Michelle is an advisor and angel investor in primarily female-founded companies, who founded a complex product that helped marquee brands keep their businesses stable during the pandemic. She shares her learnings from being a first-time founder and talks about the importance of founders being well educated in all things early-stage startups.
Michelle is an advisor and angel investor in primarily female-founded companies, who founded a complex product that helped marquee brands keep their businesses stable during the pandemic. She shares her learnings from being a first-time founder and talks about the importance of founders being well educated in all things early-stage startups.
Interested in more insights, industry best practices, and actionable content → connect with The Founders Formula Podcast!
Hatchet Ventures website: https://www.hatchetventures.com
Hatchet Ventures LinkedIn: https://www.linkedin.com/company/hatchet-ventures/
Chet Lovegren’s LinkedIn: https://www.linkedin.com/in/chetlovegren/
Michelle's LinkedIn: https://www.linkedin.com/in/michelleharrisonbacharach/
Listen on Spotify: https://tinyurl.com/36ub3fpy
Listen on Apple Podcasts: https://tinyurl.com/ystuxubt
Listen on Google Podcasts: https://tinyurl.com/bdee8y9h
Narrator: 1, 2, 3, 4. Are you a founder, co-founder, aspiring entrepreneur, or just someone who loves to hear about how companies are built? Then join us as we talk with founders and CEOs who have been there and done that. Welcome to the Founder's Formula Podcast. Sponsored by Hatchet Ventures. And now your host Chet Lovegren.
Chet: Welcome one. Welcome all to the Founders Formula Podcast. The show designed to bring you the latest and greatest stories and insights from founders worldwide who have been there and done that. My guest today is an advisor and angel investor in primarily female founded companies, a national keynote speaker, and she also sits on the board of advisors at George Mason University Center for Retail Transformation, please welcome the Founder and CEO of FindMine. Michelle Bacharach. Michelle, welcome to the podcast.
Michelle: Thanks. Chet, I'm glad to be here.
Chet: Yeah. We're excited to have you. I think your story is really interesting and unique and I really wanna dive in especially on, on FindMine, but before we do dive into FindMine typically on the show, we like to start with the background of our guests.
So what's the story behind Michelle. I was looking a little bit at your LinkedIn. I saw you have some different experience from professional actress to product management. Tell us that story of going from those experiences to being a first time founder and CEO of this really awesome machine learning platform for brands.
Michelle: Yeah, it's a great question. And I also used to what we were talking about before I used to like coach people on how to get admitted to business school. As part of getting admitted to business school, you have to talk about what you've done in your career and like where you're trying to go and make this beautiful through line between those two things.
And it never makes sense when you're doing it. It only makes sense in retrospect. And I feel like that's how my career has been. Like you look back and you're like, oh, you must have planned all that. And I'm like, Nope. Like my first job outta college, I took at a startup because I didn't know what I wanted to do.
And I figured I could wear a lot of hats at a startup. So after I graduated from Berkeley, I was like, which startup will have me? What's the smallest one where I don't have to sign up for a specific function. And that's how I got my first job. And I ended up like thinking I wanted to be a lawyer.
Maybe I wanna go to law school. So I like worked on the privacy policy for this company. I was like, Nope, don't wanna be a lawyer. That was pretty boring. And then I was like acting just in like local stuff in San Francisco at the time. And I was like maybe I wanna be an actress. Should I move to LA?
But maybe I want to do more the business side of the entertainment industry. So then I applied to business school while I took a whole year in LA, just trying to make it as a professional actress decided I didn't like the craft of acting enough to actually sustain me getting up, making no money for 10 years, like while trying to make my big break.
But what I loved about it was like the marketing strategy, like what are they looking for? What does this commercial want to like, make the consumer feel? So I took that as a sign. I came to out to New York and I went to get my MBA at NYU. And along the way before starting at NYU, I was I ended up like specializing in product management at the startup that I'd joined out of college.
They let me have my side hustle, be product manager, like slash you know user experience analyst while I was in LA trying to make it as an actor. So instead of having a waiting tables job, I was doing this like customer experience analysis thing and I went to NYU. I specialized in entertainment, media and technology.
