A guiding principle of this show is to bring authenticity and transparency to the entrepreneurial journey. This includes highlighting the challenges that female founders have to overcome to build their enterprises--challenges male founders don’t have to deal with. I’ve also tried to get an equal amount of female and male guests, which hasn’t proved easy. This week’s guest Anousheh Ansari helped me understand why.
A guiding principle of this show is to bring authenticity and transparency to the entrepreneurial journey. This includes highlighting the challenges that female founders have to overcome to build their enterprises--challenges male founders don’t have to deal with. I’ve also tried to get an equal amount of female and male guests, which hasn’t proved easy. This week’s guest Anousheh Ansari helped me understand why.
Anousheh is the CEO of the XPRIZE Foundation. Prior to her being named CEO, though, she was the co-founder of an IoT technology firm, the first private female space explorer, the first astronaut of Iranian descent, and the first Muslim woman in space. Anousheh understands deeply the systemic biases female founders must endure to bring their vision to the market.
After our conversation, I had a deeper understanding of the unstated biases that female founders have to navigate as well as how those biases have curbed the ambitions of those female founders. It is so critical for us to elevate that story, so turn into this discussion on the biases that have to cleansed across generations.
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Anousheh Ansari, CEO of XPRIZE Foundation
Anousheh Ansari: This is Anousheh Ansari. I was cofounder of Telecom Technologies and I'm currently CEO of XPRIZE Foundation, and this is MY startup story.
James McKinney: Welcome to another episode of The Startup Story. With over 100 episodes in our catalog, there might be a few of you that have consumed quite a large selection of those episodes. And I also know due to the growth that we've seen over the last few months that we might actually have quite a few listeners that have only heard a few episodes of the show. Either way, I thought it might be of value to speak to a guiding principle that I've had with The Startup Story since the very beginning, and that principle being to bring authenticity and transparency to the entrepreneurial journey while also elevating the challenges that female founders have to overcome to build their enterprises, challenges that male founders do not have to face.
If this idea is new to you, then just simply do a Google search on venture capital data for male versus female founded companies. Data doesn't lie. It is that mission that has driven me to ensure there is equal representation of female founders and male founders on this show. I'm not going to lie, securing a female founder for this show is significantly more challenging than it is to secure a male founder. Look, it doesn't take a whole lot for us men to think our story is worth telling. We could have produced nothing in life and we will gladly share our story and our pearls of wisdom for all to hear. That is not the same for female founders. I routinely have my invitations to the show rejected because, and I'm using quotes here, "Our startup is too early," or, "My story is not compelling," and a myriad of other responses. I would often just shake my head in frustration because I could just not understand why a founder would decline the opportunity to reach a new audience.
Well, after talking with our featured founder for this week's episode, Anousheh Ansari, CEO of XPRIZE Foundation, I think I have a better understanding as to why. See, Anousheh Ansari helped to cofound the Billion Dollar Fund for women because she understands deeply the systemic biases that female founders need to endure to bring their vision to market. Out of my conversation with Anousheh I have a heightened understanding as to the unstated biases that female founders have to navigate, and how those biases have curbed the ambition of female founders. Biases that, well to use Anousheh's words, "have to be cleansed across generations," and we're going to unpack this discussion in greater detail as this episode continues to unfold, so I encourage you to keep listening.
It is so critical for us to continue to elevate the female founder story, and I'm so excited for you to hear Anousheh's Startup Story episode. As CEO of the XPRIZE foundation she, along with her family, sponsored the very first XPRIZE competition that awarded $10 million to ignite a new era of commercial space flight. Prior to her being named CEO of XPRIZE she was the cofounder of an IOT technology firm and the very first private female space explorer, the very first astronaut of Iranian descent, and the very first Muslim woman in space. I could go on and on with laying out all ofher accomplishments but let's start to unpack exactly how her story begins.
Anousheh Ansari: I was not exposed to entrepreneurship as a child raised in Iran. It was something that I experienced more and learned more about in the US. In Iran, both my parents worked for large corporations, and to be honest with you entrepreneurship and doing something on my own never crossed my mind. I was more sort of a geek and into science and trying to think about how I can be an incredible inventor. So to me that was the ultimate goal, to invent something that will be amazing, world changing. Something that had an ulterior motive because I wanted to go to space. I'm like it has to be so amazing that NASA will invite me from Iran to come and fly on one of their missions, so that was my plan.
James McKinney: Now obviously you're in the states now. How long were you in Iran before you came to the US?
Anousheh Ansari: I was 16 when I came to US. I didn't speak English. I came with my mom and sister, didn't have any money, and then my dad came a little bit later. They had separated and divorced many years ago when I was a child, but my entire family ended up in the United States eventually. Originally just it was the three of us supported by my aunt, who had lived in the United States for a long time and sort of sparked the journey and immigration to the US.
James McKinney: I love, especially in the realm of entrepreneurship, I love the immigrant story. It is there's so many layers to immigrant entrepreneurship that I think those natively born in the US really take for granted a lot of times. I definitely want to spend some time unpacking the perspective that you have as a first generation American here in the US for your family. But let's talk about those 16 years in Iran. You talked about you wanted to be an inventor, you wanted to be invited by NASA to go to space. What was happening in your world where those were goals and ambitions? Because those are very ambitious goals, and again not knowing your childhood context where did that come from?
