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David Haber: The Biggest Mistake Founders Make When Hiring l Trailblazers Podcast Episode 54 · Trailblazers by Erica Wenger

0:00
[SPEAKER_01]: Today on the show, I am so excited to be joined by David Haber.
0:03
[SPEAKER_01]: David is a general partner at Andrewson Horowitz, where he focuses on B2B software and financial services investments.
0:09
[SPEAKER_01]: He currently sits on the boards of Canberrax, Eve, Moment, Rutter, Setpoint, and Tenor.
0:14
[SPEAKER_01]: Before Andrewson, David spent years at the intersection of finance and technology.
0:18
[SPEAKER_01]: He was a senior executive in firm white strategy at Goldman Sachs, helping lead partnerships, new ventures, and M&A.
0:23
[SPEAKER_01]: A role he landed after Goldman acquired his own company.
0:26
[SPEAKER_01]: That company was bond street.
0:27
[SPEAKER_01]: which David founded and ran as CEO with the aim of transforming small business lending through technology, data, and design.
0:33
[SPEAKER_01]: Before its acquisition in 2017, folded it into Goldman's digital finance business.
0:38
[SPEAKER_01]: Earlier still, he was a venture investor at Spark Capital, an founding associate of Lucas Analytics, an early-stage asset management startup.
0:44
[SPEAKER_01]: David graduated from Harvard with a degree in biochem.
0:46
[SPEAKER_01]: Let's welcome David.
0:49
[SPEAKER_00]: Thanks so much for having me on.
0:50
[SPEAKER_01]: I'm excited to be here, there's a lot to get into.
0:52
[SPEAKER_01]: You got a lot of me to work with.
0:53
[SPEAKER_00]: Let's do it.
0:54
[SPEAKER_01]: Let's do it.
0:55
[SPEAKER_01]: So let's start with an icebreaker.
0:57
[SPEAKER_01]: We like to get to the hard questions first.
0:59
[SPEAKER_01]: OK. Hopefully you've been prepped on this.
1:02
[SPEAKER_01]: But what is a time in your life that almost broke you?
1:05
[SPEAKER_01]: Can be personal, can be professional.
1:08
[SPEAKER_00]: Um, I mean, it has to be running bond street, you know, it was definitely the, um, most rewarding part of my career, but also at times certainly the most painful.
1:19
[SPEAKER_00]: Um, and I'm sure every entrepreneur can kind of empathize with that.
1:23
[SPEAKER_00]: You know, in particular, you know, we started Bonstry with sort of the ambition of trying to become sort of financial advocate for small business owners.
1:31
[SPEAKER_00]: That was sort of the mission statement.
1:33
[SPEAKER_00]: You know, and we had long-lived small business with service sort of like tagline, you know.
1:38
[SPEAKER_00]: And we started that by offering small business loans, but again, the ambition was to be kind of much more than just a lender.
1:47
[SPEAKER_00]: The business really benefited from the first wave of online lending in 2014, as an example, we had raised a million half dollars in seed equity, and before our series, I convinced Jeffries to give us $100 million to their balance sheet.
2:06
[SPEAKER_00]: Okay, Spark letter A, they put $10 million in the company.
2:09
[SPEAKER_00]: We did a pricing $800 million dollars more of debt.
2:11
[SPEAKER_00]: So 11.5 million of equity and $900 million.
2:13
[SPEAKER_00]: Crazy ratio.
2:14
[SPEAKER_00]: I still, I'm still very proud of that.
2:17
[SPEAKER_00]: It's been quite that ratio for the most part.
2:21
[SPEAKER_00]: The challenge, however, was, you know, this will date me, but like, you know, lending club when public, and I think 2016, on deck when public funding circle,
2:30
[SPEAKER_00]: These are sort of the early waves of online lending.
2:33
[SPEAKER_00]: Lenny Club, I think, at its peak at a market cap of $12 billion in 2016, 2017, that declined 90% to a billion in a half dollar.
2:42
[SPEAKER_00]: And that basically happened across the entire industry.
2:46
[SPEAKER_00]: And so really what happened was the tide went out in the market.
2:51
[SPEAKER_00]: And it was a very valuable lesson that, in some ways, timing is really important and often out of your control.
3:00
[SPEAKER_00]: I mean, really is out of your control.
3:02
[SPEAKER_00]: But as a former VC, as you had mentioned, I kind of saw the writing in the wall, right?
3:06
[SPEAKER_00]: We had the business doing fine.
3:08
[SPEAKER_00]: We got into a couple hundred million dollars a year in a rich nation, so not revenue, but a rich nation's.
3:14
[SPEAKER_00]: I didn't really know how to get us to like billions of dollars a year without raising meaningfully more capital.
3:21
[SPEAKER_00]: And then the challenge, because the market kind of fell out in this category, I recognized it like no,
3:29
[SPEAKER_00]: None of the top, let's say, 50, maybe even 100 firms adventure working upon this company.
3:35
[SPEAKER_00]: And it's been a valuable lesson to understand that
3:38
[SPEAKER_00]: in any period, you know, different submarkets go in and out of favor.
3:42
[SPEAKER_00]: Unfortunately, venture is sort of a medic in this way.
3:45
[SPEAKER_00]: Um, one of the people that I pitched back in 20, I pitched twice, I pitched, uh, in Driesen, uh, for the series A.
3:54
[SPEAKER_00]: Wait, wait, wait.
3:55
[SPEAKER_01]: I thought you were going to choose Spark though.
3:57
[SPEAKER_01]: I mean, obviously, with the connection, right?
3:58
[SPEAKER_01]: Were you actually looking at other places?
4:00
[SPEAKER_00]: Well, so we benefited actually one of our angel investors was a guy named Nathan, who I said next to my sophomore summer in Silicon Valley.
4:09
[SPEAKER_00]: It was his first job in Harvard.
4:11
[SPEAKER_00]: This is summer 2007.
4:14
[SPEAKER_00]: When the Facebook platform hit just launch, we were at this disaster run on line education company.
4:18
[SPEAKER_00]: I was pitching all these silly business ideas.
4:20
[SPEAKER_00]: He goes on to start Airbnb.
4:22
[SPEAKER_00]: Um, so he was the co-founder and CTO that company was an angel, my business.
4:25
[SPEAKER_00]: So I go to Nathan, I'm like Nathan, like, who should I raise money for him?
4:28
[SPEAKER_00]: And he's like, oh, Alfred, let it Sequoia, you know, Jeff Jordan and Jason Horowitz, like, and so he kind of went down the list of like kind of the F-tier, you know, firms.
4:39
[SPEAKER_00]: Uh, and so I had conversations with all of them.
4:42
[SPEAKER_00]: Um, Spark, I think we had other options, but they were.
4:46
[SPEAKER_00]: We both knew each other, but I had worked there for three years, and they were amazing partners to me.
4:50
[SPEAKER_00]: Mo, uh, coitment was on my board.
4:52
[SPEAKER_01]: Um, I realized Mo was at Spark before.
4:55
[SPEAKER_00]: He was, yeah.
4:56
[SPEAKER_00]: Okay.
4:56
[SPEAKER_00]: We opened the New York office together in 2012.
4:58
[SPEAKER_00]: Yeah.
4:59
[SPEAKER_00]: I was like the one junior kid at the firm.
5:01
[SPEAKER_00]: It was, you know, six GPs in me.
5:04
[SPEAKER_00]: Wow.
5:05
[SPEAKER_00]: 23 year old sort of analyst or whatever.
5:06
[SPEAKER_00]: Um, uh, but all that is to say, one of the people I ended up speaking with was Alex Rampell, and, uh, Alex basically
5:15
[SPEAKER_00]: David, you're amazing.
5:17
[SPEAKER_00]: I think you built the best team or the best product in this space, but, you know, on deck is trading at a 300 million dollar market cap, and they've raised 300 million dollars in equity.
5:26
[SPEAKER_00]: Like, there isn't really a there.
5:28
[SPEAKER_00]: There.
5:29
[SPEAKER_00]: And he sent me this very nice pass note, which he still likes to remind me of, but, you know,
5:37
[SPEAKER_00]: It was challenging.
5:38
[SPEAKER_00]: We ended up landing the plane at Goldman, as you mentioned.
5:43
[SPEAKER_00]: But it was, it's not exactly what you expect when you start a company.
5:46
[SPEAKER_00]: And the one wing was on fire, broken and the engine on fire.
5:52
[SPEAKER_00]: And we didn't land the plane, fly the plane into a wall.
5:56
[SPEAKER_00]: So I'm proud of that as well.
6:00
[SPEAKER_01]: It's remarkable.
6:01
[SPEAKER_01]: I think that you had the foresight.
6:06
[SPEAKER_01]: Like, Vc's who become founders really, you know, if you're a really a founder, you've been a founder, the whole way, and you've dropped out of school, and this is your 10th business, and what's your take on that?
6:16
[SPEAKER_01]: Like as someone who did the, was a VC, then became a founder, and I was back in the Vc seat, would you have an opinion on that?
6:23
[SPEAKER_00]: So I'd say a few things, I mean, one,
6:27
[SPEAKER_00]: You know, it has always been easy for me to come up with business ideas.
6:31
[SPEAKER_00]: It has always been much more difficult to figure out which one's to pursue.
6:34
[SPEAKER_00]: And so I always thought of myself more as an entrepreneur in many ways than an investor.
6:38
[SPEAKER_00]: And once I found the thing that I was really passionate about, it didn't feel like risk.
6:43
[SPEAKER_00]: I kind of knew that I needed to leave.
6:45
[SPEAKER_00]: And actually my now wife was the one who kind of really encouraged me to go to go start it, you know, my, my litmus test, which is funny for how do you know if this is an idea worth pursuing is sort of a funny one, which is like, would you pitch your mother and law?
7:02
[SPEAKER_00]: You know, my parents weren't really in a position in the company, but they'd love you and they'd do it if they could, you know, not if you see because it's our job, you know, to take risk.
7:12
[SPEAKER_00]: But insert somebody who would be very awkward to essentially ask money, you know, from.
7:17
[SPEAKER_00]: In my case, that was my mother-in-law, but if you're passionate enough about whatever you're thinking about building, that you're willing to pitch your mother-in-law, your professor, who member, that's probably a really good indication that it's, you're ready to go start the company because you're going to spend
7:32
[SPEAKER_00]: 95% of your time selling.
7:33
[SPEAKER_00]: You're going to sell investors, you're going to sell employees, you're going to sell your co-founder, you're going to sell customers, you're going to sell the press.
7:39
[SPEAKER_00]: And so if you can get over that sort of like awkward energy of selling your mother-in-law on the idea, I think it's time.
7:49
[SPEAKER_00]: You know, now like I feel best summer between being an investor in an entrepreneur.
7:55
[SPEAKER_00]: And so I, you know, I always say like opportunities live between fields of expertise.
8:01
[SPEAKER_00]: And I like living in the intersections.
8:03
[SPEAKER_00]: That's sort of been both a metaphor for my career and also an investment philosophy, which, you know, we can get into if you want.
8:08
[SPEAKER_00]: But I don't like being bucketed.
8:12
[SPEAKER_01]: Yeah, it's also, I think, the power of injuries in that they hire people who have that archetype that can run with things.
8:19
[SPEAKER_01]: Like I think of, you know, the American dynamism is just like an obvious example, like really letting Catherine and David in that whole team just run with it.
8:28
[SPEAKER_01]: And like I think of them as founders within the firm, which is actually very, very rare.
8:34
[SPEAKER_00]: 100%.