So technology was this through line. Got my job out of NYU at Univision. Which again, like you think, it, it all makes sense when you look back on it. But at the time I was like, what is the place that I can pay off my loans, the fastest, and is the most interesting. And doesn't make me specialize in one thing.
And so I joined the office of the CEO, which is basically an organization that helped do like internal strategy consulting for the CEO and the board of directors. So my boss was the Chief of Staff to the CEO and we would do projects that kept the CEO up at night. And that was our remit, which was very cool.
And one of the things that we worked on was transforming the digital roadmap. And so I was back to product management, having gotten hired by the President of Digital to actually go execute that project. So then I was again, leading teams of designers and developers and stuff to launch apps and websites and all sorts of different experiences.
And like that whole time product management is really about taking friction out of a user's journey. And I loved that. I thought that was so cool. So separately, I had always wanted to start a company and just had a list of ideas on my phone. And usually those ideas were like, where's Michelle experiencing friction in her everyday life.
And like what's pissing Michelle off and what could I fix? And so I had this really long list on my phone. So when I quit my job and I was like, I'm gonna start something. That was my go-to spot to say what problem am I gonna solve? And which, where am I gonna remove friction from someone's life? Via the company that I start.
Chet: That's awesome. And so it sounds and maybe I'm jumping the gun here, but a little bit of what you've created at FindMine spurred off something that you had experienced as a problem yourself, or something that you were thinking about in inwardly. You weren't just Hey, here's a market let's go after it. It was something that you had experienced yourself. Is that correct?
Michelle: Absolutely. I think that's one of my key takeaways for any entrepreneur, would be entrepreneur I ever advise is. Finding a big market and something that like, looks like a cool opportunity is not enough to get you up every single day when things are shitty at your company.
And it would be so easy to just quit. It's just not enough. Like you have to have some kind of intrinsic motivation, just like with the acting thing, like the intrinsic motivation for most actors who are really good at it is they freaking love scene study and like becoming a character. It's you gotta have that level of commitment because if you're really just looking for like booking the job, that happens so infrequently.
Same thing with the startup, you're just looking for like closing the big round of financing and being a unicorn. You're not gonna make it, man. There's so much stuff standing in the way of you and that there has to be something really exciting to you about what you're building intrinsically outside of all the external factors or the, the sexiness of being an entrepreneur.
So what I see is like the most successful entrepreneurs have that hell bent on solving a problem thing. Or they have some kind of like childhood wound that they're trying to make up for. And it doesn't matter what the idea is. They just need to be successful to solve that wound. I don't suggest being that kind of person, but if you're that kind of person, like you can't really help it. So like maybe that's a great reason to be an entrepreneur.
Chet: Yeah and I'm familiar with the performing arts, because that was a similar thing. When I first moved to LA, I was actually pursuing like standup comedy and stuff like that. And they even tell you, go to a bunch of open mics. Because it's a bunch of hungry comics that aren't gonna laugh at your material, and you do that for a couple months, the first time you actually do a real show and you hear a normal audience member laugh, you're gonna hit this instant rush of dopamine. And it's a completely different experience. But if you're chasing, like being a famous comic or going on the road, all those open mics that you have to go to all the really low paying shows that you book for $30 or maybe just a free dinner and a drink.
You know what I mean? Depending on what comedy club you're at, like you're gonna get real sick of that real soon, if it's all contingent on the outcome. So focus on the input, focus on the love of the craft. Focus on, on, on the intrinsic motivation and you'll see success. I obviously didn't see success, but that's okay because I learned a lot of valuable lessons during that time.
Tell me about the so let's dig into FindMine a little bit, give the listeners an idea of what is your product, who is it for? What problem does it solve? And then I'd also love to hear you talk about how you came about founding the company and kind of the founding story of FindMine.
