Jake Aaron Villarreal: I'm Jake Aaron Villarreal, born and raised in Silicon Valley, and here to take you behind the scenes to share what it's like to be a startup founder, the journey they're on, the problems they face, the products they build in an effort to transform industries. I'm excited to have with us today Mike Pappas, co-founder and CEO of Modulate. Mike, welcome to the show.
Mike Pappas: Thanks so much for having me, Jake.
Jake Aaron Villarreal: A little bit more about Mike. He is not only the CEO which is based in Boston but he specializes in AI-driven voice moderation for online gaming companies. He's an MIT graduate in physics and applied mathematics and he leads and focuses on fostering safer and more inclusive digital communities. He's an entrepreneur with a strong focus on systems thinking and building software to revolutionize voice. Mike, uh, I guess before we jump in here, where are you, uh, joining us from today?
Mike Pappas: I'm calling in from my house, actually, in the greater Boston area.
Jake Aaron Villarreal: Hundreds of AI startups are launching every month, battling to build their founding teams. As a leader, your job is to get results. When it comes to hiring, that's where it gets tough. So, you go out and you try a recruitment firm, but they don't understand your story. They're off target, and when they send you candidates, it's a waste of time. We believe you should never have your time wasted. That's why we launched Match Relevant, because your story is more than just an open role. It's your founders' journey, the problem you're solving, the product you're building, and why it matters. When we work with companies, we make sure we understand your whole story. So, when we go out and do a search, we're on target, it's worth their time, they're interested, and more importantly, it's worth yours. And when it comes to hiring engineers, we work to make sure we get it right by deploying a team of seasoned CTOs that have built some of Silicon Valley's best companies. They can collaborate with you in the technical interviewing process. They can be a sounding board, or they can run it for you. When it comes to building teams, there's no time to waste. Let's make it count. If you have a role that needs to be filled, book a time with a hiring guide at matchrelevant.com and learn how we do it.
Very cool. Well, house-to-house communication is the new norm in our world. [laughter]
Mike Pappas: So, so it would seem. We're we're actually a pretty big believer in in-office, but we found a balance at Modulate where Monday, Tuesday, Thursday, we're all in the office together. Wednesday, Friday, we make it a little more flexible and folks mostly end up working from home on those days to get a little bit of time back out of their commutes.
Jake Aaron Villarreal: Yeah, no doubt. Helps so much with we, we call it energy leaks when you go through your day and you're on the road and you just, you know, takes saps you a little bit from the energy that you could be contributing to your company. So, we're a big believer in that too, I guess. Uh before we jump in here about your company, tell us a little bit about you, your kind of your DNA, your entrepreneurial mindset. How did you get into uh becoming an entrepreneur and quite frankly getting into technology?
[The Entrepreneurial Journey: From MIT to Startup Founder]
Mike Pappas: Yeah, I think every entrepreneur has a little bit of a chip on their shoulder, something that they've seen out there in the world that's sort of driving and motivating them to say, "I could do better. There's something that I have that I could offer here." [snorts] For me that probably first sort of manifests from the fact that I have a pretty technical background. You mentioned I was an undergraduate at MIT. I studied math and physics there. Did a fair amount of computer science as well. So I always saw myself as that tech nerd. Had no idea how things worked in the business side of the world and you know probably there's just a lot of complicated stuff going on that I don't understand.
And as I started to do more internships in enterprise and eventually graduated and did some work in the enterprise world, I found that I was both right. And on the one hand, you know, I was certainly learning a lot about, you know, nice ideas meet the real world and how things get complicated and why you can't just, you know, apply a programmer's mentality to designing a company. But on the other hand, I was looking more and feeling like there were still consistent gaps in the way that people were building companies and trying to get groups organizing towards success. So for me, the the driving force in founding a company wasn't actually anything specific about Modulate, though I am very passionate about our mission. It was "I want to build a company for myself to test my own theories about how to make an organization of people that work together. And I want to kind of prove that's something that we can do better than has been done out there and really, you know, put those theories to the test."
Jake Aaron Villarreal: That's really cool. Yeah. I I I like that idea of a chip on your shoulder. I think we all kind of have that as entrepreneurs of what is that chip and where did it come from? Sometimes it's your upbringing where people just don't believe you can do it or maybe you know it's an idea that you haven't seen in the market that you want to be able to contribute and solve and and you just kind of take your chances and and go for it. Is this your first startup or have you built other startups before?