Anousheh Ansari: I kept probably just tied into one thing but maybe a series of things. My interest in science started because of my passion for space and my curiosity to be honest with you. I always talked to people about imagination being the most precious gift we have as human beings, and it's with that power of imagination that we start thinking and creating things. The creative capabilities come from that innate ability we have as human beings. Being able to imagine things that do not exist or imagine places we've never been. I imagine being on other planets and I watched Star Trek. I love science fiction. I just I was in love with science fiction because it was building this ideal world, a world that a lot of the problems that we face, I faced as a child growing up or the society faced at the time, they were solved. I mean in Star Trek poverty, disease, a lot of the issues we face in society they disappeared. No wars, they were a federation. Everyone got along and they had prime directive on how to bring new communities into their society. So to me that was like an ideal society and I wanted to see how we can build that, be part of it, invent things that will make it possible. The transporters so we can travel everywhere we want to go in a blink of an eye or the replicators so whatever our desires we can have it there and no one has to fight to get it. I think those inspired me a lot.
James McKinney: I love it and I love that I'm going to attract some new Star Trek fans into The Startup Story community as we leverage this content. It's going to be so good. But let me ask this question because again not knowing much about Iran, what was going on in that time from birth to 16 if you will, do you think the opportunities existed for you there in what you wanted to accomplish?
Anousheh Ansari: No, especially after the revolution happened. I was about 12 years old when the revolution happened. And with the regime changing to be more of a religious regime where women and what they are capable of doing or expected to do was very different than my ambitions. I don't think I would have those opportunities in Iran. I would probably, I mean the society is a highly educated society, values education tremendously for both men and women. I'm always proud to say that actually the majority of students in universities are women in Iran.
James McKinney: Oh wow, okay.
Anousheh Ansari: So the pursuit of knowledge it's high on everyone's agenda regardless of gender. Putting those learnings and knowledge to action is where women run into issues and walls whether it's investment, whether it's starting their own companies, or working for other companies for that matter. If you're in tech or science that becomes one of those professions that perhaps is not suitable or viewed as suitable, so that becomes a more difficult journey for women in Iran to get there. So I knew that as things started changing after the revolution, so between the age of 12 to 16 when I left, a lot changed in the country and I was watching some of the things I wanted to do disappear also with the changes. So when we had the option of coming and living in the US, to me I was happy on a couple of fronts. One was of course I knew I would have better opportunities,, and two US had a space program and Iran didn't have a space program at the time so my chances would increase.
But it was difficult as a teenager to leave my country. I had never left Iran before. Coming to the US was my first. I didn't speak the language. I had no idea about the culture or anything. It was just a huge change and big leap that I was taking.
James McKinney: Was it the change in regime that was the catalyst for your family moving to the US?
Anousheh Ansari: Yes.
James McKinney: Okay.
Anousheh Ansari: If things had not changed, I don't think… even we have a lot of people who would come and study and go back. Probably I would have, I may have come here to study or get a degree or advanced degree, but I probably wouldn't have stayed.
James McKinney: Now you come to the US. Where was your landing point? What state was your first state?
Anousheh Ansari: I landed in northern Virginia, Washington DC area. That's where my aunt lived so we lived with her, and that's where I got my start. I remember clearly like a couple days after we landed, the first Monday was April 1st and it was April Fool's Day but I had no idea what April Fool's was back then. My aunt wanted us to sort of jump in and learn the language and do everything, so she took me and my younger sister to this incredibly large they were called secondary schools, so it was elementary all the way to high school so it was huge, and just dropped us off. I had a piece of paper that had things that I couldn't read on it. Apparently it was my classes. Same with my sister. So we entered and it was just this chaotic place where people were going all over the place. I had never seen lockers. I didn't know what lockers were, so people slamming these locker doors, and I'm like I had no idea what's going on. I'm like what kind of a school is this? I was used to very orderly, form a line, go sit in a classroom and my teachers during the day would change and that's how I went to school. I have no idea how this system works. Eventually someone, after everyone went to their classes and we were just standing in the middle of the hallway, someone came and started talking to me. Of course I didn't understand. I started speaking French because I had learned French in Iran, so they went and got a French teacher who was able to guide us to the classroom and what we were supposed to do.
James McKinney: That's amazing. So the language that helped you navigate your early years in school was French.
Anousheh Ansari: Yes.
James McKinney: That is incredible. Also too it just points to when it comes to diversity of language we are so far behind the curve. I have interviewed so many foreign born entrepreneurs where there's like six languages under their belt. In the US we struggle to have a second one. It's amazing to me. So now you're in the US. The ambitions to invent and receive an invitation from NASA are a little bit more plausible than they were when you were in Iran. So coming here at 16, that puts you probably around I want to say your sophomore year of high school, maybe your junior year depending on where you were at with credits and what have you. So the idea of the future is really more present to you than anything because it's right there. You have to figure out what's going to happen in two or three years. What was the conversation with your mom when you started talking about your future while you were in the US? What did that look like?
Anousheh Ansari: So it was actually… it's an interesting question because for me it took a couple of different ways. My mom also was trying to get used to a new culture and new way of living, and my aunt's husband who was an American he played a huge role in helping me understand the culture and the freedoms that perhaps I didn't expect in Iran but they're here and available to me. He sort of filled this idea in me that in here whatever you want to do, if you work hard you can get it. And that was a new concept to me because everything else in my own country had limitation. How much money you had would dictate what you could do. So the fact that I could do everything that someone who was very rich could do, all I had to do is make sure I work hard and that there was an opportunity for me to work hard, that was new. I embraced that wholeheartedly. Also, he really emphasized the fact that as a woman it doesn't mean there are things that you can or cannot do. Whatever you want to do, you should do it. That, my parents also never limited me, they were really good at letting me do anything. Most cases I just asked so many questions they would get tired of me asking, "What is this? What is that? Why that is? Why that?" That's I think, that was very important in forming my ideas of what I want to do. I was not afraid of working hard. I worked during my last year of high school. I worked throughout my college several jobs to pay for college. Then I received these scholarships that in Iran probably wouldn't have access to them so the fact that I was getting paid, I was able to get work inside the school and be able to support myself, support my mom and sister, and go to school that was like wow this is an amazing place. I love it, this is incredible.
