Latest / Giant Ideas / Immad Akhund, CEO at Mercury: The Reality of Building a Unicorn (and Why it's Worth the Pain)

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Immad Akhund, CEO at Mercury: The Reality of Building a Unicorn (and Why it's Worth the Pain) · Giant Ideas

• 0:00
  SPEAKER_02: If you don't share the burden, they're not being given the responsibility.
• 0:03
  SPEAKER_02: So they don't feel like they need to step up because they're like, okay, you know, Mars got it, like it's it seems like it's not a big deal.
• 0:08
  SPEAKER_02: Whereas if you tell people like, hey, this is like, we're about to run out of money, and like we better f freaking figure it out, like, people rise to the occasion.
• 0:15
  SPEAKER_00: Hello, and welcome to Giant Ideas with me, Cameron McLean.
• 0:19
  SPEAKER_00: And me, Tommy Stadlin.
• 0:20
  SPEAKER_00: We're co-founders of Giant Ventures, which builds and backs purpose-driven companies.
• 0:24
  SPEAKER_01: At Giant, we're lucky to meet extraordinary people with giant ideas that are changing the world.
• 0:29
  SPEAKER_01: This podcast brings you behind-the-scenes access to those ideas and the inspiring stories of the people behind them.
• 0:35
  SPEAKER_00: We explore how one giant idea can kickstart a billion-dollar company, shape culture, and transform life as we know it.
• 0:45
  SPEAKER_01: Imana Kund is the co-founder and CEO at Mercury, which is one of the world's most widely used business banking platforms.
• 0:52
  SPEAKER_01: He also has a front row seat to Silicon Valley.
• 0:55
  SPEAKER_01: He's an investor in over 350 startups, which include the likes of Airtable, Substack, Linear, and many, many more.
• 1:03
  SPEAKER_01: This year he announced that Mercury raised$300 million at a$3.5 billion valuation.
• 1:09
  SPEAKER_01: And also his$26 million venture fund, which he's raised to back early stage startups.
• 1:15
  SPEAKER_01: In this episode, we talk about why he thinks founders make the best in venture investors, his experience with his own investors at Mercury, and what it takes to truly scale a unicorn.
• 1:24
  SPEAKER_01: Welcome, Imad.
• 1:25
  SPEAKER_02: Yeah, excited to join you.
• 1:27
  SPEAKER_01: So starting at the very beginning, when you founded Mercury, you've mentioned a few times in a couple interviews that you had a slightly embarrassing moment when you went to pitch Andreas and Horowitz.
• 1:36
  SPEAKER_01: Tell tell our listeners a bit about that.
• 1:38
  SPEAKER_02: Well, going to the real embarrassing stories.
• 1:47
  SPEAKER_02: So I developed this.
• 1:48
  SPEAKER_02: It doesn't actually happen anymore, which is kind of a little sad, but back in the day, everyone had to go to Sandhall Road, which is like this road in it's like kind of suburb of San Francisco, but that's where all the VCs are.
• 2:00
  SPEAKER_02: So, you know, I would go there, I'd go to there's a Starbucks there, I'd go there, I'd get my latte, you know, show up a little early, get prepped.
• 2:07
  SPEAKER_02: So I that's what I did.
• 2:08
  SPEAKER_02: I was pitching in recent horror words for our uh seed round uh in 2017.
• 2:13
  SPEAKER_02: Uh and I got my latte, everything's ready.
• 2:16
  SPEAKER_02: You know, I pick up the latte and like I forgot to put the lid on it properly.
• 2:20
  SPEAKER_02: The lid fell off and like the whole thing went all over me.
• 2:24
  SPEAKER_02: Uh luckily it was like kind of a brownish shirt or gray shirt, so it didn't look that bad.
• 2:30
  SPEAKER_02: But I mean it was pretty obvious that like half of it had like a latte stain on it.
• 2:34
  SPEAKER_02: But I went into the pitch meeting.
• 2:36
  SPEAKER_02: Uh, this is the partners meeting, so there's like 20 people in the room.
• 2:39
  SPEAKER_02: But thankfully they turn off all the lights because there's a deck on there, so the lights are like down, and I just do the whole pitch with it uh with like a massive coffee stain on me.
• 2:48
  SPEAKER_02: Uh but they ended up investing in me.
• 2:50
  SPEAKER_02: Oh, do you think they noticed?
• 2:51
  SPEAKER_02: Couldn't have been that bad.
• 2:52
  SPEAKER_02: No one ever mentioned it, so I guess not.
• 2:54
  SPEAKER_01: And what would be your advice now to Imad if you look back going into to pitch Andreessen Horowitz or to some of the founders who one day want to get that opportunity to to go on Sand Hill Road and pitch to Andreessen?
• 3:05
  SPEAKER_02: Uh I mean that I was successful in that pitch, so I guess I don't have like I'm like, do the same thing again.
• 3:12
  SPEAKER_02: Uh but you know, I've done uh startups for a long time.
• 3:15
  SPEAKER_02: I did my first start in 2006, so I've definitely failed uh plenty of pitches.