8:35
[SPEAKER_00]: And that's been, um,
8:37
[SPEAKER_00]: You know, two things, like one is, I wrote this piece called Firmover Fund, but it was sort of something I had been thinking a lot about as I was trying to weigh what I was looking to do in post-Goldman, and I started saying that phrase, again, to kind of describe feeling best somewhere between being the best in an entrepreneur, in a sense that I'd always been more interested in helping build a firm than run a fund.
9:00
[SPEAKER_00]: I get a ton of energy running around
9:03
[SPEAKER_00]: But I also find that I need a place to channel my builder energy.
9:07
[SPEAKER_00]: And through my lens, most people run funds.
9:12
[SPEAKER_00]: The objective function of a fund is how do I generate the most carry with the few people in the shortest amount of time possible.
9:17
[SPEAKER_00]: By the way, you can be incredibly successful doing that.
9:19
[SPEAKER_00]: So it's not really a knock.
9:22
[SPEAKER_00]: But the other variable, in my opinion, building a firm, is how do I build a source of compounding competitive advantage?
9:26
[SPEAKER_00]: Like, what are my modes?
9:28
[SPEAKER_00]: right, and that is a very entrepreneurial question, right?
9:30
[SPEAKER_00]: Every entrepreneur wakes up every day saying, you know, what are my notes?
9:33
[SPEAKER_00]: How do I build like a stronger and stronger business over time?
9:37
[SPEAKER_00]: And so if you think about a recent Horowitz as a company more than just, you know, a collection of funds, I think it kind of really reframes, you know, how you operate.
9:46
[SPEAKER_00]: And I think that is furthered by kind of what you said, which is, it's really a collection of entrepreneurs.
9:53
[SPEAKER_00]: And, um,
9:55
[SPEAKER_00]: I give a ton of credit to Mark and Ben for the way that they've structured the firm and the way they lead the firm.
10:01
[SPEAKER_00]: And it wasn't, it was actually, it was a surprise to me, candidly, for two reasons.
10:07
[SPEAKER_00]: One, just how deeply engaged and everything they are, like Ben effectively is our CEO, Marcus sort of our chairman and chief strategist, sort of the way I observe him, but they are in every meeting.
10:21
[SPEAKER_00]: They have no hobbies, and we don't have to play fucking golf.
10:25
[SPEAKER_00]: All we want to do is work with the best entrepreneurs and build the best venture capital from the world.
10:29
[SPEAKER_00]: And that intensity flows top down.
10:31
[SPEAKER_00]: I feed off of that energy, and it's very rare, because in most cases, that I've observed people hit some level of success, and they are literally or metaphorically on a beach.
10:40
[SPEAKER_00]: And these guys are just all in.
10:43
[SPEAKER_00]: I mean, it's really remarkable.
10:46
[SPEAKER_00]: The second thing, which is kind of the point you were describing, which is,
10:49
[SPEAKER_00]: they've really made the firm feel like a platform for smart entrepreneurial people to build on top of.
10:55
[SPEAKER_00]: And so there's actually very little top-down direction.
11:00
[SPEAKER_00]: You know, we have a CEO, but the CEO, Ben is not the CEO.
11:06
[SPEAKER_00]: Right, most other funds have the same person as both.
11:11
[SPEAKER_00]: Even some of the biggest venture capital firms are really a single investment decision maker.
11:15
[SPEAKER_00]: I can name them, but I will back.
11:17
[SPEAKER_01]: Yeah, but they're pretty obvious, actually, too.
11:19
[SPEAKER_01]: Look at a firm and no.
11:21
[SPEAKER_00]: 100%.
11:21
[SPEAKER_00]: And see how other partners, but it bubbles up to one person.
11:24
[SPEAKER_00]: Basically, every hedge fund operates this way.
11:25
[SPEAKER_00]: And that's more of a fund versus a firm.
11:27
[SPEAKER_00]: And in recent, it's very decentralized, right?
11:29
[SPEAKER_00]: Each fund that we operate is almost like a little division, run by its executive team.
11:35
[SPEAKER_00]: And so we manage our kind of P&L, you know, and org kind of semi-dependently.
11:39
[SPEAKER_00]: We obviously have shared resources in brand and compliance and fundraising and stuff collectively.
11:44
[SPEAKER_00]: But I think it was really wise to structure the firm this way if you want to attract and retain.
11:49
[SPEAKER_00]: the type of talent that they have, you know, people like David, you'll have it, like had incredibly successful careers before, and recently.
11:57
[SPEAKER_01]: And also don't have to work.
11:58
[SPEAKER_01]: Like a lot of these people too are so successful, they don't need to actually even have a job.
12:02
[SPEAKER_00]: Correct.
12:03
[SPEAKER_00]: And you look at Martin, like he sold his company for a billion and a half dollars, you know, Chris Dixon, unbelievably successful before coming in the firm, Jeff Jordan, I could go on.
12:10
[SPEAKER_00]: Alex, you know what I mean?
12:11
[SPEAKER_00]: By the way, most of them far more successful than me when I arrived, but they were entrepreneurs.
12:16
[SPEAKER_00]: Beyond just sort of the monetary success that they had had before, they were entrepreneurs.
12:21
[SPEAKER_00]: They don't want to be micromanaged.
12:23
[SPEAKER_00]: What they want is like the biggest canvas and the nicest paint paintbrushes and told to go paint your masterpiece.
12:28
[SPEAKER_00]: And so there is in a world that I could imagine, where like, critics and works at Injuries in Horowitz, have been has to approve every investment.
12:35
[SPEAKER_00]: I think they would never fly.
12:37
[SPEAKER_00]: And so there's a lot of humility.
12:40
[SPEAKER_00]: I think, actually, in the way that they've architected at the firm.
12:44
[SPEAKER_00]: And Mark made this very clear to me, too.
12:47
[SPEAKER_00]: He's like, listen, don't feel like you need to go off and be a hero and try to like win a deal on your own.
12:53
[SPEAKER_00]: In fact, if you do and you lose your fires,
12:56
[SPEAKER_00]: He's like, you should not be afraid to call me or ban or any other partner at the firm.
13:00
[SPEAKER_00]: If you tell me this is, you know, the next opening eye, like I will fly anywhere in the world tonight, or I will fly the founder in two night, two my house to have dinner, we will get this thing done.
13:10
[SPEAKER_00]: And so I think the firm at its best is that, which is sort of delegated authority.
13:15
[SPEAKER_00]: Like, he's like, we hired you because you were going to be on the front here.
13:19
[SPEAKER_00]: You're going to know what's happening in your area of expertise far better than I am.
13:22
[SPEAKER_00]: Like, why should I believe that I know it better than you?
13:25
[SPEAKER_00]: But if you tell me this is the thing, we will throw the entire way to the firm at it and sort of group tackle.
13:29
[SPEAKER_00]: And so I think it's this sort of interesting juxtaposition of sort of decentralized decision-making, but like the compounding advantage of the firm, if that makes sense.
13:39
[SPEAKER_01]: I mean, yeah, I mean, talk about the weight of the firm, too.
13:42
[SPEAKER_01]: It's like there's no firm also that has like bigger weight, you know, because you guys have gotten so big in size and also just, again, these compounding top talents, which is wild.
13:49
[SPEAKER_01]: One thing I've learned talking to GPs on the show and in my own experience as a GP, your back office is a signal.
13:55
[SPEAKER_01]: How fast you close deals, how clean the LP experiences, how your K1's land, investors notice all of it.
14:01
[SPEAKER_01]: The more buttoned up you are, the more likely they are to give you more money in the future.
14:05
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14:07
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14:15
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14:21
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14:22
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14:25
[SPEAKER_01]: It is not a marketplace.
14:26
[SPEAKER_01]: If you're running a professional fund, your infrastructure should look like it.
14:30
[SPEAKER_01]: Sidecar makes that possible without the overhead.
14:32
[SPEAKER_01]: Check them out at sidecar.io slash partners slash trailblazers.
14:36
[SPEAKER_01]: When you were deciding where to go, was this obvious to you or is this now in hindsight?
14:40
[SPEAKER_01]: Like you say, you know, you're in the meetings and you see Ben being the CEO.
14:44
[SPEAKER_01]: A lot of this you can kind of hear say actually too.
14:46
[SPEAKER_01]: Like I'm obviously, I don't work in injuries and so I hear from friends.
14:48
[SPEAKER_01]: But how much of it did you know going into it?
14:51
[SPEAKER_00]: Not a ton to be honest, like, I mean, I know Alex for a decade, you know, I got into know him.
14:56
[SPEAKER_01]: Because he rejected you.
14:58
[SPEAKER_00]: Well, the thing part, yes, through that.
15:00
[SPEAKER_00]: But our COOed bond street, this amazing guy named Eddie Ceral used to work for him a trial pay, and then work for us.
15:06
[SPEAKER_00]: You know, one of the companies that I had helped invest in it at Spark was plaid and the seed and then Alex lived later around a plant.
15:13
[SPEAKER_00]: So we kind of had always intersected.
15:14
[SPEAKER_00]: And I would tweet about this firm over fund distinction actually since like 2017 or maybe even earlier.
15:22
[SPEAKER_00]: And he was always riffing with me on kind of like the future of increase in Horowitz and like or the asset class broadly but but again in my mind the firm was kind of like the
15:35
[SPEAKER_00]: The difference, though, is I never really considered interesting because they were so West Coast.
15:42
[SPEAKER_00]: And I actually left, it's not on my LinkedIn, but I actually left Goldman in October of 2020.
15:49
[SPEAKER_00]: I made an unusual first move, which wasn't the right fit for me, but it was, I think, an interesting idea.
15:56
[SPEAKER_00]: I wanted to go work with a good friend of mine, Alex Kleben, who is this very successful Hatchman Manager, who pitched me on building a holding company
16:06
[SPEAKER_00]: This is sort of pre-AI roll-up, right?
16:07
[SPEAKER_00]: This is 2020.
16:08
[SPEAKER_00]: Great name.
16:09
[SPEAKER_00]: It's really good name, actually.
16:10
[SPEAKER_00]: I'd like respect on the brand name.
16:12
[SPEAKER_01]: It's giving eternal thrive.
16:14
[SPEAKER_00]: It's very good.
16:15
[SPEAKER_00]: Yeah, that's good.
16:16
[SPEAKER_00]: And in the idea was he was going to go acquire and transform legacy businesses with technology.
16:22
[SPEAKER_00]: The first expression of which was he bought a stake in Sotheby's, the auction house.
16:26
[SPEAKER_00]: And we took over the financial services division of Sotheby's, which I helped kind of lead for, I don't know, six-day months.
16:33
[SPEAKER_00]: But that move was sort of an expression in this direction of like, how do you build a firm, you know, like it was a different idea.
16:41
[SPEAKER_00]: It was sort of opportunities between fields of expertise.
16:44
[SPEAKER_00]: It was private equity like, but mostly grounded in technology.
16:48
[SPEAKER_00]: We were sort of building an embedded fintech business within Sotheby's, which itself was sort of the oldest public-edited trade-e-company in America at one point and like one of the world's best luxury brands, but also sort of a marketplace and a canvas for a fintech
17:05
[SPEAKER_00]: I could go on.
17:05
[SPEAKER_00]: It was not the right fit for different reasons, but it definitely got me fully convicted in this idea of wanting to like build a firm.
17:13
[SPEAKER_00]: And Alex, you know, we would catch up every few months.
17:16
[SPEAKER_00]: He pinged me and I think it was March of 2021.
17:18
[SPEAKER_00]: He's like, how's Goldman?
17:21
[SPEAKER_00]: Like, wouldn't know.
17:22
[SPEAKER_00]: I haven't been there for six months.
17:23
[SPEAKER_00]: He's like, what do you mean?