Mike Pappas: It's my first actual startup. And I say actual because my co-founder, my co-founder and I who met at MIT, we knew we wanted to build a company. And so we sort of play tested a bunch of different startup ideas to sort of build muscle memory around what is it like to go do market research? What is it like to try to hack together an app and then bring it to market? What is it right to try like to try to do marketing? None of those were any good. None of them went anywhere. I'll never have heard of any of them. None of them are still active. But technically at the time, we saw those as individual startup ideas, too.
Jake Aaron Villarreal: Yeah. Well, that's great. So, your first how much money have you raised for your first startup so far?
Mike Pappas: So, Modulate's raised uh between 35 and 40 million for a couple rounds, but the largest was our Series A back in 2022, which was a 30 million fund raise.
[Raising Capital: Lessons from the Startup World]
Jake Aaron Villarreal: Great. We'll talk about Modulate, but for those that are thinking about starting their first startup, you know, raising capital is part of the process. When you went through MIT, how much of it was based around just the the physics and the math and the entrepreneurial mindset of "let's hack and create and code and look at opportunities we can build products in" versus the business side of things of "how do I actually set up a company and how do I go out and think about pitching and presenting and raising capital"? How much of that was part of your education too?
Mike Pappas: So I think through MIT Sloan it could have been my education, that business side, but it wasn't an area that I was paying attention to at the time. So I didn't get any of those skills from undergrad. I think the only thing I really learned about entrepreneurship from MIT didn't come from classes, but it came from the fact that every student at MIT had a couple of cool side projects that they were working on. And so many of them were things that I would have considered impossible until I heard someone excitedly going off about it. And so just the energy of that and the belief in yourself of so many of these students just saying like "I I want this thing to exist so I'm going to go ahead and make it." That infectious energy was something that I definitely got from MIT.
But when I started to try to found Modulate with Carter, neither of us had any idea what a pitch deck was. My my former boss at my previous job actually got me in touch with someone very high up at Sequoia. I told him that I was leaving to found a company and he was like, "I want to help you. I'm going to get you some conversations with VCs. Here's this like senior partner at Sequoia. Why don't you get on a call with him?" And I got on a call and he's like, "So tell me about your business. What's it called?" And I'm like, "Oh, we don't have a name yet." Like, "Do you have a pitch deck?" "Oh, we don't have a pitch deck." "What's your business plan?" "What's a business plan?" I had no idea what I was. And he was actually quite nice in taking 30 minutes of his time to just say like, "All right, next one of these calls, here's what you need to have answers to." I really just threw myself into the fire and had to learn it. There's a lot of learnings that we got. We iterated very quickly. In in practice, I believe in that kind of learning. I believe there's no no better way to really come to understand something than to just immerse yourself in it. Try, fail, feel the pain of the failure, and build that into yourself as part of how you do better next time.
Jake Aaron Villarreal: Yeah, I think that's great. I think it takes courage, too. Some people like to have things all structured and set and ready to go. They're prepared, but life isn't like that, and startups aren't like that. You have to continue to try and experiment, learn, grow, and keep going. So, really cool. Talk about Modulate as you built the I the company and you started with a vision. What was the vision you started with? What was the problem you saw that you wanted to try and fix?
Mike Pappas: Yeah. So, I I see how you're asking that question. You know, "what problem did you want to fix?" Because that's the correct advice for building a company. Start with a problem. We didn't do that at all. Told you we didn't know what we were doing. We totally started with a technology and then went to find who cared about this technology. Today, we do primarily sort of analyzing voice conversations for different types of insights. But at the time the original technology was actually a voice changing technology back in 2015 before deep fakes or anything like that. We had built some pretty cool stuff for real-time voice transformation and say we entirely my co-founder Carter I got to take some credit for it. And we sort of sat down and said "hey, who do we think would care about changing voices?" And we went and talked to call centers, we talked to podcasts, we talked to audiobooks, we talked to marketing firms, we talked in the public sector, and of course we talked to games.
[The Vision Behind Modulate: Addressing Online Safety]
And we kind of expected games to say something like, "Oh yeah, give me the Morgan Freeman voice skin, I'll sell it for $2 a pop and we'll all be rich." And what instead we heard was this very consistent story about "look, games have become a social hangout spot. We want people to feel like they can come back here again and build these really deep relationships. But in order for that to happen, you have to be safe participating. And [clears throat] people do not feel safe using things like voice chat. They feel like they so often get harassed and terrorized. Do you think you could use your tech to for instance make a woman afraid of, you know, sexist harassment, sound like a man so that she can feel safe participating?" And we kind of looked at that and said, "Look, I don't like the idea of solve sexism by erasing women." That that's not a good solution to that problem. "But I am really interested in could we actually help solve that fundamental problem of people being safe online." So, we kind of stumbled into that. But the more we looked at it, the more we started to feel like this is something we would happily give a decade of our lives to. So that kind of coalesced into the mission of Modulate being using this kind of AI technology to uplevel the interactions people can have with each other and just enable better and richer interactions between human beings.
