Latest / Blockchain Germany – Web3 Startups, Crypto Innovation & Venture Capital by Startuprad.io™ / Andy Goldstein: Europe's VC Needs a Mindset Reboot
Transcript
- WEBVTT 00:00:00.000 --> 00:00:19.920 <v Music> 00:00:20.069 --> 00:00:23.689 <v Speaker0>Hello and welcome, everybody. This is Joe from StartupBrate.io, 00:00:24.169 --> 00:00:28.269 <v Speaker0>your trusted source on the German, Swiss and Austrian startup scene, 00:00:28.449 --> 00:00:31.449 <v Speaker0>now reaching a global tech audience. 00:00:31.589 --> 00:00:37.129 <v Speaker0>Today, we're speaking to Andy Goldstein, admittedly a former colleague of mine 00:00:37.129 --> 00:00:40.089 <v Speaker0>at Deloitte, even though we never worked directly together. 00:00:40.089 --> 00:00:44.189 <v Speaker0>He's a serial entrepreneur, co-founder of the German Axel Reinter, 00:00:44.569 --> 00:00:51.509 <v Speaker0>former colleague of mine at Deloitte, and manager director at VU Venture Partners Europe. 00:00:51.829 --> 00:00:58.009 <v Speaker0>We'll dive into how he's reshaping investor education, why Europe needs to think 00:00:58.009 --> 00:01:04.609 <v Speaker0>bigger, and what it takes to bridge the Atlantic in startup investing. Andy, welcome. 00:01:05.629 --> 00:01:07.729 <v Speaker1>Great to be here, Jorn. Thanks for your time. 00:01:08.409 --> 00:01:13.649 <v Speaker0>Totally my pleasure. How would you summarize your, 00:01:13.809 --> 00:01:18.349 <v Speaker0>admittedly, a little bit unconventional journey from launching companies to 00:01:18.349 --> 00:01:23.969 <v Speaker0>building platforms like the German Accelerator and now VU with a, I would say, 00:01:24.169 --> 00:01:27.569 <v Speaker0>extensive stint at Deloitte in between? 00:01:28.649 --> 00:01:35.489 <v Speaker1>Yeah, absolutely. So I think I would describe it as in two big buckets, 00:01:35.729 --> 00:01:41.789 <v Speaker1>one which is reinvention and the other is fascination with what's missing. 00:01:42.309 --> 00:01:48.069 <v Speaker1>So reinvention in the sense of, you know, I moved over to Germany when I was 00:01:48.069 --> 00:01:52.029 <v Speaker1>just beginning in my 20s as the IBM PC was launching. 00:01:52.029 --> 00:01:57.409 <v Speaker1>I spent 20 years building a business and exiting, really learning it the hard way in the market, 00:01:57.609 --> 00:02:03.969 <v Speaker1>and then started into building the Entrepreneurship Center at the LMU, 00:02:04.049 --> 00:02:10.329 <v Speaker1>which gave me access to great technology and lots and lots of founders with a big brand behind it. 00:02:10.329 --> 00:02:16.609 <v Speaker1>We saw then that there was not enough and we had to reinvent that. 00:02:16.749 --> 00:02:22.709 <v Speaker1>And that's where the German accelerator came in and really finding category 00:02:22.709 --> 00:02:24.209 <v Speaker1>leaders and taking them out. 00:02:24.449 --> 00:02:30.809 <v Speaker1>And also starting my own angel funds was a reinvention where I started to say, 00:02:30.909 --> 00:02:35.689 <v Speaker1>you know, I need to also get involved in helping startups to start to get the money. 00:02:36.269 --> 00:02:43.409 <v Speaker1>And now actually becoming a VC and and really trying to change the way investors think in Europe. 00:02:43.589 --> 00:02:46.549 <v Speaker1>And all of those things, when I say fascination with what's missing, 00:02:48.768 --> 00:02:56.088 <v Speaker1>At the time when I began them, it wasn't clear that somebody needed to step up and do it. 00:02:56.388 --> 00:02:59.928 <v Speaker1>And now it is, of course, clear that there should be accelerators. 00:03:00.088 --> 00:03:05.128 <v Speaker1>But back when the LMU accelerator started, it wasn't necessarily. 00:03:05.348 --> 00:03:09.708 <v Speaker1>And I think probably in five years from now, it'll be clear that we need to 00:03:09.708 --> 00:03:13.308 <v Speaker1>train our investor community much more as well. 00:03:14.448 --> 00:03:17.428 <v Speaker0>We may add for our audience most people 00:03:17.428 --> 00:03:20.528 <v Speaker0>are from the dach area but lmu means ludwig 00:03:20.528 --> 00:03:26.968 <v Speaker0>maximilian university yes it's one of the premier um universities in bavaria 00:03:26.968 --> 00:03:32.828 <v Speaker0>and i would say also very good one in germany yes of course um they also work 00:03:32.828 --> 00:03:38.728 <v Speaker0>together with a technical university tum in unternehmertum right yes. 00:03:38.728 --> 00:03:42.908 <v Speaker1>When i that was also one of the things when i first came on it was It's not 00:03:42.908 --> 00:03:47.648 <v Speaker1>so common that the universities work together, and I pulled together the LMU, 00:03:47.868 --> 00:03:49.728 <v Speaker1>the TU, the Hochschule Munich, 00:03:50.088 --> 00:03:54.668 <v Speaker1>so the University of Applied Sciences, and the Bundeswehr, which is the Army 00:03:54.668 --> 00:04:00.708 <v Speaker1>University, and pulled everyone together and started a global summer school, which is still running. 00:04:00.948 --> 00:04:05.888 <v Speaker1>So kind of thinking out of the box and getting people inside the country to work closer together. 00:04:06.808 --> 00:04:10.388 <v Speaker0>For everybody who's interested down here in the show notes, we will, 00:04:10.508 --> 00:04:13.128 <v Speaker0>of course, link our interview with Unternehmertum. 00:04:13.308 --> 00:04:19.548 <v Speaker0>I was wondering what personal experience made you realize Europe had a gap in investor education? 00:04:19.888 --> 00:04:27.228 <v Speaker1>I think the real experience of that is when I started my two angel funds and 00:04:27.228 --> 00:04:31.468 <v Speaker1>realized that every time we wanted to have a major expansion, 00:04:31.468 --> 00:04:33.448 <v Speaker1>we ended up looking for U.S. 00:04:33.568 --> 00:04:38.888 <v Speaker1>Investors. So simply, it's not to say that there aren't European investors, 00:04:38.928 --> 00:04:40.228 <v Speaker1>and it's definitely growing. 00:04:41.260 --> 00:04:47.360 <v Speaker1>It just seemed that there's a real gap in it. There's a lot of startup capital. 00:04:47.540 --> 00:04:50.900 <v Speaker1>There's a lot of government support, which you don't have sometimes even in 00:04:50.900 --> 00:04:53.800 <v Speaker1>the United States here, which is definitely impressive. 