17:24
[SPEAKER_00]: Like, yeah, here's this thing I'm doing with Sotheby's and he's like, oh, can I put you in front of Mark?
17:31
[SPEAKER_00]: I'm like, well, twist my arm.
17:32
[SPEAKER_00]: I'm never met Mark and drew some before.
17:33
[SPEAKER_00]: And we kind of hit it off.
17:35
[SPEAKER_00]: And, you know, one thing that Alex did, which I really grateful for and retrospect was kind of in the recruiting process, whatever.
17:43
[SPEAKER_00]: He's like, just come to our GP Offsite.
17:47
[SPEAKER_00]: I had no offer yet.
17:48
[SPEAKER_00]: And I show up.
17:50
[SPEAKER_00]: And it's the first time the group had all spent time with each other post-COVID.
17:54
[SPEAKER_00]: So then see each other for like, I don't know, a year or a half in person maybe.
17:58
[SPEAKER_01]: Is this spring of 21?
18:00
[SPEAKER_00]: Spring of 21.
18:00
[SPEAKER_00]: This is probably like April or May of 2021.
18:04
[SPEAKER_00]: And what was the off-site?
18:07
[SPEAKER_00]: The off-site was literally a portfolio review where they handed out
18:11
[SPEAKER_00]: documents of every single portfolio company and its marks organized by GP and they would walk through line by line and basically say like this company is doing unbelievably well this one might go to zero.
18:22
[SPEAKER_00]: It was like full open commono.
18:24
[SPEAKER_00]: I'm like wow this feels like a one-way door but it was an amazing opportunity because you could kind of get a better sense for the group dynamic, how the form operates, the level of transparency, kind of camaraderie.
18:35
[SPEAKER_00]: And it was obviously like an interview of me, too.
18:39
[SPEAKER_00]: But it was really valuable, I think, in both directions, for me to get a sense for, like, is this the place that is going to, you know, it does this resonate with what I'm looking for.
18:49
[SPEAKER_00]: And, you know, what was special, too, was they wanted open in New York office.
18:53
[SPEAKER_00]: And so, you know, they recruited me to basically help do that.
18:57
[SPEAKER_00]: And so it was both to kind of, you know, be a GPS investor, but also help plant the plant here in New York City.
19:03
[SPEAKER_00]: And that's just been an amazing, you know, journey the last five years.
19:06
[SPEAKER_00]: We've grown from basically two people in New York.
19:08
[SPEAKER_00]: We now have about a hundred full-time employees, you know, something like 70,000 square feet in so we're opening to more floors.
19:16
[SPEAKER_01]: Beautiful office too.
19:17
[SPEAKER_01]: I think, yeah, it's unbelievable.
19:19
[SPEAKER_01]: And it gives you your builder bug, you know, you can really create this beautiful new space that you are the owner of here in New York.
19:26
[SPEAKER_00]: Totally.
19:26
[SPEAKER_00]: So it's been, it's been really fun.
19:28
[SPEAKER_01]: Yeah, that's very exciting.
19:30
[SPEAKER_01]: I wanted to ask you this firm over a fun thing.
19:32
[SPEAKER_01]: I think it's a really thoughtful concept.
19:34
[SPEAKER_01]: And we talk about a lot, but I think your essays are really good articulation.
19:38
[SPEAKER_01]: And Dresden's an obvious example of a firm.
19:40
[SPEAKER_00]: Yeah.
19:40
[SPEAKER_01]: Are there other firms that you look to that really stand out as well?
19:44
[SPEAKER_01]: They are also building a firm.
19:45
[SPEAKER_01]: Maybe not in the exact same formula as Dresden.
19:48
[SPEAKER_01]: I think you guys are very unique.
19:49
[SPEAKER_01]: But I'd love to hear there's other firms that really stand out to you.
19:53
[SPEAKER_00]: 100%.
19:53
[SPEAKER_00]: I mean, I think first round as an example is very much a firm.
19:58
[SPEAKER_00]: It's also run in large part by entrepreneurs.
20:03
[SPEAKER_00]: Brett Bursin is one of my very good friends.
20:04
[SPEAKER_00]: I think he's one of the most talented people in venture today.
20:07
[SPEAKER_00]: He's really an operator.
20:09
[SPEAKER_00]: inside of a venture capital firm.
20:10
[SPEAKER_01]: He's like a CEO or a CEO, I guess.
20:12
[SPEAKER_00]: Yeah.
20:13
[SPEAKER_00]: Yeah, he gets energy from building the machine.
20:16
[SPEAKER_00]: That's sort of my observation of Brett.
20:18
[SPEAKER_00]: And I think they were always, have always been sort of pushing the front here of what platform looks like, what content looks like.
20:26
[SPEAKER_00]: And they play the long game.
20:28
[SPEAKER_00]: Like I benefited as an individual from the firm at first round, because they invited me to do angel track in like 2018 or something.
20:39
[SPEAKER_00]: Why did they do that?
20:40
[SPEAKER_00]: I don't know, because they were, again, investing in the network, right, instead of playing the long aim.
20:45
[SPEAKER_00]: And then I think it's, I'm sure it's paid massive dividends for them.
20:52
[SPEAKER_00]: But it's just this, I think, sense of like, it's sort of a very entrepreneurial question and a willingness to sort of experiment, you know, to ask like, is this working, is this broken and a willingness to tear shit down if it is broken, a willingness to really put chips on the table and take risk to build an organization, you know, as an entrepreneur might, you know, think a lot of people get an invention because they don't want to manage teams.
21:15
[SPEAKER_00]: I think the firms often aren't afraid of doing that.
21:20
[SPEAKER_00]: But beyond venture, I mean, part of why.
21:22
[SPEAKER_00]: I'm so interested in this idea is that I think there's actually a lot of very compelling examples of the ways that people build sources of the bandage outside of enter capital.
21:33
[SPEAKER_00]: Ventric capital is in a very unique asset class in some ways in part because brand and reputation has always been paramount.
21:42
[SPEAKER_00]: There's this human network effect that exists in venture.
21:45
[SPEAKER_00]: There's a recent Sequoia's returns have been so good for whatever 50 years to their credit.
21:52
[SPEAKER_00]: and success or to be get success in some ways.
21:55
[SPEAKER_00]: And this isn't to say that we're trying to be these other people, but if you kind of brought in the aperture and say, okay, how other investment firms build sources of compounding advantage, I think there's a lot of really interesting examples.
22:08
[SPEAKER_00]: I did a podcast recently with Mark Rowan, who's one of the founders of Apollo.
22:12
[SPEAKER_01]: Or legend.
22:13
[SPEAKER_00]: Yeah, and like their source of compounding advantage is permanent capital in the form of their insurance company balance sheet in a theme.
22:20
[SPEAKER_00]: And he sort of describes the business to me when I said it dinner, which was like, you know, we have a simple business.
22:26
[SPEAKER_00]: We have a cost of liabilities, which were kind of decreasing the cost of liability, effectively cost of capital, and then building like proprietary sources of origination that can generate yield, you know, per monochrome of risk.
22:41
[SPEAKER_00]: And so it's sort of this spread business between cost of capital and yield that he's just like, we're gonna widen and do at scale.
22:49
[SPEAKER_00]: And that's the whole business.
22:53
[SPEAKER_00]: If you look at probably some of the best quant hedge funds, they've done this through data or technology, Renaissance or Jane Street now or two-sickma, certainly have built compounding advantage in the technology as a differentiator.
23:10
[SPEAKER_00]: Even a firm like Goldbent, I would argue, has
23:14
[SPEAKER_00]: embedded distribution right you know they have a merchant bank he business which is essentially like a mini blackstone and a bunch of kind of private you know private credit real estate private equity private markets investing businesses but then they also have this wealth management division wild yeah which is massive yeah and so when you want to raise a new fund instead of the merchant bank they like yeah they like staffer finger they've distributed to the private bank and and it's and it works because you know
23:41
[SPEAKER_00]: clients want access to those, these funds want access to the clients and it's sort of the self-fulfilling thing.
23:46
[SPEAKER_00]: Anyway, I could go on.
23:50
[SPEAKER_00]: Even back in venture and even what you're doing with this podcast, like how do you build brand?
23:56
[SPEAKER_00]: How do you build audience?
23:57
[SPEAKER_00]: You know, I've talked a lot with like Patrick O'Shaughnessy about this between Invest like the best and positive sum.
24:04
[SPEAKER_00]: You know, what Harry Stevings has done obviously with his podcast as well.
24:09
[SPEAKER_00]: You know, these are our sources of compounding advantage, and so I think it's like, these are the types of things that I admire most in the investment essence.
24:18
[SPEAKER_01]: Yeah.
24:19
[SPEAKER_01]: It's so funny you say that.
24:20
[SPEAKER_01]: I think that's also probably why you were drawn to the holding company structure before and reason, because I do think, you know, this venture business can be very, if you do especially the fund model, very binary.
24:28
[SPEAKER_01]: It's very power law, you know.
24:30
[SPEAKER_01]: One outcome, a lot goes to zero, a couple go to one.
24:33
[SPEAKER_00]: Yep.
24:33
[SPEAKER_01]: This is an example.
24:34
[SPEAKER_01]: And so this idea that you could almost have this like diversified approach where you're doing the one to or zero bets and then you're doing these like small compounding bets and that Together feels very full and well-rounded and you know gives you a vote and so yeah, I completely agree with you and I think you was doing media and a very interesting way too.
24:53
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24:56
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25:03
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25:07
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25:11
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25:19
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25:25
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25:28
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25:46
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25:50
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25:52
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25:54
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26:02
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26:07
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26:12
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26:18
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26:25
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26:27
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26:28
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26:30
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26:36
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26:42
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26:47
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26:53
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26:57
[SPEAKER_01]: How involved are you on the media front and is that something that you think a lot about?
27:01
[SPEAKER_01]: I know you're not officially like on the new media stream, but you do a lot of media.
27:05
[SPEAKER_01]: How do you think about that as a compounding advantage for Andrewson?
27:09
[SPEAKER_00]: I think it was one of the, again, back to kind of Mark and Ben and even Margaret who was kind of leading, you know, it was one of the first hires of the firm and led comms for many years.
27:17
[SPEAKER_00]: Like, I think they were early in using content to sort of a, you know, like the magnet, you know, to sort of elevate the firm's brand and be top up mine for kind of a new generation of entrepreneurs.
27:30
[SPEAKER_00]: You know, I've been really excited to, I've known Eric Tornberg for, I don't know, over a decade, just as friends.
27:36
[SPEAKER_00]: I was an angel and on deck and, you know, when he was at Villa 2, his investor, my sister's company, so we've had a lot of, you know, kind of overlap.
27:44
[SPEAKER_00]: And I think he's done an amazing job kind of breathing, new life into the, you know, new media organization.
27:50
[SPEAKER_00]: And like, the editors on the video team, we have this kid, kid, because he's like 20 years old, Richard, who's like,
27:57
[SPEAKER_00]: So, I saw my videos, I've seen this stuff.
28:00
[SPEAKER_00]: He's amazing.
28:02
[SPEAKER_00]: Elon now retweets it and I'm like, Richard, you're a legend.
28:08
[SPEAKER_00]: But I think it sort of serves the same purpose, right?
28:10
[SPEAKER_00]: It helps, you know.
28:16
[SPEAKER_00]: elevate the brand and invisibility for, you know, portfolio companies.
28:21
[SPEAKER_00]: And it's sort of how Mark described it, but it's, you know, a lot of our job as a venture firm is to sort of lend power, lend credibility, you know, an amortized kind of the cost of the platform for the smaller company, right?
28:37
[SPEAKER_00]: You know, any individual portfolio company isn't going to build a 40% immediate team, but we can.