Michelle: Yeah. They're really related, right? That's the whole point of why I chose this as the company to build. But the software that we have is AI for retail we focus on retailers and brands and we help them scale out what we call their editorial point of view. If you think about Nike versus Adidas, there's a difference there and it matters to consumers and it matters to the brand obviously, and it matters so much that they can both have a 40 million billion dollar annual sales.
Like it's a big deal. But it's really hard to cultivate and craft that differentiation. Amazon doesn't want you to have that differentiation because if you don't, then you just buy stuff based on lowest price or the most convenience. And guess who has that in spades? Amazon does. So literally to save companies from going out of business and help brands, stay alive, you need to differentiate. And the kind of content that you're differentiating on is really tedious and manual to produce. It might be a very expensive photo shoot with a model. It might be a lookbook that your eCommerce team is building for the website. It might be your personal shopping organization where it's like a one to one conversation with a customer.
So those things are all very intrinsically unscalable. What we've done is we've taught our machine learning engine to behave as if it's a new team member. So a new marketer, a new merchandiser, a new personal stylist, a new creative director in the organization, such that it can produce the same asset. Without human intervention. So you get much more scale. You have more opportunities to tell your story and you have better differentiation.
You get more revenue from your customer, but you're also saving quite a bit in terms of the production time. And then you're we tie it all to inventory so we can actually help you prioritize, pushing a certain product in marketing assets.
Which is something that in the retail industry is like physically impossible if we don't exist. Because marketing kind of sets their content nine months before the product's even produced and then they can't change them. After the fact based on this product is performing well, these products live in the same distribution center, et cetera.
So that's what we do. We offer it to like very large enterprise retailers and brands we have a long list of like really big name brands and retailers as clients of ours. We also work with some of the more digital native companies as well. So it's been a really cool learning experience, like solving these problems at a very large scale.
Chet: That's really cool. So it's almost customized tailor fit collateral to give to their shoppers and customers throughout their journey, right?
Michelle: Yeah. It's like the stuff you see when you go to a homepage of a website or when you get an email campaign or when you go on social media, or when you see a window display in the store, it's just that, but maybe not made by a human, maybe it's made by us instead.
Chet: Yeah. And would you, so would you consider yourself because you have that product management background, like to what extent would you consider yourself a technical founder or not?
Michelle: Definitely not. I wouldn't give myself that label for sure, because I can't code it. Like I can't build any of it. I can be the what, but I can't be the how. And so that's always how I define product is like, it's the what? And engineering is the how. You have to have clear delineation of those things. Otherwise there's. You're building the wrong things, you're building things the wrong way. So I was technical enough to be able to call bullshit when an engineer especially early on, like in the founder journey, you might work with consultants, or dev shops, or people who, they're not like in it with you and the level of trust isn't really there. So who knows if they're taking advantage of who knows, if they're telling you it's gonna take six months to build this thing, and it's really gonna take six weeks and they're just gonna collect their fat paycheck and chill out the rest of the time. The level of technical comfort I had allowed me to not get trapped in those situations, which was comforting because I've, I know a lot of founders and I've advised a lot of founders who've gotten caught there and you just don't know what you don't know.
So that's scary, but I definitely would not call myself a technical founder because I had to have somebody else build the how, make it actually cash the check that my, what was writing.
Chet: Yeah that's a good way to put it. So you touched on a couple things in your background, like having, managed product and managed teams.
Like I knew when to call BS. I could tell like what the timelines realistically should be some of like how to lay the project out and how to run it. What other things in your background up to being a first time founder, in your experience, did you feel were actionable lessons? What did you experience that you were like, Hey, I can say that doing this job helped me be better at this part of a founder that maybe you were expecting to be part of a founder, or maybe not expected to be part of that founding journey.
Michelle: I wouldn't recommend anyone like repeat this because becoming an actor, just so you get used to rejection. So you're better at fundraising is not. Something, I would suggest, but it, again, when you look back on it, you're like, wow, that's a convenient skill to have. Cuz you go into an audition and you're like nine times out of nine times out of 10 or like 99 times outta a hundred, you're not getting the job.
