Inaugural episode of Clients on the Rise. Steve Wandler, CEO of Bookmarked, sits down with Chuck and Brian to talk about the AI book-intelligence company he's building in Texas, and the regulatory wave Texas school districts face. HB 900 was struck down by the Fifth Circuit; SB 13 puts responsibility on superintendents to verify what's in every library. The average high school librarian orders 300 new books a year. The average book is 200 pages. The math doesn't work without a system. Plus Steve's path from high-school dropout to three-time founder, and what it took to walk into Texas as a non-Texan.
Bookmarked is a book intelligence company, not a library management system. Its AI content-context engine reads books objectively, identifies content that could be flagged under regulatory or community standards, and surfaces excerpts with context so that school districts can make informed curation decisions. Bookmarked does not decide what is appropriate; it informs the people who do.
HB 900 required publishers to filter explicit material out of books sold to Texas schools. Publishers sued on First Amendment grounds and won at the Fifth Circuit Court of Appeals. The state was left without a legal mechanism to hold publishers accountable for what reached school shelves.
SB 13 shifts responsibility from publishers to school districts. Superintendents are now responsible for verifying that explicit material does not appear in their libraries. The practical result: someone has to read every book before it's purchased and reviewed, at high schools that often means 300 new books a year, at roughly 200 pages each.
By not taking a side. Bookmarked provides content and context, not judgment. School districts, communities, and parents make the decisions about what fits their values. The same book may belong in one community's high school and not another's middle school, that's not Bookmarked's call to make.
Multi-sided marketplace: publishers (who provide the books for analysis), school districts (who make purchase and curation decisions), parents (who want clarity about what their kids are reading), and the state legal framework on top of all three. Aligning all four is the work, and it's harder than the technology itself.
Don't do it unless you're going to the mat. It's harder than you think. Build a team of people who will tell you when you're wrong, not just when you're right. Expect days when you can't meet payroll. Strategic partners (board, capital, legal) matter more than most founders realize.
Lightly edited from auto-transcription, ad reads removed, paragraphs grouped, speakers attributed via heuristic. For exact attribution, listen on Apple Podcasts, Spotify, or via the embedded player above.
Brian Elliott: everybody wins if everybody reads more books. Welcome back to Y'all Street, everyone. I'm Chuck Krause, your co-host. Joining me is Brian Elliott.
Chuck Kraus: And today we have a guest, a Scale client, bookmarked, represented by one of its founders and CEO, Steve Wandler. Welcome to Y'all Street, Steve. Hey, thanks for having me, you guys. Welcome, Steve.
Brian Elliott: Great. Really looking forward to this conversation, this series, this client profile series we've titled Clients on the Rise. And we want to give an opportunity to have conversations with our clients, talk about the problems that they're trying to solve, the way they're solving them in innovative ways, and the way Scale is partnering with clients to do that. So, Steve, let's get into it a little bit.
Chuck Kraus: The name of the business is Bookmarked. Bookmarked helps schools maintain vibrant, safe, compliant libraries where students can explore ideas and grow while reducing administrative burden for school leaders. Tell us about Bookmarked in a summary fashion. Sure.
Brian Elliott: We're really, what we're doing is we're saving books. And books are under attack right now through censorship and primarily in public schools right now. So we're saving books and trying to understand the ban and challenge book market and the bottlenecks and the challenges that come around that. So we're essentially helping school districts curate their ultimate book library collections with AI.
Chuck Kraus: Now, you're no stranger to startups. Give us a little bit of your history and what you've done previously and then what inspired you to get involved with the Bookmarked team. Yeah. So I guess by a little bit of history, I'll go way back to my school day really quick.
Brian Elliott: I was an early entrepreneur, had my first, I guess, company. I don't know if, I don't think I had a core, but I had a DJ company and sold other products for DJ equipment and stuff like that when I was in high school. And then I dropped out of high school and I became an entrepreneur and started my first startup in 2001. And that was the largest competitor to Geek Squad at the time.