00:04:54.040 --> 00:04:58.540 <v Speaker1>But then once you get much past your A round, you're pretty much looking outside 00:04:58.540 --> 00:05:05.320 <v Speaker1>of Germany and hoping that you can find a growth capital partner as well that's 00:05:05.320 --> 00:05:07.080 <v Speaker1>from Europe or from Germany. 00:05:07.080 --> 00:05:09.320 <v Speaker1>But clearly, they're in the U.S. 00:05:09.360 --> 00:05:11.560 <v Speaker1>And clearly, they're in Asia. 00:05:11.760 --> 00:05:15.780 <v Speaker1>So that was what really – it was the reality that made me realize it. 00:05:16.140 --> 00:05:20.760 <v Speaker0>What I had in mind when you've been talking about that, like the bigger rounds, I've always heard it. 00:05:21.300 --> 00:05:25.420 <v Speaker0>Usually, rule of thumb, Series A is $1 million annual recurring revenue. 00:05:25.600 --> 00:05:29.000 <v Speaker0>And if you want to go bigger, like $10 million, so you're talking about Series 00:05:29.000 --> 00:05:33.800 <v Speaker0>B. What comes into mind is like Tiger Global, Insight Partners, 00:05:34.680 --> 00:05:37.520 <v Speaker0>Sequoia, but also from China. 00:05:37.880 --> 00:05:42.320 <v Speaker0>We had, for example, Tencent as a big investor here or SoftBank, 00:05:42.460 --> 00:05:45.680 <v Speaker0>also pretty big investors, but all from abroad. 00:05:45.820 --> 00:05:51.020 <v Speaker0>I was wondering from our audience, what do you think Europe needs more? 00:05:51.200 --> 00:05:55.800 <v Speaker0>Better startups or better investors? Drop us an answer in the comment or tag 00:05:55.800 --> 00:05:59.840 <v Speaker0>us on LinkedIn or post with hashtag StartupRadioDebate. 00:06:00.260 --> 00:06:09.500 <v Speaker0>So let's get a little bit into VU Venture Partners, a fund that actually trains VCs. 00:06:10.100 --> 00:06:17.740 <v Speaker0>Can you tell us a little bit about what this exactly is and how is it disrupting 00:06:17.740 --> 00:06:19.380 <v Speaker0>the traditional VC model? 00:06:19.900 --> 00:06:28.300 <v Speaker1>Yeah, absolutely. So when I was on to my next step recently, 00:06:28.320 --> 00:06:34.900 <v Speaker1>I started really looking deeply into why VC doesn't perform that well. 00:06:35.020 --> 00:06:41.840 <v Speaker1>And what I mean by that is around 75% of venture capital funds, 00:06:41.980 --> 00:06:49.840 <v Speaker1>as a total number of funds, don't ever produce a carry, don't pay profit, and therefore 00:06:51.001 --> 00:06:56.001 <v Speaker1>you know, don't pay their LPs back more than the money that they invested. 00:06:56.161 --> 00:07:00.301 <v Speaker1>That's just a huge number. And one of the main reasons, if you talk to VCs, 00:07:00.401 --> 00:07:04.481 <v Speaker1>a lot of them will say the same thing, which is that it's the most expensive 00:07:04.481 --> 00:07:06.981 <v Speaker1>training program of all. 00:07:07.101 --> 00:07:13.941 <v Speaker1>And that's the reason that people are, the reason for that is that people are 00:07:13.941 --> 00:07:16.901 <v Speaker1>learning by doing with the money of their LPs. 00:07:16.901 --> 00:07:24.841 <v Speaker1>And what really is different about VU is that VU is a fund that allows you to 00:07:24.841 --> 00:07:28.721 <v Speaker1>do real investing by actually doing it. 00:07:28.901 --> 00:07:34.681 <v Speaker1>So every quarter, the name of the fund, VU Venture Partners, we accept. 00:07:34.741 --> 00:07:38.861 <v Speaker1>It's a real program. We call it an investor accelerator. 00:07:39.021 --> 00:07:45.041 <v Speaker1>We accept between 40 and 60 investors globally into the program. 00:07:45.041 --> 00:07:49.481 <v Speaker1>And those people attend, they're treated as partners. 00:07:49.881 --> 00:07:53.121 <v Speaker1>They attend every partner meeting. They come to every deal flow meeting. 00:07:53.301 --> 00:07:57.161 <v Speaker1>They're in every investment committee meeting. They are driving deals. 00:07:57.381 --> 00:08:03.221 <v Speaker1>They are each looking at around 100 deals each during, let's say, a three-month period. 00:08:03.581 --> 00:08:09.521 <v Speaker1>So what you have is you have a situation where if you have 50 people in the 00:08:09.521 --> 00:08:14.941 <v Speaker1>cohort, then each looking at 100 deals, we're looking at 5,000 deals a quarter. 00:08:15.041 --> 00:08:20.841 <v Speaker1>So 20,000 a year, that's about 10 times the amount that most VCs are able to look at. 00:08:21.021 --> 00:08:24.981 <v Speaker1>And the, you know, what's also very disruptive about it is that the people who 00:08:24.981 --> 00:08:27.721 <v Speaker1>are signing up are really on an extremely high level. 00:08:27.881 --> 00:08:33.801 <v Speaker1>So whereas most VCs, when they go into a specialist area, they need to go hire 00:08:33.801 --> 00:08:35.801 <v Speaker1>expert witnesses and things like that. 00:08:35.941 --> 00:08:43.201 <v Speaker1>And people who are specialized in a specific area with VU, we now have VU stands 00:08:43.201 --> 00:08:44.581 <v Speaker1>for venture university. 00:08:45.041 --> 00:08:52.761 <v Speaker1>And we have now over 800 graduates, 800 venture fellows, which means that we 00:08:52.761 --> 00:08:56.821 <v Speaker1>have a huge network of people and we always have an expert that we can call on. 00:08:56.961 --> 00:09:02.601 <v Speaker1>And the people who are in the cohort itself are also tremendously talented. 00:09:02.821 --> 00:09:07.181 <v Speaker1>So when you're talking about our health tech investments, we have three medical 00:09:07.181 --> 00:09:10.401 <v Speaker1>doctors that are in the cohort this time. 00:09:10.541 --> 00:09:19.041 <v Speaker1>We have professors when you're talking about deep tech. So it really is a group 00:09:19.041 --> 00:09:25.241 <v Speaker1>of people that are able to analyze deals at a level that is quite uncommon in BC. 00:09:25.561 --> 00:09:30.821 <v Speaker0>You've already hinted at it. You let the participants of Venture University 00:09:30.821 --> 00:09:37.361 <v Speaker0>who gets trained there, who get trained there, ask real investors to join the 00:09:37.361 --> 00:09:39.261 <v Speaker0>real investment committees. 00:09:39.801 --> 00:09:42.801 <v Speaker0>What kind of impact does this have? 00:09:43.989 --> 00:09:51.089 <v Speaker1>So it has massive impact because the venture partners are actually driving the process. 00:09:51.329 --> 00:09:54.389 <v Speaker1>So everything is remarkably well templated out. 00:09:54.529 --> 00:09:59.509 <v Speaker1>You get help on all of your due diligence. You get coaching from the general 00:09:59.509 --> 00:10:03.529 <v Speaker1>partners and weekly meetings, two of them where they go through and make sure 00:10:03.529 --> 00:10:08.009 <v Speaker1>you understand what topics might be missing in order to get through the investment committee. 