• 3:20
  SPEAKER_02: Uh I think the two pieces of advice I would give myself if I was to go back and look at myself pitching is you know, number one, uh I used to really treat investors as kind of like a transaction.
• 3:32
  SPEAKER_02: I'm like trying to get money from someone, you know, it's like a and that I mean that is kind of the case, right?
• 3:38
  SPEAKER_02: Like it is a business deal.
• 3:39
  SPEAKER_02: But at the same time, you know, especially now that I've been an investor for a long time, it's actually like not just a business deal.
• 3:46
  SPEAKER_02: Like it's uh, you know, you're st and actually maybe no business deal is a business deal when it's like this big, but you know, you're trying to establish like a relationship for 10 years.
• 3:55
  SPEAKER_02: Uh there's a commitment as an investor that like you know you'll be there for the entrepreneur.
• 4:00
  SPEAKER_02: So like there's just all of this kind of uh human side to it that I was missing for a long time.
• 4:06
  SPEAKER_02: Like I wasn't really trying to get to know the person, and like yeah, I think people can tell if like you're there to like actually build a relationship versus there to just be a transaction kind of thing.
• 4:15
  SPEAKER_02: Yeah.
• 4:16
  SPEAKER_02: Uh so that's something I think I I missed until you know, you know, now I'm like, I mean, I just behave like a human, right?
• 4:23
  SPEAKER_02: Like I'm like, hey, I'm you know, what are you doing for Christmas?
• 4:26
  SPEAKER_02: Like I'll I'll I'll try to build a relationship and like actually uh understand people and like uh you know help them understand me beyond just like the transaction.
• 4:35
  SPEAKER_02: So uh that's one big thing.
• 4:37
  SPEAKER_02: Um I think the second thing that is also kind kind of pretty hard, especially I'm an engineer and I so I tend to take things like very literally and not want to exaggerate.
• 4:48
  SPEAKER_02: I'm also from the UK, so you know we we we we hate like overselling uh at uh modest exactly.
• 4:55
  SPEAKER_02: Uh but it that just really doesn't work in like an early stage uh startup pitch, right?
• 5:01
  SPEAKER_02: Like the like what you're really selling is not like a valuation, uh what you're selling is like a low probability of an extreme outcome.
• 5:11
  SPEAKER_02: Uh and you know, like and it's it kind of is bullshit, right?
• 5:16
  SPEAKER_02: Like, I mean, maybe that's the harsh way to put it, but like it's very low probability and very hard to believe.
• 5:23
  SPEAKER_02: But like you're really selling that vision.
• 5:24
  SPEAKER_02: Like you're selling like this low probability event, it's like you know, it's not like 0.1% probability, it's actually like 2% probability this this will be a$10 billion company.
• 5:34
  SPEAKER_02: And that's why you should give me like a$20 million valuation.
• 5:36
  SPEAKER_02: And that took me like a really long time to get my head around like how to think about this like grand vision when like you know, day to day in like an early stage startup, like everything's going wrong.
• 5:46
  SPEAKER_02: You don't have any ideas, like you can't build anything, you have no idea whether it's gonna work, right?
• 5:50
  SPEAKER_02: There's a lot of like doubt, but you have to like kind of bottle up all this doubt and like make this like really grand pitch.
• 5:55
  SPEAKER_01: So investors are people, so treat them as such, you know.
• 5:57
  SPEAKER_01: It's uh it's a long-term relationship, almost like a marriage.
• 6:00
  SPEAKER_01: I guess the second advice would be you know, sell the dream, right?
• 6:03
  SPEAKER_01: I we have a bit of a a joke at side of giant, but I give a bit of a discount to whatever the American entrepreneurs tell us they're gonna do in terms of numbers, and we put a bit of a premium on the uh on the Brits and the Europeans and the Nordics.
• 6:15
  SPEAKER_01: So that rings quite true.
• 6:17
  SPEAKER_02: It's not even just about the numbers, it's like the whole story, right?
• 6:19
  SPEAKER_02: Like I think the uh Europeans often don't sell this like hundred billion dollar idea.
• 6:24
  SPEAKER_02: It's like you know, everyone knows it's like a lot of things have to go right to get there, but and I didn't actually know you uh started in the UK.
• 6:31
  SPEAKER_01: How did you make it over to Silicon Valley from the UK?
• 6:34
  SPEAKER_02: Uh I did one, so you know, I I worked for one year at Bloomberg.
• 6:38
  SPEAKER_02: That was my only real job I've had.
• 6:40
  SPEAKER_02: Uh, and then I did one startup, uh, which didn't really go anywhere, it was like a Yelp in London.
• 6:45
  SPEAKER_02: Uh, but I just kind of got addicted to like the feeling of like doing a startup and being in the ecosystem.
• 6:52
  SPEAKER_02: Uh and yeah, even back then, this is 2006, there was a wave of entrepreneurs kind of moving from London to San Francisco.
• 6:59
  SPEAKER_02: Uh, and like the stories they would tell you were very fantastical, right?
• 7:03
  SPEAKER_02: Like it's like people raising money and like getting millions of users and all this stuff, which was like you know, much rarer in the UK, especially in 2006.
