Episode Transcript
[00:00:00] Speaker A: Foreign.
Welcome to the Victory Show.
[00:00:14] Speaker B: Hey victors. Welcome to this episode of the Victory Show. If this is the first time you're joining us, I'm Rachel League with Bestseller By Design. Our founder Travis Cody is the best selling author of 16 books and we've had the privilege of helping hundreds of business consultants, founders and entrepreneurs write and publish their own best selling books as as well. Well through that journey we've discovered a fascinating pattern. Most businesses really struggle to break past the seven figure revenue mark. On this show, I sit down with some of the world's most successful CEOs, leaders and business owners to uncover the strategies they used to scale way past that mark so you can do the same. So get ready for some deep insights and actionable takeaways that you can implement in your life and business. Starting now. Today's guest is Laura Lee Elliott, a journalist turned tech entrepreneur, building the future of human AI collaboration. After moving to the US from Australia, she bootstrapped Dauntless XR, an augmented reality company, to over $1 million in ARR within two years, earning contracts with NASA, Space Force and the US military. Along the way, her company now focuses on building mixed reality interfaces for AI using spatial computing and object detection to supercharge how we work and interact with emerging technologies. With a lifelong background in storytelling, journalism and digital media, Laura Lee also hosts New Ventures, the YouTube show where she documents the behind the scenes journey of building and buying companies, rebranding, pivoting and scaling in high stakes environments. Her forthcoming course, Write Like a CEO, teaches entrepreneurs how to translate big ideas into crisp narratives that win customers, investors and media attention. Laura Lee speaks globally on technology, entrepreneurship and the human side of innovation. Whether building tech that powers the future or sharing lessons behind it, she's driven by one belief. Bold ideas deserve execution and great stories. Laura Lee, welcome to the show.
[00:01:57] Speaker A: Thanks for having me. And thank you for that introduction.
[00:01:59] Speaker B: Absolutely. Well, so take us back. You've got this incredible background journalism to tech entrepreneur. How did you bridge between the two?
[00:02:07] Speaker A: Yeah, it's definitely an unconventional path into tech, but I started out my, you know, my adult career out of grad school as a journalist in New York City. I graduated from nyu and you know, you're right there. So after kind of getting into reporting a little bit and living in New York City, I was like, you know, it's very expensive to live here and being a journalist and surviving in New York City like is is a very tough thing to do with, with how expensive it is and how much you're paid. So I Ended up coming up with a plan B, which was to become a technical writer, which paid a little bit better.
That would allow me to maybe one day come back to or figure out what was next. So I got a job as a technical writer on a very large scale, multi billion dollar engineering project that was happening down in Australia. So I left New York, packed up my tiny apartment and jumped on a flight to Brisbane. And then I spent a couple of years living in Queensland working as a technical writer. I very quickly got kind of pushed over from technical writing to database building and management.
I really made that one data science course I took in undergrad, really made it pay for itself during that time. And I got a really good, kind of, really good insights as to what the challenges were in engineering and construction for these very large infrastructure megaprojects. And I was quite shocked when I got there. Like I said, this was a multi billion dollar project. We were using the cutting edge technology for the, the actual project itself. But the technology I was using to do my job was still largely pen and paper. I had a shipping container that we used to keep all of the data which was printed out that we would hand over to the client. And you know, anytime we had to go out into the site to do an inspection, you were printing off drawings, putting them in a backpack or a binder, and off you go. We did have iPads, but they didn't quite work the way we needed them to work. And when I was in New York, I covered fashion, but I also covered a lot of tech. One of the, I still have the notebook with this written in it, but I'd seen this was back in like 2012, 2013, really early VR glasses. And I literally wrote it as like screens in glasses because that's what it looked like. It wasn't like true kind of bifocal VR. And I was like, you know, if we had something like that where you could see all of the data that you needed to do your job and you had this kind of hands free interface to record all of your inspections and values and, and prompt you through, or provide steps to guide you through a procedure, we can get rid of all of this paper. And at the time I was like, okay, we have to, I have to do this, I have to make it happen. I can't spend the next 30 years of my career, you know, like slogging through mountains of paper. So I did end up working on a few more of these projects back in the States. And then after kind of seeing that this wasn't just A one off blip. Like all of the industry kind of behaved this way. I was like, okay, I need to, I need to create a tech company and build this product or find someone to help me build this product, because there has to be a better way. And yeah, that's kind of how I ended up in tech in a very roundabout way.