Chuck Kraus: And we ended up selling that to Sport.com in 2008. May 2nd, 2008. What happened June 2008? The market tanked.
Brian Elliott: So we were 30 days away from not doing that. So we were pretty fortunate. Yeah, good timing. Yeah, it was timing.
Chuck Kraus: Yeah, luck. And then moving on, I moved from Canada to the Silicon Valley, moved back to Canada, started a startup called FreshGrade, which was an education software company that was focused around grades. Because I was a high school dropout, grades did not serve me. And grades always told me I wasn't good enough.
Brian Elliott: And I think grades do that to most of our kids. And so I was looking for a way to measure learning and growth without grades. We made some good traction there. Came to Texas and tried to infiltrate Texas.
Chuck Kraus: And that was a pretty hard one and figured out right away that this was going to be, the market wasn't ready. And we were too early. And, but we made some good headway. And I learned a lot from FreshGrade around education and how the system works, how to sell into it, you know, where the real pain points were.
Brian Elliott: And, and then we started bookmarked. Yeah, so that's interesting. So now you're, you're back, you're dealing with, again, the, the, the school system. But, but from a different, from a different perspective, what would you say, what, what's broken in the existing paradigm that makes the bookmark solution so attractive?
Chuck Kraus: Hmm, that's a good question. Well, we're still learning a lot. What I thought was broken when we started and what I think is broken today. And so what we thought was broken when we started was, why can't we just give parents the right to give access to books that their kids want or restrict those books?
Brian Elliott: And that would just solve the problem around, you know, ban and challenge books. We just thought, everybody thought it was going to be kind of that easy. It wasn't. Because we don't know what's in the book still.
Chuck Kraus: And so I, I think that's what I originally thought it was. But now I look at it very differently. And I think, hmm, literacy is declining in America. Yeah, we could agree on that.
Brian Elliott: I think, I think the stats show that literacy is continually declining. Yes. And libraries aren't thriving. We're not opening up libraries.
Chuck Kraus: We're not, you know, when you go to a library, it's not full of people. It's full of books that are in the library when they should be in the people's hands. That's why libraries are there. So if literacy is declining and libraries aren't thriving, what does that tell us?
Brian Elliott: If libraries are the hub of literacy, it tells me the hub is broken. And I want to fix that hub. I want to get books in the library where people go in there and say, there's too many books for me to choose from that I would love to read. Versus what do I read and where do I start and how do I know?
Chuck Kraus: And that's the evolution from where we started to where we are today. And now we have to scaffold that up to how do we get the right book in the hands of a reader, whether you're 85 or 5. And the wedge for us right now is the regulatory requirements that school districts are now facing because of these new laws that say, you know, we need to re-examine what is in our libraries and ensure that they reflect our community values and needs. And how is what Bookmarked is providing addressing, you know, both sides of that issue?
Brian Elliott: When you hear about books generally or books in school districts, it's a big controversy. And I think the news articles sort of ask you to take one side or the other. So how do you navigate that as a company, not getting pigeonholed into, you know, you're on one side or the other? Yeah, we learned that the hard way.
Chuck Kraus: You know, and I'm a technology guy in a dropout, right? Like, I don't have a degree in this stuff. I don't understand it, but I'm just kind of using common sense in some, in a lot of ways and, and going, like, I don't have an opinion one way or the other. What we need to do is allow people to make informed choice.
Brian Elliott: And how we do that is by understanding the content of the book with context. And in order to do that, you have to read the book. And so if we can just give them the content and context around what's in the book, then we allow them to make those decisions for who they're buying the book for, or who is deciding to read the book. So that's how we stay out of the, you know, the two sides piece is we're just giving you the information, you make the choice.
Chuck Kraus: And as people start making more choices about that book and in different reasons. regions and different communities and stuff, then we start to understand maybe that book is more suitable in a high school than a middle school. Maybe, maybe some communities it's okay for every class. It's not, we're not making that choice.
