#StartupsEverywhere: Seattle, Wa.

#StartupsEverywhere: Evan Smith, CEO & Co-Founder, Ethosphere
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.

A personal coach for every sales associate

Retail workers have long shifts and often little time for feedback. Evan Smith is a Starbucks Vice President turned first-time entrepreneur, building Ethosphere, an AI-powered platform that uses personalized microphones to listen to sales conversations and provide retail associates with feedback on where they shine and could improve.  We sat down with Evan to discuss his product, the importance of incubators, navigating the patchwork of state privacy laws, and more.

Tell us about your background. What led you to Ethosphere?

Throughout my career, I have consistently been the person who identified  opportunities for improvement and growth. I did this initially in education, making a gradual and then rapid shift to retail. I did this first as a consultant, then working for a couple of different e-commerce startups, before landing up with Starbucks, where I spent seven years. At Starbucks, I saw an opportunity emerge as AI rapidly accelerated, making it possible to reimagine how retail could work.

What is the work you all are doing at Ethosphere? Who are your users/customers? 

We're using uni-directional microphone technology (meaning only the employee’s voice is recorded in their conversations with customers) and AI in brick-and-mortar retailers to capture and analyze customer-facing conversations. Ethosphere’s technology does three things: provide personalized coaching and feedback to the associate; give store managers the insights into the all-stars on their team and the associates who need more targeted coaching; and finally, identify–at the brand level–what marketing strategies do and do not work on the sales floor. 

We were very careful in designing Ethosphere as a tool for performance insights and coaching, not evaluation. Ethosphere is a resource to help the employees that managers hire become better more quickly, and continue to grow in role. It is built to uplift and support teams, not to drive decisions related to hiring or firing. 

Ethosphere started with some help from an incubator, could you talk about your experience working with them?

At some level, I’m a relatively risk-averse person. My ability and willingness to leave Starbucks and do this were tempered by that. The final push was getting the opportunity to join an incubator here in Seattle called A12. They gave me some capital and coaching, and if I’m being totally honest, without that nudge, it would have been a lot harder for me to take that leap.

I’d worked in startups before, but it didn’t necessarily mean that I knew what it meant to be a founder. I didn’t know what I needed to do on day zero. Having a partner who has done this dozens–if not hundreds–of times before was crucial.  I didn’t know what I didn’t know; having a coach filled the gaps in my knowledge and kept me on track. Along with all the other help A12 provided, I found myself  probably a full year ahead of where I would have been on my own. To say their partnership has been huge, would be an understatement.

How have you navigated the patchwork landscape of interstate privacy laws your technologies inhabit? 

The privacy laws we encounter revolve around voice recording and wiretapping. While Ethosphere uses unidirectional microphones, our customers think about privacy laws differently. We tell our clients explicitly that they shouldn’t keep this technology a secret. Because the customer is not being recorded, their active consent isn’t required, but we advise all our partners to disclose the use of Ethosphere in a brand-appropriate way. This is just like when you call your bank and they say, “We use voice technology to give you the best service.” The customers in your stores should have access to understanding the ins and outs of our product just like the voice technology on those calls. We do our best to partner to create safe, helpful technology, and we do this through working closely with our partners as they roll out the technology. 
Our experience is that, within the United States, California has the most extensive privacy laws. We consistently ensure our technologies comply with new laws and regulations everywhere, but staying current with California is an ongoing priority - it’s the fifth largest economy in the world! We’ve got to be able to tell at least every American company we work with that you can do this in all 50 states and here’s the legal rationale as to why. We know we’re compliant with all Californian privacy laws, but we have spent tens of thousands of dollars on lawyers to provide direction to us, memos for our customers, and broadly ensure our compliance. For a company like ours, in the early stage, the money we have spent on compliance could have paid for a quarter of the salary of a software engineer.  

Are there any local, state, or federal startup issues that you think should receive more attention from policymakers?

There needs to be more conversation around social safety nets and how they influence rates of entrepreneurship. When I started Ethosphere, my wife became the sole source of predictable income and health insurance in our house. If I were alone, and the only income I would have had was my own, there isn’t a chance in hell I would be doing what I do now. If we want more American entrepreneurship, we need to make sure there are stable foundations to support people from every background to take that risk. Would-be entrepreneurs need to have the security in knowing that the health and safety of their families are guaranteed. These things have a way of stacking up; free food programs in public schools are a small example of this. If an entrepreneurial parent knows their children will have their basic needs met, they’ll be more willing to go ahead with their idea. Helping people meet their basic needs–including income, healthcare, and food–will make more entrepreneurs, not fewer. Politicians can debate all they want, but I would not be doing this without the safety net I am afforded through having a (wonderfully supportive!) working spouse.

All of the information in this profile was accurate at the date and time of publication.

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