And most of those situations, if you're like any kind of where in the middle of the bell curve in terms of talent, which most people are in like Hollywood it's not because of your talent. It's because you're not blonde. And the mom they cast is blonde. and who knows a kid who's brunette and has a blonde mom like that doesn't happen.
So we couldn't possibly cast this brunette girl in this commercial. Like it's so out of your control and there's so much about fundraising, that's the same. Like you have no idea the context that the investors coming in with and you can't just tell them what they wanna hear. It's this there's an example of a sales, an old adage in sales, like about a carpet salesman. and someone comes to the carpet, salesman's bazaar. And she's oh, I love this rug. Like how many people bought this? And the guy's everyone buys it. And she's oh, I like to be the first one to buy things. And she leaves and doesn't buy it.
And then the next person comes in and he's oh, I love this rug. How many people bought it? And the salesman's you'd be the first one. And the guy's Ooh, I don't wanna take a risk on something that's unproven. And he doesn't buy the rug. And it's like fundraising kind of feels like that sometimes.
And so instead of trying to change your story, to fit whoever the investor is, you just gotta, here's what we do. This is who we are, like stay true to that. And if it's not a fit, it's not a fit. And it doesn't mean you have to have whiplash because this person wanted this and that person wanted that.
Like you can't build a company that way. So I think that lesson from acting and being in audition scenarios and stuff like that was very valuable from that standpoint.
Chet: Yeah. And also these investors, you're gonna have that relationship for a very long time. So also be okay saying no, it's we have to be okay with that. If they didn't, if they didn't want it, because somebody else bought the carpet first then. Okay, that's fine. I'm okay. Saying no to that. Yeah. Like it's not gonna make or break me. Yeah. As a first time founder, I'm curious to hear your thoughts on what one of your biggest struggles has been and really, how did you overcome it?
What was the lesson learned? Tell the listeners about that thing that happened as a first time founder where you're like, oh crap, but you saw it through and made it out on the other side,
Michelle: Dude, I can't even pick one. That's a really tough question. there's a thousand of them. I would. A very like challenging first term sheet and like very first, like investor negotiation is one that comes to mind. And the reason is that Stanford business school wrote a case study about it because it was I was such a damn fool that, that they made it a whole lesson. And I like go, I'm a guest speaker when they teach it. So that one's a big one.
And then COVID COVID almost killed our business and I was on maternity leave when it happened, I just had my son two weeks prior and I'm having to call investors and be like, who has a storage facility we can put a bunch of monitors in before New York City shuts down and we don't know when we can get back into our office space?
So like that was a major lesson in resilience. But for, it was a very different scenario. One was purely self-inflicted cuz I just didn't know what I was doing. And the other one was like macro I don't economic doesn't make sense, like macro health environment situation that had an impact on the economy.
And it had an impact on like operations and all these things just coming smack in the middle of, outta nowhere and being incredibly challenging. But like our business is so much better for having made it through COVID and having made the choices that we made during COVID as well.
Chet: Yeah. And I'm curious, how do you feel obviously, with what we'll talk about rounds of funding that's being raised and have been raised you've seen success through COVID, but how do you feel like that changed the retail landscape?
Obviously we know some like by online pickup in store, you park, 40 feet in the door, somebody brings out, we know some of that stuff. But from your perspective of what your product is doing and how you're helping these retail brands grow, how do you feel COVID affected that in terms of changing the way that people buy online now.
Michelle: Yeah. Like it blew the lid off this like open, secret in retail that you can have shitty inventory controls, like you buy all the stuff, hopefully you sell most of it, but you don't and then you have to put all out of it on sale and you're really not making any margins on them. And then you have to ship it to TJ Maxx and Nordstrom Rack and all these off price places to try to liquidate it, or it gets locked in a warehouse somewhere, or God forbid it gets set on fire cuz some brands and retailers still do that. And it's like, how is this? Okay, how was this ever okay? And then COVID put a really fine point on it because TJ Maxx was closed.