28:43
[SPEAKER_00]: and lend that to them to help them at the seed stage build a brand that they might not have otherwise been able to.
28:49
[SPEAKER_01]: You're such a fin tech guy.
28:50
[SPEAKER_01]: We're talking about media and you're like, lending, and we're tysing, you know, it's in your mouth.
28:54
[SPEAKER_01]: It's kind of, I want to just jump back to the New York point.
28:58
[SPEAKER_01]: Yeah.
28:58
[SPEAKER_01]: You know, I think New York is becoming a booming ecosystem.
29:02
[SPEAKER_01]: lots of great companies, Calshy being one of them.
29:04
[SPEAKER_01]: I knew it was a big investor.
29:05
[SPEAKER_01]: They sponsored the podcast.
29:06
[SPEAKER_01]: Calshy.
29:08
[SPEAKER_01]: But there's so many epic New York businesses right now.
29:12
[SPEAKER_01]: What is your take on New York versus Silicon Valley for the future of software business is the future of tech?
29:17
[SPEAKER_00]: I'm obviously very biased on that.
29:19
[SPEAKER_01]: So my, by the way, so we're going to vote the bias.
29:21
[SPEAKER_00]: Yeah, I'm very long.
29:22
[SPEAKER_00]: I mean, look, I moved here in 2009, kind of in the wake of the financial crisis.
29:26
[SPEAKER_00]: And so I've seen the New York Tech ecosystem, kind of evolve a lot.
29:30
[SPEAKER_00]: I mean, I think there were like six associates in metric capital in 2009 in New York City.
29:34
[SPEAKER_00]: And we have more than that, you know, just an increase in today, which is kind of wild.
29:39
[SPEAKER_00]: And I remember going to the New York Tech meetup,
29:41
[SPEAKER_00]: you know, which was like 200 people, or hackers and founders in mass and square park, we'd like 75 people.
29:49
[SPEAKER_00]: So it's been amazing to kind of watch the New York tech ecosystem of all, it's probably, I don't know, 50 or 100x or something since then.
29:57
[SPEAKER_00]: I think it's really hard to bet against New York.
30:00
[SPEAKER_00]: Right?
30:01
[SPEAKER_00]: I think if you're a young entrepreneurial ambitious person, there's no better place in the world.
30:06
[SPEAKER_00]: It still attracts that type of person.
30:09
[SPEAKER_00]: And I think, I don't know if this is an obnoxious thing to say, but because the city is expensive, it acts as sort of like a filter for people that are ambitious.
30:20
[SPEAKER_00]: In any domain, by the way, like you can't just chill, you have to hustle.
30:24
[SPEAKER_00]: And whatever it is that you're doing, you know, whether you're a restaurant tour or an entrepreneur,
30:30
[SPEAKER_00]: an executive at a company like people are grinding, but I think it makes the city really interesting.
30:37
[SPEAKER_00]: I also am very long New York large because you know, every big company across lots of different industries has a big presence in New York City.
30:48
[SPEAKER_00]: And back to the opportunities between fields of expertise, these I think it's also metaphor for New York.
30:54
[SPEAKER_00]: The companies that are most New York, in my opinion, are those that live at the intersection of technology.
30:58
[SPEAKER_00]: and one of the big kind of incumbent markets here in New York, whether that is financial services or media or advertising or health care, or you know, you can go kind of down the list.
31:07
[SPEAKER_00]: And you know, different themes have kind of evolved over time in the city, but I think that's largely been true.
31:17
[SPEAKER_00]: And it's a great place to pull talent out of these kind of incumbent markets into your company.
31:23
[SPEAKER_00]: And the nice thing is that tech has become less, you know, it was very non-consensus, let's say, to join a tech company if you're an executive at a big bank or something into us in the nine, but it's become easier and a more permeable kind of like talent market.
31:38
[SPEAKER_00]: And so I think that all of those things benefit,
31:42
[SPEAKER_00]: You know, building software companies, you know, the thing that I think has been more challenging for New York historically, people used to knock it because it had lacked kind of the depth of engineering talent.
31:53
[SPEAKER_00]: I think that's been resolved in large part and I don't think that's actually the biggest challenge.
31:58
[SPEAKER_00]: I think the harder challenge is actually the kind of executive layer of like VP, you know.
32:04
[SPEAKER_00]: of people that have seen hyperscale, right?
32:07
[SPEAKER_00]: It's the VP of marketing or COO that's taking a company from 100 to 1000 people.
32:12
[SPEAKER_00]: There's not that many examples.
32:14
[SPEAKER_00]: I think there will be.
32:16
[SPEAKER_00]: It's sort of a matter of time.
32:19
[SPEAKER_00]: the depth of that talent pool in the bay is far deeper.
32:24
[SPEAKER_00]: The other thing that obviously do quite well is just like very technical businesses, whether it's, I think there's a reason why a lot of the front of your labs and a lot of the robotics or set me, you know, businesses are based there.
32:38
[SPEAKER_00]: But, you know, I don't think, I think New York is just done thing.
32:41
[SPEAKER_01]: Yeah, I think your comment about this like technical piece is really strong and you know you almost have had to do like live through that wave of Silicon Valley to have learned that hyperscaler thing and yeah, it's a it's tricky if you if you weren't there you're not going to want to come to New York City
33:00
[SPEAKER_01]: I want to ask you about context is King essay, okay?
33:03
[SPEAKER_01]: I thought that was really interesting.
33:05
[SPEAKER_01]: There's this ongoing debate in our business, like technical or domain expertise, right?
33:10
[SPEAKER_01]: What matters more?
33:12
[SPEAKER_01]: A lot of people are saying in this age of AI, this technical piece matters less.
33:16
[SPEAKER_01]: Unless you're building true infrastructure, talk to me about where you think the bets are going to be made and what you're most excited about.
33:23
[SPEAKER_01]: Is it the really technical founder?
33:25
[SPEAKER_01]: Is it the founder with domain expertise?
33:26
[SPEAKER_01]: What has it been historically?
33:29
[SPEAKER_00]: Yeah, and look, we have, we have successful examples of both, but it has been interesting for me to observe that like, I don't know, six or seven years ago, if you were investing in a vertical software business, they sort of ideal archetype of a founding team, it's like somebody who was like very deep in that industry, you know, came from, I don't know, health care, construction or whatever, like knows the market, knows all the players paired with a techno go founder.
33:52
[SPEAKER_01]: And they started together.
33:53
[SPEAKER_00]: And they started together.
33:54
[SPEAKER_00]: Yeah.
33:57
[SPEAKER_00]: I think today of what's been remarkable to see is just, it's become more important to be fluent in the tool set than sort of native to the industry in some ways.
34:07
[SPEAKER_00]: I think it's just a matter of where we are and the kind of diffusion of AI is like a technology and people's understanding of how to apply LLMs to like workflows.
34:17
[SPEAKER_00]: That is still rare.
34:18
[SPEAKER_00]: by and large.
34:20
[SPEAKER_00]: And so as a result, I think you've seen younger and more tactical founders than ever, finding creative niches for a wear to plug, you know, all limbs into work.
34:31
[SPEAKER_00]: And becoming, you know, domain experts over time, or hiring for context.
34:36
[SPEAKER_00]: The point of the essay was like, it's not to say that context doesn't matter.
34:39
[SPEAKER_00]: Context is king, right?
34:41
[SPEAKER_00]: At the end of the day, the distance between, you know, a model's capabilities and, you know, delivering value in the context of somebody's job or work or industry, that distance is basically the application layer opportunity.
34:55
[SPEAKER_00]: And so you really have to deeply understand,
34:58
[SPEAKER_00]: you know, who your customer is, what problem you're solving, and a lot of that really does come from people that are deep in that industry.
35:05
[SPEAKER_00]: But as I look at some of my more successful companies, the founders themselves weren't super deep.
35:11
[SPEAKER_00]: I mean, if you look at, you know, here in New York, you know, Tre and Diego from Tenor, this is a healthcare company.
35:20
[SPEAKER_01]: You know, you were going to mention them.
35:22
[SPEAKER_00]: That's an example.
35:22
[SPEAKER_00]: They're amazing.
35:24
[SPEAKER_00]: You know, they were machine learning on the grads at Stanford.
35:27
[SPEAKER_00]: And they kind of wandered in the dark, building different things for a while.
35:31
[SPEAKER_00]: And then kind of, you know, I think trace mother is a physician.
35:35
[SPEAKER_00]: But kind of stumbled upon this kind of referral, you know, patient intake problem and recognize that actually LM's are really good at solving what I call the messy inbox problem.
35:45
[SPEAKER_00]: of sort of hooking into, you know, all the unstructured data sources.
35:48
[SPEAKER_00]: You're emailing your phone, your fax or, you know, what have you basically, uh, sucking out relevant patient information and plugging into a downstream system of record and using that wedge to sort of eat away it all the downstream workflows, whether it's prior off or eligibility benefits, scheduling, et cetera.
36:06
[SPEAKER_00]: Again, they become super deep in the health care domain, but their backgrounds weren't, you know, they were, I don't know, 24 or something when they started the business and hadn't worked in.
36:16
[SPEAKER_00]: in health care before, you know, the same is true of Eve, you know, the two founders of Eve, where I sit on the board, served today the plaintiff law market.
36:25
[SPEAKER_00]: They were the first employees at Rubric, which is now in public-traded, you know, data infrastructure company.
36:31
[SPEAKER_00]: And their original idea was basically document processing business similar in some ways to like a reducto.
36:42
[SPEAKER_00]: But they found that like the strongest commercial pull that they had for that technology was in the legal profession.
36:48
[SPEAKER_00]: And in particular, they were really interested in plaintiff law largely because they operated on a contingency basis.
36:56
[SPEAKER_00]: So unlike other areas of law where you're charging by the hour, here you only make money if you win.
37:02
[SPEAKER_00]: And so there's a ton of opportunity.
37:05
[SPEAKER_00]: There's a ton of work to be done to sift through mountains of medical records or employment documents, even figure out, is this case for my time?
37:12
[SPEAKER_00]: Because any case I take on is basically an investment of my time in my labor.
37:17
[SPEAKER_00]: Again, LLMs are quite good at doing that.
37:19
[SPEAKER_00]: Now they have voice agents that collect evidence programmatically from clients and they kind of own the workflow from intake all the way down comes.
37:28
[SPEAKER_00]: But again, I know background in the Leo profession.
37:32
[SPEAKER_00]: There are examples in both directions, but I think this has sort of been a noticeable trend certainly over the last few years.
37:40
[SPEAKER_00]: I think as LLMs and sort of the technology becomes more diffusible, probably flip-back.
37:46
[SPEAKER_01]: I was going to say, like, when do the tides turn?
37:49
[SPEAKER_00]: probably when just the understanding of how apply AI into jobs have been done becomes less rare.
37:54
[SPEAKER_00]: And actually, the rare thing is now the kind of depth of domain expertise and relationships in the industry.
38:02
[SPEAKER_00]: And so, but I think we're still early in that pendulum.
38:04
[SPEAKER_01]: Yeah, what's so tricky about our job and I'd love your take on this is sometimes when things are working like an ever-attender, it's because you invested with an idea many, many years ago.
38:13
[SPEAKER_01]: And so like actually, you're like, oh, this is something I'm noticing, but actually, you should do the reverse now in terms of investing, if you want it to be matching the times in five years.
38:21
[SPEAKER_01]: You know, like it's this awkward thing where
38:23
[SPEAKER_01]: you don't get that feedback loop too much later.
38:25
[SPEAKER_01]: And so the trends you're noticing like, oh, my companies that are doing best right now, wait, but I invested them a few years ago.
