Latest / Second Nature / E184 Soma Pitiryi: The Human Algorithm

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E184 Soma Pitiryi: The Human Algorithm · Second Nature

0:06
SPEAKER_01: We went out to San Fran for Climate Week.
0:09
SPEAKER_01: I lose truck a month.
0:10
SPEAKER_01: Really?
0:11
SPEAKER_01: When we were in San Francisco.
0:14
SPEAKER_01: April.
0:15
SPEAKER_01: And part of it was to test whether I wanted to move there.
0:20
SPEAKER_01: Because the standard joke is I am like a cliche West Coast founder.
0:26
SPEAKER_01: So PhD in data and environment.
0:28
SPEAKER_01: I played American football out in the US.
0:30
SPEAKER_01: I throw weights around and I'm quite big and I've got a British accent.
0:35
SPEAKER_01: It's like it's the bingo card of like the stereotypical tech founder.
0:39
SPEAKER_01: And every time we go across, everyone's like, oh, you should totally move it.
0:42
SPEAKER_01: You could build the business so much faster and easier.
0:44
SPEAKER_01: It'd be fantastic.
0:44
SPEAKER_01: Come and do that.
0:45
SPEAKER_01: And then I chat to my wife and she goes, Nope.
0:48
SPEAKER_01: So it's not that long a conversation.
0:50
SPEAKER_01: So we we went out and tested it.
0:52
SPEAKER_01: And I I do I love the energy and the ambition and the audacity of the US.
0:57
SPEAKER_01: But then I come back and I love it here too.
0:59
SPEAKER_01: And I just kind of um kind of point to like if Demis Asarvis can build a world-changing business from the UK, then he's proven it's possible, right?
1:07
SPEAKER_01: So the rest of us can try to.
1:09
SPEAKER_04: I lived in the US for a short period of time.
1:11
SPEAKER_04: It's different, but where whereabouts?
1:13
SPEAKER_04: Boston and New York.
1:14
SPEAKER_04: Okay.
1:15
SPEAKER_04: Boston and New York.
1:16
SPEAKER_04: And it's a really funny story that every single founder you asked them in the UK, London, Glasgow, Cambridge, also, oh, you know, the next frontier for us is extending in the US, getting to Y Combinator, uh uh being on Wall Street, so on and so forth.
1:30
SPEAKER_04: And I was like, okay, cool.
1:32
SPEAKER_04: Why do you want to do that?
1:34
SPEAKER_04: Because if you're answered just because everyone else is doing it, do you want to like do you want to have a life just like everyone else has?
1:41
SPEAKER_04: On the other side, you don't see, you know, the the other side of the coin, the dark side of the whole US ecosystem, the messy drug overdose, the the unbearable circumstances.
1:52
SPEAKER_04: Literally, I mean, that's I'm a big advocate.
1:54
SPEAKER_04: I'm a big, big advocate of the UK and the European uh, you know, startup ecosystem because here there are so many safety bets.
2:02
SPEAKER_04: And I'm not saying that, you know, if you create your own company, you should primarily focus on safety.
2:06
SPEAKER_04: That's that's not what I'm implying.
2:08
SPEAKER_04: But I've heard people in my group of friends who went there, San Francisco, VIC, just didn't work out and ended up homeless and calling me in the middle of the night that hey man, I uh can I uh can I get just a thousand and two hundred dollars for a plane ticket?
2:23
SPEAKER_04: And I was like, what here?
2:25
SPEAKER_04: This this is this is unimaginable.
2:27
SPEAKER_04: This is this is not the way.
2:29
SPEAKER_04: So um, you know, pick your poison, but be very careful.
2:33
SPEAKER_01: Totally.
2:34
SPEAKER_01: It's interesting.
2:35
SPEAKER_01: Um so thank you for coming in.
2:38
SPEAKER_01: Hugely appreciate it.
2:39
SPEAKER_01: Um absolute privilege to be here, Rich.
2:41
SPEAKER_01: Doing the background sort of research on you, it's a unique background.
2:47
SPEAKER_01: Um thank you.
2:48
SPEAKER_01: Could could you give us a window in?
2:50
SPEAKER_01: Give us the what are the contents page chapters of of your backstory?
2:54
SPEAKER_01: So I I want to go early, so like childhood step us through education to where we are now, and then we'll dive into each of the different bits.
3:01
SPEAKER_04: Okay.
3:02
SPEAKER_04: Um so there was a kid in Hungary who never ever wanted to be an entrepreneur.
3:07
SPEAKER_04: Uh, and this is a very, very interesting story that, you know, in my country where I come from, especially after the collapse of the Soviet Union, if uh if you claimed yourself as an entrepreneur, normally you were the bad guy.
3:18
SPEAKER_04: You were like, oh, you do some shady business, you don't pay tax, you know, under-the-table deals, oh, you know a guy who knows a guy, who knows a guy.
3:27
SPEAKER_04: So uh I'm not your typical founder who's like, oh, you know, at age 14, I was inspired by Zuckerberg.
3:33
SPEAKER_04: I always wanted to be a startup guy, VC, whatever.
3:36
SPEAKER_04: Um, I came to UK originally to study.
3:39
SPEAKER_04: And when I founded my first business in the first six months, you know, I was I had so many butterflies in my tummy to uh to tell my parents that what I'm doing.
3:47
SPEAKER_04: And I remember the first conversation when I like So actually, how I make a living, I have a startup.
3:56
SPEAKER_04: First question from my grandpa.
3:58
SPEAKER_04: Oh, you have such potential.
4:00
SPEAKER_04: But uh, but hey, uh, are you paying your taxes?
4:03
SPEAKER_04: I'm like, yeah, yeah, of course.
4:04
SPEAKER_04: I mean, are you?
4:06
SPEAKER_04: And I'm like, yes.
4:07
SPEAKER_04: And that's just an excellent description about the the difficulty and the difference uh of the cultures.
4:14
SPEAKER_04: Um, I had a few businesses uh at university to make a living, and uh, you know, this is how I I get the taste of it.
4:21
SPEAKER_04: Some failed miserably, most of them failed miserably, some succeeded.
4:24
SPEAKER_01: Uh and all where did the if if there wasn't entrepreneurship and business surrounding you in childhood, where did the genesis, where did the idea that you could start a business come from?
4:35
SPEAKER_04: It's really profound.
4:36
SPEAKER_04: It's really profound.
4:37
SPEAKER_04: So in the first year of my uni studies, uh, I worked in a wide variety of different jobs, including Costa Coffee, McDonald's, kebab shop, sports bar, pubs, so on and so forth.
4:48
SPEAKER_04: And at the end, uh, I study philosophy and politics.
4:51
SPEAKER_04: So, you know, absolutely no business studies, no mathematics, nothing.
4:56
SPEAKER_04: At the end of my first year, I was just sitting there and I see all my classmates who are engaging with societies, going to these beloved networking events, drinking in the pub while, you know, I'm serving them the pint in the pub.
5:06
SPEAKER_04: And I was like, there must be a more efficient way to make money.
5:13
SPEAKER_04: And uh, because of my high grades, I was invited to a startup weekend.
5:18
SPEAKER_04: And the thing is that I originally did not want to go because back then I was working in McDonald's.
5:24
SPEAKER_01: Oh, totally.
5:25
SPEAKER_04: Yeah, University of Exeter.
5:26
SPEAKER_04: University of Exeter.
5:27
SPEAKER_04: And I did not want to go originally because uh I had uh like a weekend shift in McDonald's.
5:32
SPEAKER_04: And you know, if you work at night, they pay you double.
5:34
SPEAKER_04: So I was like, why would I waste my time startup?
5:36
SPEAKER_04: What's that?
5:37
SPEAKER_04: And uh life just threw me into this direction that you must go.
5:41
SPEAKER_04: And I was like, they give me free food, so why not?
5:45
SPEAKER_04: And I went there and as a pure accident with three other folks, we won.
5:51
SPEAKER_04: And we got some money to start working on our idea.
5:54
SPEAKER_04: And that's how it all started.
5:56
SPEAKER_04: That's how it all started.
5:58
SPEAKER_04: That uh, you know, normally people say that you need to have a glorious vision, how you want to leave a legacy, how you how you want to change the world.
6:07
SPEAKER_04: Um, how I first got in touch with the whole startup ecosystem, that I was just looking for a way to make money and not work in a pub.
6:15
SPEAKER_03: Do you know and I I I I'm brutally honest.
6:17
SPEAKER_03: I'm brutally honest.
6:19
SPEAKER_01: I've been there.
6:20
SPEAKER_01: Do you not think those people who have those romanticized legacy stories are just recreating the history to fit their narrative?
6:28
SPEAKER_01: I think it's so rare that people actually like the these life plans work wonderful in reverse, but if you met that those same people in their like late teens, uh no one's got a real linear plan because it just doesn't work that way.