James McKinney: That is incredible. Do you remember… in fact, before we even continue on let's put a date stamp on this because we want to understand where the space program was. So what years were you in college?
Anousheh Ansari: I was in college, I think I started 1985.
James McKinney: So the shuttle program was a big deal at that point, right?
Anousheh Ansari: Yes.
James McKinney: So the shuttle program was a big deal and depending upon who you talk to, a couple weeks ago we had Richard Garriott and Steve Jurvetson the week before that, and both of them refer to the shuttle program as the boring years. So depending on who you talk to it's either exciting time or boring time for the shuttle program but I remember the shuttle program. And the shuttle program for me was why being an astronaut was interesting. My kids there's no framework for the idea of an astronaut as a career. It's a shame so I'm anxious to see what SpaceX and all the innovations that come from XPRIZE and Virgin Galactic and Blue Origin, all the other programs that are trying to make the space program interesting, I'm anxious to see what that does for like my kids and maybe even their kids for careers and ambitions. But in that time you were in college, what was your framework? What were you there for? What was your goal? At the end of this degree program, what did you want to do?
Anousheh Ansari: Thinking about where I was in my life also as I said we came to US without any money. My aunt was supporting us but they were not independently wealthy either so it was difficult for them, so life was not easy. My mom who I listen to all the time, when it came time for me to select my area of study I wanted to study astrophysics. I thought this is the way I'll get to NASA and I loved astrophysics. After looking into opportunities for job and everything, she was very practical and was telling me, "Well what type of job can you get? You don't speak English well either so if you even become a professor what kind of professorship will you be able to get?" She was pointing at all the limited job opportunities that will have as an astrophysicist, and I have to get my PhD and it will take so many years, and basically was telling me that you need to get a job now because we need money now. So after reviewing what job openings, what job markets were expanding, computer science and electrical engineering at that time were really, really hot markets and I loved both. I loved computers and I loved engineering because I loved solving puzzles, solving problems, building things. I became an electrical engineer and at that time I was thinking okay I just need to get out of school fast enough and get a job. That's what I did. I finished my degree instead of the four years in two years, two and a half years, and took as many credits I could and worked hard. Before even graduating had my first job which is how I met my husband.
James McKinney: Oh, I love it, I love it. The computer science degree programs at that time are really interesting because again, real quick, what school did you go to?
Anousheh Ansari: I went to George Mason University which was also a choice because I could get there by bus and it was close.
James McKinney: Excellent.
Anousheh Ansari: And it was not known for the engineering school, but now they're doing… it's a much different university now. I was part of the first graduating engineering school of the university.
James McKinney: Wow, that's incredible. That is incredible. So during the college years, especially in that era, for computer engineering majors there's a lot of discovery of what you can do with software in this machine that you're coding within. Were your eyes starting to be opened up to what could be done in the software space?
Anousheh Ansari: At that time, actually not really. I was more interested in the hardware and the electronics piece. Software I was learning, it was interesting, but just remember again I'm dating myself, coding wasn't like it is today. It was FORTRAN and you would go and sit in these computer labs and wait for the printouts to come out. It was just, we would spend a lot of time in a basement waiting, waiting, waiting. Lots of paper to go through. So it wasn't like my top choice of building careers on the software side, but I was excited about hardware. Again, in my mind my invention or creation at that time was something that was a hardware based solution that would allow for expanding exploration into the cosmos, so I thought the hardware side would get me there. But of course I was proven wrong eventually.
James McKinney: I love it. So what was your next step out of college? You mention you got a job and you met your husband. What was that job?
Anousheh Ansari: I started working for a company called MCI which through many iterations became part of Verizon WorldCom, and then Verizon. It was a long distance company which doesn't exist anymore today. But interestingly enough I think some of the lessons in entrepreneurship was by learning about the history of MCI. My husband was one of the early employees there and the company was not a startup but operated like a startup. Sort of the history of the company as a David versus Goliath type of fight they had to do with back then they called the Ma Bell's and the seven regional Bell operating companies that sort of had complete control over the telecommunications. I remember if I wanted to call home to Iran it was like, I don't know, $3 or $4 a minute. It was nothing like what you see.
So seeing how a company like MCI was able to break up an industry and create this whole new total new opportunity was exciting. Then I ended up by luck working in this department that was focused on creating new services and new businesses for the company. I was exposed to what it means to be an entrepreneur and the changes we can make through that work. My husband also, he always has had entrepreneurship at heart, also getting to meet him. He was one of those people who even in school was selling things to people and making money, a mini entrepreneur as a high school student.
James McKinney: I love it, absolutely love it. So what was your first step into… because again there are a couple steps before you get to XPRIZE, before you even get to space. So there was a technology startup that you had. How did you get there from MCI?
Anousheh Ansari: So very interesting. Those times where your world starts changing and then you either decide that okay I'm going to try to just continue down the same path or you see the winds of change and it's like oh maybe I can pivot and take a different direction. So MCI, my husband and I both worked for MCI and at that time we had just gotten married. So MCI decided to move their headquarter to Texas. After visiting Texas we both decided that we don't want to go to Texas, we want to stay here. But instead of trying to find another job we figured we're young, we've learned a lot, and why don't we try and do something on our own. So that's the first step we took toward entrepreneurship. It was new and exciting to me. I had no idea what it means to run a business, neither did he.
