Neil Patel

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Turning your passion into a billion-dollar company is exactly what Socrates Rosenfeld did. After spending seven years in the military as a helicopter pilot, Socrates suffered from a post-traumatic stress disorder and turned to cannabis for healing therapy. He always knew that the plant had healing factors. He then used his eCommerce skills to make purchasing cannabis online a simple process for others too. In turn, his company, Jane Technologies, has supported local cannabis retailers across the nation. His venture has acquired capital from top-tier investors like Gotham Green Partners, Honor Ventures, Artemis Growth Partners, and Delta Emerald Ventures.

In this episode you will learn:

  • How to ask for help as an entrepreneur
  • Staying authentic to yourself, no matter how successful you get
  • How to take your life experiences and turn them into a successful business
  • How to take risks to follow your passions
  • How to raise funds through the various funding stages

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For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

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Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).

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About Socrates Rosenfeld:

Socrates was raised in Newton, MA, and earned his commission in 2004 from the United States Military Academy.

Inspired by how mobile software can connect people and provide access to places previously unreachable, Socrates most recently became the co-founder & CEO of Jane Technologies, Inc.

He is a former Summer Associate/Associate at McKinsey & Company. Rosenfeld graduated from the United States Military Academy at West Point with a bachelor of science in Leadership and Management Studies.

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Connect with Socrates Rosenfeld:

Read the Full Transcription of the Interview:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. I’m very excited about the guest that we have today. I think that he’s not the typical traditional entrepreneur that you would think of, but nonetheless, it’s incredible what he has been able to do with his company. We’re going to be learning a lot about building, scaling, raising through several financing rounds, and also to the discipline that he really experienced when he was in the army and how he’s applying that to the way that he’s building his business. Again, we’re going to be very inspired by today’s episode. So without further ado, let’s welcome our guest today. Socrates Rosenfeld, welcome to the show.

Socrates Rosenfeld: Alejandro, thank you so much for having me on, man! It’s a real pleasure.

Alejandro: So born in D.C., but you grew up in Boston. Tell us about your upbringing.

Socrates Rosenfeld: Oh man, we would need a whole other show for that one, Alejandro. If my name is any indication, my ethnic background and how I got here is a wild one. I was born in Washington, D.C. My mother was a very young mom. She was in college at the time in an American university. She’s originally from Indonesia. Her mother is from Egypt and of Greek ethnicity. My grandfather grew up in the jungles of Sumatra, so I’m just really grateful to be here in the U.S. I grew up in Boston, where I had a very interesting childhood. Then I graduated from East South High School. That’s really where my life’s story began. I went to West Point in 2000 and graduated in ’04. I know I fast-forwarded through my childhood.

Alejandro: What got you into the army and West Point and all of this?

Socrates Rosenfeld: Great question. As much as I want to say, it was because of patriotism and service to my country. I think that was a part of it, but not really the real reason why I went. I went because I’ve always wanted to do something different. I’ve never liked to follow the crowd, and I like the sense of adventure and challenge and the unknown, and that’s what West Point presented to me. There wasn’t another person from my high school who had ever gone to that school, so there weren’t a lot of resources for me. I went, not knowing what I was getting myself into. The first year and extending into the remaining three years were quite the experience for me. I didn’t give myself so much credit up until this point, but I think looking back, as an 18-year-old kid, not knowing too much, I guess my instinct, Alejandro, knew that I wasn’t going to go where I wanted to go without changing my course. I think if I had gone to a “normal” institution, it might not have worked out so well. I knew I needed some discipline and the challenge, and that’s what West Point afforded to me.

Alejandro: Out of all things, when you end up joining the army, why helicopters out of all things?

