different types of amazing like plant-based meats and everything else. Like it was all launched at whole foods. So there's, there's a lot of, we could, we could riff about that for hours.

Michael Scharf: Well, let's change the riff a little bit. You mentioned B corporations before I said on the board of a B Corp. Why don't you talk about B Corps and your experience with them?

Brett Hurt: That's great that you said on the board of one. So you have, you have some familiarity with it. So B Corp is, it really is capitalism 2.0, so the basis of it from a tax standpoint is just a C Corp.

So it's like a C Corp with additional benefits. The additional benefit of a B Corp is that You know, my prior company Bazaarvoice was rated the number one place to work in Austin when, of small, than medium than large. And when I talked about like, why is the culture so unique at Bazaarvoice?

I would always talk about that. We were very intentional at fostering the soul of the company and a company is a collective of individuals that forms a collective soul. And you could tell pre pandemic, this is a little bit different now. In the phase that we're in, but pre pandemic, you could tell if a company had a soul, oftentimes just by walking the halls, like if you felt it giving you energy and, you know, versus taking away energy, you could tell like, oh, this is a company with a thriving culture and et cetera, you could just see it and feel it.

And you could see and feel that all the time at Bazaarvoice. And we did a lot of things early on, like created the Bazaarvoice foundation. You know, John Mackey started mentor me and he said, you know, you're a conscious capitalist. You just didn't even know it. And you didn't even know there's this whole movement.

And started inviting me to the CEO summit. It's a global summit. It's held here in Austin. It's a thriving organization and it introduced me to B Corps and it introduced me to so many CEOs from around the world that would stand on stage and literally pour their hearts out on why they were so intentional.

Building a company culture that had a strong soul and a strong foundation, why it mattered and how that affected everything from the way they interacted with their suppliers and their partners and just, you know, their employees and their, their investors and the whole ecosystem of making a business and really creating a movement, you know, which is what businesses are all about is you're trying to create something new for the world. And and so as I got more and more introduced to the B corporation structure through people like Jay Coen Gilbert, as I got into the Aspen Institute and I became a Henry Crown Fellow, I met him through people like Neil Grimmer who founded Plum Organics, which was a baby food company that Nestle bought, which all organic baby food.

They pioneered some of the initial, the squeeze packs, you know, that, that, that everybody uses now and prefers and they were a B Corp. And I thought to myself, okay, this is something I need to really get educated on. And the, the deeper I dove into it, the more I realized that it had all the things I loved about C corporations with these additional benefits of you could have the mission of your company, which is the codification of its soul as a protected asset while all investors know that when they're investing in the company, they're investing under that mission and that if you want to change the mission, you have to get their approval and you have to approve it as, as a shareholders as well. And you have to get majority approval. Therefore, your actual mission statement becomes a protected asset that everybody knows there's no mystery.

And without that, What capitalism is, is a maximization of profits, regardless of the mission that is all that matters, right, is just a relentless March to maximization of profits. And a B Corp is not an excuse to not have top tier financial metrics. You must have top tier financial metrics. I would actually say it's even more important that you have top tier financial metrics, cuz you're trying to lead a new movement in capitalism, but it's one where the intentionality, the soul of the company.

Becomes something that everybody talks about and, at, it affects the way our board talks. It affects the way people interface with us. Like we've got a lot of government partners. I remember when Megan Smith, who was the US CTO under Obama. She met me at SXSW and I told her that I'd started

And she knew my, my background a bit from prior companies. She was interested. But when I told her we were public benefit corporation, it was just me and her together. She literally stopped and she looked at me and she said, I've been waiting for someone like you to come along, like pointed at me. The US government, early partner of, lots of foundations, early partners of, lots of customers we've signed really are very strong in terms of their mission.

And I'll be careful cuz I don't know which names I can mention or not cuz of contracts, but, but some of the most soulful brands you've ever heard of are customers from And part of that is because they feel like I've been waiting for someone like you to come along. So the way that people interface.

With you very much matters in terms of where they understand you stand, like where do they think, what do they think you stand for as a company? And you can choose to be a C Corp and espouse your values and everything else. And there are many great C Corps . I mean, you know, John Mackey whole foods is a C Corps..

The B Corp move movement didn't exist back then. But I'll never forget that John actually, you know, being one of my mentors was actually skeptical of B Corp. So why do you need to go that far? Like, you know, you can just do all of this as a C Corp. And I had a long walk with him. I said, John, well, can you give me any reason why we shouldn't do it?

And I was like, these are all the reasons why I think we should. And I talked about soul and everything else. And he said, that's a really good point. I can't really give you a reason why you shouldn't. I said, well, here's one reason why maybe we shouldn't. Because we'll stand out as being different and investors will ask us, why did we take that extra step?

But I said, when they ask me that I'm gonna kick that door open and say, here's why we actually care. And. I was on stage at SXSW with John Mackey and J Cohen, Gilbert. And we were speaking about the future of capitalism. And this was years, several years later. And John Mackey on stage in front of over a thousand people said, if I start another company, I'm gonna start it as a public benefit corporation.

Michael Scharf: We are only just getting started with Brett. In next week's episode, we cover his book of the entrepreneur's essentials philosophy and tech, a little politics and of course, what's next. I can't wait to share it with you.

Jason Scharf: So what's next Austin. We're glad you've joined us on this journey. Please subscribe with your favorite podcast catcher.

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