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How Micah Brown Sold Two Companies And Started A Neuroscience Fund – Part II

Entrepreneurship is almost never a straight line. Much of the experience is unpredictable, and while you can usually weave together a cohesive story of how a successful business was able to get there, in the moment it’s anything but cohesive. This is why Reid Hoffman, the founder of LinkedIn, is famous for saying that “an entrepreneur is someone who will jump off a cliff and assemble an airplane on the way down.”

In Part 2 of our interview with Micah Brown, he details how he went from having incredible momentum in his business, to nearing the brink of failure on more than one occasion. In each example, persistence and continued execution is what kept him afloat, allowing him to survive until a lifeline seemingly came out of nowhere to keep his business moving forward.

We also discuss the work that Micah is doing to develop highly technical talent, focusing on building out their communication skills to teach them how to turn complicated ideas into massive, fundable opportunities.

Show Notes

0:00 Vadim: How did you transition to starting Centiment? –  an ad tech company that helps predict human thought and helps execute programmatic media campaigns.

0:25 Micah: So Filmfundr was initially just a spreadsheet that I took to The American Film Market in Sept 2015

1:00 This was just a spreadsheet that took existing data and came out with calculations, but people at AMF loved it. One Hollywood exec took me to his house in Beverly Hills and had me run the model on every film he’s ever done.

1:20 That’s when I knew I found my market for this.

1:52 Came back home, and cashed in my 401K to start working on this and hiring a team. Must’ve spent $80K, my entire 401K that I had with my team of 6 people.

2:00 That’s the thing about being a first time entrepreneur. Press is cool, traveling is cool, events are cool. Don’t do it until you have a product, revenue and customers!

2:58 By February of the next year I had about 2 months of runway left, and I can’t tell you how much that focuses you to work on the right things.

3:15 Got IBM as a partner, did Tech Week LA and Tech Week NYC and started getting people to use it.

3:35 It was starting to take off, but I was still running out of money, so I took a Chief Product Officer job for a while.

3:51 I needed cash at this point so I turned down equity in this company. They ended up being bought by AB Inbev within about 3 months.

4:00 That’s when I decided I didn’t want to do a normal 9-5 ever again without me being the founder.

4:30 Then I went through an accelerator called Venture Out. Great reception but still no investment.

4:40 So I started looking into PhD programs in NeuroScience and went out to UC Berkley, and I found out about this thing called the Houth Study. A way to use Machine Models on MRIs to understand multiple people’s brains at the same time. I realized this would be huge.

5:35 So I told my team back home we had to work on something else, and quite a lot of them left.

5:45 Got $20K SAFE from a few of my mentors to keep me afloat. But I couldn’t keep living in Manhattan the way I was. So I had to make the hard decision to move back home in my late 20s to continue working on this.

6:30 But I focused on this, and somehow ended up getting enough interests from engineers and scientists to have a team of 30 people helping me work on this world wide for very little money. The idea of human thought driven advertising excited people.

8:00 At one point my legal advisor calls me and says that he’s been doing free work for me for 2 years, and getting slack from his firm on this. “Can you please do something soon” he said?

8:20 So I got a coworking space for 1 day, Rise NY, and invited everyone I knew to come. I invited a bunch of VCs too. People were excited by no one wanted to invest.

8:52 I stayed there since there were no trains home and it was like 4:00 AM and I’m working, and Ken Lang walks in. He was also working. I told him my concept and after signing an NDA and looking at my code for an hour he said he was going to give me some investment capital tomorrow.

9:20 The next morning I heard from his lawyers and was wired $100K within 48 hours.

9:48 Then we became a With Watson company and a Google partner, and then we got into the Sprint accelerator.

10:07 I managed to negotiate a partnership with the Kansas University Medical center, a major neuroscience hospital. And they validated our research which was a big deal.

10:40 What I learned from this experience is that when you do something first you have to define all the rules. And how you define the rules in real time will determine how successful you are.

11:05 Like I was advising people in congress working on the Brain Act, on what you can and can’t do with neurodata.

12:00 I was getting funding from Ken and from Sprint, raised a few hundred thousand, was making some revenue, but it was still very stressful because on the outside I had the success in the press, but really I was running out of money because of all the expenses.

12:26 By Sept/Oct we totally ran out of money.

12:56 So these 2 agency guys, Billy and Todd put in some money, which turned it into a different company by that point, basically an agency. But it’s fine because we made more money doing that.

13:00 And that’s part of what being a founder is. You have to adjust. Can’t be dog headed about your vision unless you can get millions of dollars to do it.

13:42 And ultimately that pivot is what lead to the acquisition by this big holding company that we’re wrapping up now.

13:50 Vadim: Well, you obviously got a lot of these opportunities because you were putting yourself out there. But the reason you ultimately had a positive outcome is because you kept adjusting course and reinventing yourself and kept working on it.

14:30 Through this you became an expert in machine learning and neuroscience, and that led to you now starting a venture fund. And your first 4 investments have gone on to raise series A rounds. Tell us a bit about your fund and why these investments have been successful so far.

15:50 Micah: I think one of the key things for me has been what I call “market appetite segmentation”.

16:40 I like to help people articulate their vision to investors in a way that’s believable. If Travis at Uber came to Sequoia and said I want to be the connecting layer for any services, he would be laughed out. But he started with black cars and now they’re adding more and more services.

19:00 Sergei: It sounds like you were always a product guy who liked to tinker, who figured out business opportunities along the way. But because you saw how hard that is to do, now you find smart product/engineers and help them figure out their market so that they can be more compelling to investors.

20:40 You have an ability to see if someone is technically competent, but how do you know if that person will be able to bring something to market?

22:09 Most VCs want to see a clear path to profitability with proven revenue, but with deep tech you can’t really do that quickly because the technology is not well understood. The value is in what these people can create. If you only add some business competency around it, you can make those people dangerous. But that takes time.

24:30 I like to get in front of these smart people when they’re still young because giving them entrepreneurial confidence will serve them better at that point when they’re still impressionable.

26:40 Vadim: that’s really what this show is all about, is getting people information that can open up their minds entrepreneurially and activate it at the right time.

27:50 You can follow Micah on Instagram on @micahbrownofficial or Twitter @micahapbrown

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