Socrates Rosenfeld: You ask great questions. It’s funny. I try to think of reasons why I did these certain things, and I think I didn’t have a clear understanding as to why. Like most people, when they’re 18, 19, or 20 years old, you chase the achievement; you chase the status. For me, that’s what West Point was. It was a very elite school and hard to get into. I said, “Okay, let me try that.” Then when you’re there, you’re a high-ranking student. Where do all the high-ranking students go? You get to select your branch. Everybody was saying that flying helicopters was very hard to get into, so if you have a chance, you might as well do it. That’s why I did it. Again, no family members had ever flown helicopters. I didn’t even know what an Apache helicopter was or looked like. At the age of 21, I decided to go and try this. I’ve said this in the past, but at the time, I was chasing the should. I was chasing what everybody was telling me I should be doing with my life. I wasn’t giving any thought to what I wanted to do. So, to answer your question of why I got into helicopters, that’s what everybody told me I should be getting into. Fortunately, I had just enough of a class ranking to be able to qualify for helicopters. After graduating from West Point, I went down to Fort Rucker, Alabama for flight school. That was a whole other chapter of, “My gosh! What did I get myself into? I have no idea what I’m doing.” You learn along the way, not unlike entrepreneurship. Learning to fly a helicopter was one of the most challenging, coolest experiences of my life.

Must Read: Philip Belamant On Raising $230 Million To Help You Buy Now, Pay Later With Zero Interest

Alejandro: Wow! Definitely sounds cool; that’s for sure. When you went into the army, and you were there for about seven years, you were deployed on missions like Korea, Iraq, so seven years and these types of missions gave also the opportunity to go through different experiences, the good, the bad, the ugly, too. And that left you in a way that when you came back to the civilian world, it was tough adjusting to what was going on here, given what you had experienced, whether it was losing friends or seeing people dying around you. Tell us about that readjustment into the civilian world, and why did you say, “You know what? I think it’s time for me to explore something different in my life.”?

Socrates Rosenfeld: It’s a great question. I spent seven years responsible for the lives of other people, literally, their lives. That is a very intense responsibility. I’m not a parent, but all the parents that are listening, you’re responsible for a life. That’s intense. It’s not a chore or an errand, or a job. It’s a 24/7 responsibility. From the time I was 22 years old to the time I left the service at the age of 29, I was trained and conditioned to make sure that every decision I made was through the lens of life and death. When you get into a helicopter, and you have to make sure that your engines work, that’s a decision on life and death. When you have a mission, and you have to evaluate the risk and send your soldiers out there, you have to make sure of: Is that plan correct? Did you look at all the angles? Did you anticipate what the enemy was going to do? That is life and death. You take that as table stakes in the military because you know no other way. Suddenly, I got off the ride. Do you ever walk in the airport, Alejandro, and those conveyor belts that you put your luggage on, and you take a couple of steps, and you’ve gone 100 meters? That’s what I was on in the military, and then suddenly, I got off. That wasn’t a conveyor belt in the airport. That was moving at the equivalent of what seemed to be hundreds of millions of miles per hour, and suddenly, I was off the ride. I’ll never forget leaving Iraq and getting on an airplane, leaving combat, and landing at some airport in Ireland, and getting off, and going to the Starbucks, and waiting in line with a bunch of civilians, and how thin that line was between the world I was in and the world I was coming home to. If you’ve ever changed jobs, or changed locations, or went through a bad breakup, or just change in general is stressful. But to go from a highly kinetic environment that is combat to coming back home was an adjustment for me. Like most military veterans, it took me a while to fully come back home. Physically, I was home. Physically, I was back in Boston. Physically, my body felt okay, but emotionally, I wasn’t home. I couldn’t connect with my loved ones like I wanted to. I couldn’t connect with my friends like I wanted to. I couldn’t just approach normal daily activities like getting ready to go to school and preparing for an exam. I always met everything with what’s known as hypervigilance or extreme intensity. That is a sign of post-traumatic stress, and we all have that at varying levels. So, for me, I struggled to come back home fully until I started to consume cannabis. Cannabis allowed me to process the things that I had gone through in a safe space. I was able to hold the space for myself. I was able to show myself love, and self-empathy, and non-judgment. Through that time, Alejandro, I was able to start to melt away my experience in the military and come back home to my true self. Plant medicine, particularly cannabis, really helped me find that again. I will remain forever grateful to this plant for truly bringing me back home, and it was then when I really started to get very interested in this plant and start to talk to other military veterans and started to realize that this was not the only way, but a very effective way of bringing soldiers back from combat experience into a peaceful healing environment and truly helping them come back fully home. I’m truly grateful that I first consumed my first cannabis in the fall of 2011, and I haven’t looked back since.