[00:05:28] Speaker B: Incredible. I mean, I love that you saw the problem firsthand and it wasn't something you necessarily went out, but you were like, I need to solve this. I love that quote about I can't spend the next 30 years of my career dealing with all this paperwork. Like, this was truly an acute problem for you. And so when you said, okay, I need to build this problem, how did you find either the right people to bring around you or get up to speed on what it would take to build a tech company?
[00:05:50] Speaker A: At the time, sort of the thing to do was. And I'd taken a couple entrepreneurship courses at nyu, so I was familiar with putting together a pitch deck, pitching, whether that's partners pitching, investors, you know, and, and I just thought that's what you do. I didn't really know that there was another way.
So when I realized I want to build this or I want to find a team to help build this, I put together a pitch deck. I iterated on the idea a couple times and really tried to refine the story and the narrative around what I wanted to build. And then I started just pitching people, kind of anyone that would listen. I practiced my pitch like one of the early, early versions of it with some of my friends at a ladies coloring night. And after everyone had had a couple glasses of wine, I was like, okay, I need feedback on my presentation. And I like pulled out a pitch deck. And I was like, I'm gonna go through this. And one of the women that was there actually ended up becoming my co founder. She heard the idea and was like, she also was. Had a 9 to 5 where she worked in tech and was like, I'm, I'm interested in jumping on this crazy ride and seeing where it goes. Which was lucky for me because she turned out to be a product manager.
Yeah, so there's, and there were other things we did as well. We were both living in Houston at the time. And you know, I started going to all of the kind of startup events here where you can practice pitching, you can do. You know, they kind of have like open mic nights sort of for entrepreneurs at the different co working spaces and accelerators here. So we did kind of that circuit just to get practice and get feedback, get the name out there. And from there we ended up applying for so many accelerator programs, getting the exposure and the practice. And that eventually led to, like I said, many accelerator programs that we completed. I got to a point where I told Sophia, I was like, I can't do any more of these. I'm done being accelerated. Like, good.
And then that led us to getting our first commercialization grant where we could bring on more team members that ended up becoming founders like our CTO and actually build the first iteration of the project.
[00:08:07] Speaker B: Incredible story, no, I love that. You know, you just decided to put yourself out there and I have no doubt that as a journalist, like, the storytelling was incredibly compelling. And it sounds like you're able to find somebody with just the right background. And I think sometimes there is some kismet to it, right? You just say, okay, I'm going to do this now. And you never know who's going to be in the room. Power of one to elevate you. And so really fantastic that you found Sophia to bring some of the technical expertise to complement your vision and storytelling background. And so with the accelerator programs, when you said, okay, we've done enough of this and the commercialization grant was sort of the next step, was that an equity free grant? How did you come about that? And then how did you use that to get to the next level?
[00:08:49] Speaker A: Yes, it was an equity free grant. It was. Anyone in the XR space will remember this, but it was Magic Leap's independent creator program. And the timing of this just happened to work out out well for us where Magic Leap was releasing their first XR headset, the ML1.
And this is a problem with many hardware tech startups is they build this great piece of hardware and then they need apps to run on it. Because odds are, if you're really good at building hardware, you're not that invested in building all these apps and software outside of the operating system. So they put out this call for anyone to pitch them applications and we ended up, we submitted two. One was a gaming idea that we had not built, and then the second was for Katana, which was our workflow productivity application. And we were like, okay, between the two, we weren't sure what they were interested in, but between the two, we hoped we would, we would get one of them. And we did. We ended up getting selected for Katana, which was the workflow productivity, and we were one of three enterprise kind of B2B businesses in that cohort. So it was, you know, like I said, good timing and A little bit of luck that that's what they were looking for at the right time. And it was great because we got to retain all of our IP and it was, it was a grant. So bootstrapped, we can. We were able to continue bootstrapping.
[00:10:09] Speaker B: Incredible. And so at that point, and even when you were getting into the accelerator programs, did you have any product build? Were you still sort of focusing on the vision and the direction of the company? What was the state of the actual business at that point of getting the grant to scale?
