How a near-death experience changed this founder’s approach to fear

MATT POHLSON: I used to make bold choices, but they were often driven by fear, fear of not being enough, fear of not comparing well to my friends, fear of never being loved, and I really let that drive me. You realize that nothing is as bad as the fear of the thing.

JEFF BERMAN: A near-death experience forced Omaze’s founder and CEO, Matt Pohlson, to face his greatest fears. It also unlocked new ways of seeing the world. This mindset shift fueled the growth of his unusual business model.

POHLSON: The people that are maybe most in the news, they may be leading from places of fear or places of greed. So we tend to start to think that that’s the reality, but that’s just getting clickbait. We know our algorithms are designed to spread that kind of stuff. But when you look around, when you lift up from your phone and look out in the world, I think you see empathy and compassion everywhere.

[THEME MUSIC]

BERMAN:  This is Masters of Scale. I’m Jeff Berman, your host. This week on the show, Omaze founder, Matthew Pohlson, reveals how he’s scaling an innovative for-profit model for fueling charitable giving. 

Matt, welcome to Masters of Scale.

POHLSON: Thanks for having me, Jeff.

Copy LinkHow Magic Johnson inspired Omaze

BERMAN: We’ve known each other for two decades. You were an actor with a Stanford degree and a lot of ideas for what else you might do in life when we met. How do you go from being an actor in the mid-2000s to where you are today? How’d you get started on the entrepreneurial journey?

POHLSON: Well, you start by being not very good at acting.

BERMAN: For anyone who wants, go check out Matt’s Everwood run. It was epic.

POHLSON: I was doing acting. I really loved it. Then I transitioned into doing storytelling, trying to use storytelling to inspire action. So I did a bunch of different projects. Me and my buddy were the first directors on this thing called Live Earth, which was the biggest concert ever thrown. It was seven continents, one night. We were early producers on Girl Rising about girls’ education in the developing world that was funded by Oprah and Queen Rania of Jordan, and Meryl Streep was a narrator. Then we just realized we were creating a lot of awareness around these projects, but we weren’t creating a lot of impact. So I went to business school, tried to learn new ways of thinking, surrounded myself with people smarter than me. It was when I was in school, it’s when we came up with the idea for Omaze.

BERMAN:  If I remember correctly, there was a bit of a Magic Johnson moment that was part of the origin story. Will you share that with us?

POHLSON: Magic was hosting an auction for the Boys & Girls Club where he was auctioning off the chance to play basketball with him and go to a Lakers game. But it was one of those things that was only available to the high-net-worth individuals in the room. We were in the room but not high-net-worth individuals.

BERMAN: Because the highest bidder was going to win-

POHLSON: Exactly, exactly. Because we were just the guys who got invited to fill the table. I’m sure you’ve been to a lot of these rubber chicken dinners before. So we watched as the auction went up to $15,000. He was a childhood hero. Nothing I would rather do than play basketball with Magic. But we couldn’t afford to participate. So when we were driving home that night, we said, “It doesn’t make any sense. He has fans around the world, not just in that room. So if we make it so that anybody can donate $10 for the chance to win, we could raise so much more money, so much more awareness, open up a whole new donor base.”

BERMAN: How did that moment of inspiration driving home from the Boys & Girls Club event lead to starting Omaze?

POHLSON:  I was in business school still at the time. I basically went to all my professors and said, “I’m working on this exclusively.” Then we just started hustling and tried to get celebrities to do that with us. We started very slow. Our first experience was to be a guest judge on Cupcake Wars and raised $784. We now raise that in 12 seconds. That took us six months to do. First real break came with Breaking Bad. We did an experience with Bryan and Aaron that really put us on the map. That’s really how it started.

BERMAN: Bryan Cranston and Aaron Paul, the stars of the hit TV show.

BRYAN CRANSTON CLIP: Hi, it’s Bryan and Dan and Dre. They are the winners of the contest that we did through Omaze benefiting the National Center for Missing & Exploited Children. We raised $302,000. Thanks to all of you for joining us.