Brian Elliott: All we're doing is we're giving good valuable data to be able to help make better choices of curation of your entire library collection because libraries are, I call them a black box of information. You know, you got this, like we need to be sharing that data, not just amongst, you know, the school districts, but what books are kids reading across the state of Texas? And what are they loving and why? And, and what did you find over there that somebody else loved?
Chuck Kraus: Like we're relying on one single person in a library to make all those choices for 500 kids and 20,000 books. Impossible mission. Well, this is, this is interesting. And I think very timely, if we were, if we were all in Austin, like Brian is today, I think there's a debate going on, on the, on the Senate floor today, perhaps with a bill, Senate bill 13, I think it is.
Brian Elliott: Maybe you can talk a little bit about, about that bill, the, the other bill, how's bill? HB 900. Yeah. HB 900.
Chuck Kraus: And just what, you know, what those bills are attempting to accomplish and then how, how bookmarks technology solution can really facilitate, um, you know, better solutions. Yeah. Yeah. And, and like, unfortunately we're doing this, right?
Brian Elliott: Like we shouldn't have to be doing this, but we, we need to know because these laws are there. So you mentioned HB 900, which, uh, came into effect, I guess last year, the year before. And, uh, that had to do with, uh, parental choice of giving parents the right to know what's, what their child is coming home with or not, and being able to restrict individual books. Uh, and then there was another side of that bill, which turned to law, which was the publishers being required to, uh, essentially filter the books to ensure that explicit material does not show up in Texas.
Chuck Kraus: Uh, that passed and the publishers took the state to court and they won in fifth circuit court against their first amendment, uh, and they won. And so now, uh, the state of Texas has no accountability per, you know, somebody to keep accountable to. So there, they went back and they brought it eight SB 13, which includes now that it requires the school district to be responsible, the superintendent to be responsible for what books are in the library and ensuring that explicit material doesn't get through. So, and there's a whole bunch of other, you know, things inside that bill that make it difficult, uh, and.
Brian Elliott: creates bureaucracy on how we order a book and just ordering one book in that in in this new world if you're a high school librarian and you have to order 300 new books this year let's say and they're brand new and their novels in the average book is 200 pages uh and you you have to read it because you you you can't just get reviews you need to know if there's words in that book that could potentially cause a flag of some sort you just need to know and they have to read the book how many books can you read 200 page books can you read in a year right it's just it there's the bottleneck steve can you walk us through an example of of how your application addresses this like take us through what does bookmark do yeah so that's that's that's good brian because so there's two pieces there's two parts of what we do and there's one what we do today and the other side is what we're what we've built and what we're building is the infrastructure for books so we are a book intelligence company we are not a library management system so what we do so i'll start with maybe what we're building because that's the piece that that's the big uh that's the big opportunity here and that is uh we are building a content context engine that protects the ip of a book and reads the book objectively for content that could be deemed as inappropriate and we don't tell you what's inappropriate or not we just show you that these could be deemed inappropriate and we read that book for you show you where those excerpts are and help you make a decision on that book much quicker to get approval because look 90 percent of the books that we're going to read are fine it's that you have to read 90 to get to the 10 and you don't know where they are so how do you figure that out at scale and if you're only going to read 300 books so you're limiting yourself to 300 books of knowledge when there was 4 million printed last year like how are you going to choose the 300 so uh that's what we're solving the big picture we have that built what we need to do now is bring the infrastructure together we need publishers to give us their books and we need to have a mechanism to do that and we need a mechanism to have school districts understand what's in the book and how to determine what's okay and what's not okay and then we need parents and readers to understand like what are we okay or not okay with and so you have an entire ecosystem of stakeholders and you have state law that you have to adhere to so it's a very complex problem so that's what we're working towards right now what we do today think of it like antivirus for libraries and uh so we have ban and challenge book lists out there uh pen america is you know the leader they've taken the reins and and um and basically take in information from you know people and systems where they say this book was banned in this school district this was banned in this school district the problem is it's highly manual and it doesn't tell the whole story of the book because yes books are removed from the shelves but what it doesn't always tell you is what they did with the book did they remove it and take it out of the school district or did they move it out of an elementary school and