00:10:08.929 --> 00:10:16.089 <v Speaker1>But in the end, you learn how to build conviction for a deal that you're absolutely behind it. 00:10:16.229 --> 00:10:20.149 <v Speaker1>And unless there's a couple of venture partners that are absolutely committed 00:10:20.149 --> 00:10:23.569 <v Speaker1>to getting a deal done, it probably is not going to come to the investment committee 00:10:23.569 --> 00:10:29.329 <v Speaker1>because the venture partners are the ones that are saying we're ready to come to the IC. 00:10:29.329 --> 00:10:41.109 <v Speaker1>And because everybody is invited to every IC, so the program runs global online, California time. 00:10:41.369 --> 00:10:47.349 <v Speaker1>So the key meetings are like, you know, 6 p.m. to 8 p.m. European time. 00:10:48.469 --> 00:10:52.089 <v Speaker1>When there's an investment committee, even if it's a deal that you're not leading, 00:10:52.289 --> 00:10:57.529 <v Speaker1>you're on the investment committee and you start to see how you're in the meeting. 00:10:57.529 --> 00:11:02.609 <v Speaker1>You still have to pass through the two general partners, but actually that's 00:11:02.609 --> 00:11:05.109 <v Speaker1>the way every single venture capital fund works, right? 00:11:05.189 --> 00:11:09.189 <v Speaker1>You always have to get the general partners to approve the deal. 00:11:09.409 --> 00:11:18.129 <v Speaker1>And last quarter, as an example, we did six investments and had eight investment committee meetings. 00:11:18.369 --> 00:11:22.949 <v Speaker1>So there's a very large percentage of the deals that are actually getting done. 00:11:22.949 --> 00:11:28.809 <v Speaker1>And that's one of the big learnings is you come out of the program being an investor. 00:11:29.429 --> 00:11:33.169 <v Speaker1>You've done four to six deals in a quarter. If you stay for a full year and 00:11:33.169 --> 00:11:34.749 <v Speaker1>you do all four quarters, you've done 00:11:35.518 --> 00:11:42.258 <v Speaker1>16 to 25 investments, right? And you become much more proficient as you go along. 00:11:42.478 --> 00:11:46.098 <v Speaker1>And you're also in the cohort with people who have been in already. 00:11:46.098 --> 00:11:50.398 <v Speaker1>So you're learning from each other, and you're getting strong coaching from 00:11:50.398 --> 00:11:57.838 <v Speaker1>two general partners that together have over 50 years of VC experience and remarkable 00:11:57.838 --> 00:12:01.618 <v Speaker1>track records of actual paid back investment. 00:12:01.618 --> 00:12:05.618 <v Speaker0>You already hinted that you came over to Germany in your early 20s. 00:12:05.798 --> 00:12:10.778 <v Speaker0>For everybody who's watching this, they can tell that you're not in your early 20s anymore. 00:12:11.738 --> 00:12:18.038 <v Speaker0>Actually, we had a conversation at the Business Angel Day and I know very well 00:12:18.038 --> 00:12:21.578 <v Speaker0>how mature you are, how senior you are. 00:12:23.598 --> 00:12:29.098 <v Speaker0>But you've seen over this time quite a lot in the U.S. 00:12:29.478 --> 00:12:34.778 <v Speaker0>And in Europe, and VU is, as you said, also based in California. 00:12:35.058 --> 00:12:40.858 <v Speaker0>So what do you see as the main difference in mindset between the European and 00:12:40.858 --> 00:12:44.518 <v Speaker0>the American investors, and how does VU address them? 00:12:45.098 --> 00:12:49.998 <v Speaker1>Yeah. Just for clarity, by the way, we are – the main office is in San Francisco, 00:12:49.998 --> 00:12:51.978 <v Speaker1>but we have offices here in Munich and Europe. 00:12:52.238 --> 00:12:57.098 <v Speaker1>We're in Hong Kong and we opened Brazil recently. So about 65% of the deals 00:12:57.098 --> 00:13:02.898 <v Speaker1>come out of the US in 35, which is also not a bad representation of the number 00:13:02.898 --> 00:13:05.398 <v Speaker1>of startups that are really hitting the market. 00:13:05.658 --> 00:13:10.558 <v Speaker1>So, you know, the main difference that I see between the American and the European 00:13:10.558 --> 00:13:13.538 <v Speaker1>investors, and anytime you generalize, it's already wrong. 00:13:13.778 --> 00:13:21.738 <v Speaker1>But let me say that the Americans tend to be much, much more stage agnostic and 00:13:22.303 --> 00:13:29.563 <v Speaker1>It's here in Europe, you get a lot of no's because you hear it's too early for 00:13:29.563 --> 00:13:31.323 <v Speaker1>us or it's too late for us. 00:13:32.003 --> 00:13:36.723 <v Speaker1>And you don't hear that so much in the States. 00:13:36.983 --> 00:13:44.983 <v Speaker1>You see that even the big VCs are coming in very early and they're staying very late. 00:13:44.983 --> 00:13:47.723 <v Speaker1>Here it's much more what stage are 00:13:47.723 --> 00:13:50.743 <v Speaker1>we doing and you're kind of i don't want to say stuck but 00:13:50.743 --> 00:13:53.543 <v Speaker1>you're more limited uh in the 00:13:53.543 --> 00:13:59.723 <v Speaker1>stage that you're investing and i think that and the americans are definitely 00:13:59.723 --> 00:14:06.623 <v Speaker1>more agnostic because they're return focused the key focus is not you know what 00:14:06.623 --> 00:14:12.203 <v Speaker1>stage it is it's do i believe that there's going to be a return on this we for example at 00:14:12.243 --> 00:14:17.883 <v Speaker1>we invested about six months ago in open AI, which you say, well, 00:14:18.003 --> 00:14:19.043 <v Speaker1>you know, what is that about? 00:14:19.183 --> 00:14:21.463 <v Speaker1>But it's doubled since then, right? 00:14:21.643 --> 00:14:25.703 <v Speaker1>And so, you know, we get into those kinds of deals because we have access to 00:14:25.703 --> 00:14:30.803 <v Speaker1>them via our alumni, but we really are focused on what's the return gonna be. 00:14:30.903 --> 00:14:34.143 <v Speaker1>The other thing we focus on is how transformative is it? 00:14:34.243 --> 00:14:39.483 <v Speaker1>Like, do we genuinely believe that it is transformative? And I think that there's a certain 00:14:40.649 --> 00:14:43.609 <v Speaker1>Belief and experience in the U.S. 00:14:43.669 --> 00:14:48.789 <v Speaker1>That shows that actually, yes, startups can completely transform industries. 