[00:10:24] Speaker A: So we did have a prototype, I would call it that, of the application. It ran on mobile, so it wasn't in headset yet. And we had tested that out on some construction sites to just kind of validate with the end user that this thing was useful, that they would use it, because, again, like, this is a user set that at the time, like, was not using a lot of technology. So we wanted to make sure the adoption was there, so we were able to validate that. But other than that prototype, it was largely actually just the. A pitch deck. Right. Like, we were trying to refine exactly what the business model was. And that's what all these accelerator programs help you with.
You know, putting together the business case and your unit economics, and then how much are you going to be valued for and like, you know, refining all of that. You know, looking back now, I was just much more interested in building the technology and talking about it myself, rather than trying to sell it to investors. But that's kind of a separate.
A separate conversation, which I'm happy to get into. Yeah, it was up until 2019 when we got that grant. We had a little scrappy prototype and lots of PowerPoints, lots of.
[00:11:37] Speaker B: Well, you know, I mean, it sounds like you had the right vision going in, if you like, you were passionate about building this product to solve this problem, not about the glorification of the fundraise, which I think a lot of people get sucked up into, wanting to have that, that spirit. Did you eventually end up fundraising? Have you bootstrapped thus far? What does that look like?
[00:11:54] Speaker A: No, we never ended up raising around where 100% bootstrapped.
[00:11:58] Speaker B: Oh, my gosh. Incredible. Okay, so you get the grant, what do you use it on? And how do you get it to scale such that you could sustain to continue to bootstrap what we did.
[00:12:07] Speaker A: So we, we had to use the grant to build for the magic leap one. So that was the main goal there, was to take what we'd built for mobile, ramp it up a bit and Then get it onto Magic Leap's app store. And again, anyone who's developed for that platform understands it was locked down. They have their own operating system. So we knew when we were building it that we had to build in such a way that we could push to other platforms, right? Like we wanted to be able to be on Quest, Meta Quest or hololens. Rest in peace, hololens. We love you. And then whatever comes next, right? Because the industry is so young, we knew at that point, like locking into one platform was probably not the best move. So it meant we used that money we got, we got the app onto Magic Leap in record time. But it was maybe a bit more basic than what it could have been because we used some of those resources to allow us to push to other platforms. And Magic Leap was cool with that, right? Like, they got their app early, it did everything it was supposed to do.
And you know, they had, we did a ton of marketing with them. But that was one of the things that we kind of, I think, underestimated how important that was at the time, that we didn't lock in to just one, one device.
So from there, you know, we were able to do a ton of marketing, tell more people that the product existed. We started doing demos and pilots with some of the companies based here in Texas. And then you're keeping track of the timeline. This was the end of 2019, so we know it's coming, right?
Just as we're like really ramping up to kind of, you know, some of these bigger deals, the pandemic happened and the world shut down. And the construction industry, you know, that was still very much an in person kind of activity. You can't really construct remote until we get much better at robotics. And which is coming again, different story, but also on the horizon. So that was kind of all, you know, thrown up in the air. They were diverting resources to figuring out how to continue to operate and weren't spending a ton of money on innovation. So we were like, okay, we gotta figure something else out. And we just, you know, like put feelers out there. We tried again, we went to a bunch of virtual events and one of those events was with this organization called AFWorks. And it's sort of like the venture startup arm of the Air Force. So their job is to bring in like non traditional government contractors from Silicon Valley or wherever that have technology that is of interest to the Air Force and to Airmen. So we went to one of these events just to kind of see what it was about. And they hold these things called reverse pitches, which I'm sure exist in the commercial sector, but I've only ever been to military ones, which is where your customer like gets up and says, this is the problem I'm trying to solve. Industry, please solve it for me. And we listened to a couple of those and put our hands up. And eventually it wasn't immediate, but eventually someone reached back out and was like, hey, I've seen your tech for construction. Can we use it on Air Force bases? Can we use it on aircraft? And we were like, yeah, there's no reason why not. Lots of the things you see on an Air Force base you have in the commercial sector. It's not. Not that different. So we ended up getting on an R and D contract. We went through this program called cber, our SBIR and sttr and we actually won two contracts. Our first time submitting, we won two. And that's again, like, we didn't know at the time, but I guess pretty rare to happen. I think that it was like less than half a percent chance of that happening. And we, we won two to build kind of two separate products. But yeah, so then we started, we started doing that and kind of figured out as we went how to do business with the government. Still very much figuring that out, especially while it is shut down.
