Phaedra Ellis-Lamkins Of Promise

    We Spoke to Phaedra Ellis-Lamkins Of Promise

    As a part of our series called ‘Five Things I Wish Someone Told Me Before I Became A CEO’ we had the pleasure of interviewing Phaedra Ellis-Lamkins.

    Phaedra Ellis-Lamkins is an American social justice advocate and businesswoman. Phaedra is the founder and CEO of Promise. Promise is a modern payment technology platform that provides alternative payment solutions for cities, counties, states and utility companies across the country and simplifies how people manage government payments, such as utilities, child support and parking tickets by offering customizable plans and providing digital payment options.

    Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?

    I grew up in a small town in California, in a community where a lot of people were struggling. My mom was a waitress at a place called Bill’s Place in San Francisco, and she eventually went back to school so she could get a union job. I’ll never forget the day she got that call — I went from free lunch to reduced lunch in an instant, and the act of standing in that new lunch line released a sense of shame I didn’t know I carried. I did know that I wanted to work hard to ensure that members of my community were treated with the respect and dignity that they deserved.

    I joined the labor movement as an intern, where I was struck by the power of working people controlling their own destiny. I stayed for 13 years, and it shaped how I think about the world and my role within it. I then ran an environmental justice non-profit called Green for All, where it was so clear to me that the burden of climate change was destined to fall on poor black and brown people. After Green for All, I worked with Prince, where I supported him in reclaiming his masters and admired his unwavering focus on social justice and the liberation of black people. While these experiences might seem unrelated, there was a constant throughline: everywhere I looked I saw technology negatively impact working people and communities of color, and I wanted to understand it and figure out how to use tech as a tool for positive social change. So I went to a tech company, where I learned an incredible amount about systems, scale and growth.

    There aren’t a lot of models of profitable, scalable companies building products for poor people without being exploitative or predatory. I founded Promise to change that. Promise helps working people tackle their government debt and access aid. Our products include interest-free payment plans, distribution of public-relief dollars direct to individuals, and sophisticated marketing and outreach tools that meet people where they are to help them access assistance. We build systems that assume that someone doesn’t want their water shut off. We assume they don’t want to go to jail and if they miss a payment, we assume it’s because they don’t have the money, not because they don’t want to pay. We leverage the power of technology and innovation to help them succeed, rather than punish them for a lack of financial resources. In many ways, my seemingly unique career path prepared me for exactly this — making technology work for working people.

    Can you share the most interesting story that happened to you since you began leading your company?

    Promise originally started as a bail reform platform focused on decreasing the number of people in jails. But as we built the product and started to become successful, we realized that our incentives were not aligned with many of the public agencies we were trying to work with. I literally sat in a meeting — in a state that will remain unnamed — while an agency official bragged about keeping someone incarcerated pre-trial for years due to a marijuana arrest. Structurally, the criminal justice system wanted to keep people locked up. I believed that making parts of that system more efficient would ultimately harm our folks. There just wasn’t a venture scale business opportunity unless we became exploiters and we refused to do that.

    So we went back to our investors — which is hard when you’re making money — and said, this is not the path. I was petrified as a black woman who had raised significant capital that I was running the risk of setting others back. I thought people would say that black women can’t focus on business or we’re too emotional. Fortunately for us, we have amazing investors. They reiterated their faith in us and told us we had their continued support.

    We decided to look at how and why people end up in jail and we found that many were incarcerated for lack of resources. Failure to pay government-related debt meant losing a driver’s license, having your water shut off or, in some states, ending up in jail. This was perpetuating economic insecurity for working people that was often impossible to recover from.

    So we pivoted to government payments to address this problem. We went to Oakland and literally started paying off peoples’ parking tickets who agreed to pay us back. We took a total leap of faith — we didn’t even have addresses to track them down. It turns out when you give people grace, they pay — we had more than 90% repayment. We realized we were onto something and Promise was reborn.

    Making payments easy means people pay. Under our new model, everyone wins: repayment rates on Promise plans typically run around 93%, compared to less than 25% for most government payment plans (where they even exist). Speaking to customers on our plans is incredible because it underscores that our technology has the potential to make the lives of people who are struggling easier.

    Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

    When we first started Promise, my co-founder Diana and I applied for a program called Y Combinator (YC). We arrived for the interview in my minivan — Diana came in Birkenstocks and flower jeans — and we appeared to be at least twice the age of most other participants. We sat in the van laughing (and even debated leaving), but we decided to stick it out. We felt even more out-of-place when we got inside. We were both moms, had gone to state schools and didn’t yet have a product. Most of our fellow applicants were young, from Ivy League schools and were talking to us about (literally) freezing brains. It was pretty funny. We left being like, there’s no way we’re getting accepted. Luckily, we were wrong. YC was our first investor and has continued to invest in us over the years. The lesson is to always believe in yourself, especially when you don’t look like everyone else in the room. Don’t block your magic or your blessings.

