Investing in neurodiversity and building inclusive startups (with Jesse Morris from Difference Partners)

In this episode of Minds at Work, Nathan talks with Jesse Morris, co-founder of Difference Partners — a venture capital firm funding early-stage startups innovating for people with disabilities.

Jesse shares his investment philosophy and how Difference Partners is reshaping the future of inclusive technology, health care, and education. From AI-powered therapy to innovative accessibility tools, hear how mission-driven startups are solving real problems and why investing in neuroinclusive solutions makes good business sense.

(03:49) “We’re not saying telehealth replaces in-person care. We’re saying telehealth infrastructure needs to exist.”

(11:48) “Not all businesses deserve venture checks.”

(25:29) “‘Build fast and break things’ doesn’t work in this space.”

Nathan: Welcome to "Minds at Work," the podcast for leaders who embrace neurodiversity in business. I'm your host, Nathan Friedman, Co-President and Chief Marketing Officer of Understood.org, the leading nonprofit focused on helping those who learn and think differently thrive. Each week, we're here exploring how neurodiversity sparks innovation and how we as leaders across industries can create a more inclusive future for all.

Today, I'm super excited to talk to Jesse Morris. Jesse is not only a friend, but he's the founder of Difference Partners, a venture capital firm that's focused on funding early-stage startups and innovations for people with disabilities and neurodivergence. Jesse has a background in finance and social innovation, and so he's putting all of that together in his work, bringing impact investing to areas of accessibility as well as inclusion. Welcome, Jesse.

Jesse: Thank you, Nathan. Pumped to be here.

Nathan: So, let's jump right in if we might. We're wanting to start each of our conversations off with the same question. Where and how does neurodiversity fit into your work in life?

Jesse: So, this story has to start with a family story, which is that I am a quadruplet. Yes, the day I was born, there were three other people there. My sister Sabrina, my brother Tyler, and born last was my brother Paul, and Paul, has autism. Paul was a tantruming, nonverbal six-year-old, and today, in his late 30s, lives independently. So, a lot of people, when I share this story, ask, "Wait, how did that happen?" Right? And the problems that my brother faced were not cost-effective, not scalable, not tech-enabled in any way.

Nathan: Put that in like everyday speak for a second, because people often hear that things don't scale and especially in the venture world. What were some of the common challenges that you faced?

Jesse: So, my brother, like I mentioned, was non-verbal, right? So, speech therapy, speech language pathology are amazing fields and therapies to explore for people who are non-verbal. And there was a speech language pathologist where we grew up, Dr. Nancy Schwartz, who changed my brother's life. But if we weren't so lucky to live a couple miles from her and she wasn't available, right, we'd be probably in a world of hurt. So, those are the types of things or one example of a therapy that really helped my brother that wasn't available online, and I think that when you talk about the genesis story of Difference Partners, right? I had written the thesis for it a few years before it actually started.

Nathan: It's pre-pandemic, right?

Jesse: Pre-pandemic. And then I actually went to a firm called Human Ventures and was a general partner there and co-founded by a dear friend now Heather Hartnett and they focused on kind of future of work and health and wellness investing and I got to cut my teeth in those spaces but then I got a call actually from Fred Poses at the end of the first fund that I was running at Human and he said "Hey that conversation we had a couple years ago about your thesis for a neurodiversity focused venture fund, the time is now." Imagine during COVID, you could not physically walk into a clinic. So, then parents were left at home with kids that really had needs, or adults in many cases as well. And there was no digital infrastructure, no telehealth infrastructure for this population.

Nathan: We saw a huge shift, obviously, to telehealth across the entire United States. People could not actually leave their homes for months at a time. Did all of this start around the same time that we saw the increase in digital health, impact investing, and was there another kind of impetus for this?

Jesse: I actually want to say before I answer it directly, right? I believe it in-person care and our research shows that in-person care is the gold standard. So, we're not saying, "Hey, telehealth needs to replace it." What we're saying is the telehealth infrastructure needs to exist. How about the therapist that wants to work an extra 10 hours a week to provide for their families? Could they help somebody in a different state?

And this is not just a technology problem. There's kind of an insurance issue, and there's a state-by-state issue. There's a lot of things that need to get put in place, but I think in its truest form, right, you talk about, you used the term impact investing. I actually, sure, I think the businesses we invest in at Difference Partners are mission-driven and do make impact, but I don't actually enjoy maybe putting the label on us that way, because we actually are seeking venture-style returns, just like any other non quote unquote impact firm is doing. Because we believe that not only can we help people, we can also build great businesses.