BERMAN: Explain how it works, Matt. Is it a lottery? Is it a raffle? Is it a sweepstakes? How exactly does it work?

POHLSON: That depends on the country that it’s in, in terms of the legal framework. But the mechanic is very similar in that a bunch of people are putting in either $10 or £10 for the chance to win something. We’re a for-profit, but a percentage goes to charity, a percentage goes to us. So back in the day when we started, it was celebrities. Like with Breaking Bad, for example, Bryan and Aaron offered the chance to ride in a Winnebago with them, put on the hazmat suits, if you know the show, cook Blue Candy, aka meth, and watch the very last episode of Breaking Bad with them, the rest of the cast. They offered that at auction, and one person bid $40,000. Then they did it with us, and it raised $1.7 million, so you could see the delta.

BERMAN: Whoa. How does the actual water flow of dollars work? How does a charity benefit? How does Omaze benefit?

POHLSON: I think it’s probably better to explain how it works today. Now we offer houses, and so every month a person can win a £5 to £6 million house.

BERMAN: Matt is saying pounds because the company he runs, Omaze, now operates mostly in the UK.

POHLSON: Basically, the way it works is we go buy the houses, we fix them up, we design them. In some cases, we build them. Then we put them up. A $7 million house can raise, call it, $33 million in sales. A third of that goes to charity and VAT. A third of that goes to the price and costs. In addition to the house, we cover all the taxes for the winner. We give away cash prizes. We cover all their furniture, everything so that we give them £250,000 to move in, all that kind of stuff. Then a third goes to operating expenses, marketing, and our profit.

BERMAN:
Are you still doing celebrities, or you’ve moved out of celebrity entirely?

POHLSON: We still have celebrities that partner with us to help promote the houses. David Beckham did one. Prince William was also involved. They’ll do funny content to get the word out, but there’s no celebrity experience. Now it’s just a transition from doing celebrity experiences all the way into just doing houses.

BERMAN:Why did you stop doing that?

POHLSON: The celebrity experiences were great, but there was just a limit to the scale. And we would have something happen. Like, one day we were supposed to do a huge shoot with Arnold Schwarzenegger who was going to be our big experience for the next month. Then he called us right before the shoot and said he can’t come. I said, “Well, what’s the deal? Why can’t he come?” They’re like, “Well, he’s getting his haircut with Sylvester Stallone.” I was like, “Is that a real thing?” They said, “Yes, they love to get their hair together whenever they’re in town. It’s been a couple of weeks so he can’t come today.” Then we missed our next month. So we didn’t control our own destiny. So the reason we went away from that model was I had a whole personal health experience that drove that realization.

Copy LinkMatt’s near-death experience

BERMAN: Let’s go there, Matt, because to say a personal health experience is a bit of an understatement. You had a near death experience. What happened?

POHLSON: It was actually almost exactly seven years ago. I was seven years into the Omaze journey. The company was around probably, people-wise, 150 people. What happened was, when I was born, my stomach was twisted in a knot. I was supposed to die when I was born. The scar tissue from that surgery had broken off 40 years later. I was 40 at the time this happened. Over the course of a couple days, my stomach was getting bigger. I looked two months pregnant, five months pregnant, seven months pregnant.

So I called my buddy who was a doctor and said, “Hey, I look like I’m seven months pregnant. Do I need to do something about this?” He said, “You should go to the hospital.” So I go to the hospital. My parents come, our COO, Helen, came because I was supposed to be meeting with her. They do all these tests, and they can’t figure out what’s going on. Then they say to my parents, they said to Helen, “You guys go home. If Matt’s not better in the morning, then we’ll just do some kind of exploratory surgery then.” Helen pulls into her driveway. It’s probably 11:00 p.m. at night and something tells her to go back to the hospital. Helen is very serious. She’s British. She’s a COO. She’s not like a Venice Beach, listen to the cosmos-type person. But the voice was undeniable. So she drove back. If she hadn’t driven back, I may have died 45 minutes later.