    None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

    I would have to say the greatest source of strength for me comes from my relationship with God. The belief that our purpose is guided by a force that is filled with love has provided the most consistency for me. I also have a strong circle of people who have been there for me through all the ups and down and I am grateful for that incredible support.

    As it relates specifically to Promise, there are two people who stand out: Mitch Kapor and Michael Seibel. Mitch consistently supported the vision of building a company that can do good. He often reminds me that what we are building is not easy but extremely valuable. He provides resources to the company and to me personally. Mitch has never wavered in his unconditional support and has been to me what any entrepreneur would be lucky to have. Michael has believed in me from the beginning. Of course, he has helped so many entrepreneurs, through Y Combinator and just being a brilliant, generous soul. It has given him a lot of wisdom and a deep understanding of the process of reaching for excellence. He is someone who always helps me put things in perspective and stay focused on the mission.

    As you know, the United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This may be obvious to you, but it will be helpful to spell this out. Can you articulate to our readers a few reasons why it is so important for a business or organization to have a diverse executive team?

    You have to build a company that looks like the community you want to serve. If more black and brown people aren’t creating and owning technology platforms, we won’t be able to use technology to help our communities. I have seen so many tech companies built to make dog walking or valet parking more efficient. Sure, those are big problems for some people, but I am more concerned with helping families keep their water on and preventing them from losing their driver’s license or ending up in jail because they are poor. We are addressing the make-or-break issues that effect working people everyday, not making things more convenient for people whose lives already work. Ensuring the team developing that technology looks like and understands the lived experience of their customers is really critical — it’s the only way to create lasting solutions for society’s very real problems.

    As a business leader, can you please share a few steps we must take to truly create an inclusive, representative, and equitable society? Kindly share a story or example for each.

    Venture capital is an industry of mostly white men evaluating deals through the lens of patterns they recognize. That’s certainly not a great model for creating a more equitable society. We did a lot of work at Promise to find investors who were creating space and place for the type of change we want to make and for founders who look like us. But that also meant we had to decide that some investors weren’t for us. Being extremely thoughtful upfront about who we wanted to work with and who really wanted to support us was critical.

    One of the toughest things about building a company focused on making society more inclusive and representative is that there are very few models. People constantly tell me that Ben & Jerry’s or Chobani are the companies to emulate, simply because they’ve managed to not harm people. I’m sorry — I don’t care how delicious your ice cream or yogurt is, that cannot be the model for social change. The reality is, building a profitable, scalable company that focuses on poor people but is non-predatory means doing things differently. We want to work with government because we believe it’s an important institution for the people that we grew up with and the people we want to help.

    Ok, thank you for that. Let’s now jump to the primary focus of our interview. Most of our readers — in fact, most people — think they have a pretty good idea of what a CEO or executive does. But in just a few words can you explain what an executive does that is different from the responsibilities of the other leaders?

    CEOs are responsible for building and leading a team that is capable of executing against the vision and achieving success. You have to believe that anything is possible and you can’t be afraid to experiment or iterate. I wish I had understood that sooner, or that I had had the luxury of failure. I feel grateful to now have the space to fail.

    What are the “myths” that you would like to dispel about being a CEO or executive? Can you explain what you mean?

    The biggest myth is that it’s glamorous. I’ve had several CEO positions over my career and I can say that none were the romantic job that many people imagine. At a startup, being CEO often includes answering phone calls when customer service needs help, scheduling interviews, prepping for sales meetings or any number of administrative tasks. I have the privilege of leading something that is changing the world and creating alternatives to our current economic structure which makes my work incredibly important, but it’s certainly not glamorous.

    What is the most striking difference between your actual job and how you thought the job would be?

    I don’t think I realized how much pressure I would put on myself. I started Promise because I wanted to build something for my community — for working people and for black women. I don’t think I realized how much pressure would come from wanting to succeed for that community. The technology industry was built for dudes who grew up with so much privilege they believe failure is success (which probably explains why most venture capital deals fail!). As a black woman who grew up in poverty, I did not have that luxury. And the stats reflect that: nationwide, black women still get less than half a percent of VC dollars annually. So I also feel a lot of pressure to succeed for black women and to make sure they can access funding and pursue their dreams with the flexibility to fail and to iterate.

    Do you think everyone is cut out to be an executive? In your opinion, which specific traits increase the likelihood that a person will be a successful executive and what type of person should avoid aspiring to be an executive? Can you explain what you mean?

    It depends on what that person is the CEO of. I think you could be the CEO of your family: I know some moms who run their families better than any company I’ve ever seen. I think every person has to decide for themselves what they feel passionate about and committed to. You will do your best work when you believe in the product and your ability to execute.

    What advice would you give to other business leaders to help create a fantastic work culture? Can you share a story or an example?

    The best work cultures I’ve seen are those with highly-skilled, mission-driven people that are empowered to do their job. I believe strongly in creating opportunities for people to lead — bring them in, tell them they’re in charge, wish them luck and send them off! Assume that everyone has the capacity to excel, which is especially important for women and people of color, who don’t get those opportunities as often as they should. Simply put: hire well and trust your team to do the work. I wish I could say this came naturally for me, but it was more of an exercise in trial and error. It takes time to learn to coach instead of micromanage.