But the good thing about our partnership, which I think partnerships in any type of entrepreneur endeavor it's important, it was that even though we were husband and wife which complicated things on one side, we had the advantage of having worked together for three years before we got married. We sort of started having a business relationship before we got engaged. So that had taught us how to work with each other in a professional business setting. And the other things was that we had very complimentary set of skills. I was very detail oriented, more interested in the science and the building of things, and he was very he's an extrovert and very focused on sales and strategies for how he can expand markets. We had very good complimentary set of skills that helped us succeed. So when we came out we started looking at what we'd done for MCI, and are there other companies that would need this type of creativity and creating new services.
So we started with consulting, then consulting turned into this idea we would come up with but required someone to implement, so we started creating our software development team, and started developing some of the ideas for our clients. Eventually, we're like okay so why don't we do this… why are we doing this one at a time? Let's actually start creating products that we can sell to all of our clients instead of doing one at a time. So that's when we launched our first product company and started working on products. We built a product that was in an automating test system making it efficient, cost effective. Then we went into looking at fraud detection. At that time calling cards were coming out and there were all these fraud issues, so automating detection of fraud. So we were a lot using software to automate things, make it more efficient, reduce cost.
And ultimately our work was in an area called soft switch which is when we exited our last company. And soft switch basically was a game changer. It was when people started moving from going through expensive networks, hardware networks, and taking the intelligence out of the hardware and putting it in software, therefore reducing the costs. Basically that was the first step toward Skype and sort of internet calling which dropped the cost and completely disrupted the entire market. That was like sort of our big win in creating that software solution which then was purchased by many of the large carriers, and then that ended up putting us in a path for a merger with Sonos networks and our exit that happened.
James McKinney: When you were building telecom technologies did it cross your mind that there might be an exit strategy? Or were you building a lifetime business that you and your husband were going to run forever? What was your perspective at that time?
Anousheh Ansari: We didn't think about an exit strategy in terms of selling the company. We thought about monetizing strategy which was going public. We wanted to take the company public.
James McKinney: Okay.
Anousheh Ansari: We were excited about what we were building and we had sort of established a way for us to have our main line of product that we had established at that time, and we also had… we would take a lot of our revenue and had created a small R&D group that would continuously innovate other products. We thought that this is our big product right now, but we knew that maybe five years down the line that we need to change. We saw how our industry, the telecomm market, changed so we knew we can't just stay with one thing. We created sort of a continuous innovation engine inside the company that would allow us to invent new products or spin offs and create new companies alongside of it. But we never imagined that this was… we would have a large exit.
However, I can tell you this also. I remember this moment clearly when Denis Tito basically announced that he's going to be the first commercial space traveler or explorer. It was on CNN and NASA was upset and they didn't want anyone to go to Space Station who was not a professional astronaut. So I was watching this and I had built a career on something else but throughout this whole time my passion was still space. So I'm watching this and I'm like, at that time our company was so small. Okay, if my plans for NASA, going to NASA, making something for NASA doesn't work this is how I'm going to go to space. I just need money. I have to figure out how to get enough money to be as rich as Dennis Tito so I can go. So that actually became my first motivation to actually… I have never been and still not financially motivated to do anything. It has to be, the money has to be for a purpose. I have to care about the purpose. In this case, building a bigger company and trying to monetize it for me personally was a personal passion to see if I can actually go to space station.
James McKinney: I love it. How long was that period of time where you're building that telecomm company?
Anousheh Ansari: That whole duration was around almost 10 years.
James McKinney: So in 10 years you hear about Dennis Tito, going to be the first commercial astronaut, first private astronaut as you will. As someone who has spent their entire life envisioning creating something for NASA to be invited into space, were there moments of discouragement in your journey? Like why am I doing this, this is my goal, or this is never going to happen? Was there any moment where you just balanced this internal wrestling of direction and purpose?
Anousheh Ansari: No. I don't think I ever felt defeated by that sort of big dream. I felt like as long as I'm alive and I'm taking a breath, there is a chance. I fundamentally believed in that and I had even told my husband that… there were a couple of other thought processes. One is I knew eventually there will be a Mars program and I fundamentally believe that a Mars program is so risky that the first few people would go basically, they'd have to sign up to say that it's okay if we die, it's a one way trip. So I was like if there is ever a way that NASA will ask for someone to volunteer to do a one way trip, I would do that.
The other plan was I told my husband okay, if I die and I don't make it out of earth's orbit you have to put my ashes somehow. I don't know how, you have to figure out how to put my ashes in space. I have to somehow make it out there. I was determined in life or in death I'm going to go back to space. I can't tell you why I have always felt so strongly but eventually when I did go to space, to me it was like a homecoming. It was like I'm finally home. It wasn't like a new place, visiting like a new place. It was more of a homecoming for me and I've always felt that way about space and being in space. Not the rocket part. I never cared about the rocket part, whether it was a shuttle, whatever. But it was just being in space, the feeling of being outside of our earth's atmosphere and being able to look at the universe through a different lens.
James McKinney: That's incredible. I know we're going to get there quickly. As you sell your business, your startup, after 10 years with a tremendous successful exit what were you thinking as this time was coming to an end? Because obviously there's a transition period. You sign on, you exit, maybe there's a two year commitment that you're on board for, however long it may be. But at the end of that commitment when you knew your time with this newly acquired company was over, what were you thinking your next steps were?