BERMAN: What about her driving back led to the discovery that there was something existential happening?

POHLSON: She came in the room and immediately discovered that my blood pressure had plummeted. She went and got the nurse. They called in the crash team, rushed me down into surgery, came out of surgery. They said to my mom, “The good news is we figured out what it was, what it is. It’s bowel obstruction. The bad news is that he’s in critical condition. His heart rate is continuing to plummet and we don’t know why.”

BERMAN: What happened next?

POHLSON:  She got to the door and the nurse said, “I’m sorry. You can’t come in. This is really serious.” She said, “Look, I was there when he came into this world. If he’s leaving this world right now, I’m going to be in that room.” So they let her in the room. I was fully flatlined. They were doing the compressions, and they were doing the defibrillator, the shocks, but I wasn’t responding. My mom started to crumble, as you can imagine. It’s one thing to lose a child. It’s another thing if it’s happening immediately in front of you.

She saw something that created this kind of spiritual experience for her. She said every nurse and every staff member and every doctor in the ICU had just gravitated outside the window. There were like 40 of them. She said they looked like this silent church choir just sending in positive energy. She was so moved by these people that were sending love to her son that they didn’t even know that it just filled her up with strength. She took a big breath, and she started coaching me. She said, “Matthew David Pohlson, these people are fighting so hard to bring you back, but you are not fighting hard enough. You need to fight harder to come back to us. You need to fight.” The flatline went on for four and a half minutes. The main doctor pulled away indicating that this was done. She said, “No, no, please, please don’t call it,” and she grabbed his arm. Then they said they saw something that they’d never seen before in the hospital. All of a sudden, I just popped up. I was on my right side, and I lifted my right arm and gave a thumbs up.

BERMAN:  Wow.

POHLSON:  The doctor who had initially done the surgery came down and said, “His organs have shut down.” She said, “I understand, but two minutes ago we didn’t have a pulse and now we have a pulse. So what are we going to do about that?” He said, “Well, there’s this thing called an ECMO machine. It’s a very rare machine. It takes over the beating of the heart and the oxygenation of the lungs. But the problem is we only have one of these.” We were at UCLA Santa Monica and ECMO was at UCLA Westwood, which is 20 minutes apart. He said, “He’s not going to survive the ride. We’ve never transported one of these. No one’s ever transported one of these. The other problem is we only have two doctors who do this surgery, and neither of them are on call, and it’s Father’s Day.”

My buddy that I called at the beginning of the story, he happened to be at a bachelor party in Vegas sitting next to the head of cardiology at UCLA. He said to him, “Hey, man, can you check your phone to see how my buddy is doing? I sent him in yesterday with a stomach issue.” The guy checked, and he said, “Hey, man, your body’s in real trouble. He could pass any minute here.” So they got ahold of the CEO of UCLA. They got him to sign off on transporting the ECMO, the first mobile ECMO unit definitely in the US, but maybe the world. They called the doctor, got him to leave his Father’s Day barbecue. They brought the ECMO machine to me and did this surgery that had never been done before and kind of duct taping the ECMO to the ambulance.

BERMAN:  Matt, from having a buddy who’s a doctor to call when you look like you’re seven months pregnant, to Helen turning around and coming back to the hospital, to your mom saying, “Don’t call it,” and the silent choir of 40 outside the window, to your buddy sitting next to the head of cardiology at UCLA at a table in Vegas, it sounds like a miracle atop miracle atop miracle atop miracle. How do you understand what happened?

POHLSON:  It’s taken me a long time to process it. It’s really made me believe in things that I did not believe in before, and it just makes me believe so deeply in the power of humanity and compassion. I really think that is who we are. Then when I was leaving the hospital weeks later, I sat at the edge of my bed and the same doctor, he sat me down, he’s like, “Look, I want you to understand something. When I finish my career 30 years from now and I’m talking about the most extraordinary case I’ve ever seen, this is going to be it. You had a 0% chance of survival effectively, and the fact that we have you going home with your full faculties, we have no medical explanation for that.” I was like, “Do you have any explanation for that? Can you give me something?” He said, “Look, we were inspired by your mom. But outside of that, there were larger forces at play.” I said, “Well, as a man of science, how do you define those larger forces?” He said, “It was love. It was love that brought you back.” And I really believe that.