• 7:11
  SPEAKER_02: There's a tiny little ecosystem that was like two VCs.
• 7:14
  SPEAKER_02: Um, so it just seemed like you know, I decided in a very short time period that this was just something I wanted to do for the rest of my life, and uh, it seemed like San Francisco was the place to do it.
• 7:24
  SPEAKER_01: Awesome.
• 7:25
  SPEAKER_01: And so you started Mercury in 2017 almost eight years ago, it's now valued at 3.5 billion.
• 7:30
  SPEAKER_01: What was that moment when you knew we've got product market fit?
• 7:35
  SPEAKER_02: Uh I was very skeptical of product market fit.
• 7:39
  SPEAKER_02: I didn't want to like, yeah, we launched, and there's often this like idea of like the value of value of sorrow, sorrow of death, or something like that.
• 7:47
  SPEAKER_02: I don't know.
• 7:48
  SPEAKER_02: Uh, but the idea is that you launch and then people use the product, trough of disillusion.
• 7:52
  SPEAKER_02: That's it.
• 7:54
  SPEAKER_02: Uh yeah, lots of people use the product, and then uh, you know, the buzz kind of dies down, and then you have to thought think about like what's the long-term distribution and what's the long-term kind of fit, and like really find product market fit after that point.
• 8:07
  SPEAKER_02: Uh, so we launched, uh, but we actually grew like every month after we launched, like, we grew like more than 40% every month for the first year.
• 8:15
  SPEAKER_02: And I and every every month I'd be like, oh, you know, I don't know if this product market fit, like you should, you know, it's like delayed excitement, and we still have to figure something out.
• 8:23
  SPEAKER_02: And like we weren't doing any sales at all.
• 8:25
  SPEAKER_02: This was just pure organic growth.
• 8:27
  SPEAKER_02: Uh and then so we launched in April 2019, and then COVID hit in March 2020.
• 8:33
  SPEAKER_02: And I was like, this is it.
• 8:34
  SPEAKER_02: You know, I knew we didn't have product market fit, like every, you know, the whole world paused for like a month.
• 8:38
  SPEAKER_02: So I was like, okay, I'm glad we didn't spend too much money, etc.
• 8:42
  SPEAKER_02: Uh and then the month after that, like literally March was one of the worst months we had.
• 8:48
  SPEAKER_02: Oh, by far the worst month.
• 8:50
  SPEAKER_02: I think it was March or April.
• 8:51
  SPEAKER_02: And the month after that, like we've doubled, uh, because like you know, it like that like COVID like pause was so so short, but like you know, everything about Mercury kind of fit the moment because this was a uh digital banking, you could sign up online.
• 9:06
  SPEAKER_02: There was this like huge movement to like you know, digital entrepreneurs wanting to set up businesses and do e-commerce and all this stuff.
• 9:12
  SPEAKER_02: Uh, and Mercury was like right there for that movement.
• 9:15
  SPEAKER_02: So at that point, I was like, wow, if we can take like a global pandemic and still grow again, like we probably have like pretty strong product market fit.
• 9:23
  SPEAKER_02: And yeah, uh at that point, uh to some extent I'd been like starving the company of resources.
• 9:28
  SPEAKER_02: Like I was I did, I just I was like not hiring in front, I was hiring behind our growth.
• 9:33
  SPEAKER_02: So, you know, we didn't have enough customer support.
• 9:34
  SPEAKER_02: We did, you know, we weren't like building too.
• 9:36
  SPEAKER_02: But at that point, I was like, okay, you know, this is really working.
• 9:39
  SPEAKER_02: Let's go like actually try to invest ahead of the growth rather than like be behind and uh be stretched continuously.
• 9:45
  SPEAKER_01: That's the kind of trajectory everyone everyone dreams of, right?
• 9:47
  SPEAKER_01: But that is pretty rare for a startup to kind of see that consistent growth.
• 9:51
  SPEAKER_01: Yeah, seriously.
• 9:51
  SPEAKER_02: I mean, this was my fourth startup.
• 9:53
  SPEAKER_02: This is the first time it happened to me.
• 9:55
  SPEAKER_02: Uh yeah, I think it is rare.
• 9:58
  SPEAKER_02: I think it was a combination of things that allowed it to happen.
• 10:01
  SPEAKER_02: Um, I I guess I can dive into them if you if it's useful.
• 10:03
  SPEAKER_02: Yeah, I think useful.
• 10:04
  SPEAKER_02: Uh so I think there's like a few things.
• 10:07
  SPEAKER_02: Number one, this happens much better in like either consumer startup or like a uh founder prosumer.
• 10:16
  SPEAKER_02: Like, you know, we were selling to founders.
• 10:18
  SPEAKER_02: Uh so this you know, it's very hard to have like this kind of instantaneous product market fit if you're doing enterprise sales or something like that.
• 10:24
  SPEAKER_02: Like that would just you have to go to market motion there, which are different.
• 10:27
  SPEAKER_02: So that's number one.