Jake Aaron Villarreal: Wow, that's really cool. What are some of the gaming companies or studios that we would know that your your technology is working in? If you can share that.
Mike Pappas: So, most famously, we support Call of Duty in their voice moderation. Work with a number of other studios including some of Riot Games titles, Rec Room in the VR space, Among Us VR. We've got a pretty wide portfolio at this point. But yeah, we're very excited about all of our partners. But I name Call of Duty as sort of the most famous. One, because it's a huge brand, but two, they've been very generous in working with us to really dig into the impact of what our technology has done for their community. And what we've found is really profound stats that demonstrate that the players are actually having a better time. They're sticking around for longer. More of them are continuing to play month after month now that we have this technology out there. That's been really validating that even in a game like Call of Duty that is a rated M game, no one cares if you're just saying the f-word, but there there is much worse toxicity out there. And when we can get rid of that really horrible stuff, it really does make a profound difference.
[Partnerships and Impact: Modulate's Role in Gaming]
Jake Aaron Villarreal: Yeah, it's interesting. I mean, gaming is such a big part of the life of a kid these days. It's amazing. I have two little boys and they're on YouTube watching all sorts of games, probably, you know, learning a lot. But when you talk about the toxicity within the gaming community, is it more about just the players talking and chastising others and making them feel like, you know, they want to get out of the game and maybe come back to a different game at a different time? And so for the gaming companies, they're they don't want to lose that disconnection. And so your technology is an option for a player to choose a different voice or is it the gaming platform that provide the voice skins if you will and kind of mandates that they use? What's just kind of walk me through this as not a gamer personally?
Mike Pappas: Yeah. So each game has its own code of conduct. And while unfortunately many codes of conduct look more like a legal contract than something that people know how to read, the intent behind the codes of conduct is to say "this is what kind of space this is." In the physical world, think about, you know, walking into a sports bar versus walking into a kindergarten versus walking into a library. You're expected to behave yourself differently in those different spaces. It's not that one is better. It's just that there's different expectations. Games have the same thing. In a game like, you know, Rec Room that is known to be more family-friendly, that is trying to cater to a wide audience, simply using too much profanity or too many vulgar terms could be really problematic to the kind of environment they want to offer, just as you shouldn't be shouting the f-word at a children's playground. In contrast, Call of Duty is maybe more akin to the sports bar where there's room for some rowdiness, but there is a point where you stop being, you know, having a good time rowdy and you start throwing a punch at the other guy and that's when the bouncer comes in and says, "Hey, you've had enough." Right? So, that that's a lot of variance game to game.
Generally, we sort of break down the different types of toxicity usually into three categories. There's just the general kind of profanity and vulgarity that again in some spaces is totally acceptable and we try to be really careful to pre preserve that in spaces that enjoy having a little bit of that trash talk. But for the kid-friendly spaces, you need to get rid of it. The next level up are people who are intentionally trying to ruin someone's day. Whether that's because they just lost the match and they're feeling vindictive or if they're just sort of seeing how far they can push it. This is usually no more than 1 to 5% of your users. It's not the majority of gamers, but there's always a small fraction of people that are just enjoying pushing the limits. And you need to be paying close attention to them because they can be really sort of targeted awful and almost make a game out of seeing how much they can terrorize someone, right?
[Understanding Gaming Toxicity and Community Standards]
And then the last cohort are the extremely rare, and I don't want to overblow this, but very rarely you have people that say, "Hey, games are a great way to build a trust relationship with someone. Well, I'm going to exploit that trust relationship for negative reasons. Maybe that's fraud. Maybe that's someone trying to, you know, groom or cultivate a child or radicalize a disaffected teen." Again, that stuff is rare. But the very strength of games that they create such rich bonds between people can be co-opted in this way. It's not because games are evil. It's certainly not because games radicalize people. It's because games bring people together. And unfortunately bad actors can use that to be brought together with people too. We help the platforms identify those sort of really terrible actors and get them the heck away.