00:14:49.289 --> 00:14:55.469 <v Speaker1>And we see that again and again, you know, whether it's from Google to you name it, Venmo and on and on. 00:14:55.629 --> 00:14:59.789 <v Speaker1>It's always been startups that have been cutting edge over the last 50 years. 00:15:00.129 --> 00:15:04.009 <v Speaker1>And so we're looking for those truly transformative companies. 00:15:04.009 --> 00:15:11.069 <v Speaker1>And the other thing I think is that we're still a bit more, the American funds 00:15:11.069 --> 00:15:13.749 <v Speaker1>are a little more marketing focused. 00:15:14.029 --> 00:15:19.449 <v Speaker1>So trying to really understand what is it that's going to allow a startup to 00:15:19.449 --> 00:15:24.129 <v Speaker1>break into a massive market? What's the hack that they have? 00:15:25.629 --> 00:15:28.609 <v Speaker1>So it's great to have a big market, but how are you going to get it? 00:15:28.609 --> 00:15:34.969 <v Speaker0>When I look into some of the investments there, WeGrow, HealX, 00:15:35.369 --> 00:15:42.409 <v Speaker0>Cellbricks, Arquid Robotics, Isaac Health, AOA, Insight, and so on and so forth. 00:15:43.149 --> 00:15:44.729 <v Speaker0>Pretty interesting. 00:15:45.729 --> 00:15:50.269 <v Speaker0>And as you already mentioned, also stage agnostic more or less, right? 00:15:50.829 --> 00:15:51.189 <v Speaker1>Yes. 00:15:51.189 --> 00:15:58.989 <v Speaker0>Yes, yes. Especially given the valuation of OpenAI, I would say it was a big later stage deal. 00:15:59.089 --> 00:16:02.689 <v Speaker1>Later stage deal, absolutely. And it was opportunistic as well, 00:16:02.749 --> 00:16:05.429 <v Speaker1>because we had a chance to come in. 00:16:05.929 --> 00:16:09.469 <v Speaker0>We've been talking a little bit about the mindset already. 00:16:10.849 --> 00:16:15.569 <v Speaker0>I would even go as far as fixing Europe's investment mindset a little bit. 00:16:15.569 --> 00:16:21.629 <v Speaker0>And I've seen a lot of material about you where you also mentioned, 00:16:21.769 --> 00:16:26.809 <v Speaker0>for example, what I found pretty interesting, born global advantage of Israeli startups. 00:16:27.069 --> 00:16:29.909 <v Speaker0>Where does Germany hesitate to internationalize? 00:16:31.818 --> 00:16:38.118 <v Speaker1>I think, I mean, Israel has the, there's nothing like necessity, right? 00:16:38.238 --> 00:16:40.698 <v Speaker1>You know, the old saying, necessity is the mother of invention. 00:16:40.958 --> 00:16:45.418 <v Speaker1>When your company is born in a market of six or seven million people, 00:16:45.718 --> 00:16:48.458 <v Speaker1>there's no question for you that you have to be international. 00:16:48.698 --> 00:16:57.638 <v Speaker1>Germany does have the, somewhat the disadvantage that the market is massive in Germany, right? 00:16:57.638 --> 00:17:02.378 <v Speaker1>So you don't have to go outside Germany because you could build a successful 00:17:02.378 --> 00:17:08.198 <v Speaker1>business, a very successful business first in Germany and then internationalize elsewhere. 00:17:08.198 --> 00:17:12.938 <v Speaker1>You have the challenge in Germany as well that you don't have the advantage 00:17:12.938 --> 00:17:18.598 <v Speaker1>of, let's say, the UK or of France, where as long as you're in Paris, 00:17:18.598 --> 00:17:20.738 <v Speaker1>you've covered the whole country. As long as you're in London, 00:17:20.898 --> 00:17:21.898 <v Speaker1>you've covered the whole country. 00:17:22.178 --> 00:17:25.578 <v Speaker1>It's not enough to be in Munich. You have to be in Munich. You have to do business 00:17:25.578 --> 00:17:29.658 <v Speaker1>in Berlin. You have to do business in Dusseldorf. There's eight different places. 00:17:29.878 --> 00:17:35.078 <v Speaker1>So I think that the complexity of the German market combined with the size and 00:17:35.078 --> 00:17:42.698 <v Speaker1>the potential of it very often stops startups from internationalizing soon enough. 00:17:43.078 --> 00:17:48.758 <v Speaker0>So you would say they should think a little bit early about it? 00:17:48.758 --> 00:17:53.478 <v Speaker0>I have to admit most startups that are pitching startup radio, 00:17:53.478 --> 00:17:59.538 <v Speaker0>they already think internationally because they want to be in an English speaking podcast here. 00:18:00.778 --> 00:18:05.258 <v Speaker0>How can they think more globally from day one? 00:18:06.468 --> 00:18:11.688 <v Speaker1>I think that it has to do with a combination of thinking and doing. 00:18:12.208 --> 00:18:16.608 <v Speaker1>And that was also very much the impetus when we started the German accelerator 00:18:16.608 --> 00:18:20.488 <v Speaker1>program was, you know, let's not just think about being global. 00:18:20.668 --> 00:18:25.048 <v Speaker1>Let's let's go global. Let's get people over into other countries and do that. 00:18:25.148 --> 00:18:31.628 <v Speaker1>So I think it's I think it one of the big things is to have partners on the 00:18:31.628 --> 00:18:35.988 <v Speaker1>ground, you know, from inside your business as soon as possible. 00:18:36.468 --> 00:18:40.548 <v Speaker1>Who are building the market just like you're building the market in the local country 00:18:41.348 --> 00:18:44.728 <v Speaker1>that you're from you know just like you have a team in germany you 00:18:44.728 --> 00:18:47.628 <v Speaker1>want to really try and find people in 00:18:47.628 --> 00:18:52.448 <v Speaker1>the other markets as quickly as possible and not and not wait you know because 00:18:52.448 --> 00:18:56.908 <v Speaker1>the longer you wait the more entrenched you become and the more the problems 00:18:56.908 --> 00:19:01.648 <v Speaker1>in your local market become aware you become aware of them whereas when you're 00:19:01.648 --> 00:19:06.108 <v Speaker1>dealing with them in multiple countries at the same time you just deal with them 00:19:06.108 --> 00:19:11.508 <v Speaker0>For our audience i was wondering if you would join a fund, 00:19:12.188 --> 00:19:19.968 <v Speaker0>if it trained you and lady cole invest in real deals why or why not um as always 00:19:19.968 --> 00:19:26.128 <v Speaker0>leave uh the leave comment here down in the show notes andy we will be back 00:19:26.128 --> 00:19:31.788 <v Speaker0>after a short ad break then we will be talking about scaling startups and sales in europe, 00:19:37.148 --> 00:19:42.748 <v Speaker0>Andy, welcome back to Scaling Startups and Sales in Europe. 