38:30
[SPEAKER_01]: So maybe I shouldn't invest with that thesis because it's gonna be a whole new trend that's hot right now.
38:35
[SPEAKER_01]: You know, it's tricky.
38:36
[SPEAKER_00]: I think in both of those examples, and actually I could go on, like even moment where I sound the board, like these were all pivots.
38:44
[SPEAKER_00]: Some of my most successful companies were pivots.
38:46
[SPEAKER_00]: And so I think the thing that keeps me grounded is that technology can change, but people don't.
38:53
[SPEAKER_00]: And so I sort of have joke that I feel like I don't know much, but I feel like I know people.
38:58
[SPEAKER_00]: And I've always been most convicted in the investments, where I just had deep conviction in the individual.
39:04
[SPEAKER_01]: I love that.
39:04
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39:11
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39:16
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39:22
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39:26
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39:32
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39:35
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39:41
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39:47
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40:00
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40:03
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40:07
[SPEAKER_01]: OK, so a quick experiment.
40:08
[SPEAKER_01]: Think about the last long message you typed.
40:10
[SPEAKER_01]: Could be a slack thread, a prompt and declaw, maybe it's a detailed email.
40:14
[SPEAKER_01]: It probably took you 10 minutes, maybe even 20 to get it right.
40:17
[SPEAKER_01]: Now imagine you just set it out loud instead.
40:19
[SPEAKER_01]: That is the whole pitch for Whisper Flow.
40:21
[SPEAKER_01]: Whisper Flow is voiced a text that actually works in every app on every device.
40:25
[SPEAKER_01]: You speak naturally, and it outputs clean, formatted text that's ready to send.
40:29
[SPEAKER_01]: No set up, no integrations, no fixing, weird transcription errors.
40:33
[SPEAKER_01]: and it works across Gmail, Slack, notion, cloud, eye message, wherever you type.
40:37
[SPEAKER_01]: And unlike the built-in dictation on your phone, whisper flow removes all filler words, mid-sentence corrections, and jargon.
40:43
[SPEAKER_01]: What I personally love about it too is that it perfectly matches my style.
40:47
[SPEAKER_01]: So I often type in all lowercase letters, so it'll type like that.
40:50
[SPEAKER_01]: I also say things like LMK, which means let me know in short-hand, and it'll auto adjust it from let me know to LMK.
40:56
[SPEAKER_01]: Like many of you, I also do a lot of brain dumping into LLMs.
41:00
[SPEAKER_01]: So instead of typing it all out, I actually just speak my windy train of thought into whisper flow, which is infinitely faster than trying to get my fingers to keep up with the pace of my thoughts.
41:08
[SPEAKER_01]: If you do any serious writing or just send a lot of messages and emails using whisper flow is a no-brainer, get one whole month of whisper flow pro completely free at ref.wisperflow.ai-sashtrailplasers.
41:19
[SPEAKER_01]: So when you meet a founder, what is the one thing that makes you want to invest?
41:25
[SPEAKER_01]: Is it this intersection of expertise or is it something different, too?
41:28
[SPEAKER_00]: It's hard to describe.
41:30
[SPEAKER_00]: I often say, it's like, do you feel the pole?
41:33
[SPEAKER_00]: It's like almost a physical feeling.
41:37
[SPEAKER_00]: I think if I had to sort of isolate it, I think clarity of thought.
41:41
[SPEAKER_00]: is one of the things that I look for most.
41:43
[SPEAKER_00]: Like, do you have a clear articulation of what you're trying to build and why?
41:47
[SPEAKER_00]: Why you or your team are uniquely qualified to go tackle this opportunity?
41:53
[SPEAKER_00]: Um, even if the idea changes, I think just being able to click or learn a tech articulated strategy is very valuable.
42:01
[SPEAKER_00]: Alex Rampel often talks about us looking for kind of students of history, you know, it always makes me very nervous if I understand a market better than the founder does.
42:13
[SPEAKER_00]: Like if you're going to spend the next 10 years of your life, focus on this space, why wouldn't you have studied every prior attempt, and actually the best founders have often gone and talked to.
42:24
[SPEAKER_00]: the people before them that have tried and failed or had partial success got in some cases them on the cap table and had a clear articulation now and like what is what is different about today like what is unique about our strategy or the kind of why now from a technology perspective kind of unlocks that wasn't possible previously and so it's this sort of like
42:46
[SPEAKER_00]: you know, humble confidence, I think that I look forward as well, where people aren't just like totally dismissive like, ah, those guys are idiots, you know, where the geniuses that are going to go solve this for the first time.
42:56
[SPEAKER_00]: It's like, no, I'm actually like deeply understood and study the market.
43:00
[SPEAKER_00]: So if I'm learning from them in that sort of conversation, that's always a very good sign.
43:04
[SPEAKER_01]: I love that.
43:05
[SPEAKER_01]: I'm going to ask that question to slightly different way.
43:07
[SPEAKER_01]: So separate from the founders you meet and you get excited about.
43:10
[SPEAKER_01]: If let's say there's a lot of founders you're excited about, all tackling the same idea.
43:14
[SPEAKER_01]: And that's happening a lot in our business.
43:15
[SPEAKER_01]: I mean, I'm sure you get these waves of like 10 to 20 pitches with kind of the same idea.
43:21
[SPEAKER_01]: How do you think through who's going to win?
43:22
[SPEAKER_00]: It's really hard, you know.
43:29
[SPEAKER_00]: But I think it's important to meet many of them.
43:30
[SPEAKER_00]: Like Marquine has this framework and an element of butcher his sort of articulation.
43:35
[SPEAKER_00]: But like he basically says he's very skeptical that like somebody can identify a single team and say this is the best company.
43:43
[SPEAKER_00]: But you can often stack rank.
43:47
[SPEAKER_00]: And so you can understand kind of relative strength.
43:50
[SPEAKER_00]: So if you've seen the 10 companies,
43:53
[SPEAKER_00]: It's not perfect.
43:53
[SPEAKER_00]: Obviously, we make mistakes all the time, but instead of trying to hit the bullseye with a single dart, actually seeing the landscape, seeing the field really helps you sort of understand who is working, even just understanding whether it's the founding team and the articulation of the opportunity, how the metrics are trending.
44:23
[SPEAKER_00]: Again, really hard if it were easy.
44:26
[SPEAKER_01]: I think we'd all be super retro-free.
44:28
[SPEAKER_00]: Yeah, yeah, it's correct.
44:30
[SPEAKER_00]: You know, our jobs are easier, but it's not.
44:33
[SPEAKER_01]: Yeah, I think that's also something that like, you know, everyone struggles within the beginning.
44:36
[SPEAKER_01]: You meet one team, you're like, oh, they're brilliant.
44:37
[SPEAKER_01]: This market's perfect.
44:38
[SPEAKER_01]: I'm backing them and then you forget that there's another 25 plus that are really interesting that are doing the same thing.
44:43
[SPEAKER_00]: But it's something I struggle with too.
44:44
[SPEAKER_00]: Like, and maybe I often find that I'm most attracted to businesses that feel to some degree like N of 1.
44:52
[SPEAKER_00]: You know, it's hard for me.
44:54
[SPEAKER_00]: And we look, we invest in these two, obviously, where you have 10 YC fast followers kind of slicing up the market
45:03
[SPEAKER_00]: in thinner and thinner wedges, but, you know, a business like moment, for example, has no competition.
45:12
[SPEAKER_00]: They have competition with large incumbents, but it's somewhat esoteric.
45:17
[SPEAKER_00]: They build capital markets infrastructure sold into the biggest financial institutions.
45:21
[SPEAKER_01]: Yeah.
45:21
[SPEAKER_00]: And to their credit, like,
45:24
[SPEAKER_00]: that is because they live at the intersection of like hardcore Wall Street and Silicon Valley.
45:29
[SPEAKER_00]: And so it takes a very unique team to be able to deeply understand fixed-in-come trading infrastructure and be able to recruit out the Striper ramp engineer to go work with them.
45:41
[SPEAKER_00]: And so, yeah, you know, and then it has network effects and other things that I think makes it a very difficult business to be with.
45:48
[SPEAKER_00]: But, but it's
45:51
[SPEAKER_00]: It's an end of one in some ways and who likes competition.
45:56
[SPEAKER_00]: Oh, no.
45:57
[SPEAKER_01]: You know what I was like, clear that.
45:59
[SPEAKER_01]: I will set just as a quick aside.
46:01
[SPEAKER_01]: You sang Stripe Engineer, a ramp engineer, is such a great way to indicate if a company is end of one.
46:06
[SPEAKER_01]: Because when you just say Stripe Engineer, like, I know exactly what you mean.
46:09
[SPEAKER_01]: When you say a ramp engineer, I know exactly what you mean.
46:11
[SPEAKER_01]: And just as an aside, I think that that's something to notice in people's language.
46:15
[SPEAKER_01]: When they want to hire from a certain company, it speaks so much more than just giving less of traits or something like that.
46:22
[SPEAKER_01]: Totally.
46:23
[SPEAKER_00]: Yeah, and you know early on they also hired their like bosses boss who was ahead of fixed income training at Jane Street in Citadel
46:29
[SPEAKER_01]: I have one of those who just hired someone and you're like, how did you do that?
46:33
[SPEAKER_00]: Yeah, I'm like, wow, you've probably took like a 98% pick up, but respect.
46:37
[SPEAKER_01]: Or are we, are we being honest here?
46:39
[SPEAKER_01]: Did we like, you know, convince their child and to make them do it?
46:42
[SPEAKER_01]: Like, how did you get that to happen?
46:43
[SPEAKER_01]: Totally.
46:45
[SPEAKER_01]: Speaking of, I want to talk about how you picked plaid back at Spark.
46:49
[SPEAKER_01]: Obviously, like, you know, you've made a lot of really exciting FinTech investments moment.
46:53
[SPEAKER_01]: You're just talking about being one of them.
46:55
[SPEAKER_01]: How did you pick that team?
46:56
[SPEAKER_01]: How did you pick that company?
46:59
[SPEAKER_01]: Everything now is the platform blank.
47:01
[SPEAKER_01]: I literally just invested in something that's not in FinTech, but we're, we're, we're, we're calling calling it the platform blank.
47:05
[SPEAKER_01]: It's a, um, it's a really, uh, just foundational company that has changed the way that money moves.
47:11
[SPEAKER_00]: Yeah.
47:12
[SPEAKER_01]: How did you pick them?
47:13
[SPEAKER_01]: And how did you find that investment?
47:15
[SPEAKER_00]: Well, look, like, first of all, like, credit to Zach and William for everything they built, like, and I didn't fully expect that they would become such a foundational piece of infrastructure for kind of the subsequent decade plus of, of kind of fintech applications.
47:30
[SPEAKER_00]: Part of this, you know, I had, like, somewhat of a prepared mind, I guess, in the sense that in 2009, when I first moved to New York, I met this guy named Payton Surewood, who ended up
47:42
[SPEAKER_00]: Again, this will date me, but one of the companies that was most popular here in New York City at the time was four square.
47:48
[SPEAKER_00]: And so you would check in to restaurants or locations at the time.
47:53
[SPEAKER_00]: And effectively, what a check-in was, I mean, they were building effectively an ad network.
47:57
[SPEAKER_00]: And a check-in was a proxy for your transactional intent.
48:02
[SPEAKER_00]: If you checked in in the East Village where we are, you'd know, OK, David likes sushi in these bars in the East Village and also on the upper west side.
48:13
[SPEAKER_00]: But pardon me, it was like, well, why can't you just go to the actual stated preferences, which is the digital bread crumbs of your credit card data, are your actual transactions, like your actual spending?