BERMAN:  Still ahead, more on how Matt’s near-death experience reshaped his approach to business. 

[AD BREAK]

Welcome back to Masters of Scale. You can find this conversation and more on our YouTube channel. 

Copy LinkTransforming fear into a new leadership perspective

What changed for you now that you believed in love and you had this different perspective on the world?

POHLSON:  I actually went through a period of elation and then depression. Why was I here? Did I earn it? All these things that I experienced, I had this whole come back to the light experience, was that real? All that stuff I was having a hard time with. But eventually where I got was I just have a much better relationship to fear than I used to. I used to make bold choices, but they were often driven by fear, fear of not being enough, fear of not comparing well to my friends, fear of never being loved, and I really let that drive me. You realize that nothing is as bad as the fear of the thing.

Dying without living my potential used to be my greatest fear. Then I went through some version of that and it was like, “Oh, that was okay.” So I think the stories we tell ourselves about fear are always way worse than actually what happens. In most cases, our fears, we’re not actually threatened. We’re creating these things. I think I’m way better at processing through that faster, because you realize the opposite of love is not hate, it’s fear. So if you can get to the other side of fear faster, if you can process through it faster, you live a much richer life.

BERMAN:  What big decisions have you made differently because of this significantly evolved perspective on the world?

POHLSON: You can make the same decision from fear or love, like the exact same one. You can fire someone from a place of fear or from a place of love. I would say it enabled me to make some pretty bold choices against resistance when, before this happened, I had caved in to criticism. It inspired me when I came back from this to change the business, being focused on celebrities to focus on prizes. That was a huge change for us. We got a lot of resistance from our board and the team, but I was not scared of what people thought of me in that decision. I felt like I was making it from a place of expansion rather from a place of fear. We made the decision to focus just on the UK, stop operations in the US because we didn’t feel like we had enough money to do both markets. That was a very unpopular decision. I don’t think I would’ve been able to do either of those decisions before this happened.

BERMAN:  Let’s go back to the more analytical side of these pivotal calls that you’ve made in steering Omaze, the first to move away from working with celebrities. What led you to make that call? I’m curious what the opposition from board investors, other stakeholders might’ve been and how you overcame that.

POHLSON:  We had done a campaign with Daniel Craig six months before I went into the hospital where you got to go to the Aston Martin track, you got to ride around in a one-of-a-kind Aston Martin, and then you got to keep the Aston Martin. It was supposed to raise $300,000 for the United Nations, and it raised $2.1 million. So I went to our CFO, Nina at the time, and said, “Hey, I think we should take a bet. I think we should go buy a $250,000 McLaren, offer it with just Omaze distribution, no talent. If we could raise $500,000 on our own, then we would really have something.” The other thing to say, though, is we only had $900,000 in the bank, so 250,000 was a big-

BERMAN: It’s a big bet.

POHLSON: It was a real bet at that point. But then the car coincidentally launched the day before I unexpectedly went in the hospital. So when I came back all those months later and I was sitting down with Nina and kind of re-grounding myself, I said to her, “By the way, whatever happened with the McLaren? Did it raise the $500,000?” She said it raised $1.9 million. Immediately, I was like, “That changes everything. We’re going all in on that.”

But the whole team was organized around doing these crazy celebrity experiences. We were well known for that. We had been on all these shows. Their friends recognized it, and it was cool and all that stuff. The board liked that, too. It was a big change. Because I had stepped away for a while, I was able to see it much faster than if I would’ve been there every day. So I think the speed of the change was jolting for people. I think the most underrated skill in entrepreneurship is storytelling. I think it’s also the most important skill. So I basically painted a vision and story of what this would look like on the other side, and that’s how we ultimately got there.