00:19:43.408 --> 00:19:48.408 <v Speaker0>You said Europe has a sales problem in one of the interviews, 00:19:48.428 --> 00:19:50.328 <v Speaker0>one of the publications found. 00:19:50.568 --> 00:19:54.568 <v Speaker0>What's behind that and how can founders overcome it? 00:19:57.288 --> 00:20:02.748 <v Speaker1>So I'm going to be very direct and say that at least in Germany, 00:20:02.748 --> 00:20:04.048 <v Speaker1>many people don't like sales. 00:20:06.504 --> 00:20:09.944 <v Speaker1>They literally don't. They really don't like it. And so. 00:20:10.244 --> 00:20:14.844 <v Speaker0>I actually have to admit, when I was starting out by myself, 00:20:15.044 --> 00:20:22.104 <v Speaker0>January 1st, 2021, one of the hardest things that I had to learn over time is 00:20:22.104 --> 00:20:24.804 <v Speaker0>doing sales, getting out there, getting active. 00:20:25.024 --> 00:20:27.924 <v Speaker0>And I kind of know what you mean here. 00:20:28.504 --> 00:20:36.024 <v Speaker1>Yes. I mean, there's a YouTube video of mine, which has been out for well over 00:20:36.024 --> 00:20:37.924 <v Speaker1>10 years. It's called Entrepreneurial Thinking. 00:20:38.284 --> 00:20:43.104 <v Speaker1>And in that lecture, which I've done for hundreds and hundreds of people, 00:20:43.304 --> 00:20:46.704 <v Speaker1>I always ask the question, you know, who wants to be a salesperson? 00:20:46.704 --> 00:20:48.544 <v Speaker1>And almost nobody raises their hand. 00:20:48.984 --> 00:20:53.284 <v Speaker1>And it's because, and this is, I think, the way to fix it, is people have the 00:20:53.284 --> 00:20:59.004 <v Speaker1>wrong conversation going on in their head about sales. The conversation is salespeople 00:20:59.004 --> 00:21:03.804 <v Speaker1>are annoying people who sell you crap that you don't need. That's not true. 00:21:04.504 --> 00:21:09.284 <v Speaker1>That's a thought. That's not true. And I think that as soon as people are able 00:21:09.284 --> 00:21:14.044 <v Speaker1>to understand that the conversation, if you don't like to call it sales, 00:21:14.264 --> 00:21:18.704 <v Speaker1>then go right ahead and call it business development, whatever the word is that makes you feel better. 00:21:19.084 --> 00:21:24.624 <v Speaker1>But sales is nothing more than speaking your commitment. 00:21:25.484 --> 00:21:31.064 <v Speaker1>That's what it is. What are you committed to? What really, what are you? And that's the thing. 00:21:31.404 --> 00:21:34.064 <v Speaker1>Startups, you know, the thing most impressive about startups, 00:21:34.264 --> 00:21:37.524 <v Speaker1>they commit their life to something that is really hard to do. 00:21:37.764 --> 00:21:43.624 <v Speaker1>And it's impressive for other people to see startups and people see people just giving it all. Right. 00:21:43.844 --> 00:21:47.404 <v Speaker1>But they need to talk about that. You just talk about what you're why are you 00:21:47.404 --> 00:21:48.584 <v Speaker1>giving your life for this? 00:21:48.764 --> 00:21:54.684 <v Speaker1>Why are you so behind this? And not to get concerned about what's my picture 00:21:54.684 --> 00:21:59.664 <v Speaker1>of what a salesperson is, but really to think of yourself as committed. 00:21:59.844 --> 00:22:02.424 <v Speaker1>I often relate sales to marriage. 00:22:03.642 --> 00:22:07.502 <v Speaker1>Yeah. And I say to people, you know, it's like you don't want to walk in and 00:22:07.502 --> 00:22:11.342 <v Speaker1>say, hey, listen, you've you know, you're not so terrific, but I'm pretty good. 00:22:11.462 --> 00:22:14.322 <v Speaker1>You want to get married and see how it goes? No, that's not a good sales pitch. 00:22:15.042 --> 00:22:21.362 <v Speaker1>You know, a good sales pitch is I love you madly and I don't want to spend another day without you. 00:22:21.502 --> 00:22:24.642 <v Speaker1>I want you in my life. Absolutely. And I'm going to be true to you. 00:22:24.882 --> 00:22:27.202 <v Speaker1>Well, it's the same thing with sales for anyone. 00:22:28.022 --> 00:22:31.442 <v Speaker1>This is why I want you to be my client. This is what you're going to get. 00:22:31.582 --> 00:22:36.682 <v Speaker1>And you can count on me. And I think that conversation we need to push out into the market. 00:22:38.062 --> 00:22:44.042 <v Speaker0>And actually, I also learned that marriage and raising children is always done 00:22:44.042 --> 00:22:49.362 <v Speaker0>better if you do have a certain marketing mindset there. 00:22:49.582 --> 00:22:50.822 <v Speaker1>There you go. There you go. 00:22:50.822 --> 00:22:58.302 <v Speaker0>Yeah, we've been talking about sales here and more and more popping up in my 00:22:58.302 --> 00:23:01.982 <v Speaker0>mailbox first were offer for AI sales tools. 00:23:02.182 --> 00:23:09.262 <v Speaker0>And now I do have a few suspects who really bombard my inbox with pitches for podcast guests. 00:23:09.782 --> 00:23:16.742 <v Speaker0>Do you think those AI sales tools are a game changer for founders with limited sales experience? 00:23:17.222 --> 00:23:19.422 <v Speaker1>I think they can be. 00:23:20.512 --> 00:23:30.412 <v Speaker1>And the way in which they can be is when they're used for focusing on product market fit. 00:23:30.612 --> 00:23:34.372 <v Speaker1>So what I mean is helping you to find the right buyers. 00:23:34.372 --> 00:23:41.252 <v Speaker1>I think that the reality of sales is you spend 80% of your time talking to people 00:23:41.252 --> 00:23:44.272 <v Speaker1>that probably will not do 20% of your sales. 00:23:44.272 --> 00:23:49.292 <v Speaker1>And if you could change that, if you could flip that model and spend 80% of 00:23:49.292 --> 00:23:52.412 <v Speaker1>your time talking to the people who are going to really make the sales, 00:23:52.632 --> 00:23:54.892 <v Speaker1>that can be a real game changer. 00:23:55.052 --> 00:23:59.012 <v Speaker1>And I do think that AI tools hold out that possibility. 00:23:59.652 --> 00:24:06.492 <v Speaker1>And I also think that they hold out the possibility of dramatic increase in 00:24:06.492 --> 00:24:13.092 <v Speaker1>productivity, meaning that you don't necessarily need to hire the same number of salespeople. 00:24:13.812 --> 00:24:17.672 <v Speaker1>And so I think those two things put together, if you're able to achieve that, 00:24:17.772 --> 00:24:19.532 <v Speaker1>then yes, they can really be a game changer. 