Anousheh Ansari: Well at that time I had made a decision that I'm going to put my focus on how I'm going to get to space. The first thing I did is I went back to school and started studying astronomy, what I wanted to do originally. I figured if this is going to become the next thing for me I need to educate myself more in it. I had always kept up with physics and reading articles and just keeping up on the side, but I made it sort of a mission to do it more intentionally. So I went back to school to get a master in astronomy. Then I started researching what was going on, what were some of the opportunities for commercial space travel, and also keeping an eye on what was happening with Space Adventures, the company that was facilitating people to fly to space. So that became an important part of my journey.
At that time I think the second commercial passenger had also flown to the Space Station. By the time I got to go, there were two others. A total of three people had flown by the time I got to that opportunity, but it took a while. We had sold the company in 2000, just right before the bubble. Then my involvement with XPRIZE started early on, but I had no idea if XPRIZE would get me there because we didn't know if people could build it. But to me as an entrepreneur, when Peter Diamandis who is the founder of the XPRIZE Foundation, sort of had read in one of my interviews that I'm passionate about space and I want to do a suborbital and then orbital flight. He's like okay. At that time he had heard a lot of no because everyone thought he's crazy and it's too risky to get people to build the rockets in their garages to go to space. So he read this article, and I would talk about my passion all the time which is something I always tell entrepreneurs or anyone with a dream. I'm like if you don't talk about, no one knows you care about it and you will never get people to help you. So you always, no matter how crazy your idea is, talk about it.
James McKinney: Oh, I love that. I love that advice.
Anousheh Ansari: And so I always talked about it and that's how I met Peter. He came and told me and my family about this concept of a competition, and it would be to open up and create a whole new commercial space program for people like me and him who wanted to go to space, and also all the other opportunities, business opportunities, it will open up. As an entrepreneur, especially being in the software business, I look back and it's like every time we wanted to build something we would go hire a team, tell them what we want. They would say it costs I don't know $2 million, it will take six months. It usually ended up taking two years and $5 million, and you'd never know if you'd eventually get what you asked them to build. And this is brilliant because now you can just go tell the world, "Hey, I want this. You go build it, show it to me that it works, and I'll pay you."
James McKinney: I love it.
Anousheh Ansari: I mean entrepreneurs would love that model. It reduces risk so much. So I loved it and my family and I decided to sponsor the first competition, and that's how I got involved and started serving on the board of the foundation until two years ago when I joined as CEO.
James McKinney: So let's talk about… There's so many questions that come from your exit. Again, back to the immigrant story and the elements that parlay into that. Upon the exit why even go back to school when you just pay Space Adventures to get up to space, and have your dream there. I don't even know where to begin, there's just so many great questions that are coming from that journey. But let's start with the family dynamic upon the exit. Getting back to your cultural narrative of the family and why you came here, and all the opportunities that you were able to seize here in the states that you couldn't in Iran. What was the family thinking upon the success of this exit? Were they thinking this is great, just play it easy and invest and just kind of lay low. What were they thinking?
Anousheh Ansari: Yeah. I can tell you that almost every family member imagined that would be the path. My path was very different but each had their own path that involved investment and creativity, but from a different platform. Because now we had the money, we could invest whereas before it was everything we built in our company was built just on our own credit cards and stock options that we had when we worked. It was bootstrapping, it wasn't one of these when you see startups now all from the get go they usually have seed funding and there's so much venture. Back then venture funds were not anything like what we have now. As a female CEO, as a very young female CEO in tech I can tell you stories of the "no's" that I received asking for money. The only external funding that we got in the early days of building the company was a small business loan that we got from a bank, and that was it.
Everything else was I worked as a consultant myself, my husband. All of us worked as consultants and brought in money so we could actually hire software developers and build stuff. It was crazy times, but we learned a lot. I learned so much during those years. I had no idea what a financial statement was. I had no idea how to read a financial statement let alone present a financial statement to an investor. I started going, taking these night classes in community colleges to be able to understand what is a financial statement, what does running a business mean. It was a huge learning experience.
James McKinney: I love it. So people might be aware of XPRIZE because of some competition that they've heard about out there. But can you unpack for my listeners what XPRIZE is and why it exists?
Anousheh Ansari: So XPRIZE is a nonprofit organization and as I said I got involved through the first competition, which lasted the first 10 years of the foundation. The foundation is 25 years old, but the first 10 years was this one competition which was any team in the world to build a spaceship to go to 100 km which is the edge of space. Go there, come back, do it again within two weeks timeframe without completely building a new spaceship. The spaceship had to be reused and most of the mass had to be reused. The timeline between the two flights was limited. You would think that why are all these constraints, and that I have to contribute this to the brilliance of Peter when he designed it. The idea was to build a company.
We wanted a solution that wasn't a science project but something that can actually be reusable, turn into a business. It would carry passengers so we had a three person requirement, but for the test it was just one person that would fly it and then equivalent weight of two others who would be passengers in the future. That was it, and no government money. We didn't want to become another government project. That was the very simple, measurable objective to solve a problem.
When the call went out we had 26 teams from seven countries I think made it to the finals, and they were all building. A lot of them were building and each had a different approach. So with this type of competition what you do is you shine a light on the problem and the parameters that you're trying to solve for and we set a goal. We try to be audacious but achievable. We don't want just incremental improvement; we want major breakthroughs. Once you put that goal out there then you have people that you never thought of coming together, forming teams because that $10 million that's a really attractive carrot, and it brings attention to it. It took a long time for it to be won because we also had to do a lot of regulatory changes. Nobody could fly a rocket if they were not part of NASA.
James McKinney: Wow.
