How I Exited My Al Startup for $640M at Age 25 | Prepared, Michael Chime

1. 0:00 – 1:19

   Intro

   1. MCMichael Chime0:00

      I kind of landed into technology and startups just by seeing that emergency happen in my community as a kid.

   2. SPSpeaker0:08

      A second student has died from Monday's school shooting in Chardon, Ohio. All schools in Chardon are closed today. The seven-

   3. MCMichael Chime0:14

      It was an active shooter event when I was 12. I was in third grade, I think, and yeah, someone came on site and brought a weapon, shot students, and I think there were four people that passed away. My town borders the town where the emergency happened. My school locked down because it was so close. A- and as a young kid, right, I was 12 when this happened, and so, like, you just recognize, like, hey, safety is something that's not a given. So I'm Michael Chime. I'm one of the co-founders and the CEO. Prepared is an AI assistant for 911 calls that helps them process the calls better, faster, with higher quality. We are in all but one state, I think, so 49 states. We cover about 100 million in population. Technology all around us is moving really rapidly, but it's not in public safety. Somebody calling 911 and having a really bad experience, that's happening everywhere. I was an undergrad at Yale, of all things. So people are like, "Why are you building in public safety? That's a unique life choice." I actually don't know if I'll be successful, but I think I'll regret not having tried.

2. 1:19 – 2:45

   From a School Shooting at 12 to a Lifelong Mission

   1. MCMichael Chime1:22

      So I grew up in a small town outside of Cleveland. I think I wanted to play sports after college. I was always naturally drawn towards things that were challenging to do and felt important, and so sports was the best way for me to, to do that. Um, I probably would have played sports or just taken a fang job after school. That's probably what I would have done. Uh, I don't think pre that event I ever really thought about safety or the idea that I wouldn't be safe. And you know, like, as a kid, you're like, "Oh my goodness, this is not a drill," and the teachers are actually nervous. Um, becomes real quickly that, you know, you're not always safe. Seeing that happen in a place where you actually knew the people, it- I think it really hit home. Um, emergencies could happen and they could impact people you actually know, or you. That was, you know, in the back of my head. It was a thought that I had all throughout my childhood. And then, then when I went to high school and was thinking about these things more, March For Our Lives is at its, at its peak. And so our generation was really starting to take a stand and say, "Hey, this is not so great. We should change things here." And that was compelling and exciting to me. When I went to college, I met two classmates that turned out to be co-founders later, Dylan and Neil. Grew up in a very similar environment. They... and the town over from them was Sandy Hook. And so I think just generally speaking, we thought about it more as kids, and we didn't think we would build a company. We just thought we would build this simple tool schools would use in college, and then we would go off and do whatever our jobs, et cetera, after. Yeah, so our first product was an app for