[00:16:04] Speaker B: And so when you win these contracts, are they providing the capital upfront for you to then go and build or did you have. Yeah. What did that look like from. Given that you're bootstrapped and you know.
[00:16:14] Speaker A: Yeah. It actually makes it a lot easier, in my opinion, to do business with the government if you are bootstrapped because you don't have to monitor who is on your cap table. Right. Because this program especially, there are exceptions to this rule across government contracting. But in this program, it is specifically for us small businesses that are owned by US people, US persons. So if you have a bunch of investors that are not from the US then you have to disclose that and it's all of these hoops you have to jump through. So, yes, these are just straight up contracts. They don't take any equity. And how it works when you first get started is they start you off on like a baby contract just to make sure you can actually do the things that you say you can do. And they give you between 50,000 and 250,000 over three to six months to build out a prototype and figure out how to like do reporting for the government and like all of that good stuff. So it's, it's about the Equivalent of like a pre seed round, except you're doing it over six months max. So it's short. Yeah, yeah.
[00:17:21] Speaker B: Incredible. And what did the team look like at this point?
[00:17:24] Speaker A: When we started our first contracts, I was the only one that was full time. Sophia still had a 9 to 5 and CTO I think was doing other, like he was doing contract work at the time. So once we won the phase ones, those initial contracts, we were able to bring everyone on full time. So we had three people full time at that point. And then as we got more, we went up to like six, seven, plus some contractors. Yeah.
[00:17:53] Speaker B: And so with the grant funding, how did, or excuse me, the contract funding, how did you think about the split between what goes against the actual product versus enabling people to come on full time?
[00:18:04] Speaker A: Yeah. So because it's government work, you do have to submit a line by line estimate before in your proposal. So we had to think about it as we were proposing the work, who would we bring on full time? And they asked for quite a few details. You have to give their full name, phone number, all this stuff, the years of education. So that was all pretty meticulously planned before we even submitted the proposal. And there's also a lot of, not a lot, but there are restrictions on what you can spend this money on. You can't put, you know, you can't say, hey, I need to go to this conference, I'm going to spend all of my grant money on a first class ticket to wherever. Right to Vegas. And you know, you're, you're not allowed to do that. So we had to plan all of that out. And pretty much for most of the initial contracts, pretty much everything went towards development, went towards engineering and product.
And there were some lessons learned in there. Like you do need to set aside some stuff, capital in there for marketing and for talking about what you're doing and you know, figure out how to get into those conferences and things like that. Almost everything went to taxes and engineering.
[00:19:13] Speaker B: And so how did you as the business leader convince the other team members who were working part time, fractionally, who had other income streams, to say, I need your full attention on this, when it was still a little bit of tbd, if it would be a going concern?
[00:19:28] Speaker A: Yeah, what I did, what we do, even now, because contract work is cyclical and it has start and end dates, is when we want to bring someone on board. We will tell them pretty upfront, look, we have enough money to pay you for X amount of time, for two years, five years, whatever. We hope to win More work after that, but that's all I can guarantee at this point. Are you interested? For the people that came in at the founding level, there was equity involved as well, and that equity had a vest. So they are incentivized to make sure we get that extra funding so we can keep going and continue to vest. But that. That was it. We were just very honest and upfront about it, and people were very receptive to that, which was awesome. I think especially being here in Houston. A lot of the people here, because this is such a corporate city, are used to walking in the front door and being like, hey, I'm set for life now. Like, I can stay at this company for 30 years. So a kind of different. Having an offer that was a little bit different. I was like, I don't know how this is going to go, but it. It worked out pretty well. I think people appreciate just being honest with them, you know.
[00:20:36] Speaker B: Yeah. Did you get any pushback or did you have any conversations around for the. The CTO and the co founder when you were asking them to step away from their other income streams? What the timeline would look like on when you would eventually have people on payroll or how did. Or did have they just figured out a way to personally have enough worked out that they could step away from that? I mean, how did those conversations go? Because it's a lot to ask of someone.