Nathan: Right, so if you take a look at that, during the pandemic, it was a time of necessity, right? People did not have access, could not leave, could not get what they needed. And under that duress, there's a lot of new companies that popped up, like where was Zoom in 2018? Anybody remember? And so, how do you think about the problem areas that have evolved? Because the landscape is so big, there are so many different areas that you could touch. Have you decided to focus on a few? And if so, how did you make that decision?

Jesse: Yeah, so when we started Difference Partners, pre-pandemic I had kind of these five main buckets that I was like really excited about. Obviously, the therapy suite being the first one, the one we just discussed, right? How do we solve or attack this major supply-demand imbalance? Said in more layman's terms, so many families need help, and there's not enough clinicians to deliver that help. So, how do we shorten that gap somehow?

One way is through technology. How we're delivering different types of therapies to families, that's inclusive of obviously speech therapy, which I mentioned, ABA therapy, occupational therapy, physical therapy, things like actually getting a diagnosis. You can't receive those therapies until you've actually gotten a proper diagnosis. Something I learned was the words screening, assessment, evaluation, and diagnosis mean four different things.

Nathan: Isn't it crazy?

Jesse: It is crazy. And there is different businesses to build within each of those. So, that is one area. I would say diagnosis, therapy, and then the software tools that run these therapist practices are huge investable categories. That's just one area, a second area, which maybe this is, I come in with a bias because I have a financial services background, but the insurance reimbursement financial resources for families piece of this. It's probably where I just have a lot of emotional energy because of my own family and how much the services for my brother cost once you age out, right? There are these things around how old you are with a condition and the services that are available to you.

Nathan: Some of that is changing now with what's happening in the macro landscape.

Jesse: Oh, I know. We can exhale together on that.

Nathan: That's a different podcast.

Jesse: That's right. So, we are figuring out ways to get Medicaid dollars, reimbursement dollars to families faster, right? So, there's a lot of financial services and insurance opportunities. That's another bucket. A third I would call the much more technologically focused companies, right, all the therapy that we're talking about is really tech-enabled services, right? Which has its place but what about you know using AI? What about using voice analysis and helping with things like diagnosis? So, some of this kind of frontier technology companies are actually important as well.

Nathan: And there's a lot of different innovation in this space. You talked a bit about supply-demand, the imbalance, the path in that diagnosis to support, and how does one move from youth-oriented support to adult services and adult care, right? Can you give us a couple of examples of the startups that you're really excited about? I know you and I talk about this a lot, and your unbridled enthusiasm on this is palpable. What's one or two of these that you think are really amazing and doing something that is really unique?

Jesse: Yeah, I'll call it too. And you bring up a point that I don't want to gloss over. We invest across life stages. These kids grow up.

Nathan: Yes, they do.

Jesse: And the early childhood got a lot of interest when the venture space started coming online for this category, which it should have, right?

Nathan: Children always get a lot more attention, rightfully so, in a lot of instances.

Jesse: And the lifetime value of a customer, aka a family, if you are working with them early enough, just looks better on a spreadsheet.

Nathan: Will that end, we know the earlier that you engage and the earlier intervention you have, the more likely that you are to thrive later in life.

Jesse: Totally. So, let's actually, I'll actually talk about three of the tech-enabled services businesses, kind of along the continuum, along the age continuum, right? All right, so, there's a business we invested in called the Kinspire. They are offering speech, occupational therapy, and physical therapy over a mobile application. OK. The thought is that instead of a session-based platform, where every time you're going to a speech therapist, you're paying a couple of hundred dollars an hour and have to get reimbursed, et cetera. Imagine if you actually paid for a monthly subscription and you could have access to a kind of team around the family, right? This is for kind of these younger kids right post diagnosis.

The founder of Kinspire is a father of a 10-year-old boy with autism, and he built this for himself. He's a CTO by trade, so the technology of Kinspire really is awesome, but the business model has also been innovated on because it's not sessions-based, it's subscriptions-based. We also invested in a business called Answers Now. Answers Now is offering ABA therapy. This is probably the most popular form of autism therapy with only BCBAs, which is the board-certified behavioral analyst, kind of the highest-degreeed practitioner, and that is for a slightly older kid their real target demo is a slightly older kid, let's call i,t you know, seven to ten eleven.

And then in the adult sphere, we invested in a business called Prosper Health. Prosper is performing evaluations and diagnostics for the adult population that has yet to be diagnosed and then providing them services coaching, and therapy. Now these businesses all sound like they touch a similar person, but they actually are not, and they work really well together.