00:24:19.532 --> 00:24:27.672 <v Speaker0>I actually even had or have still an AI tool that is replying to my landline 00:24:27.672 --> 00:24:28.992 <v Speaker0>phone, to my office phone. 00:24:29.132 --> 00:24:33.972 <v Speaker0>And actually, it turns out this is also a pretty great thing because every time 00:24:33.972 --> 00:24:36.472 <v Speaker0>somebody wants to buy something, I 00:24:36.472 --> 00:24:41.432 <v Speaker0>get a message instantly to my phone and everything else is put in a queue. 00:24:41.612 --> 00:24:43.772 <v Speaker0>So that's working out pretty well for me. 00:24:45.112 --> 00:24:49.632 <v Speaker0>What do you think is the single biggest mistake when a startup, 00:24:49.772 --> 00:24:55.232 <v Speaker0>for example, from Germany is scaling to and in the US? 00:24:55.692 --> 00:24:59.692 <v Speaker0>And maybe you'll mention the German accelerator because that's the next topic 00:24:59.692 --> 00:25:00.952 <v Speaker0>we're talking about here. 00:25:01.932 --> 00:25:12.472 <v Speaker1>I think it really is the mistake of not being local fast enough and long enough. 00:25:13.968 --> 00:25:20.928 <v Speaker1>So I think that people wait too long to get into the other markets and markets are always developing. 00:25:21.188 --> 00:25:25.888 <v Speaker1>So this idea that I'm going to conquer one market and then I'm going to go to 00:25:25.888 --> 00:25:28.108 <v Speaker1>another doesn't really work very well. 00:25:28.348 --> 00:25:33.588 <v Speaker1>And so I think that it's, you know, it's that idea of getting in. 00:25:33.808 --> 00:25:42.208 <v Speaker1>And I think that probably they underestimate the power of partners that are in the market. 00:25:43.008 --> 00:25:45.908 <v Speaker1>So you don't necessarily need to conquer the whole market 00:25:45.908 --> 00:25:48.808 <v Speaker1>you just need to look and see who's already asking you 00:25:48.808 --> 00:25:51.688 <v Speaker1>and wants to be you know is a client already and 00:25:51.688 --> 00:25:55.048 <v Speaker1>you all most of them have clients very very early on you 00:25:55.048 --> 00:25:59.688 <v Speaker1>know really leveraging people in the local countries from a client perspective 00:25:59.688 --> 00:26:04.008 <v Speaker1>as well that are already using the product and building that out so building 00:26:04.008 --> 00:26:09.528 <v Speaker1>from a uh from a base of strength rather than trying to go out and and you know 00:26:09.528 --> 00:26:12.908 <v Speaker1>do everything all at once i 00:26:12.908 --> 00:26:16.168 <v Speaker0>See and personally i've 00:26:16.168 --> 00:26:19.928 <v Speaker0>had the experience um it's a lot 00:26:19.928 --> 00:26:27.648 <v Speaker0>of people are doing very very early on those first like uh testing the waters 00:26:27.648 --> 00:26:33.648 <v Speaker0>in different markets with um with co-working spaces and just go from frankfurt 00:26:33.648 --> 00:26:36.908 <v Speaker0>to new york and go there stay there for some time work, 00:26:37.128 --> 00:26:41.368 <v Speaker0>beat people, get to know the park and so on and so forth very, very early on. 00:26:41.468 --> 00:26:43.708 <v Speaker0>And that's something I see here. 00:26:44.688 --> 00:26:47.248 <v Speaker0>We already hinted about the German accelerator. 00:26:48.728 --> 00:26:53.808 <v Speaker0>I actually did a few interviews when I was in New York, but it's now seven years ago. 00:26:54.268 --> 00:26:58.648 <v Speaker0>There is a very nice co-working location where the German accelerator is located. 00:26:58.648 --> 00:27:03.068 <v Speaker0>And they do have an awesome rooftop from which you can see in the background 00:27:03.068 --> 00:27:09.228 <v Speaker0>the New York skyline, as well as the One World Trade Center. 00:27:10.745 --> 00:27:15.285 <v Speaker0>Having this picture in mind, can you go a little bit back how this all built 00:27:15.285 --> 00:27:20.405 <v Speaker0>up at the origins of the German accelerator and what sparked all of that? 00:27:20.765 --> 00:27:24.625 <v Speaker1>Yeah, absolutely. So it's great that you're talking about the New York location 00:27:24.625 --> 00:27:26.445 <v Speaker1>because that was actually the second location. 00:27:27.145 --> 00:27:32.285 <v Speaker1>And the first location was Silicon Valley. So originally it was called the German 00:27:32.285 --> 00:27:34.845 <v Speaker1>Silicon Valley accelerator. Right. 00:27:35.045 --> 00:27:39.085 <v Speaker1>And the real spark was Professor Dietmar Harhoff, 00:27:39.185 --> 00:27:45.745 <v Speaker1>who went over on one of his trips and walked into plug and play and saw that 00:27:45.745 --> 00:27:51.365 <v Speaker1>there were countries that were sending startups over and said, this is absolutely, 00:27:52.025 --> 00:27:55.185 <v Speaker1>you know, something that Germany has to be doing. 00:27:55.185 --> 00:28:00.865 <v Speaker1>So and the other thing I think that sparked it was that when the German government 00:28:00.865 --> 00:28:07.925 <v Speaker1>was convinced that they needed to be in the other country, we needed to have a German presence. 00:28:07.925 --> 00:28:16.405 <v Speaker1>And that was supplied by German entrepreneurship, which was a company I co-founded in Germany. 00:28:16.405 --> 00:28:21.485 <v Speaker1>And so we really had people on the ground who were able to convince the German 00:28:21.485 --> 00:28:25.285 <v Speaker1>startups, explain to them what they were doing, and could send them over there 00:28:25.285 --> 00:28:28.385 <v Speaker1>as well and then really train them. 00:28:28.505 --> 00:28:32.125 <v Speaker1>So that was really the initial spark for the whole program. 00:28:33.125 --> 00:28:37.245 <v Speaker0>We may also add that you have now way more locations. 00:28:37.765 --> 00:28:43.065 <v Speaker0>For example, Boston comes to mind. But also in Asia, you do have offices in 00:28:43.065 --> 00:28:48.605 <v Speaker0>Singapore, Tokyo, Shanghai, in Latin America, in Buenos Aires and Sao Paulo. 00:28:48.765 --> 00:28:54.025 <v Speaker0>So basically, you can get out into the whole world with this program. 00:28:54.905 --> 00:29:02.005 <v Speaker0>We've been already talking about that you now support expansion into nine plus global markets. 00:29:02.225 --> 00:29:07.725 <v Speaker0>How did the program evolve from being first in a plug of play in Silicon Valley 00:29:07.725 --> 00:29:14.665 <v Speaker0>and then adding locations? Was it like a need-based request from the entrepreneurs? 