3. 2:45 – 7:00

   3 Yale Dropouts Develop 'Active Shooter' Alert App

   1. MCMichael Chime2:45

      schools, and we had a couple hundred schools across country launch that solution, and that's how we got into 911, was schools would, say they were running a drill, right? They would take a picture of something on site, and then they'd want to share it to 911, right? Because 911 would respond to that situation. In doing that work, we'd want to share data to 911 centers. But what I realized is that that simple idea, sharing a picture to somebody in an emergency, that the current 911 systems weren't set up to do that. I don't think many people know this, but still today, most of the 911 centers are using technology built on the assumption those calls are landlines. So the first problem we attempted to solve was that. How do we make sure that when we call, the systems are intelligent enough to take that information in? I think we can hold the line and say, "Okay, when somebody has that situation, how do we hold a really high bar and make sure that we use whatever technology possible to try to, uh, make that the best possible response?" What was gonna be senior class at Yale was, like, taking the year off school. So I'm like, "Okay, I guess I'll do that, too," and I took the year off. That's when I applied and did the Thiel Fellowship. The pitch to my parents, who did not like the idea of me doing the fellowship at all, my mom actually hated it. So both parents are like, "Michael, you're one year away from graduating. Why not just finish up? Like, why not just go all the way through?" And this was... it was not obvious that we were gonna have any success. It was like, our first office was an apartment, and the master was the office, and it was just folding tables with monitors. And so I was like, "Mom and Dad, I'm gonna go and live here, and I'm gonna work on this thing." So it was a hard pitch. I said to them what I said here, which I really believe, is just like, "You know, Mom, Dad, like, the problem that we're talking about here, somebody calling 911 and having a really bad experience, that's happening everywhere. I actually don't know if I'll be successful, but I think I'll regret not having tried, right?" And they let me do it. And so this is when I just started knocking on the door of 911 centers, and then they, you know, walked me through the center. I remember that moment walking through a 911 center for the first time really vividly. It was like, you know, I, again, I'd come in with this assumption that I was about to walk in and see the coolest technology I've ever seen. I was about to see the best technology in the world, and I saw the complete inverse. I remember the first time I sat next to a call taker, and they were doing their best work. But the guy, you know, like, he, he's taking a call. Someone was very urgent. He kind of had, like, the headset on his ear. He's typing as fast as he can every single detail that this person's trying to describe, like, clearly missing stuff, and anybody would. I would miss stuff if I was in that same seat. But the dashed stream of consciousness of notes is what someone was gonna run into a burning building with, and my mind was blown. It's very daunting to rip out their current technology. If you rip out center and you miss one single call, that's, like, a really big deal. And so what we had to do was architect, okay, how do we fit within the systems? We sit there and we say, "Hey, like, I can appreciate why the technology is that way." It's very hard. It's difficult to switch systems. How do we actually build our solutions around your, your concerns, which are valid, right? And I don't think any vendor's done that or any technology company has done that before. They've just, you know, said, "Well, why is that so bad? Let's just rip it out." And I think that you need something more thoughtful than that to, to see real change. We should solve it today. We shouldn't wait 10 years to go and solve that problem. So we thought the best, you know, kind of most speedy way to start making progress was integrating with the systems as opposed to ripping them out.

   2. SPSpeaker5:56

      The next generation of 911. The Orlando Fire Department is upgrading its dispatch center with new software that allows callers to live stream videos and pictures

   3. MCMichael Chime6:05

      I remember when we first turned on our product for 911 centers. Within our first week, people used it to save a life. I think it was a CPR call, so someone calls in, they're with their friend, and they, you know, passed somebody on the street that was passed out, and they're like, "Okay, we're gonna initiate... We're gonna do CPR." But they had no idea how to do CPR. They had never done it before, and the call taker was trying to walk them through it over the phone, but couldn't understand where their hands were placed, if they were breathing at the right time. And they remembered, "Oh, I have Prepared," and they turned on live stream. And so the friend started streaming CPR with the phone on speaker, and the call taker saw it and was able to coach them through live, and the guy comes back to, to life. And so that was in our first week of deploying the technology, and you're like, "Okay, that's pretty cool." So I think early on, that was a real driver and motivator. And now, I mean, we are on track this year to process well over 30 million calls. Every day, you just get stories of how people are using it to save lives.