• 10:28
  SPEAKER_02: Number two, we had a surprisingly polished product because it took us a year and a half to launch initially, and that's mostly because we ended up doing one partner bank in integration and that didn't work out, so we had to switch that partner bank to another partner bank.
• 10:43
  SPEAKER_02: So you know, the way Mercury works is the whole back end is based on uh sponsor bank, and we ourselves are just a software that like kind of sends customers to the sponsor bank.
• 10:52
  SPEAKER_02: Uh, but that means the integration is like quite deep with these partner banks.
• 10:56
  SPEAKER_02: Um, but because the first one didn't work and we had to spend another six months building new one, we just had a like the designer and the front-end team had like a ton of time on their hand and uh to like rebuild the product, and we actually ended up rebuilding the whole product.
• 11:11
  SPEAKER_02: Uh so it ended up being a very polished product by the time we launched.
• 11:16
  SPEAKER_02: Uh, and that was like a pretty important part to the Mercury story.
• 11:21
  SPEAKER_02: It's like, hey, you know, normally people are so used to having this like very janky experience with a banking product, like it's gonna uh yeah, it's actually like slightly better in the UK, so maybe you guys don't feel as much, but in the US, it's like a very painful product to sign up for a bank account.
• 11:36
  SPEAKER_02: Uh, you have to go in person, you have to stand for three hours in a key line, uh, and then you know you find out that the wires aren't enabled.
• 11:43
  SPEAKER_02: You have to go back to the bank branch to enable the wire.
• 11:46
  SPEAKER_02: When we started Mercury, we signed up for like 12 banks uh to see the experience, so it's really painful.
• 11:51
  SPEAKER_02: And conversely, Mercury was like this real, really delightful experience.
• 11:55
  SPEAKER_02: Um, so it really got people hooked very early on.
• 11:58
  SPEAKER_02: Uh, and then the other thing is I refused to launch until we had like a pretty complete feature set.
• 12:03
  SPEAKER_02: Because I was like, Which is you know running startups for a long time.
• 12:06
  SPEAKER_02: Yeah, exactly.
• 12:07
  SPEAKER_02: Like people, you know, especially in 2017, there was a lot more like MVP, do the minimum possible thing.
• 12:12
  SPEAKER_02: Uh, but I was like, yeah, if we don't have wires, there's no point in launching because that's what startups need.
• 12:17
  SPEAKER_02: Uh, if we don't have multi-user support, there's no point in launching because startups have multiple co-founders and they often hire people that need to manage the bank account.
• 12:25
  SPEAKER_02: Uh we also wanted to support immigrant founders because I was like, hey, I'm an immigrant when I started uh my first company, uh, but also, you know, about 50% of uh startups have like at least one immigrant founder.
• 12:39
  SPEAKER_02: Uh uh so like because we had this like high bar, I mean that's partly why we ended up switching partner banks because the first one wouldn't give us all the features we needed.
• 12:49
  SPEAKER_02: Uh but because we had this high bar by the time we launched, it was you know, it was a complete product.
• 12:55
  SPEAKER_02: It wasn't like it wasn't like there was bits missing that were like stopping product market fit because you know I knew exactly what the feature set needed to be, and there was no point in kind of going out there without like that completeness.
• 13:06
  SPEAKER_01: Amazing.
• 13:06
  SPEAKER_01: And so then you hit product market fit, you're growing uh healthily, you decide to go bring on some capital and really supercharge this thing.
• 13:14
  SPEAKER_01: You've brought on some of the best investors in the game, A16Z, Sequoia.
• 13:18
  SPEAKER_01: Do you think they've had a tangible impact on your trajectory?
• 13:20
  SPEAKER_01: Is it something you would advise other founders to go optimize for?
• 13:25
  SPEAKER_02: Um so one funny thing about Mercury is you know, we are selling to the portfolio companies of these VCs.
• 13:32
  SPEAKER_02: Um we actually did this analysis where you know for our early VCs about 60% of their portfolio uses Mercury.
• 13:40
  SPEAKER_02: But for someone that's not uh uh a Mercury investor, it's like averages out to like 30, 35%.
• 13:47
  SPEAKER_02: Uh and the funny thing is like it's not like our VCs like you know, we try to make promotional like perks and things like that for them, but it's not like they're like actively pushing it that aggressively, but there's just something about being like backed by the VC that also invests in you that just lends a lot of credibility to Mercury.
• 14:06
  SPEAKER_02: Like if you're selling to startups and that's like a core segment that that matters to you, I think having great VCs is like 100% useful and successful.
• 14:14
  SPEAKER_02: Uh and that's work really well for us.
• 14:17
  SPEAKER_02: Outside that, there's you I I do think most of the time, like you, you know, you're not gonna be successful or fail because of a VC, but there are like very tangible, like specific things that almost every VC has done for us, like you know, helped helped hire like a VP of people or uh you know, helped us through some other time or close a candidate.
• 14:36
  SPEAKER_02: So I think VCs are like very useful and powerful uh when used correctly, but they're not like the reason you're gonna succeed or fail.
• 14:42
  SPEAKER_01: Yeah, I I always talk about with my team is they can we can tilt the scales.