move it to a high school and there's where it just goes into the vapor and we need to we need to be transparent about that so we know exactly what's happening with the book so we know what is being censored and what is not being censored and just being reasonably you know responsible and the reason those books were in the elementary school and not in the high school isn't because some librarian decided to put that nasty book that a sixth grader shouldn't read it's because they don't know they don't know 100 of the libraries that we scan 100 we find books that shouldn't be in those libraries not because they're trying to be you know malice i guess is that the way like they're not trying to be that they just don't know and i guess one one of the benefits of of the program as you're describing it is you can be that hub uh rather than a bunch of silos superintendents uh or librarians making isolated decisions uh the benefit of your review in one in one district or in one jurisdiction can be leveraged uh uh to the benefit of of additional districts right yeah yeah you know like so so if pen america is looking at a book in i don't know i don't even want to name a school district because i don't want to point anyone out but in acne isd there's probably an acne isd in texas so sorry acne if there is but um they're collecting evidence on that book that's public education public taxpayer money that's collecting evidence on the book they should be sharing that with other school districts so that they don't have to collect the same evidence because they are they're duplicating work and this is a great example of where technology and ai can really transform an prove it really interesting history. We're not trying to get rid of jobs here. We're trying to get people to read more books. Everybody wins if everybody reads more books.
Chuck Kraus: With leveraging cutting-edge technology and a flexible structure, Scale empowers attorneys with a more satisfying and lucrative career and delivers efficient, connected legal solutions for clients. The startups that I also mentor and I sit on boards with, I've helped a lot of startups in the past. I don't know if I have a legal strategy. I just have a, this is what I do.
Brian Elliott: I guess that's become a strategy. But definitely there's some scaffolding things that we need to be thinking about, right? And first is, you know, what is the corporate structure of this thing? And what does that look like?
Chuck Kraus: And that's probably where I spend with, you know, legal a lot or most of my time because raising money and fast growth. But then, of course, there's all the legalities around ensuring our customers are protected and their data and infrastructure is protected. And we have a multi-sided marketplace to do this. So it's extremely complex.
Brian Elliott: But as far as a strategy goes, you know, market experts, of course, and I don't, I've done it before where I've gotten involved with legal firms and you have way too many cooks in the kitchen and it can drive costs up. So it's like, how do you find someone that is scrappy and understands startup life? I mean, I guess if I had a strategy, that would be one is like, you got to get, you got to understand that. And yeah, a lot of people just go to their lawyer.
Chuck Kraus: Well, speaking of, speaking of going to lawyers, Steve, how did you come to work with scale? Well, that, and that comes down to another piece, like it's really. relationships and uh so i i moved from canada to texas uh to build this company my last startup uh we did well but i want to be exactly where the problem is and i want to be in the belly of the beast and texas is that that belly so moving here i know a lot of lawyers in silicon valley and i know a lot of lawyers in you know where i lived in canada but this is texas and we know how texas is texas and i learned that from my previous startup i'm not a texan and i know when you're not a texan you're not a texan and i'm okay with that but i need i need people to support me and i was looking for a firm or someone that understood texas and through a friend i got introduced to chuck and he took me to our edmonton oilers game and uh we and everything was great from there so and i'm really thankful for our relationship because you guys are texas and but you're not as well and i get the texas part and i also get the other side of you know immigration and all those things that i have access to uh that that are helpful so relationships we talked chuck about your client acquisition strategy taking everybody to hockey games doesn't seem like maybe the most productive way to handle it but um steve tell it talk to us about like how how your relationship with scale how how scale helps you deliver on the mission that you're on right now oh man well i mean so many different ways and it's hard to it's hard to articulate that because it's a when you know you know type of thing and and especially when you know you're in texas how important that is and knowing that you know that you keep me in check we don't do that around here or this if you want to get that done this is how we get it done so understanding how to navigate those waters into we're working with school districts across the country but texas is our mainstay and just you guys have been so helpful in navigating those waters and working with our our channel partners education service centers um that was like all of those things are so important to the business i just didn't realize how lucky i was to that we couldn't have done those things with a silicon valley firm because they don't understand the culture and the ecosystem system. And that's what Scalefirm brings.