6:40
SPEAKER_01: The world doesn't open itself up and afford you that direct for very few people anyway, I think.
6:45
SPEAKER_04: Yeah, yeah, yeah, yeah.
6:46
SPEAKER_04: I I think that you know, it's a bit of a mixture.
6:49
SPEAKER_04: It's a bit of a mixture that there are I can imagine that there are people who are, you know, from age five really dedicated to become the greatest uh bodybuilder champions of all time, like Arnold Schwarzenegger.
6:59
SPEAKER_04: Uh and I can imagine that, you know, whatever sounds good on a podcast, people just connecting the dots in reverse that at age 14 I saw Zuckerberg and uh I wanted to do this.
7:08
SPEAKER_01: What was what was the first business idea at that um startup camp?
7:12
SPEAKER_04: So we we literally had no idea what we were doing.
7:16
SPEAKER_04: Uh we had no we had we had no idea what type of product we want to develop.
7:19
SPEAKER_04: And uh the best advice what we received that hey, if you have no idea, just go to the street and just start asking people that that what's their problem?
7:29
SPEAKER_04: Because at the end of the day, startup entrepreneurship is about solving problems.
7:33
SPEAKER_04: So ask people what's their problem.
7:35
SPEAKER_04: And this is exactly what we did.
7:36
SPEAKER_04: We were like one of those uh goofy guys on the street who are like, hey, can I have five minutes of your time?
7:40
SPEAKER_04: What's your biggest problem right now?
7:42
SPEAKER_04: And uh, as it turned out, it's a massive issue in Exeter that there are a lot of pubs, a lot of sports pubs there.
7:50
SPEAKER_04: And when people enter the pub, they don't know what sports they're gonna see on the screen.
7:56
SPEAKER_04: So the idea was that okay, let's solve this problem.
7:59
SPEAKER_04: How about an app?
8:00
SPEAKER_04: You download it, and it's just gonna give you all the pubs which are open at the moment and what is on the screen and right right here and right now.
8:09
SPEAKER_04: When we pitched it, nobody was like, Oh, this is such an amazing idea.
8:13
SPEAKER_04: We were like, Well, that's what we found.
8:15
SPEAKER_04: And you told us that we should ask the people, do the customer interviews, solve a real problem, and uh and just just just do it.
8:24
SPEAKER_04: And this is exactly what we did.
8:26
SPEAKER_04: And we we were as surprised as everybody else that we won.
8:30
SPEAKER_04: I remember it, you know, I was looking around like is it a joke or something?
8:34
SPEAKER_04: It wasn't.
8:35
SPEAKER_04: They gave us 10k to uh you know just hit the ground running, develop the technology properly, set up the business, start the sales, start the marketing, so on and so forth.
8:46
SPEAKER_04: We had a summer and the rest is history.
8:50
SPEAKER_01: Love it.
8:51
SPEAKER_01: Okay, uh that that's not the only degree though, right?
8:55
SPEAKER_01: You've been collect uh collecting degrees like Todd Trump's cards.
8:58
SPEAKER_04: Yeah, like Pokemon cards, like Pokemon cards, absolutely take it to the next one.
9:02
SPEAKER_04: So the next one uh was actually in St.
9:04
SPEAKER_04: Andrews, Management and IT.
9:06
SPEAKER_04: Uh the one Why there and why that that cost.
9:10
SPEAKER_04: So back then we were running a running a proper tech company.
9:15
SPEAKER_04: Um and I realized very quickly, if we want to grow the business, I need some understanding about technology.
9:21
SPEAKER_04: This is 2018.
9:22
SPEAKER_04: So anybody who's listening to us now, they will be like, come on, man, just ask Chat GPT.
9:27
SPEAKER_04: You you don't need a computer science degree in order to gain some understanding about technology.
9:32
SPEAKER_04: It was 2018, pre-AI, pre-everything.
9:35
SPEAKER_04: It was it was completely different.
9:36
SPEAKER_04: And I felt that, you know, as a CEO as face of the business, it's like really slowing us down.
9:43
SPEAKER_04: That I don't understand, for example, technical workflows.
9:47
SPEAKER_04: I don't understand, you know, the uh not the coding language, but the algorithmic thinking.
9:52
SPEAKER_04: I I had no idea.
9:54
SPEAKER_04: And the next degree came from that we were running a small uh like you know investment group with a bunch of people together.
10:03
SPEAKER_04: And uh the business has to side, one which is focusing on the education, because everybody has these wild dreams to go into investment banking, asset management, private equity, venture capital.
10:12
SPEAKER_04: And what we were doing, super simple, we just show you what you're really gonna do.
10:18
SPEAKER_04: Shadowing and inviting people to from from the industry, you know, junior and senior, just to tell you that hey, what you see on Wall for Fourth Street is not necessarily what an investment banker is doing.
10:31
SPEAKER_01: So just pause there for a sec.
10:33
SPEAKER_01: Yeah.
10:33
SPEAKER_01: So we've gone from a um a childhood completely disconnected from entrepreneurship and business.
10:39
SPEAKER_01: We've gone through politics and philosophy.
10:41
SPEAKER_03: Politics and philosophy.
10:42
SPEAKER_01: Yet at some point in that journey, you've picked up the language, the understanding, you know, the the types of finance you've just rattled off there.
10:50
SPEAKER_01: That's not a 10-minute learning experience in itself.
10:52
SPEAKER_01: That's a huge, that's a complex understanding of what is an incredibly nuanced, complicated, fragmented world of finance.
11:00
SPEAKER_01: Where did you pick up that knowledge base?
11:03
SPEAKER_04: The the finance bit.
11:04
SPEAKER_01: Yeah, the even understanding the language, the terminology, the different types of capital, the way it all fits together.
11:09
SPEAKER_01: Where did that learning come?
11:10
SPEAKER_04: Failing.
11:11
SPEAKER_04: Learning and failing, learning and failing.
11:13
SPEAKER_04: So imagine my three years at university that you know, I was funding a business, either I succeeded or I failed, and I moved to the next one, and I moved to the next one, and I moved to the next one.
11:22
SPEAKER_04: And whenever I made money, I paid for my accommodation fee, I paid for food, I paid for a pint in the pub.
11:28
SPEAKER_04: Uh, when I failed, went back to McDonald's.
11:31
SPEAKER_04: But always started again.
11:33
SPEAKER_04: And I had I had no like formal education, for example, what's IBEDA, ARR, or or any of that.
11:40
SPEAKER_04: Uh, I was just literally failing, learning, doing it again, failing, learning, doing it again.
11:44
SPEAKER_01: And the learning part, uh, is it reading for you?
11:48
SPEAKER_01: Is it podcast?
11:49
SPEAKER_01: Is it YouTube?
11:50
SPEAKER_01: How do you collect information in the best way?
11:52
SPEAKER_04: Okay, you're gonna laugh at it.
11:53
SPEAKER_04: So uh as everybody in 2016 and 2017, you know, we started raising money.
11:59
SPEAKER_04: And imagine that, you know, we we were able to land a lot of conversation with local angel investors.
12:05
SPEAKER_04: Sit down, sit down with them in a coffee shop, and you know, they were looking at us.
12:08
SPEAKER_04: Okay, so talk to me about your customer acquisition cost.
12:12
SPEAKER_04: What's that?
12:13
SPEAKER_04: Would you mind explaining?
12:15
SPEAKER_04: And you know, all with all these conversations, when you make a fool out of yourself, that's how you learn that, for example, what's churn, what's ARR, why financial model matters, why investors invest in people, why you need to solve like a bulletproof problem.
12:31
SPEAKER_04: That's interesting.
12:32
SPEAKER_04: And and that's it.
12:33
SPEAKER_04: And that's it.
12:34
SPEAKER_04: I was laser focused on my studies.
12:36
SPEAKER_04: You know, I was reading a hella lot about philosophy and politics, all the papers, all the research, writing my own essays.
12:42
SPEAKER_04: So I didn't have time to like, you know, open a proper business book or any of that.
12:47
SPEAKER_04: But I had a conversation with an angel investor.
12:50
SPEAKER_04: They said that okay, talk to me about the business plan.
12:52
SPEAKER_04: You were like, okay, we have heard something about the business plan.
12:57
SPEAKER_04: And the conversation failed.
12:59
SPEAKER_04: They ridiculed us.
13:00
SPEAKER_04: They said, Oh, come on, guys, you know, you you you you you clearly don't know what you're doing.
13:04
SPEAKER_04: Uh, we went home, we were like, okay, so customer acquisition cost EBED uh he mentioned something about MMRR or AARR?
13:13
SPEAKER_04: What's that?
13:13
SPEAKER_04: Googling, learning for the next one, you know, we came shielded.