Anousheh Ansari: We had to work with policy makers and help build this whole new group that then it became a permanent part of FAA that licenses commercial launch plans. That took a long time to just get NASA to open up and see that there is an opportunity for NASA to work with commercial companies. As you can see that has resulted in amazing programs that have helped Blue Origin and SpaceX and many other companies. I don't know I think they estimate it's about a $20 billion industry that didn't exist before XPRIZE.
James McKinney: That's amazing.
Anousheh Ansari: It's a way to leverage an investment. I always call our contribution to XPRIZE as an investment, it wasn't a donation. It was an investment in the future of space and the future of our planet, and a legacy that we're all very proud of. It brought in, that $10 million, brought in $100 million of investment by other people into the teams. Like Paul Allen invested $30 million into Scale Composite which was the winning team ultimately, and then Virgin Galactic Richard Branson bought their license and built Virgin Galactic which went public for I don't know $1 billion last year.
James McKinney: That's incredible.
Anousheh Ansari: So there is a multiplier effect that our competition brings about. It really crowdsources innovation to the world. It creates awareness, creates policy changes, and all of it in one package of a competition which is to me an ultimate platform that we've now perfected and looked at the biggest challenges in the world where government is not doing enough to solve it, private investment is not going there because it's difficult, risky for whatever reason. So we go after solving these big huge challenges because we have the right platform to do it.
James McKinney: That's remarkable. So when was the first competition awarded?
Anousheh Ansari: 2004.
James McKinney: Have you had subsequent competitions?
Anousheh Ansari: Yes. We've launched about $200 million worth of competitions or more.
James McKinney: Wow.
Anousheh Ansari: Almost all have had at least a 10X return on investment. We've launched competitions in the area of environment a lot, energy, and learning health and education. We have a Carbon XPRIZE for example right now that will be awarded early next year, but right now the teams are in testing so we have teams in Calgary and teams in Wyoming at the test center attaching their technology to the output of a power plant with natural gas, and turning that CO2 in commercial products that can be sold in the markets. So things from concrete to luxury items, to vodka, to hand sanitizers, jet fuel, all sorts of creative ways of turning CO2 into a valuable product instead of something that's ruining our environment.
James McKinney: I feel like I just recently got pitched for someone to be on the show that was taking CO2 and creating vodka.
Anousheh Ansari: Air Co.
James McKinney: Yes!
Anousheh Ansari: That's one of our teams. That's one of our XPRIZE teams we're very proud of, and they just announced last week that they're also looking at turning CO2 into rocket fuel, so we're going full circle.
James McKinney: I mean basically vodka is rocket fuel. Let's just put that out there real quick.
Anousheh Ansari: Don't tell the Russians that. They will be drinking rocket fuel.
James McKinney: I love it. I did not realize XPRIZE had that many competitions and had awarded that much money out there for innovation, and it's not just space. In my mind, I had land locked it to space… well, that's a bad illustration. It was always space oriented.
Anousheh Ansari: Space is a big part of our work and we love exploration. We have a whole area we call New Frontiers and we believe that pushing the frontiers, whether it's off planet or on planet… we have a lot of ocean discovery type competitions, or even we're looking at human consciousness, what does it mean to be human. In a future where machines and humans will merge somehow, what does it mean to be conscious, to be human? So we're trying to address a lot of difficult questions, but also some really important problems that face us today which a lot has to do with energy, with the environment.
When the pandemic happened we launched our Pandemic Alliance which was just something totally new that we came up with and it was just to tap into our network and bring all the researchers and innovators we've been working with over the years to try to see what can they do to help us build a more resilient society to future pandemics. To look at how we can have new testing methods that would be fast and we launched in a matter of like really literally a few weeks, we launched the rapid COVID testing which is to bring companies who built a really cheap, reliable, high accuracy test that can be self-administered, it's easy to do it, so we can do it very frequently to get us, be able to go back and get us living our lives and going to work and going to social events again but do it safely.
We did a next gen mask to get young people, this is for people age I think 14 to 25, design masks that won't have all the limitations of the masks that the people don't like to wear and make it something that people would wear and it's cool and it's nice, and it's working. We did rapid rescaling to help with unemployment and that's been a wonderful competition that we announced.
And in the past we've had, as I said, many around environment. We had a global learning XPRIZE that really had these amazing teams proving how online working with AI can help kids that can't read or write actually learn reading, writing, and basic arithmetic much faster than people who sit in classrooms. A lot of those teams now, the winning teams and even the finalists, are being used with school systems around the globe in this pandemic. It's been a wonderful journey to see how technologies are evolving and helping people. As someone who worked in the tech industry, to me technology is always the tool and can be used for good or bad, and with XPRIZE with the hopeful lens we have towards solutions to our problems we try to direct a lot of that innovative energy, creative energy toward using technology to solve problems for humanity.
James McKinney: That's remarkable. That is unbelievable. I cannot wait to just dive into the XPRIZE website to see all the different things that you've helped bring into the world. But as we're talking, as I'm hearing about the opportunity that XPRIZE has to help empower and equip innovative companies to solve some really complex problems, my mind starts to begin to think of all the opportunities you've been fortunate to seize as you move the US. Begin to think about all the no's you got when you were building your business as a female cofounder. And I have to wonder knowing the current state of venture capital, and again I don't know if venture capital works with XPRIZE at all in any way shape or form, but it is a known fact that female founded companies are underfunded. They're underrepresented within venture capital, period. Is that a passion point of yours at all, to help female founded companies? And if so, are you addressing it in XPRIZE? Is there something else you're doing to help address that? What are you doing to help solve that, if it even matters to you?