Copy LinkThe importance of storytelling in leading change

BERMAN: It’s a really important note, Matt. I think it’s something that a lot of founders are naturally good at and a lot of founders don’t pay a second of attention to.

POHLSON: It’s fundamental to everything that we do. I teach storytelling classes to every team member, no matter what role they’re in. We go into the first principles, the fundamental neuroscience of storytelling, why the stories matter to the principles of how you tell them and how you make the customer the hero. So we’re very serious about it, and that shows up in everything you do. 

Think about fundraising. What’s evaluation? Evaluation is just metrics plus storytelling. We see wild differences in valuations because of their better storytellers. Marketing, obviously, product development, seeing the world through the eyes of the other, hiring, recruiting, setting a vision for the company, all of that really emanates from how well you paint where you’re going. What we’re going to do next year is just a story. Every great social movement, every great business movement, even every great sports movement in the world has been driven by storytelling.

Copy LinkWhy Omaze pivoted operations from the US to the UK

BERMAN: Let’s go back to the second pivotal decision that you noted, which was the decision to focus on the UK and leave the US. Not a lot of companies that have hit your scale that have gone in that direction. Why’d you do it?

POHLSON: After the Daniel Craig, the McLaren thing, we had started doing prizes in the US. We had done holidays and then sneakers and watches and then cars and supercars, and all those things were going well. But we said where it’s really at is houses. A car changes someone’s lifestyle. A house changes someone’s life. It’s the perfect product to story-tell around. A house represents all of Maslow’s hierarchy of needs. It’s safety, it’s security, it’s status, it’s relationships, it’s self-realization. So we felt like from a first principle’s perspective, that would really work. We had a good business going, though, with the celebrities and the cars, and so we decided to test that in the UK.

BERMAN: Why the UK?

POHLSON: Smaller market. We had a really good operator here. It was a good regulatory environment. It was a small country with high population density so the houses would be relevant to everybody. We didn’t want to disrupt what was going on in the US. We felt like to do it right, it had to be very simple and very clear and just wanted to get to the point where we could do a house every month as a subscription. It really just took off really fast. We had 20 people in the UK. We passed the sales of the US. Had 180 people in 15 months, and the retention rates were off the charts. So it became very clear this was the model.

BERMAN:  And that the model was subscription. It was you’ve got a monthly £10 or whatever it is, and that automatically enters you into the monthly house experience?

POHLSON: Exactly. Yeah, we’ve got higher tiers to get you different things and other prizes, but that’s basically it. We put it in the category of a consumer subscription entertainment, like a Spotify or a Netflix. The retention rates are at that level. It’s wild. The unit economics were really strong. 

We said, “Okay, over time we can flip this into becoming a really profitable business.” So it was clear that we should just be doing that. Then the question was, well, if we’re doing that with 25 people in the UK and we have 180 people in the US, something’s got to give there.

Then the question was, do we try to do it in both markets? But we really wanted to focus and get the UK to a great place and get to where we could do a house every single month. In order to do that, you have to buy eight houses out in front. So that’s a big investment. We thought, “Let’s just prove it there.” We think the market’s big enough, even though it’s a smaller country, and then we can come back to the US. So that was how we arrived at the decision. It was definitely a leap, and it was hard. It meant letting go of 180 people that were amazing people, a lot of which had been there since the beginning of Omaze and were uber creative and uber resilient and super talented. But it was just the reality of where we were.

Copy LinkOmaze’s RFP approach to charity selection

BERMAN: Matt, when it comes to this newer model where it’s not a celebrity who’s choosing a charity, how is Omaze choosing what charities to work with? How are you vetting them? How are you deciding how you can have the greatest positive impact?