• 14:46
  SPEAKER_01: We're not gonna decide which way the scales ultimately fall, but we can help tilt them one way or the other.
• 14:51
  SPEAKER_01: So you've now built a unicorn.
• 14:52
  SPEAKER_01: We actually had Tom Blomfield, one of your uh London to San Francisco peers, back on the show a couple months ago, and he's been incredibly open about the toll that Monzo took on his mental health.
• 15:02
  SPEAKER_01: Um he's he's been quoted saying, I remember I'd remember what's happening in my life and what I'd have to do that day, and this enormous weight of anxiety would just descend on my chest and push out all the air as I realized what my life was like.
• 15:16
  SPEAKER_01: It's quite dramatic, um, but also quite intense.
• 15:19
  SPEAKER_01: What's it been like building Mercury?
• 15:20
  SPEAKER_01: Has it been tough in that way, or what's been the toughest part for you?
• 15:26
  SPEAKER_02: Um you know, I I have this outlook that like I had that you know, that one job I had uh for one year, and I just remember being just like so unmotivated.
• 15:39
  SPEAKER_02: You know, I'd wake up in the morning, I'd do that like 45, 50 minute commute on the tube.
• 15:45
  SPEAKER_02: Uh, and I just like did not at all feel like uh I was enjoying myself.
• 15:51
  SPEAKER_02: And I was like really tired after the day ended, even though I didn't even do that much work.
• 15:55
  SPEAKER_02: And then I remember this feeling of just like starting a startup, and I was like working like you know, I mean I was young back then, I was working like the whole nine, nine, whatever, nine, nine, seven.
• 16:04
  SPEAKER_02: Yeah, I wasn't I wasn't not working, that's all I was doing.
• 16:07
  SPEAKER_02: Uh but I just remember the feeling of like just going like wow, I'm just like so excited to build something.
• 16:12
  SPEAKER_02: Uh so I I just feel like what I do and like you know, get to build something and like set my own, uh set my own rules is like such a privilege.
• 16:22
  SPEAKER_02: Uh that you know, I can't imagine doing anything else.
• 16:27
  SPEAKER_02: Uh so that's like keeps my hopefully keeps my mental health like a little bit in check.
• 16:31
  SPEAKER_02: Uh there's definitely like times of like uh like it's an extreme up and down life, right?
• 16:38
  SPEAKER_02: Like sometimes you're great, sometimes you're not, like this.
• 16:41
  SPEAKER_02: Uh yeah, as I said earlier, like there's plenty of times I've like tried to fundraise and failed, and that's like one of the most disheartening things because like you know, put you you put your soul into this fundraising process and everyone says no, and like you know, to some extent your ego is attached to the company that you're trying to build.
• 16:57
  SPEAKER_02: Uh uh, and you don't like it's it's that's probably like some of yeah, one of the worst feelings is to have that process, and then you have to figure out like what the hell do you do with this like startup that has employees and all this stuff.
• 17:07
  SPEAKER_02: Uh, so it's definitely like a an extreme lifestyle choice, but uh, but it's also like I think I consider it like a big privilege as well.
• 17:18
  SPEAKER_02: So like even through like there's moments where it's like hard, like I try to think of that and go, like, okay, you know, what else would I be doing?
• 17:24
  SPEAKER_02: Like, uh, I feel like I can do something here, and and so that like helps center me.
• 17:30
  SPEAKER_02: I've I've also been, you know, married uh with a very supportive wife for like most of that time, and she helps helps give me perspective as well.
• 17:38
  SPEAKER_02: Um it's definitely hard though.
• 17:40
  SPEAKER_02: I mean it's not it's not like easy.
• 17:42
  SPEAKER_02: Uh I think one thing that has helped me also is like I don't see it as like all on me.
• 17:49
  SPEAKER_02: Like I don't I don't personally go like wake up in the morning and like oh the only way Mercury succeeds is like if I if I think of solutions to things and like work really hard.
• 17:58
  SPEAKER_02: Like I you know we have 1100 people working on Mercury now and I think it's like a shared responsibility and obviously some people have it more than others, but I have two co-founders, I have a tall person exec team.
• 18:09
  SPEAKER_02: But you know, even when there was nine of us, uh which is like the kind of initial core team, uh I didn't think of it as like it's my job to make Mercury successful.
• 18:17
  SPEAKER_02: I was like, hey, how do we make it together?
• 18:19
  SPEAKER_02: Uh and I think that helps a lot.
• 18:20
  SPEAKER_02: I think sometimes and I did this earlier in my career as well, like taking it too much on yourself.
• 18:26
  SPEAKER_01: I think that's quite unusual.
• 18:27
  SPEAKER_01: I think a lot of founders, uh founder CEOs do feel the opposite, actually do feel like uh, at least at the beginning, that it all stops and starts with them and and they're gonna have to like yeah, ultimately be the one who drives it forward.
• 18:40
  SPEAKER_01: So how do how did you was that sort of a psycho deliberate psychological trick, or that's how you've always been?