13:18
SPEAKER_04: And uh, I'm not saying that that's the best way to do it, because you know, I guess if if you have a proper education and you go through all these experiences, it's considerably easier to learn it from the book instead of you know people looking at down looking down on you and saying that come on, you you came to this conversation raising 200k and you don't know what's uh like a customer acquisition cost is.
13:39
SPEAKER_01: Okay, that's the I think if um if you could be sure the angel investment pool was big enough, the the feedback mechanism you created there is actually a really efficient way of doing it, as long as you don't rattle through all the angel investors.
13:54
SPEAKER_01: So if there's only 10 of them and you and you're only learning nine things and the tenth one, it doesn't work out.
13:59
SPEAKER_01: But if you hadn't if you had a theoretical unlimited list of angel investors that you could rattle through, it's a really efficient way to do it.
14:05
SPEAKER_01: Because then you're not reading beyond what you need, you're learning for that specific feedback loop.
14:09
SPEAKER_01: So I mean it took me three years.
14:11
SPEAKER_04: I I guess you know, you pick up all this knowledge in business school like in a couple of months.
14:15
SPEAKER_03: So um so how efficient it is, you know, it's debatable.
14:19
SPEAKER_01: But you would pick up a different set of information.
14:22
SPEAKER_01: You would pick up the documented information that was pertinent X years ago, whereas the stuff you got was more timely because it was the live feedback mechanism you created.
14:30
SPEAKER_01: Totally.
14:31
SPEAKER_01: So um uh I've I've probably outed this on the podcast, but um this is the single best learning and development hack I've ever come up with because I get to invite brilliant people on the show, they tell their stories.
14:44
SPEAKER_01: Now, yes, we get to give the guests beautiful video and audio footage that they can use for their businesses, but I get to learn tons for two hours.
14:52
SPEAKER_01: And it's I love the reprocity, I can never say that word, of that because it's beneficial for everybody, but honestly, it's been the most amazing way of me to learn.
14:59
SPEAKER_01: And actually, in some ways, that's what you were modeling there.
15:02
SPEAKER_01: You were having that back and forth conversation.
15:04
SPEAKER_01: You'd the worst thing you would leave with, sometimes a check, but without fail, something you'd learn.
15:09
SPEAKER_01: Totally.
15:09
SPEAKER_01: I adore it.
15:10
SPEAKER_01: Okay, we're in St.
15:11
SPEAKER_01: Andrews.
15:12
SPEAKER_04: So we are in St.
15:13
SPEAKER_04: Andrews, and uh I'm I started to study about AI, which is uh, you know, it comes really handy nowadays.
15:19
SPEAKER_04: It comes really handy nowadays.
15:20
SPEAKER_01: Give people a flavor of what AI meant in so this is 2019.
15:25
SPEAKER_04: 2018.
15:26
SPEAKER_01: Yeah.
15:26
SPEAKER_04: Uh it was extremely theoretical, just you know, going back to the basics, neural network, what why we created it, what what it does, what are the limitations.
15:37
SPEAKER_04: And I feel it in my everyday work that, you know, when people are extremely falling for the hype and they're like, oh my God, you know, this next AI is gonna such and such.
15:45
SPEAKER_04: You understand that this is a piece of technology, this is an equipment.
15:49
SPEAKER_04: Like you have amazing film equipment, but someone else would make a mess with it.
15:53
SPEAKER_04: So it matters just as much, the person who is giving the instructions to AI.
15:59
SPEAKER_04: And I understand that many on the other side of the camera would say that, oh, but AI agents, you know, they do their own thing, but you still need to set up the system.
16:07
SPEAKER_04: You still need to give it a goal, a purpose, a mission.
16:11
SPEAKER_04: And that's why, in my opinion, in the AI era, people matters more than ever.
16:15
SPEAKER_01: So in 2018, who were the leading lights?
16:19
SPEAKER_01: Who would who were the anthropic OpenAI's uh deep minds of today, who would have been mentioned as the cutting edge of AI in 18?
16:26
SPEAKER_04: Funnily enough, open AI was mentioned quite a lot, uh, but from a different standpoint, because uh what many people don't realize that the core technology behind OpenAI, it came from a research paper published by Google.
16:38
SPEAKER_00: Indeed.
16:39
SPEAKER_04: They uh they they they were just you know put it in the uh put it in the drawer.
16:42
SPEAKER_04: They said that, well, it's interesting.
16:44
SPEAKER_04: Let's focus on I don't know what was Google focusing on in 2018.
16:48
SPEAKER_01: So the research part of things.
16:49
SPEAKER_01: So that it was almost a the same team was so set on the the scientifical, the medical.
16:57
SPEAKER_01: I'm not sure if they were protein folding yet or whether it was still Alpha was Alpha Go was 16, so it would have been Alpha Zero after that, and then they were on to the phase where they were um utilising the simulated environments around like our um Atari games and the the space shoot em up one that I can't remember the name of.
17:14
SPEAKER_01: But it was very much a passion on the research side of it.
17:17
SPEAKER_01: And act and the paper you refer to is the sort of transformer technology side of things, um, and almost it was uh not wanting to engage in that side of it because the the research was the purest part of what it did.
17:30
SPEAKER_01: Yeah, and then so uh when was OpenAI founded?
17:32
SPEAKER_04: Was that 18?
17:33
SPEAKER_04: No, no, no, it was 20, 2015, 2016, if I reserves me right.
17:37
SPEAKER_04: And originally, you know, a bunch of tech billionaires from the valley, they were like, okay, we need an open AI system in order to ensure that the future of AI, which can cause so much trouble as we see nowadays, it's in safe hands, rest is history.
17:52
SPEAKER_01: Rest is history.
17:53
SPEAKER_01: For for people who have heard the term but don't understand it, could you give them a simple explanation of what a neural network is?
18:00
SPEAKER_04: Neural network that imagine that the whole AI system works like your brain.
18:06
SPEAKER_04: So when you learn something, there are a lot of interactions, and this is something which we are trying to mimic with the neural network, so we can get like a uh a cheaper version of your brain in a computer system.
18:22
SPEAKER_04: That's that's the that's the best and most commonly understandable explanation I I can give.
18:27
SPEAKER_04: We can go into the mathematical details.
18:29
SPEAKER_04: Uh, my memory is a little rusty from 2018, so you know.
18:32
SPEAKER_04: No, it's not.
18:33
SPEAKER_01: I hope my professor is not watching it because I I think the thing that always fascinates me about that is that um one thing DeepMind did wonderfully is so Demis brings a background from um neuroscience and literally a physical understanding of the brain, and applying that to the thinking around machine learning, it just the the more we seem to have replicated human processes, even through to the use of transformers, in the us realizing that language is a more easy gateway than we thought it was.
19:01
SPEAKER_01: So for the whole history of AI and machine learning, the assumption was this would be ones and zeros and we had to work through code rather than natural language.
19:11
SPEAKER_01: But actually, the transformer technology and the speed of which we've managed to progress has been as a result of mimicking the language that we'd spent years developing anyway.
19:20
SPEAKER_01: I just think it's fascinating how we've got closer to human structures and processes, the faster we've actually been able to accelerate.
19:27
SPEAKER_04: And completely passing the Turing test.
19:29
SPEAKER_04: Completely passing the Turing test.
19:31
SPEAKER_04: Help people understand what that is?
19:32
SPEAKER_04: So the Turing test is that uh when you can't tell the difference if you're talking to a machine or talking to a real human being.
19:39
SPEAKER_04: And many people did not pay attention to this in 2022, when ChatGPT came out.
19:43
SPEAKER_04: And that's why I'm saying that if you had like a really basic understanding about what AI is, what AI does, what are the mathematical models behind it, you you were able to see the story from a completely different angle.
19:55
SPEAKER_04: It's not just that, oh my God, it this stuff is writing me emails and saving me so much time.
20:00
SPEAKER_04: You really felt in like November 2022 that, gosh, a revolution is coming.
20:07
SPEAKER_00: Yeah.
20:07
SPEAKER_04: The ghost is out of the uh uh out of the glass and uh and gosh.
20:12
SPEAKER_01: I remember it.
20:13
SPEAKER_01: So we um so when you sat in in St.
20:16
SPEAKER_01: Andrews, we was your brain still popping with business ideas and what the next startup might be?
20:21
SPEAKER_01: Was that always part of the thinking there?
20:23
SPEAKER_01: And if so, what did you think the next chapter would be at that point?
20:26
SPEAKER_04: So at that point, we co-founded Future AI, which was this uh like partially education, partially investment club.
20:33
SPEAKER_04: And uh we were really, really focusing on like AI investment um on the stock market.
20:38
SPEAKER_04: Uh, our strategy was super simple.
20:40
SPEAKER_04: We tried to find companies where an AI announcement is coming.