Jake Aaron Villarreal: Got it. So, as a gamer and knowing that the rules and the conduct for a specific game and if you're going outside those boundaries, will your technology help the platform identify that and then they'll send an alert or a message to that gamer to say, "Hey, we've seen this activity from you. This is your first warning or whatever it happens to be and then you're kicked off kind of deal."
Mike Pappas: That's right. So, what what we do is we identify behavior that's violative of the code of conduct. We score it saying how bad of a violation is it and how confident are we about it and then we send that all to the platform. We never make decisions about what to do with that user. That's always in the platform's hands. Most platforms will say for the stuff that's really severe and really confident, we're just going to automatically mute the person live because that can happen within, you know, 20 30 seconds. And so if I'm bullying you and then suddenly I get muted and you get a notification from the platform saying "we're so sorry you had that experience. We've muted Mike for 30 days." Whatever it is, that can actually build a lot of trust with you. For the stuff that's less certain where you know ToxMod is flagging it but we're not 100% sure that we've got it right, that will typically be flagged to actual moderators on the platform side who will review it more closely and decide what exact action they want to take.
Jake Aaron Villarreal: That's really cool because you know kids oftentimes go in the room shut the door you might not know what they're logging into what game they're playing and are they in harm's way but knowing that there's a third party or at least a system that's able to kind of track that down and help really provide safety for users I think is something that is much needed. Um why is this space important to you?
Mike Pappas: You know, it it goes back, I think, to to the chip on the shoulder, right? Like I mentioned my my original sort of chip on the shoulder was, "hey, all these organizations aren't, you know, getting people co collaborating together," right? But if you squint at that a little, it kind of just looks like we're not building communities correctly. I think that really is something that has been a big passion of mine for a while. You know, the internet is this incredibly magical place. We have access to 7 8 billion other people. All these incredible ideas and we mostly use it to polarize against each other and shout at each other and spam each other and do all of these terrible... and that that just feels on a very fundamental level broken.
[Technology's Role in Ensuring Player Safety]
Um, so I think for me like I the reason I got excited when we started hearing about this from the games, I'm very thankful that well of course I've dealt with my own share of bullying and different things like I I've mostly been privileged to not have that really kind of terrible experience myself. I know many people on my team are directly motivated by that personal experience. But for me, it's really just looking at a systems level and saying like what do I want for the world? What do I want for my kids? What should things be? They could be better than this. If I have the ability, then I want to really, you know, do everything I can to make them better than this.
Jake Aaron Villarreal: Yeah. Well, that's great. And, you know, it's interesting because you look at entertainment and you see the movie industry and you see the gaming industry and gaming has just skyrocketed in the last 10, 15 years. So the growth is there, the interactions there, and the impact of being online and an iPad or on a console more than you probably should as a kid. I mean, we're just kind of seeing these trends. You just hope that they're getting more good out of it than bad. And you know, even as young kids, I mean, I've got seven and eight year olds and I hear them, you know, and it's, you know, not necessarily something they're doing on purpose to make the other one sad or mad, but I could see how easy it is to bring out the emotions in people on a game. If you're competing, if you're collaborating, or just in general, if there's a bad actor, it's real easy to impact somebody and their day kind of changes, which is weird. I mean, you could see the impact.
Mike Pappas: It's absolutely true. But I'll also say, you know, we all recently went through the pandemic, right? We all had to endure not being able to see our friends, not... and I I think everyone during the pandemic got so incredibly sick of Zoom. And yet what you did see is people going back to games again and again because it was something more than Zoom. It was a joint activity. It was a way to really deepen your bonds with each other. And not only that, but it had real sort of mental health benefits for a lot of users. The Trevor Project did a great study on LGBTQ teens during the pandemic. And unfortunately, they found a lot of these teens were quarantined with families that didn't respect their identity. And that was obviously a really difficult time for a lot of these teenagers.
[The Importance of Building Better Online Communities]
And what they found, they were looking at, you know, what kinds of resources helped teens endure that really difficult experience better. And far and away the best answer was engagement in a massively multiplayer online game because MMOs allow you to craft and design your avatar to express yourself, your identity in the way that you want to. And so that provided an outlet for so many teenagers that did not receive the respect that they deserve from their family to be able to go online and say like, "Hey, I I can be seen as a person. and I can be treated as me." And that was incredibly important for them. So, you're absolutely right. You know, the energy of games, the competitiveness of it, it can sometimes bring out ugliness, but it can also bring out really profound warmth. And I think that's the double-sidedness of games that we cannot lose the warmth. We cannot lose the benefits by being too quick to try and put a stop to the risks. We need to come in with a more surgical approach. And that's really what Modulate is trying to do.