[00:20:59] Speaker A: Yeah. I did not ask either of them to step away from the other commitments until I could put them on payroll. Yeah, yeah, yeah.
[00:21:07] Speaker B: And so that was that. You had the government contract, so they were still doing their other 9 to 5 or contracting work while working on that. Okay, that makes. Yes.
[00:21:16] Speaker A: It made it very interesting for my co founder to. She had to disclose everything. Of course. It was all.
It was all above board and like, pretty difficult to keep quiet here doing all of this very publicly. But yeah, there was a lot of PTO taken on her part to go to. Go to. We literally spent her birthday on an air force base in Wichita in the middle of January. Lots of things like that. Just juggling before we could make it happen. But yeah, we were, you know, we weren't fresh out of school. We all had mortgages and. And husbands and wives and responsibilities. So I couldn't. None of us were in a place where we were like, yeah, we can just, you know, throw everything up in the air and go all in on this company. It had to really make sense, which was a little bit different to how things were when we started the business, you know, before we had any of those things. But yeah, it, it was a little bit different to a traditional startup story.
[00:22:10] Speaker B: No, I love it. I think it's really thoughtful because I think there's so much, so many stories you hear of. Oh, we just all went in with no pay from day one and we figured it out. And I think it's. The reality is a lot of times that's it's not the right setup and it's, it's just not feasible. And I love how you were able to figure out how to balance the other practical realities of their needs and your own and still were able to get this going. And so how did you guys think about the, the time division and you know, when they have other things pulling other time and how did that come into maybe equity conversations or what did that look like in terms of. They were not all full time, but we're committed to this. And how do we think about the right way to split up? What is the value distribution given that?
[00:22:55] Speaker A: Yeah, it was, you know, when I started the company with Sophia, because it was just the two of us the beginning, we were all, we were both pretty on board with the idea that when we had, when we bought on a technical founder, we wanted them to have a significant stake in the business because we didn't like. And this was very, this is very common for Silicon Valley startups where like the CTO who is responsible for building all of the IP has like 5 or 10% ownership in the company and the other founders have way more. And that did not sit well with us because this is a technology company. So we knew when we did bring on a CTO that we wanted them to have a significant stake, like significant skin in the game.
So that was not really too much of a conversation because we were aligned on it from the beginning. And then as hours before everyone was full time, that was actually a very short period of time. Right, because like I said these, we, we were able to get that funding and go from the grant to the government work fairly quickly, but some of it was just hourly. Like we are able to pay you for this many hours and this is the work that we've committed to doing, like, you know, budget that in for Sophia. She is very good at what she does and was thankfully able to do all of the backlog management and, and, and building out the product roadmap and things like that just out of, outside of hours on her, like outside of the hours she had committed for her nine to five. And then, yeah, like I said the other thing which I asked her to do, and she thankfully did, was to sacrifice some of her PTO to go on business trips for the, for the company. But that was more towards the end where we kind of knew she was going to be transitioning out soon anyway. So it wasn't too big of a deal. But yeah, beautiful.
[00:24:47] Speaker B: I mean the story is so incredible with your background as a journalist and I, you know, you saw the problem firsthand and all of that. You have some of these other team members who are bringing more the technical expertise. What did your roles and responsibilities look like? What were sort of your sweet spots? What were you, where did you shine most in the business and what do you lean into and is that still today the same kind of role that it was in the early days?
[00:25:11] Speaker A: Yeah, the, it hasn't changed too much. It has been very nice as we bring on more people to not have to wear all of the hats. And sometimes it is a bit, a bit sad when we're not all in the, when not all of us are in all of the meetings where it's like, oh actually like the engineering team can just take this one. You don't need me in there. And I'm like, but I want to be. It's like, you know, this is how we built this thing. But no, so in the beginning I, I was doing a lot. I did to this day do the proposal writing and the, any kind of, you know, the visionary like forward looking strategy things like where do we need to be looking at next? Are there opportunities to, you know, go into this market or build something that will address this problem?