Like they can't take your order. Your store is closed. They can't help you liquidate this product, cuz no one's able to go into store. So if you had a bad performer, you might be sitting on like years worth of inventory and with no levers to get rid of it other than dropped price and you can't drop the price below a certain floor, otherwise, there's just like all these bad things that happen To your reputation and you just can't do that after a certain point.
So there needs to be more levers to help optimize the self rate of inventory. There needs to be better planning and like prediction to not buy a whole bunch of stuff. That's not gonna sell in the first place. And so that like crisis point really helped accelerate our business because we produce marketing content dynamically.
Which means you don't have to produce it nine months before the product is produced or, starts to sell at a good rate or a bad rate. It's you can say, okay, these products are in the same warehouse. So let's make a beautiful marketing asset about these products. Because then we can upsell customers on something that's coming from the same box.
Let's detect when a product is not performing well before it has to go on sale or get liquidated to an off price channel, and give it an opportunity to be in more marketing assets and see how well it's gonna perform. And then we can track because we use AI. If it's hurting the performance overall, cuz it's just a bad product and it needs to be like segregated and isolated or most of the time it's not a bad product.
It just didn't get the right placement. It didn't get the right storytelling around it and we fix it and then the product sells, and you didn't have to put it on sale. It never had to go to TJ Maxx and you cleared out this excess inventory and protected your margin in doing so. So that's why COVID was like a blessing in disguise for us once we figured that out. But it took a little bit of time to figure it out and then released the feature sets and the data sets and the product that could support that new paradigm.
Chet: Yeah. I think that's cool. As a consumer, I don't really think about that concept that whatever's being released now, they were doing photo shoots, video photography, like they were doing tons of stuff. 6, 7, 8, 9 months ago. I think naturally us as humans just think, oh, that just, they just made that, it's like podcasting. It's a great example.
Michelle: Yeah, exactly no, it's a great parallel with everyone's obsession with the founder or the company, or like, the Actor who came outta nowhere. They got discovered. It's they didn't fucking get discovered. It was 10 years of grueling hard work and preparation before they were at that Ralph's, when, Ron Howard comes in and like strikes up a conversation with them, like they were ready and they had the body of work to back it up.
Like it's all unseen. It's the same thing within retail, within podcasting. There's always this base of the iceberg that is not visible. And the tip is all and it's so easy to be like, oh yeah whatever, but there's like a lot of complexity in all of things that we're talking about.
Chet: That's really cool though. How you built something to expose, not just that tip of the iceberg, but show more of it. And add that flexibility. And like you said, those levers for them to be more agile and adaptable, which is really cool. And I guess as you said, like COVID helped prove our model a little bit more because people now needed that agility and flexibility.
Now I want to touch on fundraising because as we were talking a little bit earlier, you've raised three rounds so far including the round you just currently raised. And I know that a lot of people listening on the podcast, this is like one of those things everybody raises funds differently, everybody experiences it a little bit differently. It's one of those things where it's not like a one size fits, all type thing. Talk about that journey of having raised funds three times around and what's been challenging for you. And what kind of advice would you give to other founders that are either maybe currently going through a round a fundraising, maybe looking for their first round, or maybe even going for a round two or three, what's what kind of advice would you give them?
Michelle: Yeah. The first one I did the biggest mistake that I made was I like didn't play investors off each other. So I was like, ah, every I have this term sheet, I have this term sheet, like everyone can come in together, but then I like lost all my negotiating power in doing that.
And the other mistake that I made was I wasn't fluent in how these things normally go. So I didn't sense the red flag when I got a term sheet like too early, you know, no real diligence had been done. And so when, in retrospect, when I look back at that particular investor, that particular term sheet, they were used to a much larger stage company where you get the term sheet first and then all the diligence comes after.
It's like they put this handcuff on you, and then they do all the work to validate that you're the company that they want to invest in. Whereas at the early stage, that does not happen. You, they go through, your market, your product, your team, like they know all the stuff about you before you get the term sheet.
So they're comfortable with you know, say like 85% of the risk before they give you a term sheet. And then after the term sheet, Negotiation. It's like confirmatory diligence. They're looking like you have the customers you say you do, you, your background checks out, like all those different things.