Brian Elliott: But you also bring Silicon Valley mindset and startup mindset to this. So you guys are unique and it's cool. Well, let's pay it a little bit forward to other founders in the audience. What's some advice you might give to a founder starting out?
Chuck Kraus: Don't do it. It's hard. You guys, it's so hard. It's hard.
Brian Elliott: And, you know, so clearly I get emotional, but when you're doing something that you truly believe it, like I'm not quitting, but it's so freaking hard because you're dealing with problems every day and you're doing something that's nobody, like we're doing something that's never been done. So, and people tell you, you can't do it every day or give you reasons why. That's wearing. And you need people around you.
Chuck Kraus: Like the advice would be put people around you that can help and support you truly and tell you where you're going wrong and tell you where, you know, to, and fuel you where you're going right. And not just always say yes, because like I will hit, we, we, we, we can't afford to hit a landmine here. This is important. And so I take that really seriously.
Brian Elliott: And I think as a founder, if you don't, if you're not going to go to the mat, like you might want to rethink about doing it because it's harder than you think it is. The fun times are awesome. We're on a high right now and it's pretty cool. I'll tell you, there's some days that it wasn't good.
Chuck Kraus: Yeah. Chuck, you guys know, like we couldn't meet payroll a few times. That's not a good feeling. We've had, we've had really good conversations about making sure the, uh, the board was strategic and we, you know, you have, you have a very strategic board.
Brian Elliott: It's been, it's been fantastic built on purpose for the stage that the company's at. Uh, we've talked a lot about the strategic, um, capital raises that have been done and, and making sure that the, the capital you have is, is highly supportive, which it is, um, and believes in the, it believes in the story and understands the, the miles. zones and the roadblocks that we're going to face along the way. You know, none of that was easy.
Chuck Kraus: And the mishits we've had, right? Like we thought this and then that happened and it didn't turn out the way we thought and now we have to restructure a bunch of stuff. Well, and one of the interesting things about the revenue model, of course, is it's very chunky, right? These purchases from school districts don't happen on a daily basis.
Brian Elliott: They happen a couple of times a year. And when you miss the window, you're kind of locked out for at least six months. And so we had a lot of conversations about making sure that the company was resilient enough to withstand some of those things. And you're pointing out the challenges you faced along the way.
Chuck Kraus: But, you know, I think you've been through it enough times and we advising, you know, similar companies who face these things were able to give you some advice. About what might be around the corner and ways it's, you know, ways it's gone wrong in other circumstances. And, and then, you know, you can't, you can't fully insulate from these things, but at least being prepared that there's, there's a potential downside scenario, but there's a bunch of things we can do to prepare for it and mitigate, mitigate the damage. So, you know, congrats on, on navigating through those things.
Brian Elliott: Well, it's not, it's, but I, so congrats is it like, I, I fundamentally believe it's teamwork, right? Like you need partners. So it's not, it's like, yeah, we did it. Cause I, I can't do that on my own.
Chuck Kraus: Like, uh, and so founders need to find those trusted sources that you can really lean into or you're like, you'll just, you'll go crazy and you'll make big mistakes. And I think that's what, like, it's not as easy as just getting a contract signed. We've spent a lot of time together, Chuck, you know, like just talking about the bigger problem and what, and then you're like, oh, we need to be thinking about this. Like, well, we can't afford that right now.
Brian Elliott: What? Okay. Well, you guys are thinking about that and you guys bring that to the table for us when we're ready. And, you know, we find ways to work things out because it's not just show up at the lawyer's office and start a corp and issue, you know, equity and I'll see you when I raise, like it just doesn't work that way.