Jake Aaron Villarreal: Really cool. You talked about gaming. You mentioned call centers and kind of looked at that as an opportunity early on but decided to to go with gaming. What other opportunities do you see for Modulate as you look at the market?
Mike Pappas: Yeah. So what what we're really focused on again is where do people interact with each other in ways that often go wrong whether because of heightened emotions or you're not understanding each other. Well, GA games can involve heightened emotions. You know what else involves heightened emotions? Yeah, contact centers. Most people calling a contact center are not happy about it. So, if we can help recognize things like, "hey, this person's been talking to a bot for 30 seconds, but they're already incredibly frustrated. We need to get a human in here." Or "here are the general reasons people have been calling your call center. And it all comes back to your product design is confusing and if you change these three things, they won't need to call anymore." There's a lot of applications like that.
Anti-fraud as well. One of the areas that we're really excited about is actually in the gig economy where you know you'd be... you may or may not be surprised. You'd certainly be disappointed in the world to find out how many people when their pizza is 5 minutes late will call the driver and start threatening to hunt them down or do all kinds of horrible and graphic things. And if you are, you know, a delivery company that... you get a call from your driver saying, "I no longer feel safe making this delivery." Well, now either you're going to fail to deliver to your customer or you're going to put your driver in a potentially unsafe situation. So, it's really important to the platform to know what was said so that they can make an informed decision about is this a driver just trying to get out of a long drive or something like that or is this a serious threat that we need to respect? So that's an area that no one else has really been serving because it's so decentralized. You have every gig worker on their own phone. You have customers calling from their own phones. But because Modulate is really designed for these natural person-to-person conversations instead of something really centralized like a more traditional call center, we've been able to support these kind of gig applications, whether on the safety side or the anti-fraud side very swiftly with very minimal changes to our core product line.
Jake Aaron Villarreal: Wow, that's amazing. Uh it seems like there's a lot of applications that this could be applied to. Are there any others that I'm not asking about or that come to mind?
Mike Pappas: I I mean there's zillions, but it comes down to prioritization, right? Which is the entrepreneur's sort of bane and boon. So I could give you a long list. We've got an internal list of about 50 or 60. But from a practical standpoint, we we need to focus on a couple at a time. And so for us right now, we really are focused on these couple of applications. And I think the only other big one that we're really thinking about today is sort of AI and brand safety. A lot of brands are starting to move to saying, "Hey, let's use an AI chatbot to talk to customers in various different situations." Well, AI chatbots have a lot of issues. Sometimes they hallucinate. Sometimes they just go off the rails. How can you be confident that your AI chatbot is actually representing your brand and your values correctly? That's another area where the tools that we've already built allow us to just slot into that very very seamlessly. So we are working with a couple of sort of AI applications where instead of a human to human conversation, it's human to AI and we can make sure that the AI sort of stays on track and continues engaging in a constructive way with the you know other individual on the other end of the line.
Jake Aaron Villarreal: Yeah, good to know that. What's your view on AI? I mean it's become much more of a household brand name if you will. OpenAI and ChatGPT and you know it seems to be taken every industry by storm. What's your thoughts on the amount of technology that's coming out, the pace that's coming out and where do you fit in?
Mike Pappas: Yeah, I mean first off I mentioned I'm a math physics guy so I like to be precise and the term AI is so far from precise at this point. There's so many different things it could mean. At bare minimum, I think it's really important to differentiate between generative AI and what I call sort of analytic AI or some might call like classifications or something like that. If you're doing generative AI, there's room for lots of things like hallucinations. There's a lot of unpredictability. If you're running classifiers, you have much more sort of discrete kinds of outputs that you can generate and test. They of course have their own problems. Both of them are conventionally black boxes to some degree. It's hard to kind of explain what's going on. So, I won't go into my whole lecture on this. You can tell that I've got a lot of thoughts, but I think high level I am bullish on AI in general. There's just too much cool stuff happening for it to not revolutionize a lot of the world.