20:45
SPEAKER_04: Uh, the best I can give you as an example where we made a decent money was John Deere, a tractor company.
20:52
SPEAKER_04: And they announced November 20 something that uh, oh my God, you know, we are going to implement an AI system into our tractors, what we are deploying on the US and the African market.
21:02
SPEAKER_04: As a result, the stock went up 20%.
21:05
SPEAKER_04: And these were the nuances, the news analytics, what we were what we were looking at.
21:10
SPEAKER_04: And because we were so laser focused on AI, most of the people who co-founded the uh the club came from, you know, the same the same degree and the same thing.
21:19
SPEAKER_01: And was that following thesis at that point?
21:22
SPEAKER_01: So you you weren't building per se in terms of tech, you were instead investing against the thesis that was tech focused, or were you also building to identify those opportunities?
21:32
SPEAKER_04: No, no, we realized that there is a way to build this technology, but nobody's smart enough to do that.
21:38
SPEAKER_04: And uh most of the people have commercial mind around the table.
21:41
SPEAKER_04: So uh, as much as we were like, hey, it would be really nice to do something automated, maybe pattern recognition, stuff like that, very quickly we realized that it's it's significantly easier if we if we just do it with the human eye.
21:54
SPEAKER_04: And the other side of the business was about the education, which I just uh what I just told you that.
22:00
SPEAKER_04: People have such a false perception and perspective about what finance looks like in general.
22:06
SPEAKER_04: Because there's it's like overly glorified, uh, the bankers make a lot of money, uh, you know, huge parties around.
22:13
SPEAKER_04: The reality of an investment banker, the even the reality of a venture capitalist is just completely different than that.
22:20
SPEAKER_04: And uh, we had a massive failure, like a massive failure.
22:24
SPEAKER_04: 55% of all money that we managed gone in one day.
22:29
SPEAKER_04: And this is was the leading point why I started my next degree, which was at UCL, risk and disaster science.
22:37
SPEAKER_01: That 55% loss was the biggest smile you've done so far.
22:43
SPEAKER_01: Talk to me about how you can literally smile in the face of a loss like that.
22:47
SPEAKER_01: What's the emotional processing you've learned to be able to do to deal with that?
22:52
SPEAKER_04: I've lost so many ideas, businesses, money in my life.
22:57
SPEAKER_04: If if I lose everything today, you know, honestly, I don't think I would panic.
23:02
SPEAKER_04: I would be like, okay, let's start again.
23:05
SPEAKER_00: Let's give McDonald's a call.
23:07
SPEAKER_04: Let's start again.
23:08
SPEAKER_04: Let's start again.
23:09
SPEAKER_04: And uh this was fascinating that it was a simple miscalculation because that's this is when we realized that uh as much as we were doing very, very nice trading and we were making a decent money, we had a zero risk strategy.
23:25
SPEAKER_04: Because nobody around the table understood okay, risk strategy.
23:28
SPEAKER_04: Come on, you know, we we're not the big guys, we we take risk, we we're not gonna mitigate risk, you know.
23:35
SPEAKER_04: Risk is risk is our friend.
23:37
SPEAKER_04: And uh and this was the point when I was like, okay, so I really, really, really need to learn what what risk is in general.
23:45
SPEAKER_04: And I was desperately looking for for a course, a degree, something which is uh back to back in 2019, you know, there were like you can study financial risk, uh, or you can study quantitative financial risk.
23:58
SPEAKER_04: That's all.
23:58
SPEAKER_04: And I was deeply looking for something which is giving me like a broader perspective, what risk really is, because uh the reason why we lost, because we did not take into account the different variables.
24:11
SPEAKER_04: And uh if you just focus on the financial variable, as we will talk a lot about it uh in this show, that you know, the paper risk is the biggest risk as always.
24:21
SPEAKER_04: And if you just focus on the the financials, you're missing a large chunk of the pie.
24:26
SPEAKER_04: And I found that actually UCL was running a course exactly on this risk and disaster science.
24:32
SPEAKER_04: And I was like, I I want to be there.
24:34
SPEAKER_04: I want to be there.
24:39
SPEAKER_01: Doesn't feel as if it um at any point in your journey did it impact you from a confidence or an ego or an identity perspective, or you were always called to just see it as a signal, just a signal to cool, that's a learning point, on we go.
24:53
SPEAKER_04: I think it helped me a lot that, you know, uh these days what we talk about, uh I was basically I was living from paycheck to paycheck.
25:01
SPEAKER_04: And when you are living from paycheck to paycheck, when your next thing that, okay, I need to somehow make the money to pay for the accommodation fee, to pay for the tuition fee, which does not come cheap in the case of a master's degree, uh, and just put food on the table, you don't have time for philosophy.
25:20
SPEAKER_04: You don't have time to think about that, oh, that was a failure.
25:23
SPEAKER_04: You just go, just move on next, move on next, because the end of the month, 10 days left, five days left, two days left, so on and so forth.
25:33
SPEAKER_01: So sulking's an indulgence, isn't it?
25:35
SPEAKER_01: Like you need you need space and time and money and capacity to sit and do nothing.
25:39
SPEAKER_04: Yeah.
25:39
SPEAKER_04: And and and you know, back then, uh what you see a big smile on my face.
25:44
SPEAKER_04: Um, of course, you know, we were really mad, we were disappointed, we went through the five stages of grief uh very quickly because we understood that okay, 55% is gone.
25:53
SPEAKER_04: Um, what we can do about it?
25:55
SPEAKER_04: How we can make enough money that you pay for it to rent, I pay for it, he pays for the food, so on and so forth.
26:01
SPEAKER_04: And uh, you know, I did not have time for philosophy.
26:05
SPEAKER_04: I did not have time to uh, you know, collapse and just cry in the corner.
26:09
SPEAKER_04: I was like, okay, move on.
26:11
SPEAKER_04: Next.
26:11
SPEAKER_01: So talk to us about risk.
26:14
SPEAKER_04: Risk in general.
26:16
SPEAKER_04: I think risk is fascinating.
26:18
SPEAKER_04: And uh what many people don't understand about risk, that there's no such thing as too much or too little.
26:25
SPEAKER_04: Everything depends on your own appetite.
26:27
SPEAKER_04: And with ETA technologies, you know, I always highlight that I'm not gonna tell you whether it's a good investment or not.
26:34
SPEAKER_04: I'm gonna tell you that, you know, what the numbers say, and you need to make a decision according to your risk appetite.
26:41
SPEAKER_04: And uh what UCL gave me as a concept, uh, it just fascinated me that even when you are analyzing a stock, for example, a volcanic eruption in Thailand can have an impact on that stock.
26:56
SPEAKER_04: Maybe the impact is gonna be so little, you're not gonna notice, the stock market is not gonna notice, but the impact is gonna be there.
27:04
SPEAKER_04: So we live in an extremely overconnected and and uh and really wired together world.
27:12
SPEAKER_04: Uh the butterfly effect.
27:14
SPEAKER_04: The butterfly effect.
27:15
SPEAKER_04: And when you see the this butterfly effect, which you know it sounds like as a theoretical concept, maybe you will have seen the film, maybe it's interesting, you know, next to a pint, you discuss it that hmm, have you heard the butterfly?
27:27
SPEAKER_04: Hmm, I've heard a butterfly effect.
27:29
SPEAKER_04: But when you see it in real life, that how many different things can impact your life, your investment, your thesis, your your in your your everyday operations, uh, that gives you a whole lot of like perspective that, oh my God, where I am, what I need to do, how to move forward, it's very scary.
27:48
SPEAKER_04: It's very, very, very scary.
27:50
SPEAKER_04: Because uh if you don't have the right mindset, you easily can maneuver yourself into like, oh my god, you know, everything is gonna collapse.
27:57
SPEAKER_04: Risk is here, risk is there, danger is there, danger is here, the best if I don't even move, but if I don't even move, you know, I can continue the analogy.
28:04
SPEAKER_04: Um but if if you manage to like put yourself in the right mindset, risk is your best friend.
28:15
SPEAKER_01: Going into that course versus coming out of that period, what changed the most in your awareness of how risk is managed and also your appetite to it?
28:25
SPEAKER_04: I think that this was the uh the point of origination when I first see that how many of what we call as technical risk, operational risk, financial risk is actually down to one factor and one factor only, which is the people.
28:38
SPEAKER_04: Um when we analyzed why a business failed, uh a relatively large business, so we don't talk about startups, scale-ups, or SMEs.
28:46
SPEAKER_04: We we talk about like proper giants, too big to fail uh types.
28:51
SPEAKER_04: If you really dissect the causes of the failure, you don't just try to have like a surface level diagnostics that they ran out of money, or a bank was unable to you know return money.
29:04
SPEAKER_04: So they were filing for bankruptcy.