I want to call it a business that we didn't invest in as well. I don't want to sit here kind of promoting, you know, only the businesses that we've invested in, but I think sessions-based speech therapy also has its place, right? I think what Kinspire is doing is really unique, but there's a business called Expressible, which is probably the largest speech and speech language pathology telehealth business in our space. And I really love what they're building and love the team there.

Nathan: Yeah, you've invested in different areas, you've invested in different life stages, and you've been invested in different types of founders, right? That's right. I think one of the things I've noticed about you when you talk about a lot of these companies is not only the founder, but their story. Can you talk a little bit about the philosophy of how you make your investment decisions, the approach, and kind of how you're seeing the space evolve?

Jesse: Yes, so we are an early-stage investor. We typically like to be what I call, or many call, inception investors. So, we want to be the first institutional check in the company. When you are writing inception checks, you're really looking at four things. What is the total addressable market? So it's TAM. Who's the team? Is it an individual, is it a pair?

Nathan: Do they have experience?

Jesse: Do they have experience? Have they done this before? The tech, we are a venture fund, not all businesses deserve venture checks.

Nathan: It's a huge differentiation and a mindset.

Jesse: That's right, and then the fourth is price just like you know, Warren Buffett just announced that he's stepping down at the end of the year last week, so I'm gonna give him a shout out, but he always talks about you know, how important entry prices. The same goes for us, right? We really are disciplined about our entry prices as well. So, I'm typically looking at those four things. But the team or the individual that is starting these companies is obviously an enormous variable. I would say out of the 26 investments we've made 90% of them are either an individual that is neurodiverse themselves or an advocate. I am a sibling advocate. There are parent advocates, sibling advocates.

Nathan: It takes a village.

Jesse: It takes a village.

Nathan: And you need advocates on your side throughout the entire process.

Something else you said a little bit early just sparked a question that I think the audience would love to hear a bit more about as you're investing. You obviously have a tremendous track record. How do you determine if something is more of a feature, a product, or a company? And at this stage is really hard to, right? Because there's no product market fit, and there's a few other variables. But you know, does that come with instinct, or is there something specifically around neurodiversity that helps you distinguish between those?

Jesse: At the end of the day, because we're so early, sometimes we actually are investing in like a hero feature. There's just a feature that hooks. And we have to believe that that team can iterate on that further. We also made a very important structural decision which is we want to invest in a high volume of companies in this first fund. So, instead of being more concentrated, you know, 12-ish, 15-ish companies, we're probably going to look at 32 to 36 companies in this first fund. So, that allows us to actually, to your point, invest in a bunch of different types of companies.

Sometimes the business model is so unique. We have a company called Divergent, which is doing voc rehab or vocational rehabilitation, allowing individuals in specific states to get trained for tech jobs, mostly adults with autism, and then get them into the workforce. But the customer is actually the state.

Nathan: Interesting.

Jesse: So, there's business model innovation in that company. Divergent really doesn't have a whole ton of competition from other tech players because no one really did this before. So, that's an example of a company that we were really excited about because of business model and innovation. Sometimes it's just white space, right? You know, we have a company that's kind of building the TurboTax for disability benefits. Getting disability benefits is really hard sometimes, can take lawyers and all these things, and there's really no technology involved. So there, it's like, OK, well, maybe let's make an existing process just faster.

Nathan: That's a real solve because there's a need.

Jesse: That's right.

Nathan: And you know, you use the word TurboTax, for we've always heard like the Uber of fill in the blank of, have you seen anything that's been stepping out of the boundaries to really do something that's earth-shatteringly new?

Jesse: Yeah, we are living in an amazing time. We, I haven't invested in this business yet, but we were pitched a company that is doing AI speech therapy.

Jesse: Interesting.

Nathan: So, I listened to a full-blown AI speech therapist. We have a company we did invest in, though, called Valence, which is actually focused on making, it's an emotional AI company, making the AI agents not sound like robots but instead sound like real humans with emotional tonality in their voice.

Nathan: What are some of the dangers of some of this early-stage investing in AI? You know, there's obviously hallucination, there are obviously trust issues with what happens with the data. Are you filtering for any of that when you look at some of these organizations at the front end?

Jesse: Totally. So, the reason why I might have hesitation on an AI delivering therapy, because I actually don't really fully see the real-world application just yet, right?

Nathan: What do you mean by that?

Jesse: I mean, instead of a human being delivering therapy, having a trained AI doing so, I just, I haven't believed the trials that I've seen yet. It's not believable just yet. I do believe the supply-demand imbalance is so vast, if we could curtail the supply somehow with a well-vetted, trained AI, it makes sense in concept, but in practice, it needs to be believable to me.