    How have you used your success to make the world a better place?

    I have always measured success by whether people’s lives are getting better. When we started working in payments, it was clear that payment processors weren’t thinking about working people. If you’re rich and you want to buy a Peleton on a zero-interest payment plan, all you have to do is check a box when you check out. If you’re poor and you want to pay your water bill in installments, you have to take time off work, drive to a government office, pay for parking, prove that you’re poor, show your taxes and put 50% down — all so you can pay them back! Furthermore,if you miss a payment, you’re in trouble. In some states, you’re incarcerated. When a person of means misses one of those Peleton payments, they’re like, Save your sweat for the workout! Take all the time you need. Something is structurally wrong with that. The people making these products are not acting on behalf of those who need support, and I will celebrate success when we fundamentally change that.

    Fantastic. Here is the primary question of our interview. What are your “5 Things I Wish Someone Told Me Before I Started” and why? (Please share a story or example for each.)

    • Be yourself — the world needs all types of leaders. I started my career as a heavy, poor black woman who went to community college and state school. I often tried to model other peoples’ behavior because I hadn’t been in the business world, and I didn’t grow up around money. When I started Promise, people would tell me to use words like “machine learning” and “AI” so that people in tech thought I knew what I was talking about. And I was like, I don’t know what those things do, why would I talk about them? I’m busy building a company, so if someone wants to talk about AI, they can call my engineering team. I realized that the problems I want to solve haven’t been addressed because there aren’t enough CEOs who look and think like me. I became my most successful when I embraced my own strengths and stopped trying to be like everyone else.
    • Fire quickly. I really like the people I hire, but that doesn’t always mean they’ve landed in the right job. The longer you wait to face that reality, the worse it will be. The best CEO advice I ever got was that being a CEO means making the best decisions for the institution. That has really helped me move past feeling sorry for an individual versus doing what’s best for the company.
    • Sometimes, sh*t is just hard, and that’s okay. Instagram and Facebook have created a world where we only hear about people’s successes. Making a pivot at our company was really hard and scary, because it felt like everyone around me was killing it. It turns out that pivoting was the best decision for me personally and the only one that was true to my values. I realized that sometimes the sh*ttiest moments lead to the greatest breakthroughs, so you live through it and come out the other side even stronger.
    • Failure is an option! A lot of very privileged people grow up with enough confidence and wealth to believe that failure is success, so they keep going until they make it big. Failure wasn’t an option for me as I entered my career. My mom wasn’t mailing me checks so that I could pursue my next big idea — I was sending money home so that she could make ends meet. But that intense fear of failure brings about an inability to separate out the small stuff. Failing and iterating can be really meaningful and the ability to not get discouraged by the little critiques we hear all day long as women and people of color allows you to constantly evolve and embrace the chance to get better.
    • The best businesses are run by people who are passionate about what they do and who they serve. I am driven by the possibility of bringing dignity and grace to people who look like me and grew up like me. It helps push me through the tough moments and makes me excited to go to work everyday. You cannot lose sight of how important that is — if you don’t believe in the mission and the product, you will not do your best work.

    You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.

    Economic liberation for working people. The process of accessing government programs or paying off government debt is totally punitive in nature and it’s so burdensome that it effectively serves as a regressive tax. I want government to be flexible, rather than relying on legacy systems designed to hold poor people and people of color back. My vision is a world where people say, Why would I pay the government interest? Promise doesn’t charge me interest. I just need a little more time to pay. That should be the rule, not the exception.

    One simple way to do that, which is something we’ve heavily advocated for at Promise, is something called self attestation. When someone applies for a program or a benefit, they should qualify based on their word and then the government retains the ability to audit. It doesn’t make sense that people have to do all this paperwork and go through all of these hoops just to pay government back or access the programs they’re legally entitled to.

    At Promise, folks in our system who miss a payment usually make it up within two weeks. So rather than charging them a late fee, we let them request a two-week extension. You don’t need to talk to anyone, you don’t need to prove anything and our payment rates reflect that. More flexibility and a more accessible product is not just the more dignified way to treat people, it also results in more payments.

    Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

    Working for Prince was tough, because my job was to play bad cop. I wanted people to like me and Prince felt that it only really mattered that people liked him. When I told him that really upset me, he responded with something I will never forget: “If you want to play Madison Square Garden, you better get used to booing. If you don’t like booing, then you should play in your backyard.” Essentially, you can’t please everyone: if you want greatness, you have to get used to the haters. That put everything into perspective for me and it was a really helpful life lesson.

    We are very blessed that some very prominent names in Business, Venture Capital funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them.

    Dwayne “The Rock” Johnson would be my pick. I learned working in music that people who are disciplined win. His discipline and commitment to excellence constantly inspires me. Even more importantly, he achieves in a way that is kind. A lot of people in power are mean and rough and try to make you feel less-than. He represents a different way of being and I am working on learning to show up in that same way.