Alejandro: In this case, for you, the adjustment ended up being quite successful because you went and studied your Master’s program at MIT, one of the best universities in the world to do your graduate program. In this case, for you, after that, as they say: ideas are like doormen. They are there. They are incubated even though we don’t know that they are there. But obviously, they are. In your case, you did a little bit of time at McKinsey after MIT, and it’s interesting because I’ve met a lot of consultants that were at McKinsey, and then they built their own companies. I find that you have two things that really played for you, to your advantage. Even though you were not the typical Silicon Valley type of entrepreneur, I think that there were two things that played for you. One was the discipline that you could apply, and the other experience is from the army. But now that we’re talking about the time at McKinsey is being able to grab a big problem, and then perhaps you break it down into small problems, and then you tackle each one of those. In this case, being at McKinsey, how did it help you in being an entrepreneur later on?

Socrates Rosenfeld: Oh, that’s a great question! Usually, people ask me about the military, how did it prepare you? But very few people ask me about McKinsey, and it really did help me a lot. One is, it taught me how to communicate. As a pilot, you’re taught how to communicate. On the radio, there’s a certain cadence; there are certain words you use; there’s a certain tempo to things. In business, there is a very similar cadence and tempo to business communication. So how do you take something very complex, as you had mentioned, Alejandro, and break that down into actionable steps and put it into a logical plan? McKinsey and other management consulting firms do a wonderful job teaching their associates and their employees how to take very uncertain ambiguous problems where there’s a lot of dirty data or a lot of assumptions, and how do you get to an answer with certainty. To be honest with you, I say that I got my Ph.D. at McKinsey, but you get that in the army as well. You have limited resources. There’s an unknown risk, and no one knows where the enemy is at all times. So how do you take the end-state, and that is a mission accomplishment of taking a certain piece of terrain on the battlefield or finding a high-value target or something like that on the battlefield? How can you take that end-state and then from that end-state back plan to the current state and then come up with a logical plan that seems to work? I think you nailed it, Alejandro. At the end of the day, that’s how you go from idea to execution. That’s how you go from assumption to actually assigning risk or uncertainty to those unknowns. Then, from there, hopefully, you have a clear landscape and a battlefield, if you will, to roll with that analogy, to make a decision that gets the capture of the most amount of reward with minimizing that amount of risk. My time at McKinsey trained me to think that way, on my feet, over and over and over again and to see that now translate into how we look at and solve problems here at Jane. I think there’s an absolute tie and linkage to my time at McKinsey, and I’m grateful for it.

Alejandro: Let’s talk about ideas and execution, as you were saying. Let’s talk about Jane Technologies, which is your baby, your company. Let’s talk about that moment where you realized that it’s time to bring it to life. What was the moment like, and how did you go about actually bringing it to life?

Socrates Rosenfeld: The first moment was the idea. I remember that I was on a study at McKinsey, and I was studying all these different eCommerce strategies. I realized that whether it was in shoes, food, apparel, places to stay, or flowers, these platforms provided a very patterned way to shop for consumers. And that way worked. You can search for stuff that is very ambiguous or very specific. You can read reviews from real customers who have used that product or stayed at that place. You can get recommendations from data-driven algorithms. You can compare by price or various things like that. Ultimately, what you were given was real purchasing power. I remember when it was my wife’s birthday in 2015. An idea popped into my head, and I said, “What if we could do this in cannabis?” I called my brother. I talked to my wife, obviously, in the middle of a birthday dinner. She loved that. And, usually, these people in my life have told me no because they love me. They say, “No, that’s not a good idea. I don’t think that’s going to work.” Here I had people in my life who were actually telling me, “That’s a pretty good idea,” and that was the first time I had heard that. I was still a consultant at McKinsey, and at night, early in the morning, and on the weekends, I’d be putting together a business plan as a side project. It wasn’t until I talked to our first investor, and I knew nothing, Alejandro. I knew nothing. I was almost embarrassed to ask people for help. Now I know that closed mouths don’t get fed. You have to ask for help as an entrepreneur, but I didn’t know that at the time. I approached him and said, “You have some money. You’ve invested before. Would you ever give me money for an idea like this?” He said, “Yes, but when are you going to leave McKinsey?” That was the first time it was ever real for me, and I said, “At the end of the year,” and that was in three months. He said, “Okay. I’ll give you the check.” To say that I was not terrified—not terrified, but I was scared about leaving my job, leaving a very “well-known” job, a respected job at McKinsey, good salary, I was just starting my career, and I remember talking to my wife saying, “Here’s this investor. He wants me to go full-time on this. Should I do this?” She said, “If you don’t do this, when will you ever do it?” I took the leap on January 1, 2016, and I was making no money for the first time in my life ever since I was 18. I was the happiest I have ever felt in my life, and in a very long time, I was free to pursue that which I loved, pursue that which gave me energy and light and life. I remember all the entrepreneurs have their stories of eating peanut butter and jelly and eating almonds for breakfast and lunch. You don’t do that for the story. You do that because you don’t care about anything else. All you care about is growing that idea and pursuing that because you believe in it. For me, I will never forget that lesson; that feeling, again, fills my heart and my soul. I know that I must pursue that because, essentially, that’s destiny talking to me. I really believe that. Taking the leap was terrifying, and it was the greatest thing that I’ve ever done for myself up until this point, truly.