29:07
SPEAKER_04: If you analyze the causes, which sometimes starts like 10 years before the failure actually hits the uh the headline of the New York Times, you realize that 90% of it is down to the people, the decisions what people made, why they made the decision, their behavior under pressure, so on and so forth.
29:25
SPEAKER_04: And I think that this is where I really started to capture and appreciate that if you understand people, I'm not saying that you know you can remove risk completely, but you can mitigate a lot of risk in your life just by understanding and just by uh formularizing and mathematicizing the human behavior.
29:46
SPEAKER_01: Do you think um why do you think people don't recognize the risk afforded by the people part of the business as much?
29:53
SPEAKER_04: Because we are extremely obsessed with like one-liner solutions.
29:58
SPEAKER_04: Why did this startup failed?
29:59
SPEAKER_04: Oh, they never found product market fit.
30:02
SPEAKER_04: Why that startup failed?
30:03
SPEAKER_04: Because there was no demand for the technology.
30:06
SPEAKER_04: And uh as much as everybody's loud that, oh, you know, I love the details, vast majority of people they don't like the details.
30:13
SPEAKER_04: They they're looking for an easy answer.
30:15
SPEAKER_01: They want simplicity, they um they want a world that's black and white.
30:18
SPEAKER_04: Yeah.
30:18
SPEAKER_04: And and you know, the people side of operations is extremely complex, extremely connected, and and it's a deep and dark rabbit hole.
30:28
SPEAKER_04: And the more you dig deeper, the more you realize that, oh my God, you know, I I uh I really have a difficult time understanding people.
30:36
SPEAKER_04: That's why I build technology, but how I can build a technology if I don't understand the people.
30:41
SPEAKER_01: Um, and then on from UCL?
30:44
SPEAKER_04: On from UCL.
30:45
SPEAKER_04: So, in parallel doing UCL and um and um St.
30:49
SPEAKER_04: Andrews, I was doing like a part-time master's in Cambridge uh in entrepreneurship.
30:54
SPEAKER_04: Um what is it?
30:56
SPEAKER_01: Why not?
30:57
SPEAKER_01: What did a day look like for you in that period?
31:00
SPEAKER_01: Like what did a 24-hour block of time because you've put three chapters of life into one chapter there.
31:06
SPEAKER_01: How did you make that doable?
31:08
SPEAKER_04: So a lot, a lot, you know, there was like a massive like shift between the theoretical work, aka the courses, the studies, the essays, preparation for the exam, preparation for the AI exam was absolutely killing me, December 2018, and focusing on the business.
31:26
SPEAKER_04: And I think that this period of my life really taught me that the more you do, the more time you have.
31:33
SPEAKER_04: You can write an essay in 20 days, you can write an essay in 20 hours, and you can write an essay in two hours.
31:39
SPEAKER_04: Now, I'm not gonna say that the quality will be the same, but one of the one of the greatest, like, you know, teacher in entrepreneurship for me was that done is better than perfect.
31:49
SPEAKER_04: You need to submit that essay.
31:50
SPEAKER_04: Maybe it's not gonna be the highest quality, but you have two hours because right after you have five sales calls, and in this five sales call, you need to bring in at least two deals.
31:59
SPEAKER_04: Otherwise, you can't pay for the accommodation, you become homeless, so on and so forth.
32:03
SPEAKER_04: So, putting a lot of a lot of stuff and compressing your time that you don't you don't have time to think, you just do.
32:11
SPEAKER_04: You go from one action to another.
32:14
SPEAKER_04: You uh, okay, finish the essay, five minutes break, having a coffee, stretching my legs, sales quo.
32:21
SPEAKER_04: Uh, this helps a lot for me.
32:23
SPEAKER_04: I'm not saying that this is a universal advice.
32:25
SPEAKER_04: I understand.
32:26
SPEAKER_04: In fact, I know that one of my co-founders he just operates completely differently.
32:31
SPEAKER_04: So um, I'm not saying to anybody that, hey, you should do it, but it helped me a lot, that it was extremely compressed.
32:39
SPEAKER_04: Always there was a deadline.
32:40
SPEAKER_04: And uh the more I try to like squeeze in, the more things happened.
32:47
SPEAKER_01: Has the has the style of your work changed over that sort of because you had like a block period of four degrees in five years?
32:55
SPEAKER_04: Yeah.
32:56
SPEAKER_01: So over that five years, was the style of how you worked and how you learned and how you planned your days, did that evolve a lot?
33:02
SPEAKER_01: Or a lot.
33:03
SPEAKER_01: It did.
33:04
SPEAKER_04: A lot.
33:04
SPEAKER_04: Because um let me tell you just a simpler stuff.
33:07
SPEAKER_04: When you work in McDonald's, you have shifts.
33:10
SPEAKER_04: So you can, and you have, of course, classes, tutorials, exams.
33:14
SPEAKER_04: So you can like, you know, feel in that I have two hours between the shift starts and actually this tutorial finished.
33:22
SPEAKER_04: When you work on your own business, you know, you just need and you just want all the time.
33:28
SPEAKER_00: Yeah.
33:28
SPEAKER_04: So uh when you see that actually a class is coming up, a tutorial is coming up, it's like, oh my God, it's stealing time from the business.
33:35
SPEAKER_04: So uh once again, Annold Schwarzenegger saying that just sleep faster.
33:40
SPEAKER_04: I wish I could compress this two-hour lecture into one hour.
33:43
SPEAKER_04: I wish I could just speed up the time so I have more time to write a proposal, write an email, reply back to the client, initiate a sequence on LinkedIn, whatever.
33:53
SPEAKER_04: You are constantly under pressure, and that really, really helps you to focus because you have no plan B, you know, no, no other options.
34:02
SPEAKER_04: You cannot you cannot afford not to focus.
34:04
SPEAKER_04: How much do you sleep?
34:07
SPEAKER_04: I'm very lucky.
34:08
SPEAKER_04: I'm a very, very lucky person because I'm all right with six hours.
34:11
SPEAKER_01: Nice.
34:12
SPEAKER_01: Okay.
34:12
SPEAKER_04: I'm more than all right with six hours.
34:14
SPEAKER_04: Uh, if I go less than six hours, I know I need to pay it back to my body.
34:20
SPEAKER_04: So if um last night was super challenging with a client, so I had four and a half.
34:27
SPEAKER_04: So this night I make sure no matter the cost, I will have seven and a half.
34:31
SPEAKER_01: I I'm I'm the same.
34:32
SPEAKER_01: Six is fine.
34:33
SPEAKER_04: Six is fine.
34:34
SPEAKER_04: Less than that is very dangerous.
34:36
SPEAKER_01: And um you don't do anything else, right?
34:38
SPEAKER_01: You work and occasionally sleep and then work.
34:41
SPEAKER_01: That's the hobby as well.
34:42
SPEAKER_01: And go to the gym.
34:44
SPEAKER_04: And go to the gym.
34:45
SPEAKER_04: Exercise is the key.
34:46
SPEAKER_04: Why I am like a monk.
34:48
SPEAKER_04: You know, whatsoever happens, I know that.
34:50
SPEAKER_01: What time of day do you prefer to train?
34:52
SPEAKER_04: Morning.
34:53
SPEAKER_04: I'm more I'm more like a morning person.
34:55
SPEAKER_04: Once again, you know, I don't want to sell it as like the uh ultimate ideology that wake up at 4:30 like Bill Gates, a cold punch, go to the gym, journaling.
35:04
SPEAKER_04: Uh, find your own style.
35:06
SPEAKER_04: Find your own style.
35:07
SPEAKER_04: I know people who are extremely efficient and they are nightoes.
35:10
SPEAKER_04: I know people who are a you know morning, morning person and they they are just absolutely flourishing.
35:16
SPEAKER_04: Invest the time to know yourself that well that you can make this decision and stick to it.
35:22
SPEAKER_04: Stick to it.
35:23
SPEAKER_04: My habits are keeping me, you know, the person who I am.
35:26
SPEAKER_04: Without my habits, I would collapse.
35:30
SPEAKER_04: I would absolutely collapse.
35:32
SPEAKER_01: But for young people out there listening to this, that is great life advice.
35:36
SPEAKER_01: I I I would say I've um echoed a a lot of those similar processes and iterative, learning how things fit together and work.
35:45
SPEAKER_01: Um morning training for me, absolute key part of it.
35:48
SPEAKER_01: I've never been a journaling guy, however.
35:51
SPEAKER_04: Me neither.
35:52
SPEAKER_01: I've written three books in three years, so I suppose I kind of have in a way.
35:57
SPEAKER_01: Um I guess it does that job.
36:00
SPEAKER_01: But I to me, if something doesn't have an outcome or a purpose, I struggle with it.