I don't think the OpenAI model of "let's build one giant incredibly expensive general AI to emulate humans" is the right approach because in all honesty humans aren't so great at a lot of the stuff that we do, right? We have all kinds of both sort of cognitive and mechanical errors. Building something to imitate the way humans behave is rarely the right answer. You know, we wanted something to be able to do math for us. So, we didn't try to build something to do arithmetic the way people did. We built a calculator. And the calculator is way better than hiring even the smartest person in the world to try and do math for you, right? So, I think we're going to see a lot more of a gear shift soon towards more specialized AIs. And those general AIs will be... I don't just want to say like a novelty or a parlor trick. They're going to inspire and in some cases enable a lot of those narrow applications. But the final use case will not be my AI companion who is just like a person in every way. The final use case will be my AI weatherman that's really good at explaining the weather and my AI mathematician that's really good at doing precise math and you know balancing my checkbook or whatever and much more narrow specific AI tools.
Jake Aaron Villarreal: Yeah, there's a lot of different technologies that are building out there. So, I know there'll be a shakeout and a lot of acquisitions and a lot won't make it, but I like where it's headed and I think that there's going to be some really good value that comes out of it in a lot of different areas. As you look at your company, what's the biggest challenge you see as you head into 2025?
Mike Pappas: I sort of alluded to it before, sort of prioritization and bandwidth, which is maybe a bit of a copout answer because every startup has that challenge, but that doesn't make it any less true for us. We have so many things that we can pursue. Even in games, we're doing content moderation, but what if we could also find you your most positive players that you could reward and encourage to engage with your community in that really positive way? What if we could recognize when your players are really frustrated at a new update you just pushed out because the controls changed and they're not working properly anymore, right? There's so much we could do even just within games. We have all these other applications. The upside for Modulate is that our AI doesn't need to be retrained. We can deploy to these new applications very very quickly. Um, but I just described sort of our narrow AI vision. We do want to make specific product layers on top of this. So if you are expecting a content moderator, I want to give you a content moderation tool. If you're expecting a call center sort of summary, then I want to give you a like call summary tool. And that tool has to be built and we need people on the go to market side to bring those to each individual application. So right now I think the biggest challenge is just how do we grow as a company to be able to pursue multiple of these things without everyone needing to keep track of five different markets in a way that makes it too difficult for us all to actually stay organized and coordinated internally.
Jake Aaron Villarreal: Yeah, makes sense. I mean our company we come from the people side and it's about allocating resources to help companies grow and build and there is always a challenge of as you grow and sometimes it's harder to grow than it is to downsize because you need the right people to do the work and then you have to hope they can actually deliver. So there's a lot of questions around "do I have the right people on the team." What's worked for you in terms of recruiting and finding the right people? And what's the process you typically go down to make sure that you feel like you're getting what you're trying to get and hiring the right way?
Mike Pappas: We, we've done a lot to sort of signal our values around sort of inclusivity and diversity, which we do believe incredibly important to any team. But especially if we're going to try and decide, you know, what is harmful to all these different communities, we'd better have representatives of those communities that can speak to those things and we better all be able to come together and have a meaningful discussion about that. For us, we've actually employed a lot of novel tools. I mentioned earlier the first thing that started Modulate off is that voice changing tech. We actually employ that in our phone screens. So when we are phone screening you we cannot tell whether you're a man or a woman or non-binary. We cannot tell what your age range is. We're just hearing the content of your answers. And that obviously, you know, is not perfect, but it's part of our process that's designed to minimize the opportunity for bias to come in, which is important for us, but it also is an important signal to people that this is something that we take seriously.
So, I think we've actually punched above our weight class in the incredible talent we've been able to bring together even at very early stages when we maybe couldn't afford the the best sort of salaries just because we could demonstrate really vividly. "We share your values. We have a real mission to do good in the world." And I think so many people, especially these days, desperately want to feel like they're contributing to something good. And that feels rarer and rarer in so many cases. And so I think that has been a huge component of our recruiting philosophy is just show that we take this seriously and that we're willing to make sacrifices in the name of our values and look for people that are able to reciprocate that. And if they have the competence and they're willing to say, "Hey, I believe enough in this mission that I'm also willing to maybe not make some sacrifices, but invest some real part of myself in seeing that mission through. That's going to allow us to do a lot more with a much smaller group of people than you'd expect."
Jake Aaron Villarreal: Yeah, that's amazing. I I didn't know the technology could be very useful on the recruiting side because that's we do that all the time. But yeah, it's very easy to get on a call quite frankly just human to human. Sometimes you hear something that you feel that "I don't think that's a right fit for what this company's looking for." But could you be wrong? Yeah, maybe you could be wrong. How someone talks, how they communicate, how they, you know, talk about topics or subjects, you know, male, female, and it it gets very subtle, right?