4. 7:00 – 10:15

   Let Customers Evolve Your Product

   1. MCMichael Chime7:03

      One way to make sure that we internalize the weight of what we're doing is spend time with the centers. You go into a center, and you see somebody take a call and just kind of, like, feel the weight and the pain of not being able to handle that call, because they're sitting on language line, or they miss a key detail. And so, like, the impacts of those things are life-changing. Every new product that you've seen us launch has been sitting next to a center who's actually using it, and we just watch them have a problem, and then we go and, and solve it. In our first month where we launched the very first version of our product, which was, again, you could send a link to a citizen, and they could live stream and share pictures and videos, et cetera. Our first month, we had, like, 350 incidents go through the platform. Shortly thereafter, three months later, we had 60,000 monthly messages going through the platform, so you saw this huge uptick in emergencies. And so you had this large amount of data that you can go in and talk to customers, "Hey, why are you using it this way?" One of the things that became clear was if you had bad information go into 911, that was actually worse than no information at all. Language translation is an example. Initially, we would see people text back that link in Spanish, and we literally have centers go into our platform, get that text in Spanish, copy and paste it into Google Translate, translate it, and then go back to us. Like, they were toggling between these two screens, and we're like, "Oh, my goodness," like, "We'll just bring that in." And so our first paid product was this just language translation over text, and centers used it. You know, the next evolution of our product was, "Oh, wait, why even text them at all if they don't speak English? Why can't we just, you know, translate it right on the call?" And so our next product was could we plug in, pull out the audio, and start translating on the audio as opposed to moving them to text? And then, you know, we launched that product, and centers across the country started using that transcription and translation. And then now, this last year, we started launching new versions of our, or new modules on top of our product because we saw new problems. We started processing millions of calls a month, and you just look at those calls and you see, oh my goodness, one, we have hold times on non-emergency calls, and two, when emergency calls come in, I'm rushing between, you know, call to call. Why do we have the critical resource, a human agent, focused on noise complaints or parking tickets? AI could do that job. And so we launched a voice agent that could handle non-emergency calls, and now some of the biggest cities in the country are fully offloading those calls to us. But we've just kind of consistently looked at the usage in our system and then gone and solved problems now. And so we've just really gotten focused on how are they using the system, and then what new problems are coming up that they're trying to use the system to solve, and then how we just actually solve those. With what I've learned is that, like, often the centers are telling you exactly what you should build and the problems that they have. And if you just stay really tight to them and build those things quickly, you'll probably have a lot of success. Now, I spend a lot of time in centers, just sitting next to them. I think, you know, even, even as we've gotten big, I've tried to spend a week or two weeks a month in centers sitting next to them, and it's just been, like, such an advantage for us is that, like, okay, how are they actually using it? And you'd be surprised how many founders or companies don't do that, just don't sit next to the centers and say, "How are they actually using it?" That a lot of the decisions get made in rooms like this, totally away from anybody that's actually using the technology, and so it's something that we've tried to stick to as we've, we've gotten bigger.

5. 10:15 – 13:20

   How We Hacked B2G- Launch Your Product for Free Now

   1. MCMichael Chime10:19

      I remember when we were first starting, and we were pitching investors. They would tell me, "Don't work in government. Don't work in 911. One, it's very hard to do, very hard to see change," which is certainly true, "But also there's not much money in 911. It's not a big enough market." And I remember that advice of, like, you know, starting small and focusing on something niche was actually a good thing. And so I stuck to that, and it worked out. One of the things that had blocked innovation was this long, arduous process to even get in working with the center. There were startups that, in other markets, that had faced similar. Two decades ago, selling to the Fortune 500 companies for a startup was very difficult. Normally, that was just, like, Oracle or Salesforce or any other big company was able to actually punch at that weight, and the reason was you had these large systems IT units in public companies. They would block everything. They would say, like, "No, you can't work with a startup. We're gonna work with the big guy." And then naturally, the big companies didn't face any pressure, so the technology got really decayed, and so you had Fortune 500 companies with really antiquated tools. So startups started to change their model. So companies like a Slack or a Yammer started to give their product to end employees. And at the time, that was very controversial. They're like, "Wait, you can't just give your technology to the end employees. You gotta go through IT first. You gotta do these things." And they did it, and it worked, and bottoms-up was born, this idea of starting with the end employees, then going back to the kind of processes of the big company. But at least now you have the users at your back. You've already shown them that they have something better. And the reason that was really innovative was now the large companies could no longer just defend on process. They had to actually defend on technology because you were getting in, right? Our idea was that government was the same thing, or that procurement was the systems IT equivalent in, in government, and that if we could get our technology in the hands of end users and make the discussion about technology and not procurement, that, uh, we would win. [laughs] And so that was a big part of our initial strategy. So our first product was no cost for centers, and the only goal was to get our technology in, build the best solutions, show them that there was a better way, and then we thought that if we did do that, we'd be able to expand from there. And so our first roughly thousand cities, and we have over a thousand cities now across the country that use us, paid us nothing. But they saw like, "Oh my goodness, there is a better way." And that was a big part of our initial strategy. Startups should really think first principally about what is the reason the thing that they think should happen has not happened. Every good company starts with a vision of a better future, right? And to you, it's clear that that future should come to pass, but it hasn't, right? So it's really s- you know, sitting on the question why it hasn't come to pass. So in our space, there was a lot of companies that had actually built better technology, but nobody used it, right? The real constraint for us was nobody had hacked distribution. Most times the hard problem with government is actually getting in. And so again, like counterintuitive idea because a business should make money, but if my goal is to get the technology side by side, what should you do? Give it for free. Remove all the barriers and all the friction needed to get your technology next to theirs. Sometimes it's non-obvious. It's not just build a better system.