36:05
SPEAKER_04: It's so interesting because I had a I had a chat with a friend of mine, he's also a founder, and uh he's really big on journaling.
36:11
SPEAKER_04: He's not going to the gym, he he's a big on sleep, he's going out a lot, drinking a lot of alcohol, having a different lifestyle.
36:19
SPEAKER_04: Uh, but he is extremely rigorious on journaling.
36:22
SPEAKER_04: And he told me that it just an excellent capture of time that what happened two days ago, why why I was literally like worrying like there is no tomorrow.
36:34
SPEAKER_04: And sometimes I read it back, especially in the dark days, and I realize that there was a level 10 crisis three months and 12 days ago.
36:44
SPEAKER_04: It feels like it happened two years ago.
36:46
SPEAKER_04: And it's it's gone, it's done.
36:49
SPEAKER_04: I survived, I came out, I'm still alive, I'm still working.
36:53
SPEAKER_04: So, what I worry about, it just puts in a different context.
36:56
SPEAKER_04: And I was like, I'm doing it in my head.
36:57
SPEAKER_04: And he was like, no, no, no, no, no.
36:59
SPEAKER_04: Doing it with a pen and paper and reading it back, reading it back, you know, your own tears, your own internal suffering, which is tearing you into pieces.
37:09
SPEAKER_04: This is the different experience.
37:10
SPEAKER_04: And I was like, I'm not convinced.
37:13
SPEAKER_04: I'm not convinced, so I'm not gonna try journaling, but I I can imagine why it works.
37:17
SPEAKER_01: I just I just talk to people about that.
37:19
SPEAKER_01: Yeah.
37:20
SPEAKER_01: So I I I prefer to express so I I don't like being on my own if I can avoid it at all.
37:25
SPEAKER_01: It I don't mind it in the gym, but if I'm in the gym, I'm now constantly watching YouTube podcasts or videos or updates on everything tech and I that's my soap opera now.
37:36
SPEAKER_01: Like I don't I don't watch TV, but I do love everything that's going on uh uh across the business and tech world.
37:42
SPEAKER_01: But again, it comes back to because it's adding value to if it's not benefiting my family or the business, I'm not interested.
37:48
SPEAKER_01: I've got no bandwidth for anything that doesn't add value.
37:52
SPEAKER_01: So I wouldn't sit and watch a movie or a soap opera, but I will watch a podcast on tech or SpaceX's IPO or whatever that's gonna look like because I see I'm gonna learn one or two things that I might be able to apply in the business and let it fly.
38:04
SPEAKER_01: Yeah.
38:04
SPEAKER_01: So yeah, it's so interesting.
38:06
SPEAKER_04: I'm a diff I'm a little bit different on the gym time because I really prefer it to be quiet, just just with my own thoughts.
38:13
SPEAKER_01: Um yeah, I don't want to be alone with my thoughts.
38:16
SPEAKER_01: No, that that was my point, sorry, about uh talking with others.
38:18
SPEAKER_01: So the more challenging, the more difficult a situation, the more I'll talk about it.
38:23
SPEAKER_01: So I'm we have the most trance.
38:25
SPEAKER_01: So there's about 50 people in the business now.
38:27
SPEAKER_01: I would say the core team that I'm closest with is sort of 10 or 12 that have been with us as we've scaled.
38:33
SPEAKER_01: But we have the most open culture, you would imagine.
38:36
SPEAKER_01: The only things that's gonna get discussed are like an individual's medical situation or a specific person's salary and compensation.
38:44
SPEAKER_01: Outside of that, everything's discussed.
38:47
SPEAKER_01: So if I'm having a bad day, everyone knows.
38:49
SPEAKER_01: Not because Rich is sat in the corner yelling, because I'll say, look, this is what's happening and this is the challenge, and what do you think on it?
38:55
SPEAKER_01: Because if you've managed to surround yourself with the talent I've been absolutely privileged to work with, why wouldn't you ask their opinions and views on it and everything else?
39:03
SPEAKER_01: So yeah, I'll vocalize that with our head of people, our head of operations, or our general counsel gives the most amazing advice, you know.
39:10
SPEAKER_01: So, and because we've got such an array of different personalities, they've all got different approaches to that challenge and problem as well.
39:16
SPEAKER_01: So, within there somewhere, there's an option, there's an idea, there's a thing we haven't thought of.
39:20
SPEAKER_01: So I I adore being able to do that.
39:22
SPEAKER_01: But that's best done expressed externally with me.
39:25
SPEAKER_04: And that's just honestly the perfect way to build, like scientifically, a culture.
39:29
SPEAKER_04: You have the right cognitive diversity, you create an environment when people are not just sitting in the corner keeping their ideas close to their chest, but everybody's involved, everybody is heard, everybody's listened, everybody can share, and they don't feel like intimidated, they don't feel like penalized why they share.
39:45
SPEAKER_04: And among the many different perspectives, the solution is gonna be there.
39:49
SPEAKER_04: And I that's why I'm saying that uh one of the one of the most dangerous companies set up when you create an echo chamber, and just the same minds, and they can be brilliant minds, don't get me wrong.
40:01
SPEAKER_04: Like biotech, medtech is an excellent example.
40:06
SPEAKER_04: Many startups, what we see, they're completely lacking cognitive diversity.
40:10
SPEAKER_04: Everybody's PhD, associate professor, they're geniuses.
40:15
SPEAKER_04: But when we get to the commercial side of things, of course, they are not salespeople, they are not like cheeky car salesman, they are not marketing gurus.
40:23
SPEAKER_04: They try to reverse engineer it on their own, using their own mindset, using their own problem-solving skills.
40:30
SPEAKER_04: And this echo chamber is what's really killing the company.
40:34
SPEAKER_01: It's um it's the reason why I love the fact that um so so we've um worked in cultures before where the more senior people are beyond challenge, they're beyond reproach.
40:50
SPEAKER_01: You can't joke with them, you can't interact with them.
40:52
SPEAKER_01: As soon as you get that way as a senior person, you're not hearing the truth about the business anymore.
40:57
SPEAKER_01: And you are done.
40:58
SPEAKER_01: Because terrible things are gonna happen and no one's gonna tell you because they don't want your reaction.
41:03
SPEAKER_01: So I I am always acutely aware of I still want the jokes and the mockery to be about me as well.
41:09
SPEAKER_01: Because as soon as it stops, that's when you need to be scary.
41:12
SPEAKER_01: Uh you need to be scared.
41:13
SPEAKER_01: The the other thing that um I was thinking about when you just spoke then.
41:16
SPEAKER_01: So we had an amazing lady called Annabelle Thomas on the podcast.
41:19
SPEAKER_01: She's the founder, she's at the time, she was the only female founder of a whiskey distillery in Scotland.
41:25
SPEAKER_01: Oh, wow.
41:26
SPEAKER_01: It's a business called Nookneen.
41:28
SPEAKER_01: They're the world's most sustainable whiskey brand.
41:30
SPEAKER_01: They are incredible.
41:31
SPEAKER_01: And she said her barometer, and so I think she was she was Cambridge educated, incredibly bright, incredibly charismatic, was a management consultant for a while as well, and started this this whiskey brand.
41:42
SPEAKER_01: And she said, when she what she used to hear from that sector was, we've always done it that way.
41:47
SPEAKER_01: And she said, A, be afraid if that's what a business tells you, but also what an opportunity for disruption.
41:53
SPEAKER_01: So she came on and talked about how they've scaled their business as a result of that.
41:56
SPEAKER_01: She's an astonishing lady.
41:57
SPEAKER_03: Amazing.
41:58
SPEAKER_03: Amazing.
41:59
SPEAKER_01: So we have been collecting so far.
42:01
SPEAKER_01: You have put on the resume, politics and philosophy.
42:04
SPEAKER_01: We've then gone up and picked up everything we needed to know about machine learning and the background of AI.
42:09
SPEAKER_01: We've then gone, actually, we need to know more about the risk side of things there.
42:12
SPEAKER_01: What was the final string to the bow missing?
42:15
SPEAKER_04: Entrepreneurship.
42:16
SPEAKER_04: A degree in entrepreneurship.
42:17
SPEAKER_04: And I remembered when I pitched this idea to my friends.
42:22
SPEAKER_04: Everybody's laughing at me.
42:23
SPEAKER_04: Oh, come on, you know, that's that's just so stupid.
42:26
SPEAKER_04: You don't study entrepreneurship.
42:27
SPEAKER_04: You you do you've been living it already, right?
42:30
SPEAKER_04: Yes, and no, at the same time, because to my extent, I was still making a living paycheck by paycheck.
42:37
SPEAKER_04: So I was generating money, but there was like a fundamental piece or multiple pieces, which was missing from my my business strategies, how I was setting up companies.