Alejandro: I love it. For me, by the way, it was rice and beans. [Laughter] Let me ask you this, Socrates, for the people that are listening to really get it, what ended up being the business model of Jane?

Socrates Rosenfeld: In its simplest form, can we make shopping for cannabis as simple and as straightforward and as trusted as shopping for anything else in this world? Can you take the thousands of fragmented small retailers situated across 30-40 state markets with different products and different naming conventions and different tax structures, and can you create a thread that ties all of these disparate systems and stakeholders together, package that up in a way that for number one, the consumer, they can feel like they’re shopping on an Amazon, but instead of an Amazon where products are getting shipped directly to you from Amazon, instead, what we do is, we take your order, and we push that across the local markets to you so that you’re actually ordering a product from a local retailer. Then you flip that, and that’s supporting local retailers by providing them a powerful eCommerce technology that they can use. It takes all of their offline inventory and pushes that online fully automated. If you can do that on both sides of the market, what we think and what we’ve cracked into is the new age of retail, the new age of eCommerce. That is the convenience and curation of an Amazon, with a locality and a convenience of a DoorDash or an Uber Eats. That’s what we’ve been able to combine here in the Cannabis industry, and it’s really exciting.

Alejandro: Amazing. In terms of capital, how much capital have you guys raised to date?

Socrates Rosenfeld: We recently closed our Series C, and we’ve raised, to date, about $130 million.

Alejandro: What was that progression like? You’ve done a bunch of rounds, so, obviously, it started with the check of that individual that got you to do that leap of faith all the way to the last round. How have you experienced those different financing cycles?

Socrates Rosenfeld: Not a lot of people know this, but going into our Series A, in which we raised about $6 million, the first $1.5 million came from a convertible note. It took me a year to raise that note; $25,000 checks, we raised $1.7 million. I didn’t have a big fund to go to. I started from my network in the military. There are a dozen or so military veterans who are my friends who I talked to about this, and they said, “Soc, if this is helping you, and you seem so passionate about this, I’m going to give you a check. I believe in you, man. Go and do it. Don’t just do it for yourself, for Jane, or for us, but do it for the veteran community.” I’ll never forget that. I’m forever grateful for that. So it went from very small checks to friends and family to people, Alejandro, who didn’t know anything about cannabis or technology but knew about me. “Okay, Soc. If you’re going to do this, I trust you that you’re going to do everything you can to make this a success.” Again, I am forever grateful to those people. Then, Series A closed with, I would argue, friends and family. Then that got us to be able to get into about 100 stores. Then we started to raise our Series B, and then it was a little bit more and bigger names, but still, no one knew who they were. They were very focused on cannabis, cannabis-specific investors from whom we raised about $20-$21 million from there, which was great back in the summer of 2019. That got us to about 800-900 dispensaries, 14 state markets. Then, boom, the pandemic hit in early 2020. At the time, we thought we could raise another $30-$40 million Series C, but everything was pushed to online, and cannabis became an essential business. Every startup, Alejandro, has to get lucky. I think you make your own luck in positioning and timing. But it was a perfect storm. Unfortunately, it had to do with the pandemic, but fortunately, for the industry, what it did was it pushed everybody to order online, and from there, in 2019, we went from doing about $100 million in gross merchandise value to $1.6 billion in 2020.