• 18:44
  SPEAKER_01: This is a collaborative effort.
• 18:46
  SPEAKER_02: We're all I mean I it happened over time.
• 18:48
  SPEAKER_02: Well, hey, I've always had co-founders, so I mean there is like hopefully most people feel like they have that shared uh shared responsibility with them.
• 18:55
  SPEAKER_02: Uh, but there was this like distinct time, probably in 2013, uh where my previous startup was like about to fail, one of those times where it like not you know, not raise money, etc.
• 19:06
  SPEAKER_02: Uh yeah, Union Square Ventures stepped up and gave us a million dollars basically.
• 19:10
  SPEAKER_02: They were our series A V C.
• 19:12
  SPEAKER_02: Uh, when like you know, we basically presented a plan to them saying like, hey, in six months we'll profit, we'll be profitable.
• 19:18
  SPEAKER_02: We need a million dollars to like kind of bridge the gap.
• 19:20
  SPEAKER_02: So they gave us a million.
• 19:21
  SPEAKER_02: Uh, but it was, you know, it was they didn't say it, but it was pretty obvious this was like the last money we were gonna get.
• 19:27
  SPEAKER_02: Uh, so we had to figure it out.
• 19:29
  SPEAKER_02: Uh, and we went to the team and we were like, hey, we have we have this much money, this is the plan for the next six months to become profitable.
• 19:36
  SPEAKER_02: Uh, and I really thought at that point, like everyone's gonna quit.
• 19:39
  SPEAKER_02: Because I was like, okay, you know, who's gonna stick around for this like crazy plan where they won't have a job after six months?
• 19:45
  SPEAKER_02: But but really, I think maybe like one or two people quit, but like basically everyone stuck around.
• 19:50
  SPEAKER_02: Um, and we did become profitable.
• 19:52
  SPEAKER_02: Um uh but it really showed me that actually like you know, shelling people like transparently what's going on and sharing the burden is like the only way to uh to solve big problems.
• 20:04
  SPEAKER_02: Uh because I think the problem is like if you uh if you don't share the burden, people know that they're not, you know, they're not being the given the responsibility.
• 20:13
  SPEAKER_02: So they don't feel like they need to step up because they're like, okay, you know, Mars got it, like it's it seems like it's not a big deal.
• 20:18
  SPEAKER_02: He's not even whereas if you tell people like, hey, this is like we're about to run out of money and like we better freaking figure it out.
• 20:25
  SPEAKER_02: Like we all have our job to like try to figure that out.
• 20:27
  SPEAKER_02: Uh it's just like I think that people rise to the occasion and yeah, maybe they don't take it as like yeah, for them it's to some extent it's a job, they'll get another job after six months, I guess, if they if it doesn't work out, but so they won't take it as seriously as like maybe you would as a as the founder CEO.
• 20:45
  SPEAKER_02: Uh but they do actually like they enjoy that.
• 20:48
  SPEAKER_02: Like I think people actually like being told what's going on and they like being given difficult problems.
• 20:53
  SPEAKER_02: So uh so after that happened, from then on, I've been like, okay, you know, this actually worked great.
• 20:57
  SPEAKER_02: Let me try to do that, like uh in all my companies.
• 21:00
  SPEAKER_01: I love that story.
• 21:01
  SPEAKER_01: That feels like a an important leadership lesson.
• 21:03
  SPEAKER_01: Um and yeah, I totally agree.
• 21:04
  SPEAKER_01: Startups, the highest highs, the lowest lows, but ultimately a privilege to get up every day and and be building something that you're that you're excited about.
• 21:11
  SPEAKER_01: Um shifting attention to the the other hat you wear in Silicon Valley, you have angel invested in over 350 startups.
• 21:18
  SPEAKER_01: I've got to ask you what your process for getting K1s is because that's got to be a whole work stream there.
• 21:24
  SPEAKER_01: But um, and you've and you've been in some fantastic companies, a bunch of unicorns, Riplin, Airtable, Rappi, Substack.
• 21:31
  SPEAKER_01: What have you learned from those 350 investments?
• 21:34
  SPEAKER_01: What do you look for in a truly brilliant founder?
• 21:37
  SPEAKER_01: How do you spot a future unicorn?
• 21:41
  SPEAKER_02: Um, I mean, part of the reason I have so many investments is it's quite hard to spot a speech unicorn.
• 21:46
  SPEAKER_02: That's one way.
• 21:47
  SPEAKER_02: I knew for sure you wouldn't um no, I really do think it's like it's very hard early on to know for sure.
• 21:54
  SPEAKER_02: Uh, and I think like, yeah, I'm a believer in a diversified portfolio because uh yeah, it's it's so much.
• 22:00
  SPEAKER_02: Of the returns are in that power law that, like, if you can get a hundred billion dollar company uh and you do a hundred bets to do it, uh that will actually give you a higher return than like 10 bets uh most of the time.
• 22:12
  SPEAKER_02: Uh but at least for me, the biggest thing, and it kind of ties into a lesson I learned in Mercury, is that I think the market matters so much.