00:29:16.291 --> 00:29:23.891 <v Speaker1>It was a combination. Yes, there was definitely a request from the market side. 00:29:26.031 --> 00:29:30.811 <v Speaker1>And there was also, I have to give a lot of credit to the German government, 00:29:30.811 --> 00:29:33.311 <v Speaker1>regardless of the administration. 00:29:34.111 --> 00:29:39.911 <v Speaker1>There's various people. Johannes Felling is a name that I think you can't think 00:29:39.911 --> 00:29:41.751 <v Speaker1>about the German accelerator without him. 00:29:41.851 --> 00:29:45.631 <v Speaker1>He was really the person who brought it through in the very beginning. 00:29:46.291 --> 00:29:53.591 <v Speaker1>Stefan Dreves from the ministry has been and still is one of the driving forces 00:29:53.591 --> 00:29:55.651 <v Speaker1>behind the German Accelerator. 00:29:55.771 --> 00:30:02.111 <v Speaker1>And it really has a lot to do with the ambition of the government to be in and 00:30:02.111 --> 00:30:07.591 <v Speaker1>support market leaders from Germany to become global. 00:30:07.811 --> 00:30:13.831 <v Speaker1>And so it was very much done hand in hand with where entrepreneurs were asking, 00:30:13.831 --> 00:30:17.871 <v Speaker1>but also where the government itself said, this is a priority for us. 00:30:18.031 --> 00:30:22.891 <v Speaker1>And that also, I think, shows the power of, you know, that's what I meant before. 00:30:23.091 --> 00:30:29.531 <v Speaker1>Sometimes when you have one really great client can actually take you very, very far. 00:30:29.631 --> 00:30:34.691 <v Speaker1>And I think that's something we also try and teach people in the U.S. 00:30:34.811 --> 00:30:37.831 <v Speaker1>And when they go to different, whether it's Singapore, wherever they go, 00:30:38.031 --> 00:30:41.671 <v Speaker1>get a great client and expand along with them. 00:30:41.671 --> 00:30:44.791 <v Speaker0>That usually makes a lot of sense. 00:30:45.031 --> 00:30:56.271 <v Speaker0>It's also a recommendation I've heard pretty early on, and it's kind of stuck with me over time. 00:30:58.471 --> 00:31:03.571 <v Speaker0>To wrap this a little bit up, because I know you're not currently actively involved 00:31:03.571 --> 00:31:04.991 <v Speaker0>with the German accelerator anymore, 00:31:05.631 --> 00:31:09.851 <v Speaker0>I would still be interested to pick a little bit your head about your framework 00:31:09.851 --> 00:31:14.871 <v Speaker0>for deciding when a startup should expand beyond Europe. 00:31:16.732 --> 00:31:24.712 <v Speaker1>Yeah, so I think that the important thing is that it's not about our frameworks. 00:31:25.672 --> 00:31:30.692 <v Speaker1>Yeah, it's really one of the things I like to say is passion not included. 00:31:32.412 --> 00:31:37.912 <v Speaker1>Yeah, it's not about the it's not about a framework that says you're ready to do this. 00:31:38.112 --> 00:31:41.512 <v Speaker1>It's are you passionate about being in the country? 00:31:42.032 --> 00:31:46.792 <v Speaker1>Are you committed to doing that? Is it something that's absolutely on your roadmap? 00:31:47.032 --> 00:31:49.592 <v Speaker1>And it's not. And when we see that kind of passion. 00:31:50.072 --> 00:31:54.932 <v Speaker1>Yeah. And it's this another saying I like to use is mission possible. 00:31:55.412 --> 00:32:00.892 <v Speaker1>Like, I believe I can do it. And when we see the passion for doing it and we 00:32:00.892 --> 00:32:06.532 <v Speaker1>see that the startup really believes that they're able to do it, 00:32:06.652 --> 00:32:10.372 <v Speaker1>those are the kinds of companies that we really want to support. 00:32:10.612 --> 00:32:15.212 <v Speaker1>And I think that that's worked quite well when you actually look at the results 00:32:15.212 --> 00:32:17.632 <v Speaker1>of the German Accelerator program. 00:32:18.592 --> 00:32:24.172 <v Speaker0>Yeah, I have to totally agree. I think I'll dig deep in YouTube and maybe link 00:32:24.172 --> 00:32:31.472 <v Speaker0>the interviews that I did in almost almost seven years ago in May 2018 in New York. 00:32:31.712 --> 00:32:38.492 <v Speaker0>OK, for the last piece, let's talk a little about the view venture partners, 00:32:38.772 --> 00:32:41.312 <v Speaker0>the portfolio and investment strategy. 00:32:41.672 --> 00:32:48.912 <v Speaker0>Are there any sectors and technologies you are particularly excited about right now? 00:32:48.912 --> 00:32:54.712 <v Speaker1>So we are a generalist fund. We invest out of six different verticals, 00:32:54.792 --> 00:33:01.232 <v Speaker1>fintech, prop tech, health tech, consumer enterprise, and what we call pioneer, 00:33:01.532 --> 00:33:02.912 <v Speaker1>which would be deep tech and space. 00:33:04.412 --> 00:33:10.652 <v Speaker1>I would say we're probably like anyone today, not even just funds. 00:33:12.429 --> 00:33:16.449 <v Speaker1>Very excited about AI, you know, but AI goes across everything. 00:33:16.669 --> 00:33:20.849 <v Speaker1>AI is really not in any way a vertical in our opinion. 00:33:20.869 --> 00:33:25.749 <v Speaker1>And I would have to say that the two sectors that we're probably most active 00:33:25.749 --> 00:33:29.949 <v Speaker1>in right now and most excited about are health and space. 00:33:30.169 --> 00:33:36.529 <v Speaker1>So I think that the breakthroughs, especially in health, which are coming specifically 00:33:36.529 --> 00:33:38.689 <v Speaker1>through AI are just remarkable. 00:33:38.689 --> 00:33:46.349 <v Speaker1>And if we could get regulation to keep up with the breakthroughs of technology, 00:33:46.349 --> 00:33:50.109 <v Speaker1>I think we would be saving a lot more lives today. 00:33:50.389 --> 00:33:56.289 <v Speaker1>And then I think that what's happening in space is just, yeah, 00:33:56.369 --> 00:34:03.749 <v Speaker1>it goes without saying the cost of putting something up into space is just coming down dramatically. 00:34:03.749 --> 00:34:10.289 <v Speaker1>And as that happens, the possibilities increase dramatically as well. 00:34:10.549 --> 00:34:15.889 <v Speaker1>You know, we're looking into everything from, you know, setting up more real 00:34:15.889 --> 00:34:21.049 <v Speaker1>estate in space to how you do charging in space. 00:34:21.289 --> 00:34:25.329 <v Speaker1>And so those are two areas that we're definitely excited about. 00:34:26.729 --> 00:34:32.529 <v Speaker0>I vividly remember even a few years back, you already had companies that were 00:34:32.529 --> 00:34:40.789 <v Speaker0>doing a lot of interesting analytic stuff with data they gotten from pictures of the Earth's surface. 