Anousheh Ansari: It definitely matters to me and it was one of the cofounders of the Billion Dollar Fund that was focused on getting venture capitalist investors to pledge $1 billion of investment to female founded companies, which we were able to do in record time. Over the next three years now the companies are fulfilling that pledge. In general, I can tell you that from my own experience of being a woman in tech and especially how I see technology will direct and shape our future, it is more important than ever for women to have a seat at the table when design decisions and engineering decisions and policy decisions are made regarding all this tech. If we don't, we will see again a more biased world in the future where some of our even hidden biases will be amplified through use of AI and machine learning without us even realizing it.
To me, it has ever since I could have a platform to speak to young girls I've been getting students, young girls especially more interested in STEM education, getting involved in tech. I've always been a big supporter of women in tech in every shape or form, whether as entrepreneurs or as participants in design and engineering teams of large corporations. Because just having these voices matter and it's important. As I said with AI and machine learning relying on a lot of our old experiences, the limited set of data that is not diverse, that doesn't represent the whole world I think we'll end up with a fast accelerating future with technologies that are evolving at an exponential rate and the biases will also grow at an exponential rate.
I'll give you an example. The pharmaceutical industry more and more is relying on AI to develop drugs, new drugs, doing new drug discovery. The data they're using is from a lot of old trials to see what worked, what didn't work and AI and machine learning algorithms analyzing these things. When you look at it, most trials, especially the further back you go even more, were all on white males. That's why a lot of times drugs either have adverse effect on women or don't work on women as well, or the dosages don't work. If you take all of that old data and now you try to do new drug discovery, more drugs will have this, won't work or won't help women or have bad effects on women. We need to create a new world where the data is diverse, we pay attention to what is used to build these new machine learning algorithms that will run our world in the future. The time is now because if we don't do it now the biases will be so deep embedded in the black boxes that you won't even know they're existing. That is one of my passions and the work I do at XPRIZE now, and also the work I do outside of XPRIZE.
James McKinney: I want to talk about that Billion Dollar Fund real quick just because when we hear a data point about the underrepresentation of female founded companies and how small of that venture pie they're getting I think the first response is well allocate more money to female founders, allocate more money to funds that are specific for female founded companies. And I hear about the Billion Dollar Fund. I can't even imagine how many companies that could go into funding, but there's also the other side and that's the deal flow. That's the inflow of female founded companies. How do we address… I feel like the money side is the easier side to address, and maybe that's just naive of me and please correct me if my thoughts are wrong in that. But how do we get a greater influx of female founded companies to come into that funnel so that we can get them funded?
Anousheh Ansari: In our experience the funnel is not the problem, the approach to how you make a decision to invest in a female funded company has to be different, and the decision makers have to be different. If you bring a traditional venture investor who would sit at a table and try to bring all his knowledge and experience from his past investment and apply the same set of questions to a female founder, a lot of time whether they realize it or not they have built in biases that prevents them from making decisions. A lot of female founded companies get passed not because they're bad ideas, just because people who make decisions on investment are not using the right criteria. There has been multiple studies so it's not just me saying that. Multiple studies have showed that women outperform actually as entrepreneurs in results. Where we don't outperform or we don't have many women is when you want to actually go toward building billion dollar companies. But startups to building very profitable companies very quickly, women do really well.
It is our society that has sort of curbed the ambition of women when it gets to a certain point, and the fact that some women are not as big of risk takers as perhaps male counterparts. That is something that has to be cleansed over generations as more women enter the workplace, and as society changes and our definition of entrepreneurship and risk shifts. But other than that, I don't think there's lack of enough startups and ideas with female founders at the helm. It's just that one, they don't know where to go to get the capital even though the money is there. Finding the pockets of money and making sure you get in front of the right person is a huge barrier for women. And then once you get there, the person sitting on the other side of the table thinking you're right at the age that you may actually want to have a child and you're married, all the things that people apply to why women can't make good CEO's or good this or good that, which is all false. If anything, we do multitasking better than anyone can do.
James McKinney: Amen. I can tell you that is the truth. You know it's funny you mention just even that simple perspective from an investor, and you're right at that age where you might be having kids. I can't tell you how many female founders I have had conversations with where they will tell me in a pitch someone asking them, "Who's going to run the company when you have a kid?" It is mind-blowing to me, and maybe it shouldn't be, maybe I'm just… I don't know, mind blowing or disgusting however you want to phrase it that's still the perspective that is out there when they see female founders. I've had female founders talk about they're pitching and the male counterpart will get all the complex technical questions and they get the softball pitches to them. It is amazing to me. I love that there are resources for female founded companies. So let me just ask you this question for my female founders that are listening, which are about 45% of my audience, where can they go to find funds that are for female founders, run by people that might look at it differently than a male funded company?
Anousheh Ansari: There are some resourced. The Billion Dollar Fund was one of them where we would actually identify and have actually specific pledges, and identify what area of investment that the fund is investing in, and have it link so that they can go and apply. We didn't get involved in the selection process because that was each fund has their own selection process and criteria, so we didn't do a good job in my opinion in helping coach the founders to maneuver that maze of getting from the pitch to actually getting the funds. But more and more I can see now especially in the recent years, even large organizations like Goldman Sachs announced just I think it was a couple of days ago I was reading a $500 million fund that comes with actually mentorship and support for young female entrepreneurs to help them through the path to success. So I think with a little bit of research you can find it.