Nathan: And the other elements, which sometimes people don't quite grasp, it's not like you have something or you don't, there's different severity levels.

Jesse: Absolutely.

Nathan: And so, you can't really boil ADHD diagnosis down to this one solution will work for everybody.

Jesse: That's right.

Nathan: And I can see that in what we do it Understood is there's a variation and where we take risks where we don't take risks because we're dealing a lot with children and adults people who are neurodivergent to, you know, trust us to provide real actionable insight and resources and support. That's really hard to do when there's a higher degree of variability or a bigger risk tolerance than what we're comfortable taking. And on that note, actually, to circle back on that last point, what do you view your role in the development of these companies? I know it's not like you have a team of 1,000, but how can you best help organizations at this point?

Jesse: This is the first podcast I've done in four years. So, maybe let's that be a signal. This is not about me in any way. It is about the individuals running these companies and the companies themselves. I'd like to think of being a person behind the scenes. When I was a kid, I really wanted to be like a Jerry Maguire-style sports agent or talent agent, right?

Nathan: I can see that, actually.

Jesse: Where you're just like. You know, in the background, but like helping people achieve their potential. It's basically what...

Nathan: And then behind the curtain.

Jesse: Yeah, well, I think that's kind of what, at least what gets me up in the morning. I think I see potential in all of these companies and the people running them, and I think it's my job to put them in the best positions to succeed. What that is on a daily or weekly basis changes, right? A lot of it's storytelling. A lot of it's getting really clear on message. A lot is getting focused on the business model, and the hardest but most fruitful thing is balancing the long-term vision with what you have to do today, like this second.

Nathan: Yeah.

I wanna shift a little bit, talk about some of the challenges you're seeing in venture in this time in the landscape. It feels like it's changing every three, four months, if not more frequently, for a variety of reasons. What are a couple of the top reasons, or top changes rather, that you've seen, and what are the reasons for those?

Jesse: Yeah, well, I mean, Difference Partners turns four years old on June 1st.

Nathan: Congratulations.

Jesse: It's gone by very quickly, but the landscape has changed drastically. Because we mainly do pre-seed investing and some seed, what a pre-seed company needs to prove today, number of users, revenue, product market fit, all of these things, the bar is definitely much higher than it was, obviously, in 2021 and 2022, where there was just much more free flowing term sheets. But I think these cycles are to be expected. I don't think it's just our space compared to another. I think behavioral health, which is I would call like maybe the broader theme around a lot of our companies, you know, is sometimes in way more favor and sometimes not.

We're speaking at a very interesting time because earlier this month, there was an extremely huge acquisition announced in the kind of autism community, a business called Central Reach, which was a legacy EMR product, but you know, it was a billion and a half dollar acquisition. So, now investors are saying, "Wait, that deal just got done. This is really interesting. You know, we should probably look at this space again," so.

Nathan: Is there anything playing into your investment strategy relative to what's happening at the federal level right now?

Jesse: You know, I think it's back to our earlier point, we really applaud business model innovation, right? So, when we think what's happening at the federal level, we're asking, I'm asking, and my peers are asking things like, "OK, the Department of Education. The Department of Education funds school districts, if those school districts are the customers of our portfolio companies, what are we doing, right? How do we evolve? Do the business models need to change a little bit? These things are really important, that's forcing us to ask questions.

The same thing for Medicaid, right? If Medicaid ends up being 80% of what it was, can we still run the businesses as we thought? So, a lot of assumptions are being challenged, but it doesn't mean that we're gonna shy away from investing in businesses that work with these units. I think, also, something we haven't spoken about, but we mentioned that these conditions don't know age, but they also don't know geography, right?

Nathan: Very true.

Jesse: So, we've made, most of our investments are based in the United States. We have one in Canada, some in Israel. But I have diligence companies all around the world, Australia, Copenhagen. So, there's a lot of innovation happening.

Nathan: And the innovation is being spurred because more and more people are identifying or have been diagnosed as neurodivergent, right?

Jesse: That's right.

Nathan: The studies we've seen have been north of 50%, I think it's around 54% of Gen Z identifies as neurodivergent, right? That just opens up a completely different TAM or addressable market for...

Jesse: And the TAM is not just the individuals themselves.

Nathan: Correct.

Jesse: It is their families.

Nathan: It's everybody, it's their ecosystem.

Jesse: That's right, so I've been screaming this from the rooftops a little bit. You know, the analysts at the big banks and the private equity firms look at TAM and they say, "Hey, this is just for the individuals involved and what flows through them." But in reality, a lot of these individuals have a family caregiver, right? So, it affects them, it affects a sibling. And I don't think those people are calculated in that.