Mike Pappas: It's not even just how they talk about it, though that's also true. But all you often see if you look at interviews side by side of the same interviewer but different candidates the interviewer asks questions differently. Give an overly cliched example. You know if you're asking a technical question you might see some interviews interviewers ask that question very directly and bluntly to a male candidate and to a female candidate they'll kind of teach it more in a way that implies less confidence in the female candidate skills. And many interviewers don't even realize they're doing this. It's entirely subconscious, but it really skews the degree to which that female candidate is empowered to show how smart they really are because you just gave them half the answer and you thought you were helping them, but you're actually sort of cutting off their opportunity to show their own talent. So yeah, it's a really tricky thing to balance, but again, we think it's incredibly important. And again, going back to prioritization, it's not our core focus now, but one of these days, we've thought about could we make that voice changing tech more broadly available to other sort of recruiting platforms as well. I think it would be an interesting thing to experiment more broadly with.
Jake Aaron Villarreal: Yeah, I think you'd have a lot of success in the enterprise market, sort of the big companies that have hundreds of thousands of people or just larger organizations where they're interviewing tons of people and any little technology or tool that can help them make better decisions where they balance out their company in in terms of diversity and everything else I think would be great. You know, this is your first startup. What's something that you wish someone would have told you before you started that you now know that you could share with others?
Mike Pappas: Oh jeez, that's hard because they did tell me so many of those things. And I nodded and said, "Thank you. I agree." And it was only two years later that I realized I didn't hear them at all. I didn't really appreciate things like "the idea is cheap, execution is what matters" until I had gone through it all. So I think what they could have told me that would have actually helped me is that when you are a pre-seed company, you don't have a business plan. You're selling your team. You're just selling your team. The story of the business plan matters a little bit because it shows the competence of your team. If you don't have a business plan, that's a big warning sign. But no one is judging you on is that exact business plan the right business plan. They're judging you on do I believe in this team? Am I willing to invest in these people? And do I think they're going to be able to do something meaningful?
And if I had understood that earlier on, I think those first rounds of funding could have gone very different. We were so focused on "let's talk about the technology and the IP and here's exactly the battle plan for the next 10 years." And you could see every VC's eyes glaze over as soon as we're talking about the 10-year plan. Like, yeah, two, two random college kids that have never started a startup before. Sure, why don't you tell me what's going to be true in a [laughter] decade, right? Like but it's easy to fall victim to the belief that you need to have that plan in that really concrete way. And so my advice that I give people now is really just focus on showing why should they believe that you're going to continue iterating and find your way rather than why should they believe that you already have the exact right answer.
Jake Aaron Villarreal: Yeah, really cool to hear that. You know, as a company, it sounds like you've had some really good technical breakthroughs. What's been uh a personal breakthrough as a leader that you've gone through as you've built your company?
Mike Pappas: I I started out Modulate and I still believe in this like believing very strongly in the importance of feedback and I was very worried about people not being willing to give me feedback because I'm the big bad CEO and how dare they, you know, try to contradict me. So, I early on went far out of my way to emphasize that I wasn't actually that confident in things. You know, I would say, "Hey, here's what I think we should do on the sales side, but like I might be missing something." And, and I, I was trying to make that point to emphasize like feedback is welcome. I want to hear from you if you disagree.
And it wasn't until about two years in, we were about 10 people, and one of my uh recent hires uh pulled me over and you know, "hey, great spirit of feedback." I'm so happy that they did this. Where they pulled me over and said, "Hey, Mike, I don't think you realize how demoralizing it is to hear from the CEO, the founder, that you don't even have confidence in your vision. That's not what I need to hear from you. I need to hear that you have a plan." And that, that was a sort of revolutionary idea to me that maybe is very obvious to a lot of other people, but it completely flipped the way that I was thinking about it. And I've changed my style a lot to still try and convey that I do always want that feedback, but to really focus again sort of going back to what I was saying before, not on "I know the exact right answer," but on "I am very confident that we have the pieces to see this through. I think this is the best way to align those pieces. If you all have other ideas, let let's talk about that. But what's not up for debate is that we've got this." And sort of being able to have that different flavor of conversation I think has really helped me to inspire and excite the team here.
Jake Aaron Villarreal: Yeah, that's great. Looks like you've really evolved a lot from what you're sharing with me of where you started, where you're at today. You've also talked about a distributed team and remote. What's worked for you to keep the culture together and to stay on mission and to continue to build the company without losing a lot of people?