00:34:40.789 --> 00:34:47.929 <v Speaker0>Was it building radar that did like tracking of large building projects to, I remember, 00:34:48.269 --> 00:34:54.089 <v Speaker0>a company that was tracking that were forecasting a Black Friday sales based 00:34:54.089 --> 00:34:56.969 <v Speaker0>on the occupation of the parking lots and stuff like that. 00:34:57.129 --> 00:35:00.789 <v Speaker0>So that is already pretty interesting. Yeah. 00:35:01.726 --> 00:35:09.426 <v Speaker0>Getting a little bit back to VU, how does your program's deal flow differ from a traditional VC? 00:35:10.106 --> 00:35:14.506 <v Speaker1>Yeah, I think that is really a very big differentiating factor. 00:35:15.126 --> 00:35:23.086 <v Speaker1>And it continues to grow, right? Every quarter, we're graduating 40 to 60 additional investors. 00:35:23.746 --> 00:35:28.686 <v Speaker1>All of those people are incentivized for their entire career to bring deals in. 00:35:28.686 --> 00:35:34.366 <v Speaker1>We share any deal that you bring in as a venture fellow alumni, 00:35:34.366 --> 00:35:38.746 <v Speaker1>you're going to get a very significant profit sharing on that deal. 00:35:38.746 --> 00:35:45.406 <v Speaker1>So we have remarkable access to deals that other people are already doing, 00:35:45.426 --> 00:35:49.726 <v Speaker1>where we get allocations in deals where you would wonder, you know, 00:35:49.806 --> 00:35:52.546 <v Speaker1>how would a fund that's, you know, 00:35:53.026 --> 00:35:59.046 <v Speaker1>making ticket sizes between 200K to 1 million and can go up to maybe three or 00:35:59.046 --> 00:36:03.886 <v Speaker1>four and follow on getting into deals which have, you know, are raising 400 00:36:03.886 --> 00:36:06.966 <v Speaker1>million, right? And it's coming in from our alumni. 00:36:07.706 --> 00:36:14.006 <v Speaker1>So I think that that's one of the very key factors that I just don't see any other fund having. 00:36:14.326 --> 00:36:18.286 <v Speaker0>I think that's maybe a little bit understatement that you've worked with dozens 00:36:18.286 --> 00:36:20.746 <v Speaker0>of founders, maybe hundreds. 00:36:24.766 --> 00:36:30.786 <v Speaker0>What do you think are the three traits that separate the top 1%? 00:36:31.066 --> 00:36:36.246 <v Speaker0>You talked about passion already. You talked about sales already. 00:36:37.126 --> 00:36:38.266 <v Speaker0>Would you include them? 00:36:39.566 --> 00:36:42.566 <v Speaker1>No doubt I would include them, for sure. I wouldn't have said it before. 00:36:42.566 --> 00:36:43.826 <v Speaker1>I didn't think that was important. 00:36:44.026 --> 00:36:49.806 <v Speaker1>But I do think that if I had to really say what are the three key traits, 00:36:49.966 --> 00:36:56.866 <v Speaker1>one is that the startup has a massive impact. 00:36:58.350 --> 00:37:04.810 <v Speaker1>Differently better solution for handling the problem than the status quo does. 00:37:05.230 --> 00:37:11.290 <v Speaker1>Massively better. So it's a magnitude of improvement that is just completely 00:37:11.290 --> 00:37:14.590 <v Speaker1>has the potential for transformation. 00:37:14.590 --> 00:37:20.950 <v Speaker1>So that massiveness of the difference to the status quo is one very big thing. 00:37:20.950 --> 00:37:25.150 <v Speaker1>The second very thing is clearly the market size. 00:37:25.450 --> 00:37:30.590 <v Speaker1>You know, are they targeting something that if it were to actually, 00:37:30.710 --> 00:37:34.270 <v Speaker1>if they were to be successful, would it be transformative, right? 00:37:34.390 --> 00:37:38.130 <v Speaker1>So I think that's a very, very important thing. 00:37:38.210 --> 00:37:43.290 <v Speaker1>And the other thing is something that people often miss, which is that there's 00:37:43.290 --> 00:37:50.430 <v Speaker1>a certain genius in simplicity of the way they market, right? 00:37:50.430 --> 00:37:52.490 <v Speaker1>And so let me give you a real-life example. 00:37:52.630 --> 00:37:57.050 <v Speaker1>One of our general partners, Andrew Salison and Sky Fernandez, 00:37:57.070 --> 00:38:00.510 <v Speaker1>are the two general partners inside of BU. Definitely look them up. 00:38:01.970 --> 00:38:07.750 <v Speaker1>Andrew wrote the first check to Venmo, the payment company, which everybody 00:38:07.750 --> 00:38:12.710 <v Speaker1>– in America, people don't say transfer me the money. They say Venmo me, right? It's a verb. 00:38:14.510 --> 00:38:19.930 <v Speaker1>When that investment was made, I'm going to guess there were probably 100 companies 00:38:19.930 --> 00:38:21.270 <v Speaker1>out there doing payment transfers. 00:38:21.770 --> 00:38:26.490 <v Speaker1>So the size of the market was obvious, right? 00:38:26.770 --> 00:38:32.210 <v Speaker1>So what was the marketing hack? And the thing that the marketing hack was that 00:38:32.210 --> 00:38:37.150 <v Speaker1>Venmo was really the first company that said, all you need to transfer money 00:38:37.150 --> 00:38:38.590 <v Speaker1>is a mobile phone number. 00:38:40.110 --> 00:38:46.790 <v Speaker1>That blew the market open with an incredibly interesting and simple interface. 00:38:47.250 --> 00:38:51.850 <v Speaker1>So I think those sort of three things together are really what separate the 1%. 00:38:52.490 --> 00:38:57.790 <v Speaker0>Andy, we are now recording, I do believe, for almost, 00:38:59.830 --> 00:39:07.770 <v Speaker0>yeah, for quite a bit. And I do believe it was very interesting and insightful for our audience. 00:39:08.010 --> 00:39:12.050 <v Speaker0>Thank you for sharing these insights and for giving us a window into how you're 00:39:12.050 --> 00:39:17.030 <v Speaker0>transforming both startups and the people who invest in them to our listeners. 00:39:17.030 --> 00:39:21.170 <v Speaker0>If you enjoyed today's episode, of course, give us a five-star review and follow 00:39:21.170 --> 00:39:26.170 <v Speaker0>us wherever you're listening and check out our exclusive subscriber segment for more. 00:39:26.590 --> 00:39:30.750 <v Speaker0>And remember, this isn't just a podcast. It's a global startup intelligence network. 00:39:31.310 --> 00:39:34.010 <v Speaker0>Andy, thank you very much. It was a pleasure having you as a guest. 00:39:34.470 --> 00:39:35.550 <v Speaker1>Jordan, thank you so much. 00:39:36.080 --> 00:40:05.842 <v Music>