And so the fact that like this investor was using a super late stage playbook for a very early stage investment. Was a red flag that this was an inexperienced investor in early stage. It was someone who had been like an entrepreneur at the later stages and was just starting to invest, but he was using the wrong playbook and I missed that completely.
In retrospect, that was so clear to me. But like at the time I was just like, I got a term sheet! This is amazing! Like I could care less or I just didn't even register that was not the set of steps to follow. And so that was a great learning because every subsequent one thereafter, I knew what to expect in the process, given the kind of round we were raising and the type of investors we were talking to.
Chet: And yeah, I think also that's a little bit of that growth mindset that I've heard other founders talk about, like that opportunity to fail, learn from it. And like you said, now in hindsight, I can look back on it and go yeah. That person was nowhere near where they needed to be. They were in the wrong ballpark at that point.
But as a first time founder, you're like, oh, I got that term sheet you were really excited about as you should be. That's a big victory, but being able to identify, victories and red flags and red flags disguises victories, I think is sounds like that's something that you've recognized is really important in that funding.
Michelle: Yeah, exactly. And my own husband at the time was. It was very soon became clear that this was a deal that was not good for the company. And, but I didn't have any other offers at that point. Cuz I had lost my negotiating, leverage, my two term sheets turned to one and of course they got the worst terms of the two that I had when everyone came together. And we didn't have any other prospects.
We didn't have a lot of burn at the time, but like we were gonna run outta money and could have scraped it by a little bit longer. There wasn't really any like fallback plan. And my husband at the time was like, yeah, I know it sucks, but you gotta take it. And I was like, you know what?
I'd rather have no company than a company that's set up like this because it's not gonna be the company I wanna build. And it wasn't like the investor was like a bad person or anything. It was just like, shit rolls downhill. So if we start here, the next round is gonna be that or worse. It's never gonna get better from that.
And there was just some structural things that meant that we wouldn't be able to build the kind of company I wanted to. And it's no, like I'm gonna turn it down. And I did. And it was like traumatic to do that. And. But then, right after that, like a whole bunch of good stuff happened.
So like my other main advice to people who are well, my two pieces of advice to people who are wanting to start a company is don't do it because if you can listen to me, you'll be much better off. And if you can't listen to me you are meant to do whatever it is that you set out to do. And then the second one is if you do it just don't die.
Because there's always something around the corner. If I had shut down when this had happened, I wouldn't have waited the four weeks till we got our first like marquee customer, like two weeks after that, we signed with Adidas. And then we also did like a smaller funding round, but we raised our first round.
It was, $150,000. And I was like, Hey, like now we have six months of runway and we have a marquee customer. We did it. So to go from we're dead to, we did it in four weeks. You never know what's coming. You gotta eek it out.
Chet: That's awesome. So that is Michelle's Founder's Formula for success. So you hear it, you heard it here first Michelle as we close here how can people get in touch with you to learn more FindMine, or if they just want to connect with you? What's the best place? Where's the best place to reach you? How can people get in contact?
Michelle: Yeah, so we're findmine.com and I'm on LinkedIn, Michelle Bacharach. I think I'm the only one there. So those are the two best places to, to learn more. And I have a Twitter, but I'm not active on Twitter at all. I don't think I've been on there in four years or something, but,
Chet: yeah, I think that's a lot of people's Twitters these days. It's oh yeah, I have one. I don't know if I've used it in a couple years or so. I think my last tweet was 2019.
Michelle: Yeah like I use it as like a read only environment, I don't ever post.
Chet: Exactly. Awesome. Thank you so much for the time today, Michelle. I know the listeners most likely got a lot of value out of it.
If you are interested in engaging with the Founder's Formula Podcast or Hatchet Ventures any further we will have all the information on where you connect with us on social and our websites in the show notes below as well as a link to LinkedIn and her company's website in the show notes of this episode.
Thank you everyone for taking the time to listen the Founder's Formula Podcast and we'll see you on the next one. Thanks, Michelle.
Michelle: Thank you. Yeah.