Mike Pappas: Yeah, I mean again we believe pretty strongly in the in office. So we do three days a week in office. So that's the biggest answer to that. We do have some full-time remote folks and in all candor I don't know that we've figured out any special skills to engage them. I think that the folks that have had most success working remotely with us have been those who had prior experience and know how to kind of make themselves visible. But I guess the advice that I would give less for company organizers and more for employees is if if you are working remotely, consider how much less of what you are doing is visible. And for lack of a better term, learn to brag. It doesn't have to be abrasive, but just share the wins, right? Companies run on positive energy. Companies run on getting to hear about the cool things other people are doing. If you're just, you know, hacking away in a silo, then you are one person. But if you are sharing all the cool stuff that you're working on and energizing everyone else, then it is that 1 plus 1 equals three situation. And you feel like you're much more of a team and unified together. So, I don't know how to set that up at the organizational level, but I think the people who know how to do that are the ones that have the most success.
Jake Aaron Villarreal: I love that phrase, learn how to brag. Oftentimes, you think that it's, you know, an ego thing, but it's more about sharing, you know, your accomplishments and hopefully it's good for the company. So, that's really cool. As we look at 2025, what's on the road map that you're excited about?
Mike Pappas: Yeah, I mean I I talked about these expansions into both sort of new markets and new kinds of analysis. That's something that I'm very excited about. I personally have had the opportunity to get involved on the legislative side. There's a lot of uh new legislation that's been coming through in the last few years and some that's still coming down the pipe around what should online safety look like. In the past, we've had really just privacy legislation saying don't collect users' data, but if someone gets terrorized on the platform, that's fine. And we're now starting to see more focus on, hey, actually, we need to make sure that someone is protected there.
I honestly like I think someone would look at my position in my company and say, "Oh, Mike probably wants regulation forcing everyone to be maximally safe all the time." I actually don't want that because I do want a healthy overall ecosystem and I think being too prescriptive is not good for that. So what I'm really excited about is next year we're going to see a lot of transparency legislation kick in in particular and that to me is what I think is the most promising legislation that if we can get all these online platforms just to say "hey honestly here's what's going on here. we have this goal of being super safe or maybe we don't. But whatever it is, here's the real experience you're likely to have if you log in." You can now make an informed decision about whether this is the space for you. I think that's the right way to enable safety. And if some people want to say, "Hey, this is a very rowdy sports bar. Enter at your own risk." Good for them. That's wonderful. But if someone is saying, "Hey, this is a beautiful kindergarten playground." and then you get step inside and it's a rowdy sports bar. That's a problem. And to me, that's not we need to make everyone a kindergarten. That's just we need to be transparent about what kind of space it is. So, I think as that as those reports start coming out, we're going to see a lot of change in sort of public perception of some of these online platforms and of the sort of tech ecosystem as a whole. And I think that's going to be a really healthy driver for the future.
Jake Aaron Villarreal: Do you see yourself getting into politics in the future?
Mike Pappas: I personally would be an awful politician. I'd like to influence some of the specific sort of legislative and other decisions that are happening there. I think I god I could go into a whole thing, but I think the the debate about what values do we stand for and what's the right way to achieve those values need to be decoupled. I don't think I'm the right representative of the people. I know I'm not neurotypical. I just I do think in a different way from a lot of other folks. And as much as I want to be able to inspire my team, I don't see a lot of joy in going out and trying to really represent hundreds of millions of people at once. I do think I'm a pretty good strategist. And I think if I could understand, "hey, here's what we the people want," I think I have a lot of insights whether it's about AI or about online safety or about these other things where I can point to ways that our current approaches are not achieving the goals that we all have agreed on because they're underinformed because we have unfortunately people in Congress that still don't really understand what a video game is or what a lot of these tech platforms are. And I think the more we can inform that stuff with experts from the outside, the better off we sort of are as a civilization.
Jake Aaron Villarreal: Yeah. Well said. Well, I love what you guys are building. Uh I know it's going to be part of my kids' upbringing and at some level it's probably already touching them. So really good to hear what you're building and you know be great to have you come back in 6 12 18 months. See how things are going as you grow your company. Well, thanks so much for joining and thanks for the listeners for making some time to hear us out. Uh, I'm your host, Jake Aaron Villarreal, signing off for now, but can't wait to catch up with you all on the next episode. Until then, Mike, the world, take care. If you like what we're doing, don't forget to subscribe, leave a review on Apple Podcast or wherever you listen, and follow us on YouTube where we go behind the scenes to learn what it takes to be a startup founder.
.jpg)
.webp)
.webp)
.webp)
.webp)