POHLSON: We do an RFP process, a request for proposal process where the charities talk about how they’re going to use the money. We try to do tangible projects as much as possible. An example is one we did last year with the London Air Ambulance, which Prince William is the patron, and David Beckham is a supporter. London Air Ambulance, if you don’t live in London, they are these red helicopters that come and pick people up when normal ambulances can’t get to them. Those have been going for 25 years. They had to retire the old helicopters by law. They were $4 million short to sponsor the new ones, and if they didn’t raise the $4 million, that program was going to go away. That picks up 3,000 people a year in London. I happened to be at the gala when they announced that an ambulance saved my life, so I was like, “Well, we would really love to help.” So the Omaze community raised them actually $5 million, a little bit more than that actually.

I’ll tell you a crazy story on that just to bring it back. When I went to the event to see the new helicopters, I said to them, “What’s the difference between these helicopters and the old ones?” They said, “They have this special machine on them that has never been on a helicopter before.” I said, “Well, what’s the machine?” They said, “Oh, you would’ve never heard of it. It’s a very rare machine.” I said, “Try me.” They said, “It’s called an ECMO machine,” which is obviously the machine that saved me. This will be the first mobile ECMO in the UK. The machine that saved me was the first mobile ECMO we think in the world. They told me, I just started crying. At an event in front of… I just immediately started crying. But that’s an example of something that has a real tangible impact. The Omaze community can see what they did, and we know it changes people’s lives. It gives everyone a chance to survive, and that’s really cool.

BERMAN: There’s a lot of coincidence in the world, but occasionally there’s providence, and this sounds like providence. How big’s the business today?

POHLSON: I don’t give exact numbers, but we’re past a $400 million run rate.

Copy LinkBusiness as an inherent good

BERMAN: It strikes me that we focus so heavily on shareholders and so little on stakeholders who aren’t shareholders, and building it into the business model makes it certainly easier to do. But you’re proving the point that you can build a pretty darn big and impactful business that’s generating a lot of revenue and a lot of profit while also doing a lot of good in the world. What’s the takeaway for founders who have businesses where that impact is not core to the business model? What do you say to them about how they can lead their companies in a way that will both do good and do well?

POHLSON: Well, I think a company is inherently a good thing. Creating jobs for people is a good thing. Organizing people around a productive use of their time is a good thing. So the vast majority of companies shouldn’t necessarily try to do good. I think what they can do good is do good by their team, make sure what they’re doing does no harm. Creating a big business in its own right that serves customers or serves businesses is a great endeavor and a beautiful thing.

BERMAN: We’re in a moment, certainly in the US and to a large extent globally, where empathy and compassion seem to be out of fashion. They’re not in vogue at the moment. What keeps you optimistic? What keeps you believing that what you came out of your near-death experience with can come back and help lead the world to a better place?

POHLSON:  I see so many examples of empathy and compassion on a daily basis. I think there’s heroes all around us if you look for them. We tend to hear people that are maybe most in the news are leading from different places. They may be leading from places of fear or places of greed. So we tend to start to think that that’s the reality, but that’s just getting clickbait. We know our algorithms are designed to spread that kind of stuff. But when you look around, when you lift up from your phone and look out in the world, I think you see empathy and compassion everywhere. When you see people interact with others that they may criticize online, when you see them interact with them in the real world, they feel that connection. I really believe that that is our default, and we will find ways to celebrate that and make that more of the culture again.

BERMAN: When things are dark, it’s helpful to look for the glimmers, and one of the glimmers that does come through my phone is every time I see you post about someone whose life Omaze has changed. So thank you for providing those glimmers and for what you’ve done and for being with us on Masters of Scale, Matt. I really appreciate you.

POHLSON:  I really appreciate you, Jeff. This is a great podcast.

BERMAN:  I’ve known Matt a long time. It is hard to come away from a conversation with him not feeling inspired, energized, and, frankly, fired up. What he and the Omaze team are building is a fascinating new model for how to do good and do well. You also don’t, I think, have to go through a near-death experience to realize new ways of approaching your business and serving your customers. I’m Jeff Berman. Thank you for listening.