48:26
[SPEAKER_00]: And so Peyton and I went to American Express, and we're like, cool, can you give us access to all your transactions?
48:31
[SPEAKER_00]: You know, like, fuck off, you know, like they're like, no, you know, we went to Yodely, who was sort of the incumbent version of
48:44
[SPEAKER_00]: terrible, you know, not API, I think it was like, you know, soap interface or something, and also you're going to pass 250,000 dollars and we were like 22, or I was 22 and head to money and whatever.
48:56
[SPEAKER_00]: So that was tough.
49:00
[SPEAKER_00]: But the idea at the time was how do I build sort of a,
49:03
[SPEAKER_00]: geolocated ad network based on your transaction history, and it was at a time when if you looked at your transaction statements, you might see Starbucks, you might see Starbucks on 59th in Park where you might see 4, 5, 6, 2, 0, sort of a unique merchant ID code from the processor.
49:25
[SPEAKER_00]: For all those reasons, it was hard, we sort of shelved it.
49:27
[SPEAKER_00]: You know, come 2013, I ended up meeting Sacramento and they were based here in New York at the time.
49:35
[SPEAKER_00]: And they were actually originally who had built a consumer product.
49:40
[SPEAKER_00]: But in order to build this sort of consumer PMFM like thing, they had to build an API that hooked into a bunch of transaction data from all the banks.
49:51
[SPEAKER_00]: And I remember one of the first meetings where imagine if you could geolocate this transaction day like what you could do and Zack like spun around his, or maybe it was what I'm spun around the laptop and they're like, you mean like this and they had sort of like a real-time view of all the users spending data in Manhattan as a cloud that's awesome.
50:11
[SPEAKER_00]: The other sort of analogy at the time was Twilio is a very successful developer tools company and that it sort of abstracted
50:20
[SPEAKER_00]: of telcos, and it built a very strong API business.
50:26
[SPEAKER_00]: And so, you know, that was a bit of the mental model.
50:28
[SPEAKER_00]: Was that, like, plaid could be sort of the Twilio for financial services.
50:32
[SPEAKER_00]: I at least had some inkling of that you could build, like, some ad network or something on top of that data.
50:38
[SPEAKER_00]: didn't again fully anticipate that it would become huge, but fast forward, you know, Peyton ended up being the head of engineering at Venmo, and he was always completely Venmo was built on Yodlee at the time.
50:50
[SPEAKER_00]: He was always complaining on terrible Yodlee was, and so I remember introwing Zach and William to Peyton.
50:57
[SPEAKER_00]: I was like, hey, you should meet this company.
50:59
[SPEAKER_00]: Still the email, you know, pla.io.
51:02
[SPEAKER_00]: It's similar to kind of what we were thinking about, and it does an eye, and you should talk to them.
51:05
[SPEAKER_00]: And so he ends up ripping, yodely out, and replacing with plaid.
51:08
[SPEAKER_01]: Is it before after your investment in him?
51:10
[SPEAKER_00]: This is before.
51:11
[SPEAKER_01]: Wow.
51:11
[SPEAKER_00]: Venmo became plaid's first customer.
51:14
[SPEAKER_00]: And I think it was the biggest customer for the first, like, four years because of PayPal's acquisition.
51:18
[SPEAKER_00]: Um.
51:21
[SPEAKER_01]: so pretty wild stuff again better be lucky and then good their amazing you know what's act is done today with the business and what Williams down doing with with column is crazy insane so it's epic that he continues that fight to you know it's like he's got this north star and he's just attacking it now from a different angle hundred percent absolutely brilliant yeah I mean hindsight is always twenty twenty but when you look back it sounds like a lot of it really is that founder
51:45
[SPEAKER_01]: that stand out.
51:47
[SPEAKER_01]: I do want to ask you one quick question before we get to our trailblazer tradeoffs.
51:51
[SPEAKER_01]: I read it in your bio and I have to do some more research.
51:54
[SPEAKER_01]: You have this like secretive biochem background.
51:58
[SPEAKER_01]: You know, you've done some health care, obviously, like 10 or being an example, like does biochem ever pop up anymore?
52:03
[SPEAKER_01]: What happened to that biochem interest?
52:05
[SPEAKER_01]: Give me a little bit more there because it feels like, huh, look, you could have a different route.
52:09
[SPEAKER_01]: You could have gone pre-med, you could have done something a little
52:12
[SPEAKER_00]: It's true.
52:13
[SPEAKER_00]: Yeah, I think from like, you know, I don't know, age 7 to 17 or something.
52:17
[SPEAKER_00]: I thought I was going to be an orthopedic surgeon.
52:21
[SPEAKER_00]: I have like flat feet and so I had gone and I grew up in San Diego and went to this like famous, like, or San Diego famous sort of pediatric orthopedic surgeon as a kid.
52:30
[SPEAKER_00]: I was like, how do you like that guy?
52:32
[SPEAKER_00]: And, you know, so that was sort of my,
52:36
[SPEAKER_00]: dream at the time.
52:37
[SPEAKER_00]: I'd always been pretty good at science, and I thought that's exactly why you should go study by a chemistry.
52:47
[SPEAKER_00]: I think I recognized early on, unfortunately, in college,
52:51
[SPEAKER_00]: Yeah, I always thought about, like, if I became a doctor, I'd open a private practice and it was like, wait a second, I don't have to become a doctor, become a entrepreneur.
52:59
[SPEAKER_00]: You know, like, totally.
53:01
[SPEAKER_00]: One thing does not require the other.
53:03
[SPEAKER_00]: And I think I just like people too much, can't really, like, a lot of the prerequisites of going to medical schools, yet it like spend a ton of time in lab and, you know, do the MCATs.
53:14
[SPEAKER_00]: And so I still, I stuck with biochemistry, graduated, you know, from Harvard, that degree.
53:19
[SPEAKER_00]: Um, but, uh, and I'm grateful for that because I think it taught me how to think and, um, there was never another time.
53:27
[SPEAKER_00]: I'm sure that I would have studied organic chemistry to that depth or whatever.
53:31
[SPEAKER_00]: Uh, but, um, but my interest changed a lot.
53:34
[SPEAKER_00]: Um, um, you know, my first boss, which I guess I didn't mention back to the firm and fund idea was an unbelievably successful
53:45
[SPEAKER_00]: who aside from starting a few biotech companies that he taking public, and also started the largest billboard company in Japan, ran a railroad.
53:53
[SPEAKER_01]: Yeah, and went to such a entrepreneur right there.
53:55
[SPEAKER_00]: And then started this giant effectively private equity firm of royalty pharma, which has become the largest buyers of pharmaceutical royalties in the world.
54:06
[SPEAKER_00]: And he sort of invented this asset class in the mid-90s, but talk about a firm over fund, royalty-farma is now a public traded company.
54:17
[SPEAKER_00]: It has, I think something like 50 to 100 employees and a 25-billion-dollar market cap.
54:23
[SPEAKER_00]: I literally don't know any other business on the planet that has more market cap per person.
54:27
[SPEAKER_00]: than royalty farm.
54:28
[SPEAKER_01]: It's like the early mid-Journey, you know, vibe, like when you do the calculation, yeah.
54:32
[SPEAKER_00]: Yeah.
54:33
[SPEAKER_00]: And it's in part because, again, knowing like what intellectual property to buy is really challenging, you know, anyway, he built a permanent capital vehicle.
54:43
[SPEAKER_00]: It wasn't a fund.
54:44
[SPEAKER_00]: It was a holding company.
54:46
[SPEAKER_00]: He had sort of a cost of capital vanage over time, with lower cost of debt that I could go on.
54:51
[SPEAKER_00]: But like,
54:52
[SPEAKER_00]: that's like like one of the purest expressions in some ways of a firm over fund.
54:58
[SPEAKER_00]: He was just as incredible first boss in mentor.
55:01
[SPEAKER_00]: And so that was probably actually the original seed of the idea.
55:04
[SPEAKER_00]: And so I still try, you know, we have a biotech and healthier fund.
55:10
[SPEAKER_00]: So I still try to to listen it on biotech pictures when I can, but my any knowledge of random, you know, protein pathways or something that I memorized is pretty far gone.
55:21
[SPEAKER_01]: It's also one of those fields where, like, you really have to stay up to speed, you know, like, it's one of the things where, like, God bless the investors who do it.
55:27
[SPEAKER_01]: But it's just so over my head that we don't even acknowledge compounds like you can't fake it, like, you really have to know your shit.
55:32
[SPEAKER_01]: So yeah, yeah, yeah, yeah.
55:33
[SPEAKER_01]: And you can, things can go really south of you invest in something that's just like stuck in FDA approval forever and just dies, like.
55:38
[SPEAKER_01]: Yeah, not good.
55:39
[SPEAKER_01]: So here's a problem I hear constantly from operators.
55:42
[SPEAKER_01]: The data exists.
55:43
[SPEAKER_01]: The answers are somewhere in there, but getting to that actually pulling a useful insight without bugging the data team or learning SQL takes way too long or just does not happen.
55:52
[SPEAKER_01]: Hex solves that.
55:53
[SPEAKER_01]: Hex is an AI analytics platform where anyone on your team can ask data questions and plain English and get real answers backed by your actual business context.
56:02
[SPEAKER_01]: No SQL required.
56:03
[SPEAKER_01]: And the best part is that hex shows you exactly how it's data agents think, so you can see where the logic comes from and trust the output.
56:10
[SPEAKER_01]: The more your team uses it, the smarter it gets.
56:12
[SPEAKER_01]: From seed stage founders running lean to larger orgs dealing with serious data complexity, Hex is built to scale with you.
56:18
[SPEAKER_01]: It's game-changing for people like me who want to understand what's going on under the hood, but we are not the data experts.
56:23
[SPEAKER_01]: It's funny too because I feel like every time I look over my operator friend's shoulders, whether they're in product, or marketing, or ops, they often have a Hex dashboard pulled up.
56:31
[SPEAKER_01]: It's a great tool.
56:32
[SPEAKER_01]: Trailblazers listeners get an exclusive 30-day free trial at Hex.ai-slash trailblazers.
56:36
[SPEAKER_01]: And let's do the trailblazers trade off.
56:38
[SPEAKER_00]: Sure.
56:38
[SPEAKER_01]: Okay.
56:39
[SPEAKER_01]: Let me know what comes to mind first.
56:41
[SPEAKER_01]: book in hand or podcast in ears.
56:43
[SPEAKER_01]: Podcasts.
56:45
[SPEAKER_01]: Any favorites besides Patrick's, Shadow of Patrick's.
56:48
[SPEAKER_00]: But yours, obviously.
56:48
[SPEAKER_01]: Oh, yes, I was in mind of empathics.
56:55
[SPEAKER_00]: I love, I mean, I've always loved like Stratecary.
56:57
[SPEAKER_00]: I think Ben Thompson is one of the best tech thinkers.
57:01
[SPEAKER_00]: And then he and Patrick did a podcast recently.
57:03
[SPEAKER_00]: I was about this.
57:03
[SPEAKER_00]: It's like the.
57:04
[SPEAKER_00]: I didn't see it.
57:05
[SPEAKER_00]: It's really good.
57:06
[SPEAKER_01]: I watch love it.
57:08
[SPEAKER_01]: Higher slow or fire fast.
57:10
[SPEAKER_00]: both get to pick higher slow at the beginning this is something I emphasize a lot with the founders I work with like getting exceptional people like holding the bar really find the exceptional person at the beginning of building a company pays massive dividends and it's a really hard thing because you have a thousand things you have to do and there's this sort of poll to just want to throw bodies to the problem it's like oh my god I need help.