And I kind of pitch those to the team when I find a good one. But the, yeah, the proposal writing and then I cover. Sophia and I both cover the marketing and social media. So any of the kind of outward facing kind of communications and then I still do the pitching. Like we still pitch clients if we have a contract or a client. I'm usually the main interface to manage that. I also took a prime contract management course way back when and that one's paying dividends now too. To be able to rip apart a contract and make sure it's administered properly, that's my job. And then yeah, Sophia and I kind of split the back of house admin responsibilities, you know, making sure accounting's done and taxes are paid and registrations are up to date and all that stuff that I really would like to hand off soon.
[00:26:45] Speaker B: Yes.
[00:26:46] Speaker A: But yeah, it's pretty consistent from when we started to now those have kind of been our roles and we're able to keep doing them.
[00:26:54] Speaker B: Incredible. What's next for the company?
[00:26:56] Speaker A: What is next? So as a, what's called a dual use company, which means our products can be sold to the government but they can also be used commercially, we've obviously been focusing pretty hard on government the last couple of years and starting kind of last year we wanted to split the focus to bring bring back on some more commercial facing products. So we took what we built for military and then we're now looking at how we can apply it to the commercial sector. We have an app launching in a couple of weeks called Flight Deck which is for pilot training. If you're getting your private pilot's license or if you're going through training for your commercial pilot's license, you'll be able to use that. And we're really just looking at more opportunities to use the tech in the commercial sector. We've been doing really great project based, project based work for some pretty big companies, which is so cool. Like I never thought we would be, we, we would be doing that. But you know, that's work that does not scale but has opened so many doors for us. So I'm, I'm like, I'm thinking we're going to keep doing that. And you know, we didn't really get into M and A in this conversation but we did acquire one business along the way and we're looking to acquire more.
So we've been looking at, looking at and evaluating different companies along the way to help scale that way or grow that way. Yeah, so never a dull moment, that's for sure.
[00:28:22] Speaker B: I love it. You're attacking scale from so many different perspectives. I love that you mentioned that some of the contract work you're doing does not scale but it is worth the investment. And I think people sometimes are focused on just doing the things that you can 10x but the opportunities, the doors that open from some of these more bespoke projects I think is so valid. So I'm glad you highlighted that. And then what is the profile of the kind of company that you would consider engaging for M and A?
[00:28:48] Speaker A: You know, we work with a couple other buyers so sometimes we will. We're looking at acquiring someone together and then looking at acquiring independently for us. Independently. I don't want to speak for them because they're not, they're not here today. But we look for businesses that are doing around a million three hundred thousand to a million dollars in revenue and those companies are typically ones that are in an adjacent industry or complementary industries. So we're looking at a lot of aviation business. Aviation, aerospace or something that is more on the marketing and maybe educational technology side that we can bolt onto the business. The like, ideal kind of profile as well, that is some combination thereof is a more legacy company, like a company that's been around for like a 20 or 30 years and is doing really well but hasn't kind of kept up technologically. So a company that we could acquire and then inject a bunch of technology into to help it grow and scale and take it from there. And whether that bolts onto our business or not, like, that's not a requirement. Obviously it's nice if it does, but doesn't have to. So those are kind of our little deal box criteria.
[00:30:03] Speaker B: All right, we'll keep that in mind. What does victory look like to you today?
[00:30:06] Speaker A: Now, I saw a quote the other day that, you know, it's hard to put like a dollar value on something like, oh, I want to sell the business for X amount of money. I saw a quote that said, victory looks like being able to permanently delete my LinkedIn. And I think it's something like that. But I'd say on a smaller scale, like a shorter term scale, if I were to see our apps being used in the wild, like, you know, walking around and seeing someone who's like, oh, they're using something we built, I think that would just be so cool and definitely one of our little, like victory markers. And because we're not like a consumer brand, like we're not going to see someone like wearing our sneakers on the subway or like, you know, using our app on a plane per se. Maybe they will now. But yeah, something like that would be like a kind of intermediate little victory symbol.
[00:30:53] Speaker B: And if you were to give your younger self one piece of advice, what would it be?
[00:30:56] Speaker A: That there are no prescribed paths to success for anything. And your intuition and instincts are better than you give them credit for.
[00:31:10] Speaker B: So amazing. Absolutely.
I have thoroughly enjoyed our conversation. Thank you so much for joining, joining us and sharing all about your entrepreneurial journey. It's been fantastic.
[00:31:19] Speaker A: Yeah, thanks for having me.