6. 13:20 – 15:15

   Unlearn Fast, Change Faster

   1. MCMichael Chime13:24

      I, I think the hardest thing is, especially at the rate that we've grown, we were in that apartment office only three and a half, four years ago, and now here we're plus 100 people, might double in the next year. I think the hardest thing is the job is changing every month or every day. [laughs] And so like when we first started, first customers, I was selling. I was going out and having the conversations with them. Very quickly, we needed to scale that and grow that, and I was no longer selling. And now it was about managing people that are going and having those conversations. Now, selling it actually and managing people who are selling it, very different jobs, [laughs] doing it versus managing it. And the hard things for me were letting go of the past job and getting good at the new job, 'cause it's not so fun. You like feel like, "Oh, I'm just starting to get good at this selling thing, and now I gotta go and do something I've never done before, and that's uncomfortable." And you're not so good at it initially. And I learned, like, how can I get good at communicating why we do it this way, working through whether their way is actually right, agreeing on some solution, and then them taking it. You know, it's like your baby and you wanna do it. Now, as we have, like, very professional managers on the team, it's really about building a culture. We don't really compromise on are we customer obsessed. I think it's incredibly important that even as we get to a thousand people, that we're still sitting as customers. We're not gonna budge on that. But there are certain things we absolutely need to budge on and change because the company's changing so much. So, like, how do you do that at scale across a lot of people? It's very different than management, which was the last job. Like, letting go of the last job, being like, "Okay, this is the new job," and being okay with learning against it and the uncomfort that comes with learning. And I think that's where a lot of founders get tripped up, is they just keep doing their last job even though the company needs them to do their new job. And sometimes it's really hard because the people want you to keep doing your old job. But if I spent my whole day with one-on-ones with every team member, I probably wouldn't talk to customers very much. [laughs] I probably wouldn't make very many decisions that are important. And so it's difficult to let go of the last, the last

7. 15:15 – 17:51

   The Hard Way is the Easier Way

   1. MCMichael Chime15:15

      job. I, I think it's actually easier to build a hard company than an easy one, if that makes sense. There's this thing in the world that nobody's done yet, and us, a group of kind of like ragtag people you put together, we're gonna change it. That's like an inherently confident, maybe arrogant thing, thing to say. Yet, though, it's very easy to get people rallied around that, right? Like, so when you say something like, "Our mission is to ensure that every time somebody calls an emergency, they get the perfect response, they get the best possible help," people get excited about that. Very, very hard, very, very difficult. We can't take that lightly, but people get excited. So you attract better talent. You attract people that are willing to work harder towards that thing. It's much easier to get the right talent necessary for a startup if you do the ambitious thing. So people are like, "Why are you building in public safety? That's a unique life choice." I don't know if I ever thought it had to be me. I guess I still think [laughs] it doesn't necessarily have to be me. I, I, I think that one of the most compelling reasons to work on the company is we legitimately believe if we didn't do the work, it wouldn't get done. And I would say most days it feels quite uncomfortable. I, I did not come out of a dorm room ready to build a company. [laughs] And so most of the day is doing things that you, you haven't done before, but you have to do quickly. You have to learn really, really fast. And so a lot of days I think, "Oh my goodness, why me?" [laughs] But it does seem true that if we just stop tomorrow, the world would be less safe, um, that the technology would likely kind of fall back into the status quo of being okay with decay, being okay with inequation, and the result of that would mean everyday lost lives, and I don't feel okay with that. Our work seems to be raising the temperature of the space, and so, you know, as we go out and launch new things that the space hasn't seen before, so too are the big companies, which is also great, right? I tell this to you a lot too that, you know, like, look, if we build things and then they get mass distributed by somebody else and it saves millions of lives, that's freaking great too, right? And, and our work will be, you know, super successful even if somebody else does it on our backs. That, that's amazing for the world. It just feels like we have to do it, less that, uh, it has to be me. [piano music]

Episode duration: 17:52