• 22:22
  SPEAKER_02: Uh and like I don't think I'm like that much better an entrepreneur when I built Mercury versus my previous companies.
• 22:28
  SPEAKER_02: I'm I'm definitely better, but like I'm not like 10x better.
• 22:32
  SPEAKER_02: I'm like mostly uh similar.
• 22:34
  SPEAKER_02: But the idea for Mercury was just like so good uh at the right time uh and obviously well executed, but but the idea made a huge difference.
• 22:44
  SPEAKER_02: Um that's definitely something I focus on is like I want to yeah, it's not that the market has to already be huge, but I want to see a path that like in 10 years' time this could be a huge company.
• 22:56
  SPEAKER_02: Uh and then there's a bunch of things around that.
• 22:59
  SPEAKER_02: Like you know, to build a huge company, you need to like have like uh some motes and things like that as you scale.
• 23:06
  SPEAKER_02: Uh, you need to be the kind of entrepreneur that wants to build a huge company.
• 23:09
  SPEAKER_02: I mean, lots of people are okay with you know uh not doing that, like it takes like a lot of intensity and commitment to to build a big company.
• 23:18
  SPEAKER_02: Um and you kind of as an investor have to have like some sort of thesis about where the world is going.
• 23:26
  SPEAKER_02: Uh and that thesis has to change all the time because you know what uh like what exists as an opportunity, either someone already does it or you know, like maybe you believe something during the pandemic that you don't believe after, etc.
• 23:38
  SPEAKER_02: So it does require, like, yeah, I'm like I literally look for different things every six months to invest in because I'm like, you know, I think this has played out and like this is maybe more interesting.
• 23:48
  SPEAKER_02: But obviously you're also opportunistic to just see what like entrepreneurs are coming up with.
• 23:52
  SPEAKER_02: Um so that's by far my biggest focus.
• 23:54
  SPEAKER_02: Uh the second thing is kind of it kind of goes back to like this kind of human aspect of it.
• 23:59
  SPEAKER_02: Like I feel like if I invest in an entrepreneur, I'm kind of making a commitment that like you know, if they text me, I'll I'll respond and I'll jump on a call on like a Sunday evening or something.
• 24:08
  SPEAKER_02: Right.
• 24:09
  SPEAKER_02: Uh so I only want to do that if I if I like the person and if you know I feel like our values align, if you know, if they're kind of uh like not being transparent and open or whatever, like that that's uh that I have an issue with.
• 24:23
  SPEAKER_02: Um and so that's number two.
• 24:27
  SPEAKER_02: Uh I think there's there's something else that that is hard to judge, especially in kind of younger entrepreneurs, but you want to see like, is there is there a track record of like this person like trying to do hard things and succeeding at them?
• 24:40
  SPEAKER_02: Uh and of you know obviously it's easier if it's a second-time entrepreneur or third-time entrepreneur.
• 24:45
  SPEAKER_02: And uh actually, you know, all the examples you just you just uh mentioned are all second-time entrepreneurs, uh like Airtable, uh how he sold his previous company to uh Salesforce, uh the Rappi founder, he actually built like a 300-person consultancy before he built Rappi.
• 25:02
  SPEAKER_02: Uh anyway, I won't go through all of them.
• 25:03
  SPEAKER_02: Uh, but yeah, often second-time entrepreneurs, like, you know, if they're willing to do it again, they're crazy enough to like make a big company.
• 25:11
  SPEAKER_02: Uh, so it is I do have a bias towards second-time entrepreneurs, but you know, often obviously like some of the biggest successes are first-time entrepreneurs as well, so you can't be like kind of too closed off to that.
• 25:21
  SPEAKER_01: Yeah, we've backed a bunch of second-time entrepreneurs at Giant, um, and some of them are doing phenomenally well.
• 25:26
  SPEAKER_01: But I would say even for the first-time entrepreneurs, you often can spot examples of exceptionalism in their backgrounds, whether they, you know, they won, you know, loads of money on an online poker tournament when they were 15, or they came top of the uh the the national exams in Turkey, um, or they ran an art gallery at 24.
• 25:46
  SPEAKER_01: There's always kind of these these awesome, unique stories, I think, of what people have done and shown real agency and and and some brilliance.
• 25:53
  SPEAKER_01: Why did you decide to formalize this angel investing?
• 25:56
  SPEAKER_01: You had a great, great seat being the CEO of Mercury, writing your angel checks, but you chose to turn this into a formalized$26 million fund.
• 26:02
  SPEAKER_01: What was behind that decision?
• 26:05
  SPEAKER_02: So I've actually been investing with other people's money since 2016.
• 26:09
  SPEAKER_02: So I had a rolling fund on angel list.
• 26:12
  SPEAKER_02: Um so I had this process, but you know, it was a lot less formal.
• 26:16
  SPEAKER_02: Um mostly I decided to formalize it like because well, two things.
• 26:20
  SPEAKER_02: Number one, uh I had a bunch of LPs kind of approach me saying they would invest.
• 26:24
  SPEAKER_02: So you know, I was thought uh why not in the the fund in a fundraising process sounded quite complicated, but I felt like I had a few people that were that would be relatively quick to close.