Chuck Kraus: Yeah. It's, it's been a partnership the whole way through. It has been a partnership. Yeah.
Brian Elliott: That's good. So what do you think if we sit down, uh, this time next year, uh, what, what do you think we'll be talking about at that point? What's next on the, on the horizon for Bookmarked? Huh?
Chuck Kraus: Well, if I could tell you what I thought three months ago and where it was today, like, I mean, it, it's just like, I can't even predict it anymore, but I'll tell you what I. I'll tell you what I thought three months ago. Bye. Thank you.
Brian Elliott: What I believe can happen, like I don't know where we're at this time next year, but I fundamentally believe that technology and AI are going to exponentially increase our capacities to do amazing things. And that I believe that we can start the foundation of finding ways to reinvent libraries in how we buy books and how publishers sell books and how publishers sell a lot more books than they're selling right now. And that we won't have that fully baked out next year, but we will have a fully working model where we'll have hundreds of publishers on the platform and school districts will be able to go through our platform and look and say, I can buy that book, I can buy that book, I can buy it. Because they have no foul language in them.
Chuck Kraus: It's just easy. That's 90% of books, guys. We're talking about a small number of books. Like I said, you've got to get through the books to do it and you don't have the capacity to do it.
Brian Elliott: And that's what AI can do. And we will do that next year. We can do that today. We can.
Chuck Kraus: It's just we need infrastructure to be able to get all the parties involved. It's like it's trying to organize a, you know, I don't know, a herd of cats. And then you have regulatory issues around this that are very vague in some ways and we have to bring clarity to that. And so I'm taking responsibility for bringing clarity to school districts and bringing clarity to publishers so that we can build a platform that protects books and protects freedom and protects the foundation of this country.
Brian Elliott: Like, that's what we're doing. This is high stakes. We'll get there. Nobody else is thinking about it this way.
Chuck Kraus: And if they are, great. We need that. But we need this. So we will be there next year.
Brian Elliott: Now, at scale? Don't know. With scale? Of course.
Chuck Kraus: I like that. You like that? I didn't plan that word, by the way. Yeah, I think the technical term for the collaboration is goat rodeo, not herding cats, which reminded me of one of our favorite questions in our lightning round, which is, what's one of your favorite spots to grab a bite to eat?
Brian Elliott: I'm in Fort Worth, so rodeo goats just down the road. What's been your favorite Texas spot to grab a bite to eat? Well, I will tell you, you know it. It's by far my favorite.
Chuck Kraus: I go there every... and it's called shane and jennifer warwa you know i go to shane and jennifer's who are my good friends here in texas who have taken me in as family and who i i met chuck through jennifer and so every sunday i go to shane and jen's and we have dinner together and that's my favorite place in texas and we're in frisco to have dinner that's great favorite uh favorite app you've discovered recently oh you guys game changer gamma gamma app change your life it takes your presentations and powerpoint to a whole new level you don't have to worry about design anymore it's rad it's the best love it gamma app try it out we'll check it out and uh and lastly uh where can where can the audience learn more about bookmarked yeah i mean uh we're drinking from a fire hose right now so like our website is uh probably the most up-to-date place to go uh check it out um hopefully yeah i mean the website's always a good place we're not super active on social media right now just uh you know we need to be sensitive about that and uh it can be a strange place sometimes when you're dealing with stuff like this got it got it head down uh delivering the solution well thanks thanks steve thanks everyone for listening to yall street law you can learn more about bookmarked at bookmarked.com and if you're building something bold uh scales here we're ready to help uh subscribe for more founder stories and legal strategies from scale thanks steve thanks guys thanks for joining us thanks for tuning in to the scale llp yall street law podcast we hope you enjoyed today's episode and found it valuable if you like what you heard don't forget to subscribe and leave us a review for more insights and updates visit www.scalefirm.com or follow us on linkedin until next time we'll see y'all later we'll see y'all later