Alejandro: Wow!

Socrates Rosenfeld: Then, this year, in 2021, we’re going to do about $3.5 billion. So it just keeps growing and growing. We decided because of that growth, we needed to prepare. Basically, it took five years of growth and crammed it into a year. Most recently, we raised our Series C, which we closed in July of 2021, led by Honor Ventures and Jeff Housenbold. And still, the same premise. Trust in the team; trust in the mission; trust in the technology; just bigger checks, and more sophisticated investors who are very helpful for us in thinking and how we can accelerate our business and position ourselves in the next chapter of growth. So it’s nice to say that we’ve raised $130 million. If I take myself back to 2016, asking people for $25,000 checks—and I will say this because there are entrepreneurs listening and founders listening. That feeling that you get for that first $25,000 check that I ever got, I don’t think anything will ever match that feeling. Even $100 million, which is a lot of money, that feeling is still the same there. It’s not even bigger with more money, so enjoy every step of the process. That’s what I’ve come to realize.

Alejandro: Yeah. It’s amazing because I’m getting flashbacks, too, from the first check, and I’m right there with you. In your case, your background is not the typical hypergrowth founder or background, and obviously coming from a completely vertical, segment, or industry, here you are coming in, and you had to go about building your own network too, starting from nothing. So how did you go about really building those relationships, whether it will be for fundraising, whether it will be for hiring, or for partnerships for distribution?

Socrates Rosenfeld: Some of my teammates are probably laughing at this moment, but I can’t do this anymore, but used to, I would take a call with anyone and everyone. Any opportunity I could take to pitch my business, I would. Even if I didn’t know that this person could be helpful, even an insurance broker, for instance, or a banker or an accountant, it didn’t matter. I told myself that what I was doing was planting seeds. You use the word: patience, which is a critical component of the entrepreneurial journey. I said, “Nothing wonderful grows overnight. Beautiful plants and trees here in California don’t grow overnight. They take time, so let me plant the seeds today.” That was my mentality. Ultimately, though, what I realized, Alejandro, is—you know this as someone who has started his own business. Other entrepreneurs will recognize who is for real and who is not, in my opinion. You can only understand who is for real if they’ve gone through the experience. What I was trying to do was just be as authentic as I possibly could about where I was. I didn’t lie and say, I started another tech companies; you should bet on me. But what I was able to be honest about, and it was very easy, was my passion around cannabis because it helped me. Also, my passion around leading people and teams because I had done that before. And ultimately, my passion around shaping what the future of eCommerce and what the future of this cannabis industry would look like. I didn’t have a product early on to sell, but what I could sell was my passion, and my belief, and my authenticity, and that’s something that you can’t fake. So I think that resonated early on with mentors, advisors, entrepreneurs, and investors who were willing to see that in me and willing to take a shot and support me. If you don’t have anything but yourself, that’s what you should be selling, and I truly believe that. That doesn’t change today. Here I am. Jane is much bigger than I am, Alejandro. It’s 100 employees and much smarter as engineers and designers and salespeople than I could ever be. But my role as a CEO is to be authentic, and I just have to bring my authentic self. I think that’s what resonates with a lot of people, and I think, at least for me, that’s what resonates to me when I hear other people speak is to be themselves and not to try to follow any template. Because I think if you can do that as a human being, and particularly as a founder/CEO, then you will create a company that is itself and not a copycat of another. That’s something that we take very seriously here at Jane. We make mistakes; we don’t get everything right. I make mistakes; I don’t get everything right as a human being, but man, we are our authentic self, and we’re trying to be as genuine as we possibly can. Whether we are successful or not, how will we measure that? At least we did this our way, and that’s the way I’ve always approached it, and I think that’s resonated with a lot of investors, and I think, quite frankly, has extended to the Jane brand, and it has resonated with the rest of the market as well.