Nathan: They aren't, but I think the other thing we've seen and Understood is the universal design aspect of it, right? Some of the companies I believe in your portfolio and definitely in the world, when you're thinking about universal design and application of that is it helps everybody. Design from those marginalized populations, everybody's benefiting from it. So, like curb cuts with the ADA, it's not just for people with wheelchairs, people with strollers, people who have mobility issues, et cetera. I think if we have that mindset, that actually opens up different TAMs and different adjacent market opportunities for companies once they've reached a certain point of maturity.

Jesse: We didn't talk about this yet, but usability and accessibility is obviously enormous and overlooked, and we have a few businesses in the portfolio on this. We've got a business in Boston called Cephable run by this amazing guy, Alex Dunn, who is really helping those that have kind of physical limitations by using eye movements and neck movements use digital products, right? This opens up an entire universe of people who haven't been able to use mobile apps and things of that nature ever before. So, there's still a lot of work to be done.

Nathan: There's so much work to be done. So, we've talked a little bit about some of the companies. What are some of the lessons you've learned over the past four years?

Jesse: One really important one, which is maybe different than what a lot of venture capitalists or people working in this space would say. A business that has a family on the other end receiving care, it's really important that a company that's serving them is growing organically and not faster than it needs to. And that is a misaligned incentive sometimes.

Nathan: Tell me what you mean, like they're gaining traction and getting people that may not be the right users or?

Jesse: And I'm speaking in euphemism a little bit, and I'm not going to call it any company specifically, but, but imagine we spent a lot of time on this podcast talking about care delivery, right? Delivering tech-enabled services to people, right? And tech companies, right, if they're growing, investors will pour as much money on them as possible so they can continue going faster, hiring more people to continue delivering the service because speed to market helps companies achieve larger market share and beat out competition, all of these things that are totally well in good in other spaces.

You might have heard maybe like "build fast and break things." That doesn't work in this space because when you quote-unquote break things, you have a family on the other end, someone who is meant to be receiving care. I have a zero tolerance policy for a company that grows fast at the expense of an individual that needs care.

Nathan: Yeah, that's so true and so important.

Jesse: And there have been cases where a care delivery business, a family will be waiting for a clinician to show up at their home, and they'll have a no-show, not just once but two or three times in the same week. That's unacceptable from where I sit. Mistakes happen but sometimes this is happening more frequently when a company is trying to go, grow faster at all costs. You can tell my maybe the tone of my voice has changed, because this is one of the risks. This is one of the dangers of bringing kind of profit-mindedness into this space, right? Every strength has its shadow. I think the dollars are important to flow into the category because we need more innovation but not growing at all costs.

Nathan: It's the do no harm, right, and the right guardrails. And I've seen so many different organizations step outside of what I would consider a guardrail because they need to earn, you know, hit some target that set. So, your slow growth, right growth, right audience, right delivery is a measured yet, the right approach from my point of view.

Jesse: I actually do believe that we are learning. We, the royal we, this space, investors coming into a mission-driven area, are learning, and hopefully the companies that get started from here on out at least read the page of that book.

Nathan: Yeah.

Thank you so much for coming here today. I think it's an amazing way to kick off your fifth year, I guess, for a complete fifth year starting. And so, applause to you and a lot of heart for everything you've done so far for people who are neurodivergent, their families, and for the field at large.

Jesse: Thank you, Nathan. I just wanna also thank the team at Understood. Have loved meeting everyone here, and honestly, the content you put out is best in class, so keep going.

Nathan: Thank you.

Thanks for tuning in to "Minds at Work." I hope today's conversation inspired you to think differently about what's possible and how we approach our work as business leaders. If you want to know more about our guest today or the work we're doing here at Understood.org, please check out the show notes. For those looking for resources to better advocate for themselves and others, please visit U.org/work.

"Minds at Work" is brought to you by Understood.org. Understood.org is a non-profit organization dedicated to empowering people with learning and thinking differences like ADHD and dyslexia. To help us continue and expand our work, please donate at Understood.org/give.

The show is produced by Julie Subrin and Alison Hoachlander. Mixing is by Justin D. Wright, Samiah Adams is our supervising producer, Briana Berry is our production director, and Neil Drumming is the editorial director. Our executive directors are Laura Key, Scott Cocchiere, and Seth Melnick, and I'm your host, Nathan Friedman. Please join us next time. We'll continue exploring how difference can spark connection and shape a more inclusive, creative future of business.