42:47
SPEAKER_04: Uh, sometimes I found great product market fit, which was awesome.
42:51
SPEAKER_04: We made money, but we never managed to like scale and you know reach the next level.
42:56
SPEAKER_04: We raised money, but down the line they failed the business.
43:00
SPEAKER_01: Do you do you think it was because you collected so many almost and and not to underestimate the impact that each of these had, because clearly they weren't pleasant experiences, but you almost collected like micro failures along the way?
43:13
SPEAKER_01: So a lot.
43:15
SPEAKER_03: A lot.
43:16
SPEAKER_01: I it's a weird analogy, but um the um so uh Mai Thai experts and Thai boxers, they train by kicking wooden panels because it creates tiny micro fractures in their shins.
43:32
SPEAKER_01: And over the space of 10 years, they've collected so many micro fractures.
43:36
SPEAKER_01: Um my PA sat at the back of the room in there, and she's a physio.
43:39
SPEAKER_01: So the idea of micro fractures, she's like, Don't start doing that, Rich.
43:42
SPEAKER_01: Um but it toughens up the bone.
43:45
SPEAKER_01: I almost wonder your ability to not because so many entrepreneurs think they've got the right answer, and the fact that it hasn't worked before makes them go, oh no, I'm right, everyone else is wrong, the timing was bad, I was unlucky.
43:56
SPEAKER_01: But you didn't do that, you didn't have an ego, you went, there's something I don't know.
44:00
SPEAKER_01: Yeah, I've got a gap in my knowledge.
44:01
SPEAKER_01: I need to learn more.
44:02
SPEAKER_01: Yeah.
44:02
SPEAKER_01: That's super impressive.
44:03
SPEAKER_01: Do you think it is the collection of each of those learning points that made you so open to I've got another gap I need to fill?
44:11
SPEAKER_04: You know, if if I want to sound like really smart, I would say exactly like that.
44:16
SPEAKER_04: Exactly like that.
44:17
SPEAKER_04: The reality is that I didn't have time to think.
44:21
SPEAKER_04: I was just seeing the next step and the next five steps.
44:24
SPEAKER_04: And uh I was just collecting the Pokemon cards, what I need to achieve the next step and achieve the next five steps.
44:30
SPEAKER_04: So if I want to sound smart, of course, that was the plan all along from day zero, you know, being inspired from like age 14.
44:37
SPEAKER_04: The reality is that if you don't know something, either you ask, or if you are not surrounded with people who you can ask, you go to the room where you are surrounded with experts who can ask.
44:47
SPEAKER_04: That was my absolute, absolute philosophy in my whole life.
44:50
SPEAKER_04: I uh I don't think that there are people who know the ultimate truth.
44:54
SPEAKER_04: They they have the you know holy grail of knowledge and they know everything.
44:58
SPEAKER_04: You you need to find, you need to find experts.
45:01
SPEAKER_04: You need you need to find how you can learn, how you can develop yourself, how you can improve on your ignorance.
45:07
SPEAKER_04: On uh, I didn't know anything about you know like startups.
45:12
SPEAKER_04: I went to the weekend, I gained something, and after, okay, that's a good enough start.
45:17
SPEAKER_04: Just start basically the snowball and the snowball effect will multiply it.
45:22
SPEAKER_04: And that's that's my all-time best advice for people who are contemplating about starting their business.
45:28
SPEAKER_04: It's in their mind that in the AI era, maybe I should do something.
45:31
SPEAKER_04: Don't think, just start.
45:34
SPEAKER_04: Just start and do stuff.
45:36
SPEAKER_04: And if it's a mistake, if it's a failure, you can recover.
45:40
SPEAKER_04: You can't you have one step back, you lost something, you're gonna regain.
45:43
SPEAKER_04: Just do it, do it, do it, do it on a daily basis, on a monthly basis, on a yearly basis in in your life.
45:49
SPEAKER_04: And uh whether ETA is gonna be like, you know, uh the greatest success ever, I don't know, but I'm doing it.
45:55
SPEAKER_01: So the final Pokemon card was at Cambridge?
45:58
SPEAKER_01: Cambridge.
45:59
SPEAKER_01: How much of that was the course?
46:01
SPEAKER_01: How much was it the place, the majesty, the the folklore that is Cambridge itself?
46:07
SPEAKER_04: Interesting.
46:07
SPEAKER_04: You mentioned the the majesty, the folklore, the course, but you didn't mention something which I believe that the more mature I am, the more I utilize this part of my education.
46:17
SPEAKER_04: And funnily enough, nobody's talking about it.
46:19
SPEAKER_04: The network.
46:21
SPEAKER_04: Um it was a bit of a 50-50.
46:24
SPEAKER_04: When I got accepted to the course, I wanted to go there to understand that okay, I'm I'm capable of setting up like a 270k MRR business.
46:35
SPEAKER_04: How I can set up a 270 million.
46:38
SPEAKER_04: I I had no clue.
46:40
SPEAKER_04: And uh these people in this amazing institution offering a fascinating opportunity to to tell you in a practical way that how you can scale it up.
46:51
SPEAKER_04: Nowadays I know that this is what we call scaling it up.
46:54
SPEAKER_04: And nowadays I know why the businesses I was setting up during my university years, why they were not as successful as I wanted them to be.
47:02
SPEAKER_04: But back then I had no idea whether I am I'm missing one particular particle or or like a chain or whether I'm completely getting it wrong.
47:10
SPEAKER_04: I was just lucky.
47:12
SPEAKER_04: Um the network is very, very, very important.
47:16
SPEAKER_01: What was the composition of that course?
47:18
SPEAKER_01: Is this all uh essentially MBA-esque people?
47:21
SPEAKER_01: They're people who've had elements of a career already?
47:24
SPEAKER_01: It was a great mixture.
47:25
SPEAKER_04: It was a great mixture.
47:26
SPEAKER_04: I was the youngest guy uh there.
47:28
SPEAKER_04: So uh, you know, I I I from a networking perspective, I really had a difficult time.
47:32
SPEAKER_04: Uh because I went there, everybody was like, you know, 10 years experience, 15 years experience, 13 years experience, and I was like, I'm a unit student.
47:41
SPEAKER_04: Hello, guys.
47:41
SPEAKER_04: I had some businesses and I was like, oh, okay, cool.
47:44
SPEAKER_04: Uh who's this guy from Barclays?
47:46
SPEAKER_01: Uh so a lot of them were placed through their existing larger companies.
47:50
SPEAKER_04: Yes.
47:50
SPEAKER_04: Yes, because they they they uh started contemplating about that, okay, what's the next step in my in my career after years in in corporate?
47:59
SPEAKER_01: Often confuse me why big companies would do that.
48:01
SPEAKER_01: Because I I bet you the exit rate's massive after that.
48:05
SPEAKER_01: I bet you when big companies pay for because if you think about it, if you're quite long in your career in a big organization, you've stayed.
48:15
SPEAKER_01: You've stayed long enough that they say, Oh yeah, sure, we'll pay for an expensive master's degree for you.
48:19
SPEAKER_01: So they're they're wanting to incentivize you in some way.
48:22
SPEAKER_01: You've probably got a bit stuck because if you're flying through the ranks, you don't have time to do it.
48:26
SPEAKER_01: Because if you're changing job every six months or a year, you're learning a new sector.
48:31
SPEAKER_01: But you you've got enough willingness to go do something else, to do additional work outside of your job role.
48:36
SPEAKER_01: I'd be flabbergasted if it wasn't quite a high exit rate after people do those degrees.
48:41
SPEAKER_04: I have two theories.
48:43
SPEAKER_04: Why there's a huge return on investment here.
48:46
SPEAKER_04: Um, it was in the news a couple of weeks ago that actually, from the return on investment perspective, Google is the greatest venture capitalist of all time.
48:54
SPEAKER_01: Oh, yeah, without a shadow of a doubt.
48:55
SPEAKER_01: I I saw some stats on that this morning as well.
48:58
SPEAKER_01: Yeah.
48:59
SPEAKER_04: I mean, just imagine if you're Google, you're sending all those smart and ambitious people to learn something about entrepreneurship.
49:06
SPEAKER_04: Google was sending people there.
49:07
SPEAKER_04: Google was sending people there.
49:09
SPEAKER_04: Not just Barclays, JP Morgan, so on and so forth.
49:12
SPEAKER_04: But with Google as well.
49:13
SPEAKER_04: And, you know, they can be your second or third or maybe first best performing employee.
49:19
SPEAKER_02: Yeah.
49:19
SPEAKER_04: You make a decent money on them, but you make even better money.
49:23
SPEAKER_04: If they set up their own business, you put some money into this business, and after you acquire it, or it just grows to a SpaceX IPO or an anthropic IPO, and boom.
49:35
SPEAKER_04: You're gonna be the greatest venture capitalist of all time.