57:35
[SPEAKER_00]: and so having the restraint to sort of keep the bar super high and find like the person for whatever role you're looking for is hard to do but again I think it makes hiring the next like you know 30 people that much easier.
57:48
[SPEAKER_01]: Yeah well especially now as things are growing so much faster than they ever have before is there like certain agencies are certain people or is it really just like keep the bar high spend all your time doing it any other advice.
58:02
[SPEAKER_00]: And keep the bar high, I guess, the other...
58:07
[SPEAKER_00]: phrase that I often use is like find people that are safe hands.
58:11
[SPEAKER_00]: The best feeling is as a founder or I think even as a manager is this notion that you can like give somebody a project, a business unit, you know, a big, you know, a big piece of responsibility and just know that like it's going to get done with quality on time.
58:27
[SPEAKER_00]: You don't need to micromanage.
58:28
[SPEAKER_00]: It doesn't mean that like they're not going to face challenges, but they're going to be communicative, they're going to race their hand, you know, they're going to be entrepreneurial
58:37
[SPEAKER_00]: And especially with the early stages of company, like, you don't have time to micromanage people.
58:43
[SPEAKER_00]: And so you need people with that level of agency.
58:47
[SPEAKER_00]: And even as you scale, I think this becomes really critical.
58:51
[SPEAKER_00]: It's how you evolve from being an IC to a CEO.
58:56
[SPEAKER_00]: It's like having the right team around you, that like you know, okay, the marketing team is going to get to like the sales organization is in safe hands, the engineering team is in a great place.
59:09
[SPEAKER_00]: Again, it doesn't mean that you're sort of abdicating responsibility for understanding all the details and taking into the weeds when it matters.
59:17
[SPEAKER_00]: Um, the only way that you're going to be able to scale and build the machine is by having, in my opinion, people that are, say, pants and all those kind of functional leadership roles.
59:24
[SPEAKER_01]: Yeah, we all only have 24 hours in a day, you know, so you'll can only do so much.
59:27
[SPEAKER_00]: Totally.
59:28
[SPEAKER_01]: Um, 10 small wins are one big moon shot.
59:31
[SPEAKER_00]: Um, 10 small wins.
59:34
[SPEAKER_01]: I knew you were going to say that.
59:35
[SPEAKER_01]: Hmm.
59:36
[SPEAKER_01]: Because now as we're talking, I'm really noticing this like compounding language is really strong for you.
59:40
[SPEAKER_01]: Yeah.
59:40
[SPEAKER_01]: Tell me more about that.
59:43
[SPEAKER_00]: Um.
59:45
[SPEAKER_00]: I think you just learn by iterating, I think something that I've kind of been excited about recently is just going super deep in all these coding tools.
59:58
[SPEAKER_00]: I've been building this whole AI operating system for myself.
1:00:02
[SPEAKER_01]: Separate from Andrewson, because I know you just have your own.
1:00:04
[SPEAKER_01]: We're in the firm.
1:00:05
[SPEAKER_00]: Oh, within the firm, okay.
1:00:06
[SPEAKER_00]: Yeah.
1:00:07
[SPEAKER_00]: This is product I built called Vantage.
1:00:09
[SPEAKER_01]: Oh, this is different than the one I'm thinking of.
1:00:10
[SPEAKER_01]: You guys must have a lot of different.
1:00:12
[SPEAKER_01]: But tell me what you're building.
1:00:13
[SPEAKER_01]: I want to hear.
1:00:13
[SPEAKER_00]: Yeah, I mean, the original insight was, I had this amazing associate that worked with me.
1:00:20
[SPEAKER_00]: He went off to go take a new role, which I was very excited for him to do, but I'm like, well, shit, I've been spoiled the last like four years having this amazing person kind of ride shotgun with me.
1:00:29
[SPEAKER_00]: And so,
1:00:31
[SPEAKER_00]: You know, like, how do I kind of rebuild a lot of the work that we would do together?
1:00:35
[SPEAKER_00]: And the initial insight was, I think I took 750 meetings and corn all the last year.
1:00:41
[SPEAKER_00]: Like there's a tremendous amount of sort of unstructured information that sort of lives in these, you know, meeting transcripts.
1:00:48
[SPEAKER_00]: And so it started by just using that as a wedge to sort of categorize my meetings and then kick off.
1:00:53
[SPEAKER_00]: excuse me a bunch of work in the background, you know, whether it's, you know, boredom, it's a monthly update, sir, passed out, or investment memo, you can really get kind of pretty far with that context.
1:01:05
[SPEAKER_00]: But that was just sort of like the first wedge.
1:01:07
[SPEAKER_00]: And then once you're sort of building, you're like, oh, wow, here's another whole surface, you know, how do I sort of, you know, point this infrastructure at sourcing?
1:01:15
[SPEAKER_00]: How do I point it at building a CRM?
1:01:16
[SPEAKER_00]: How do I,
1:01:17
[SPEAKER_00]: You now have a whole slack agent that sort of lives ambiently, you know, empty in our team conversations.
1:01:24
[SPEAKER_00]: And it's fed, you know, the entire kind of and recent canon.
1:01:28
[SPEAKER_00]: So every blog post we've ever written, every podcast transcript, every tweet for the investors, every investment memo we've ever written.
1:01:36
[SPEAKER_00]: And so it'll jump when we're debating an investment in Slack, it'll listen into the thread and then jump in ambiently in a proactively when it has something sort of thoughtful to say, grounded in a fact.
1:01:47
[SPEAKER_00]: And I put all this into like a vector database, so it can find sort of like interesting points of comparison between theses that people've written about and new deals for evaluating, even from like six years ago.
1:01:59
[SPEAKER_00]: Again, that wasn't the initial idea, right?
1:02:02
[SPEAKER_00]: That wasn't like, hey, huge moonshot, boom, application, it sort of happened iteratively.
1:02:10
[SPEAKER_00]: And now it's like really powerful, and I'm super proud of it.
1:02:14
[SPEAKER_01]: It's incredible.
1:02:14
[SPEAKER_01]: It's only going to be a more powerful.
1:02:16
[SPEAKER_01]: Yeah, and I should have took an only two.
1:02:18
[SPEAKER_01]: They spawn to the pod.
1:02:18
[SPEAKER_01]: We love granola.
1:02:19
[SPEAKER_00]: Go Chris.
1:02:20
[SPEAKER_01]: Yeah, exactly.
1:02:21
[SPEAKER_01]: Chris is amazing.
1:02:22
[SPEAKER_01]: But this reminds me a lot of your everything is recorded essay, which we didn't just talk about too much, but it is just a very exciting time that we can product ties the data set.
1:02:30
[SPEAKER_01]: Like conversations, I think, are the most valuable data set out there.
1:02:35
[SPEAKER_01]: And there's just so much nuance that you cannot pick up in other places.
1:02:39
[SPEAKER_00]: totally.
1:02:40
[SPEAKER_00]: And I think if, you know, as we're entering this world of kind of AI agents doing real work, most of the data that lives in conversations doesn't live in any other system of record, right?
1:02:51
[SPEAKER_00]: If you think about it, like, it's beginning to because of tools like Renewal and other transcription, no takers.
1:02:58
[SPEAKER_00]: But ultimately giving an AI agent the right context to do
1:03:10
[SPEAKER_00]: culture.
1:03:11
[SPEAKER_00]: Conversations are where culture resides.
1:03:13
[SPEAKER_00]: It's where expectations handling live.
1:03:15
[SPEAKER_00]: It's where, or exception handling, where expectations reside.
1:03:19
[SPEAKER_00]: It's all this sort of unstructured stuff that actually an agent will need to understand where the edges.
1:03:30
[SPEAKER_00]: If you're just giving it sort of the super structure deterministic logic that exists in an ERP or CRM, you're missing out
1:03:40
[SPEAKER_00]: And it's partially why I think that AI just think the overton window of like recording things is shifted pretty dramatically.
1:03:47
[SPEAKER_00]: Kind of assumed now every meeting is crazy.
1:03:49
[SPEAKER_01]: It's like illegal that we just go with it.
1:03:52
[SPEAKER_01]: Yeah.
1:03:53
[SPEAKER_00]: Yeah.
1:03:53
[SPEAKER_00]: I mean, yeah.
1:03:56
[SPEAKER_00]: And like, whether I'm recording or not, whether I say it or not, like, I kind of assumed somebody's recording in the background.
1:04:04
[SPEAKER_00]: And if you're not, I think you're basically explicitly saying that like, you're willing to give up all of that context to actually train agents.
1:04:15
[SPEAKER_00]: I think that's risky, you know, part of the bigger idea even for this product that I'm building is, you know, how do I deliver value to the individual, you know, at the edge, like, you know, how do I make my own workflow, you know, less redundant or whatever, and not free up time to spend time with founders.
1:04:33
[SPEAKER_00]: But if you think about a firm like in Dreson, like there is signal everywhere, right?
1:04:37
[SPEAKER_00]: There's signal in every conversation, in every pass node, in every investment mode, in every investment that we make, in how those companies perform over time.
1:04:48
[SPEAKER_00]: But historically, it was just very difficult to organize that information in a structured way.
1:04:53
[SPEAKER_00]: And so there's no, well, there's signal everywhere.
1:04:56
[SPEAKER_00]: There's no sort of central nervous system or brain that builds sort of the collective intelligence of the firm.
1:05:02
[SPEAKER_00]: And so at the limit, back to the compounding that advantages and firm over fun, I actually think what I'm trying to build is sort of the central nervous system for the organization.
1:05:13
[SPEAKER_00]: Maybe that's too bold.
1:05:16
[SPEAKER_00]: and how do you sort of codify the thinking and decision-making and lessons learned?
1:05:21
[SPEAKER_00]: So that doesn't have to be only passed down, you know, by happening, you know, have a chance in, you know, being in a meeting with, you know, Jeff Jordan when he was here because he had so many amazing lessons or Martina, or whomever.
1:05:33
[SPEAKER_01]: It's letting you be a student of history without needing the human intelligence of the person that's memorized all the things.
1:05:38
[SPEAKER_01]: And that's also, I think, how you can build something that outlasts a Jeff Mark Aben, like because it maintains that same culture and the same learnings and all that.
1:05:46
[SPEAKER_00]: That's all right.
1:05:46
[SPEAKER_01]: Yeah, super exciting.
1:05:48
[SPEAKER_01]: I do have to recommend, did you read Rebecca Caden's data at the address, eh?
1:05:51
[SPEAKER_00]: haven't.
1:05:53
[SPEAKER_01]: It's like it's ever ever saying, she's the best, I won't get into it now, it's so good.
1:05:58
[SPEAKER_00]: And they've been experimenting a lot, you know?
1:06:00
[SPEAKER_01]: It's the same concept that they're doing, like a lot of the seven turn-off.
1:06:02
[SPEAKER_00]: Totally, I mean, it's funny they have agents in email most, I think, that these slack that often, but one of them is called Parker, who's named after Andrew Parker, who used to be at USB, way back in the day, he was the one who referred me to Spark.
1:06:16
[SPEAKER_01]: The world is small.
1:06:17
[SPEAKER_01]: This is the other people thing people that are saying, like everyone is just the same like 500 people, amazing.
1:06:22
[SPEAKER_01]: Okay, being early or being right.
1:06:26
[SPEAKER_00]: Oh man, being early.
1:06:29
[SPEAKER_00]: Okay.
1:06:31
[SPEAKER_00]: Yeah.
1:06:32
[SPEAKER_01]: What's the best teacher?
1:06:33
[SPEAKER_01]: A mentor or a mistake?
1:06:36
[SPEAKER_00]: Hmm, mistake.
1:06:38
[SPEAKER_01]: Okay, any crazy ones come to mind?