• 26:35
  SPEAKER_02: Um and then number two, uh, I'd been working with uh Josh, who's my partner on the fund for a year.
• 26:42
  SPEAKER_02: He was actually an early investor in Mercury, and you know, he was available and he was kind of helping me uh with investing.
• 26:48
  SPEAKER_02: Uh and I really like working with him, but you know, in order to really work with them full-time, uh, at least he's full-time on the fund, uh, I needed to have like a formal fund.
• 26:57
  SPEAKER_02: Um, and I partly thought it would like save me time because I was like, oh wow, I'll have someone working full-time on it.
• 27:02
  SPEAKER_02: It'll save me so much time.
• 27:03
  SPEAKER_02: But you know, it turns out it but he mostly just goes and finds more companies to talk to.
• 27:07
  SPEAKER_02: And uh uh yeah, so I end up spending like about the same amount of time on the fund.
• 27:11
  SPEAKER_02: Uh, but I think we end up investing in like better things.
• 27:14
  SPEAKER_01: Fair enough.
• 27:15
  SPEAKER_01: So Giants, founded by two former founders, myself and my partner Tommy.
• 27:19
  SPEAKER_01: We personally believe that having been in the trenches, built a company from the ground up, gives you a certain empathy and an ability to spot talent over those that that haven't gone through that experience.
• 27:28
  SPEAKER_01: Do you agree?
• 27:29
  SPEAKER_01: You're you're a founder slash investor yourself.
• 27:31
  SPEAKER_01: Yeah, 100%.
• 27:32
  SPEAKER_01: Yeah.
• 27:33
  SPEAKER_02: I mean, it's also not all the time, but most of the time, uh, you know, if you're an entrepreneur and you have an issue, uh like you know, you're trying to hire a CFO for the first time, or you're trying to do a series B.
• 27:47
  SPEAKER_02: Uh yes, you can ask VCs, but you know, they they haven't really done it themselves.
• 27:52
  SPEAKER_02: Like they have like second-hand information.
• 27:54
  SPEAKER_02: So yeah, I have like how many, at least 10 entrepreneurs that invested in Mercury that are like unicorn uh CEOs, um unicorn founders and CEOs.
• 28:05
  SPEAKER_02: But those are the people I turn to when I'm doing something new, uh, because they've done most of the new things.
• 28:10
  SPEAKER_02: So uh I think that by far is like the most valuable aspect of having kind of operators.
• 28:16
  SPEAKER_02: Uh I think that yeah, the other thing is they'll yeah, they're all busy, so like they don't bother you.
• 28:21
  SPEAKER_02: Right?
• 28:22
  SPEAKER_02: Like the one the one thing you don't want as an entrepreneur is to be bothered by your investors.
• 28:26
  SPEAKER_02: Like you want to reach out to them when you need something, you don't want them to say, like, hey, did you see this competitor that just launched?
• 28:31
  SPEAKER_02: Uh and then you have to like write a write a story about why they're not competitors.
• 28:36
  SPEAKER_02: Like surprisingly, I was on I was also reading the news.
• 28:39
  SPEAKER_02: Um so yeah, I think there's that's that's the combination, and I I do think it's valuable.
• 28:45
  SPEAKER_02: Um obviously from my seat at Mercury, a lot of entrepreneurs know about me and uh yeah, know about Mercury and want to emulate our success.
• 28:54
  SPEAKER_02: So you know, I end up seeing a lot of companies.
• 28:57
  SPEAKER_01: I'm gonna ask you one more question.
• 28:58
  SPEAKER_01: I'm gonna ask you uh a tough one because I'm gonna ask you to choose your your favorite child from the 350.
• 29:04
  SPEAKER_01: Um, so what which company are you most excited about in that angel portfolio and why?
• 29:10
  SPEAKER_02: Uh it's uh I am a like a big sci-fi reader, so it is it's always kind of fun to talk about like some of the crazier, more sci-fi or hard tech kind of companies.
• 29:20
  SPEAKER_02: Um so like I'll I'll pick this one because I think it's like the most crazy one that's having some success.
• 29:26
  SPEAKER_02: It's called Astroforge.
• 29:27
  SPEAKER_02: Uh they're they're like building uh satellites that go and intercept asteroids and like mine uh palladium from them.
• 29:35
  SPEAKER_02: Uh which, you know, when I heard that idea, I was like, I have no idea whether it's gonna work, but it's gonna be very, very fun to like be part of that story.
• 29:42
  SPEAKER_02: Uh so I don't know if it's like by far my favorite, but it's one of the kind of more fun ones I've invested in.
• 29:48
  SPEAKER_01: Awesome.
• 29:49
  SPEAKER_01: Well, Amart, on that note, we'll uh we'll end on mining future asteroids.
• 29:52
  SPEAKER_01: It's fantastic to have you here.
• 29:54
  SPEAKER_01: Thank you so much for sharing your wisdom, and uh it's great to see you again.
• 29:58
  SPEAKER_02: Yeah, thanks for having me.
• 29:59
  SPEAKER_02: This was fun.