But also I want to mention that when I talk about women and women entrepreneurs, I always have a global lens as well. And you and I are talking about US and you say that you're surprised and it's amazing to you that female founders in US get these questions. Imagine if you were in the Middle East in Egypt or Africa and there is no lack of talent or ideas from women entrepreneurs in Iran or other parts of the world. If we think we have a problem here, they have it much worse when you go out. In general globally there is a big problem and I think that society has to address head on and from the root, and make sure that equity is something that we don't talk about and it's not sort of a topic of conversation, but having gender, race, equity in all aspects of humanity and making sure that we are all looked at as individuals and not based on the boxes that people draw around us. It's very important.
James McKinney: Oh my goodness, I love that. I want to honor your time. As I'm glancing at the clock, our time is coming to an end and I want to make sure that I honor my listeners time by getting to the three questions that I ask all of my founders. And that first one, and I'm excited to hear your perspective because of the opportunities that you've seized in your life, that first one is about just the general idea of entrepreneurship. Do you think anyone can be an entrepreneur? And I know not everyone wants to be an entrepreneur so this is not a do you think everyone wants to be, but for those that do, do you think anyone can be an entrepreneur?
Anousheh Ansari: I believe anyone can be an entrepreneur, but they need to know what entrepreneurship means. Some people say they want to be an entrepreneur but if you probe a little bit what they think is entrepreneurship is so far from the reality that then you're like okay you will never get it. But entrepreneurship is about putting your passion and your mind in creating the dream you have. So it's not about being your own boss, it's not about making it rich, it's not about being on the cover of a magazine or going to take the company public and things like that. It's not recognition in that fashion. It's about taking something that you believe in, that it's in your mind, it's in your head, it's in your heart and actualizing it and getting it there. And it's hard. It's going to be brutal. It's going to take a long time. It's going to take a lot of money, it's going to take a lot of sacrifices. So if you're not ready for the journey and you don't have that expectation in mind that it will be hard and I will fall down, and I have to get up, then you won't succeed. But if you go knowing what you're getting into but you feel strong enough about your passion or dream that you say, "It's worth it, I'm going to try," it's the best journey and anyone can go on that journey.
James McKinney: Oh my goodness, that was absolute fire. Everything you just said is exactly why I created The Startup Story, is to give people that perspective of what entrepreneurship really entails and that it's not fast. Everyone thinks it's like that movie Field of Dreams where if you just build it they will come. You hear about these massive success stories in two years, as I'm using air quotes, because you don't hear about the eight years ahead of all the success that they started achieving. I just love bringing the authenticity back into the entrepreneurial story. And with that though part of the entrepreneurial journey is the fact that we don't do this alone. Many times, people think that it is a solo journey and we kind of get landlocked in this idea that I'm on my own, just nose to the grindstone, I'm pushing through. But it's when we get a chance to talk with successful people like yourself that have built amazing enterprises and amazing organizations that we get to understand that you didn't do it alone. And so when you look back on your entire life journey, who are all the people you point to with such immense gratitude for their role in where your journey is today?
Anousheh Ansari: Of course as you know my cofounder was my husband. I have learned a lot from him. I hope he has learned a lot from me. I would credit him with putting the entrepreneurship bug in me, and to watch him how passionate he gets with just making a deal it's an incredible gift he has. It's been a big inspiration to me from an entrepreneur's perspective so I credit him with a lot.
James McKinney: Oh, I love that. Absolutely love it. We've been talking to tens of thousands of entrepreneurs across the world, but mainly in the US, Canada, UK and Australia, at a high level of just your journey. I want to afford my listener this one on one time with you to take it from the masses down to the one. So if there was, if you had coffee with one of my entrepreneurs and maybe it's the entrepreneur that's about to lose their business because of COVID, and maybe COVID exposed some hard truths in their business that it wasn't stable and wasn't on the right path. Or maybe it's the wantrepreneur who has a 9 to 5 and a book full of dreams and ideas but they don't move on it because maybe they think I'm a female founder and I hear female founders don't get funded. Or I'm 60 years old and I hear you have to be in your twenties to start a business. Or maybe just I'm married with kids and a mortgage, and I can't take the risk. Whatever it is, there's some narrative that stops them from moving forward. Whoever it is you would like to talk to, what would you say to that one listener?
Anousheh Ansari: If you are the entrepreneur who has a passion but facing adversity, you're questioning whether you should go for it or not, whether you should continue or not, I've been there. I've been there throughout my career many times and what has helped me make the right decision is to go back and think of the "why." Why did I even start this? Why do I care? Why am I passionate about this? And your "why" usually becomes your guiding light to see if it can help you through this difficultly. And I know if the "why" is strong enough, no matter how difficult the situation is that you can find a way through it, over it, under it, around it, you'll find a way. Maybe the path goes through a failure, complete failure and a complete restart. But still the goal is not to make what you're doing now successful; the goal is to get to what you want to build at the end. If you have the right reason for pursuing it, you will get there.
James McKinney: once you've had a few moments to process all the value Anousheh Ansari brought us in this week's episode, please hit me up on LinkedIn, Facebook, or Instagram and share with me your thoughts on this episode. And lastly if you've been around The Startup Story for any length of time then you know how much emphasis I put on the idea that entrepreneurs support other entrepreneurs. XPRIZE shares the same values that we do at The Startup Story and that is about supporting entrepreneurship so make sure to visit xprize.org to learn about ways you can get involved. You can support XPRIZE financially. You can form a team to enter one of their competitions as well as sign up to be a mentor to their startups. I say it in every episode because I believe it with my very being: entrepreneurs support other entrepreneurs so let's show up for Anousheh and the entire XPRIZE Foundation and visit xprize.org as a way of saying thank you for all the value Anousheh brought us in today's episode. Let's get involved in supporting other entrepreneurs. And now for my personal ask.
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