1:06:41
[SPEAKER_01]: The mistakes you've made.
1:06:42
[SPEAKER_00]: All of them at Bond Street, I mean, I make so many mistakes all the time.
1:06:46
[SPEAKER_01]: is the future of AI abundance or chaos?
1:06:50
[SPEAKER_00]: I think abundance.
1:06:51
[SPEAKER_01]: OK, and why do you think that?
1:06:54
[SPEAKER_00]: Um, I think we just choose to be a techno-optimists.
1:06:58
[SPEAKER_00]: That's sort of like the natural disposition of the firm.
1:07:02
[SPEAKER_00]: But part of this is, even this own experience that I was just describing, like I'm not a developer by training.
1:07:10
[SPEAKER_00]: Um, and uh, the fact that I can write a product that has, I think, now, like, 400,000 lines of code blows my frickin' mind.
1:07:18
[SPEAKER_00]: You know, I had this funny dinner where I was, I was showing the early version of this product and Mark and Ben and Mark's, like, Have you ever looked at anything in our line code that you're writing?
1:07:28
[SPEAKER_00]: It's like, hello.
1:07:29
[SPEAKER_00]: He's like, if you ever looked at any code you've ever in, hello.
1:07:33
[SPEAKER_00]: He's like, exactly.
1:07:34
[SPEAKER_00]: Like, that is where we are.
1:07:36
[SPEAKER_00]: And so I think we're just democratizing access to this technology.
1:07:40
[SPEAKER_00]: You know, one expression that is coding, it's no longer precious.
1:07:44
[SPEAKER_00]: And so anybody can be a builder if you have a sort of agency in an idea and context like context is really the rate limit or knowing what good looks like at last you'd rate incredibly quickly in building something.
1:07:56
[SPEAKER_00]: You know, but my sister, for example, is responsible for the youth product that open the eye.
1:08:01
[SPEAKER_00]: And I think like every kid can now have a tutor.
1:08:06
[SPEAKER_00]: in their pocket, you know, and I think that or a doctor or you can go on and I think that's like an amazingly powerful thing that I think will raise, you know, people's lived experience in the world.
1:08:19
[SPEAKER_00]: So I'm very excited about that.
1:08:20
[SPEAKER_01]: What an awesome job your sister has.
1:08:22
[SPEAKER_01]: It's really extremely important.
1:08:24
[SPEAKER_00]: I agree.
1:08:25
[SPEAKER_00]: She's amazing.
1:08:27
[SPEAKER_00]: You know, she deals with all the really
1:08:32
[SPEAKER_01]: Yeah, and her role at, like, we also have it like steering the train off the tracks, right?
1:08:36
[SPEAKER_01]: Or on the tracks, it's like, she is like in the passenger seat.
1:08:39
[SPEAKER_01]: Like I think that like education, kids, me'd say, like that's all essential.
1:08:43
[SPEAKER_00]: And how do you ensure that they have, you know, a safe experience?
1:08:46
[SPEAKER_00]: And create the right guard rails at the model level, at the application level.
1:08:50
[SPEAKER_01]: And like data consent, like that's a whole other conversation.
1:08:52
[SPEAKER_01]: But like there are a lot of people give away access to everything.
1:08:56
[SPEAKER_01]: I mean, at the time of this conversation, like instinct has been blowing up.
1:08:58
[SPEAKER_01]: Totally.
1:08:59
[SPEAKER_01]: You know, what does that look like for a child to do that?
1:09:01
[SPEAKER_00]: Totally.
1:09:02
[SPEAKER_01]: There's a lot.
1:09:02
[SPEAKER_01]: There's a lot there.
1:09:03
[SPEAKER_00]: And I'm, you know, she has three kids we're on and get hard job, but if anybody's going to do it, I'm going to search.
1:09:07
[SPEAKER_00]: She's amazing.
1:09:08
[SPEAKER_01]: I love that.
1:09:08
[SPEAKER_01]: That's awesome.
1:09:09
[SPEAKER_01]: Killer product or loyal niche audience.
1:09:14
[SPEAKER_00]: Killer product for loyal niche audience.
1:09:19
[SPEAKER_00]: I think niche audience to start, actually.
1:09:22
[SPEAKER_00]: I mean, these are, that's why you ask the question.
1:09:25
[SPEAKER_00]: They're hard trade-offs, because you can be so successful in either.
1:09:30
[SPEAKER_00]: I think it was Henry from Carda has this great line, which is, do you want to build an N of one company or one of N company?
1:09:38
[SPEAKER_00]: And it's sort of, I think, also Peter Kielism, which is like, do I want to be a monopolist in a small, but very fast growing market?
1:09:48
[SPEAKER_00]: or a one-of-end company and often a very large market, but almost by definition, a large market means that it's their stasis.
1:09:58
[SPEAKER_00]: And I think people just back to like Thintech, for example, people were often head-ficked a lot by like Tam.
1:10:04
[SPEAKER_00]: They're like, ah, I just got 1% of all of consumer lending that would be a giant company and sure, that's true.
1:10:11
[SPEAKER_00]: But almost by definition, because it's such a big market, it is very competitive.
1:10:16
[SPEAKER_00]: And so I think if you start small, you can use that wedge to expand aggressively, but it's all often better in my opinion to be a monopolist in a small, but very, again, fast growing is sort of doing a lot of work, because you don't want to be a monopolist in a tiny market.
1:10:32
[SPEAKER_01]: Yeah, that's what I'm going to do back a little, yeah.
1:10:35
[SPEAKER_00]: But, you know, I remember the early days of Karta when it was e-share.
1:10:39
[SPEAKER_00]: So we were sponsorous, one of the first few customers we were logo.
1:10:42
[SPEAKER_00]: on the homepage.
1:10:43
[SPEAKER_00]: I love that.
1:10:43
[SPEAKER_00]: It was a weird business, right?
1:10:45
[SPEAKER_00]: It looked like services business.
1:10:46
[SPEAKER_00]: It was captables.
1:10:47
[SPEAKER_00]: How big was the start of marketing it to Henry's credit and like he's used that as a wedge to build a much bigger thing.
1:10:53
[SPEAKER_01]: I'm going to use that.
1:10:53
[SPEAKER_01]: I'm stealing that.
1:10:54
[SPEAKER_01]: I've never heard one of one or another one and I just think the way that you described that is so thoughtful and I stole it from him.
1:10:59
[SPEAKER_01]: Okay, we'll get some re-credit album.
1:11:01
[SPEAKER_01]: But it's really good.
1:11:02
[SPEAKER_01]: I love that.
1:11:03
[SPEAKER_01]: Be sure bootstrapping.
1:11:07
[SPEAKER_00]: I mean, depends on what your ambitions are.
1:11:09
[SPEAKER_00]: I don't think venture capital is right for every entrepreneur.
1:11:13
[SPEAKER_00]: You know, bond street is an example.
1:11:15
[SPEAKER_00]: We were small business leaders, right?
1:11:17
[SPEAKER_00]: And I think you saw from the thousands of companies we worked with that there was a lot of ways to be successful.
1:11:24
[SPEAKER_00]: You know, we became, for example, one of the largest coffee lenders in the country, oddly.
1:11:28
[SPEAKER_00]: So, if you walk around New York and you see a bunch of Joe coffees, we've probably opened 8 or 10 of those locations.
1:11:34
[SPEAKER_01]: Pretty good.
1:11:34
[SPEAKER_01]: Please see my old stomping grounds in the West Village.
1:11:36
[SPEAKER_01]: Yeah.
1:11:37
[SPEAKER_00]: And, you know, Danny Meyer came in after us, you know?
1:11:39
[SPEAKER_00]: Oh, Danny Meyer.
1:11:40
[SPEAKER_00]: They came in the company.
1:11:41
[SPEAKER_00]: But, you know, credit to Jonathan Rubenstein and his sister Gabrielle, who started that business.
1:11:46
[SPEAKER_00]: like they bootstrapped it, you know, and like, by the way, if you can, bootstrapped it, which basically means you're making more money than you're spending from your customers, even better, you own, you know, as much of the business.
1:12:01
[SPEAKER_00]: There are some companies that you require, you know, a big investment to build technology, or team, or go capture market.
1:12:09
[SPEAKER_00]: But I think you kind of understand what game you're playing.
1:12:12
[SPEAKER_00]: And I think in venture land, we've seen a lot of examples of companies that raise a ton of venture that probably weren't enter businesses that could have been amazing outcomes.
1:12:23
[SPEAKER_00]: I think about one of our early customers in Tuffton, Needle, for example, which is the one of the early online mattress companies.
1:12:30
[SPEAKER_00]: And there were a lot of examples of people raised tons of venture capital, some who in public.
1:12:35
[SPEAKER_00]: a lot of matches companies, they were on that, and then, and then, uh, uh, tough and yield bootstrapped a business, we lent them, I think, 500,000 dollars when they had 7 million of revenue or something, I think they did like 7, 40, 100, like, and they own 100% of the company when they sold.
1:12:51
[SPEAKER_00]: Also better for the founders, a lot of the time to, I mean, the founders, yeah, crushed it, um, so you kind of need to know what game or what?
1:12:59
[SPEAKER_01]: I love that.
1:13:00
[SPEAKER_01]: It reminds me a little bit of like the one of and, and of one, also
1:13:04
[SPEAKER_01]: You know, big fish, small pond or small fish.
1:13:07
[SPEAKER_00]: They were based in Phoenix.
1:13:08
[SPEAKER_00]: They'd like, we don't talk about the coastal bullshit.
1:13:12
[SPEAKER_00]: And they crushed it, it's amazing.
1:13:14
[SPEAKER_01]: I think there's a lot going to be a lot of opportunities now with AI to back the like Phoenix founder.
1:13:18
[SPEAKER_01]: 100%.
1:13:19
[SPEAKER_01]: They can do a lot.
1:13:20
[SPEAKER_01]: All right, the final question is AI overhyped or underhyped?
1:13:25
[SPEAKER_00]: Underhyped, obviously.
1:13:26
[SPEAKER_00]: I mean, I really do think that we are very, really.
1:13:29
[SPEAKER_00]: As crazy as the market feels right now,
1:13:32
[SPEAKER_00]: And I still think we were incredibly early in the dissemination of this technology into our all of our lives and into work.
1:13:40
[SPEAKER_00]: And it just seems like the market for inference that basically intelligence is like unlimited.
1:13:47
[SPEAKER_00]: And I think things are going to get much crazier.
1:13:50
[SPEAKER_01]: And need for computer.
1:13:52
[SPEAKER_01]: Yeah, I mean, it's grind.
1:13:54
[SPEAKER_00]: Yeah, yeah.
1:13:55
[SPEAKER_00]: So,
1:13:57
[SPEAKER_00]: I'm very optimistic.
1:13:58
[SPEAKER_01]: Awesome.
1:13:59
[SPEAKER_01]: David, thank you for being here.
1:13:59
[SPEAKER_01]: This was super fun.
1:14:00
[SPEAKER_00]: Thanks so much for having me.
1:14:01
[SPEAKER_01]: Appreciate it.
1:14:02
[SPEAKER_01]: Thanks so much for listening to the Trailblazers podcast.
1:14:04
[SPEAKER_01]: If you found this conversation valuable, please follow along on socials, share with a friend, leave a review, all the things.
1:14:11
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1:14:13
[SPEAKER_01]: It helps more contrain builders find us and supports the work we're doing here.
1:14:16
[SPEAKER_01]: To learn more about what we're doing, you can visit Trailblazerspod.com or my venture capital firm parkrangerscapt.com or just follow along on socials at Erica Underscore Winger.
1:14:26
[SPEAKER_01]: Until next time, keep trailblazing.