Alejandro: That is very profound, Socrates. Let me ask you this. Imagine that you go to sleep tonight, and you wake up in a world five years later where the vision of Jane is fully realized. What does that world look like?

Socrates Rosenfeld: It’s much better than waking up to a bunch of emails in comparison.

Alejandro: 100%.

Socrates Rosenfeld: You know, it’s a very healthy cannabis ecosystem. I’m big on this ecosystem tip lately, Alejandro, where an ecosystem like a lake or a pond or a forest. It’s balanced. There’s not one big winner that’s taking up everything, and everybody else is playing on the ancillary. Everybody is successful here. There’s a lot of value to be created here. There’s diversity in a very healthy ecosystem. It’s not the same tree over and over and over again. You walk through the forest. You see a bunch of different bushes and trees, etc. That’s what we want. So not just one big brand. Not one big retailer. Hundreds and thousands of different brands and retailers are all living in this ecosystem. I think that’s what we want. For the plant itself, to protect the integrity of this plant—this is not beer. This is not cheeseburgers. This is not a pair of sneakers. This is a medicine that helps people whether they want to believe it or not. Some people think, “Oh, it’s just recreational—you smoke a joint at a party; you become relaxed; you’re more sociable. You take an edible; you go for a walk with your dog; you look at the sunset. Sure, some people might say that’s recreation. For me, that’s on the spectrum of wellness and wellbeing. That is healing, in my opinion. As a society, can we view cannabis through that lens and not through the lens of just some commodity product that’s like everything else? Then, ultimately, for the consumers. Number one, first and foremost, the people who are put in prison from this plant are now out of prison, and in my opinion, should be given first access to perhaps coming back into this industry in a legal way. Not everyone. There are some bad actors. For a lot of people that were thrown in prison for cannabis, they were probably coming from black and brown communities that were unfairly targeted. Let’s make that right as a society. That’s what I would like to see in five years. Then, ultimately, for the consumers who need access to this plant, whether that’s senior citizens that need topical cream to rub on their arthritis or terminally-ill patients with cancer or AIDS that need some kind of relief in their transition from this world, from parents who have children with epileptic seizures, from soldiers who have post-traumatic stress—everyone who needs access to this plant, do they get it? Not just in the U.S., not just in Canada, but around the world. If we can do those three things, if we can protect the integrity of the businesses, protect the integrity of the consumer, and ultimately protect the integrity of the plant, then we will have built a healthy, diverse, balanced ecosystem globally, I think if we can do that, we can bring a lot of love in this world, and that’s the mission that we’re on here at Jane.

Alejandro: I love it, Socrates. One question that I typically ask the guests that come on the show is, imagine that I put you in a time machine, and I bring you back in time; I bring you back in time with all this wealth of knowledge that you’ve been able to accumulate over the past five years or so building and scaling the company. And I bring you back to that moment and being able to speak to that young Socrates that is in McKinsey, and right at that point where that younger Socrates has that check on the table, and he’s looking at that check. Imagine that you were able to give yourself one piece of advice before launching the company. What would that be and why, given what you know now?

Socrates Rosenfeld: I love this show, man. You ask some great questions. This is what I would tell myself: life is not to be endured but to be experienced, and all of it—the good times, the bad times, the hard times, the easy times, experience it. Don’t just endure it to the next stage. Experience all of it because eventually, all the dots connect, and if you can remain present and truly experience, then you have lived a full, rich life, and you will probably have learned some things along the way. For me, that is what I would tell myself to embrace the experience, don’t just endure it.

Alejandro: That’s fantastic. Socrates, for the people that are listening, what is the best way for them to reach out and say hi?

Socrates Rosenfeld: We love hearing from everyone, good, bad, otherwise. Please feel free to reach out to us across our social channels at iheartjane.com. If you want to email us directly, we’d love to hear from you: [email protected]. Please feel free to reach out to us at any time.

Alejandro: Amazing. Socrates, thank you so much for being on the DealMakers show today.

Socrates Rosenfeld: Thanks so much for having me. It’s a great show, man. I appreciate it.

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