49:37
SPEAKER_04: Uh, I mean, that's that's one sideline.
49:40
SPEAKER_04: The other one is that, you know, I think what the course did extremely well, like giving a realistic picture about entrepreneurship, not just the glaze, the glamour, and you know, all the romance, but uh it is very difficult.
49:53
SPEAKER_04: It is gut crunching, uh, it is soul crushing, and that it's a very, very, very challenging profession.
50:00
SPEAKER_04: And many people who were like, Well, I want to leave, I want to start my own business, but I don't know how to do it.
50:06
SPEAKER_04: They got a realistic, like a reality check, a cold shower that this is what you're gonna sign up for, Paul.
50:12
SPEAKER_04: Do you want to do this?
50:13
SPEAKER_04: And they were like, Okay, you know what?
50:14
SPEAKER_04: I had the idea.
50:15
SPEAKER_04: I I tried it, I put my finger in the cold water, now my cup of tea.
50:20
SPEAKER_04: Thank you, no, thank you.
50:21
SPEAKER_04: I'm getting back, you know, just being a VP.
50:25
SPEAKER_01: Everyone talks about that in terms of entrepreneurship and founding businesses.
50:31
SPEAKER_01: My experience has been totally different.
50:34
SPEAKER_01: You think it's easy?
50:34
SPEAKER_01: No.
50:35
SPEAKER_04: That tell me something I don't know.
50:36
SPEAKER_04: No, no, no.
50:37
SPEAKER_01: I don't think it's easy.
50:38
SPEAKER_01: I think it's a lot of hard work.
50:40
SPEAKER_01: But what's the worst job you've ever had?
50:45
SPEAKER_04: The worst job I ever had.
50:47
SPEAKER_04: I'm a very lucky person because I loved all of it.
50:50
SPEAKER_04: I was I was working in an all-you-can-eat Chinese restaurant once, where uh I mean the restaurant is closed down, so I can tell you this the hygiene standards were not taken very seriously.
51:02
SPEAKER_04: And it was not just the food, but actually the the preparation area, the kitchen in the background.
51:06
SPEAKER_04: Yeah, and uh I uh many times I was like, oh, after touching this stuff, I just really want to wash my hands, but there was no soap.
51:14
SPEAKER_04: So I need I I literally I would I was buying a soap to wash my hands, and on the uh after two weeks in the business, you know, I realized that someone was really mischievous because I bought the soap, I put it there, liquid soap, like classic, washing my hand.
51:29
SPEAKER_04: Somebody stole it.
51:30
SPEAKER_04: And uh and and and you know, you you you need to figure out how to make money, how to stay alive, how to study.
51:38
SPEAKER_04: How bad a business gets like and and even you need to figure out how to protect your own liquid soap to watch your entrepreneur.
51:45
SPEAKER_01: That's my exact point, right?
51:47
SPEAKER_01: That's bad.
51:48
SPEAKER_01: So, however bad the entrepreneurial lifestyle and the businesses we've got now, that's still better than being back at that Chinese restaurant.
51:57
SPEAKER_01: So, for me, like I I used to dig holes at a steelworks, like manual labour in really unsafe, unpleasant environments.
52:05
SPEAKER_01: You know, I had a pretty shit upbringing as well.
52:08
SPEAKER_01: And I'm like, however bad business gets, it's so much better than that.
52:12
SPEAKER_01: So I think that's why I'm like, I I I joke.
52:15
SPEAKER_01: It's half a joke and half a genuine expression.
52:17
SPEAKER_01: I can't believe I get to do this.
52:19
SPEAKER_01: Like, I love what I do so much, and that's not to say the days aren't long and hard and it is is traveling all the time nice?
52:26
SPEAKER_01: No, of course it isn't.
52:27
SPEAKER_01: Is your kids going, are you gonna be here in the morning when I wake up?
52:30
SPEAKER_01: And you have to say, No, sweetie, I'm sorry, I'm not.
52:33
SPEAKER_01: Is that good?
52:33
SPEAKER_01: No, it's horrible, but it's still better than digging holes in the rain in somewhere that's not safe.
52:38
SPEAKER_01: So I think that's how I always kind of characterize it that actually and and then the other bit is people talk about it being a really lonely experience.
52:47
SPEAKER_01: I think that's a choice for a founder.
52:49
SPEAKER_01: I think founders choose to be lonely because they choose not to share.
52:53
SPEAKER_01: Like if you if you are open about your thoughts, your feelings, your your decision-making process, and and it segues beautifully into your world now.
53:02
SPEAKER_01: But if if you are so informed about the people you choose to work with and that you bring into your business that you want to share your thoughts with them because you know they'll make you better, I've never been less lonely than being in business because I get to work with people I adore and respect and value and want their opinions on everything.
53:21
SPEAKER_01: So why wouldn't I share the business and life with them?
53:24
SPEAKER_04: It's so fascinating you say that because uh I was sitting in a panel a few weeks ago when I was asked that hey, in the AI era, when I have AI agents, where I have uh cloud cowork, where I have open claw, why do I need a co-founder?
53:40
SPEAKER_04: And I was like, that's a very good question, but it's also it's also an awful question.
53:45
SPEAKER_01: So there's an obsession at the moment when will we have the first one person billion pounds?
53:48
SPEAKER_04: One person billion company, yeah.
53:50
SPEAKER_04: You need a co-founder, not just because of the technicalities.
53:54
SPEAKER_04: 2016, I founded my first startup.
53:56
SPEAKER_04: It was natural that you need a guy who's doing the coding, a guy who's doing a good design on the website, someone who's doing the sales, someone who is doing the marketing, so on and so forth.
54:05
SPEAKER_04: Nowadays, AI is gonna do all it for you.
54:07
SPEAKER_04: However, do not underestimate that once again, how soul-crashing and gut-crenching entrepreneurship is.
54:14
SPEAKER_04: You need someone who is lifting you up.
54:17
SPEAKER_04: And if you completely rely on the delusional Chat GPT who is gonna say yes to whatsoever you say, you are going crazy.
54:25
SPEAKER_04: You're gonna lose your mind, you're gonna lose your touch with reality.
54:28
SPEAKER_04: And this is extremely dangerous for a bit hole to go into.
54:30
SPEAKER_04: So when we speak about co-founder relationships, I always say that the other guy is not just there to push a button or not just there to do the sales.
54:39
SPEAKER_04: It's there to provide you something which is called the synergistic support.
54:43
SPEAKER_04: And you also need to provide the synergistic support because you are going through on the same hell together.
54:48
SPEAKER_04: And this is what this relationship is really about.
54:51
SPEAKER_04: And that's why so many people compare the intimacy of this relationship to marriage, uh, which I do support.
54:58
SPEAKER_04: I absolutely do support.
54:59
SPEAKER_04: It's there is a lot of psychology in it.
55:02
SPEAKER_04: There's a lot of psychology in it.
55:04
SPEAKER_04: And uh, people who underestimate it normally, I'm always asking, have you ever had a good co-founder?
55:09
SPEAKER_04: And they're like, Yeah, well, that was this guy.
55:12
SPEAKER_04: He got on really well.
55:14
SPEAKER_04: You you when you have a good co-founder, like like I had, you know that you know, he has your back, you have his back.
55:21
SPEAKER_04: And no matter what, you want to do it together.
55:23
SPEAKER_04: There's no like quitting.
55:24
SPEAKER_04: There's a pivot.
55:25
SPEAKER_04: There's a pivot.
55:26
SPEAKER_04: You need to pivot.
55:27
SPEAKER_04: You need to be flexible, you need to listen to the market, you need to be super coachable, you need to learn super fast.
55:32
SPEAKER_04: But at the end of the day, you know, you have somebody who you can share this absolute like, you know, hell together, who you can rage, who you lifts you, who lifts you up on your worst days.
55:45
SPEAKER_04: We all we all have those days when you know Sunday afternoon the funding hasn't arrived, and on Monday morning you sit down with the team and you say that like Thanos, 50% of you is gone.
55:58
SPEAKER_04: If you do it alone, I think you are missing.
56:01
SPEAKER_04: I mean, you you're you're missing a lot.
56:03
SPEAKER_04: And entrepreneurship in itself is very difficult.
56:06
SPEAKER_04: Don't try to make it more difficult.
56:07
SPEAKER_04: Don't play the hard mode, play the medium mode.
56:09
SPEAKER_04: It's difficult enough.
56:10
SPEAKER_04: Don't be easy.
56:13
SPEAKER_01: Um what year was the entrepreneurship masters?
56:16
SPEAKER_04: From 2018 to 2020.
56:18
SPEAKER_01: 2020.
56:19
SPEAKER_01: Um what did the concept of the current business did did that begin during that period?
56:25
SPEAKER_01: That's it.
56:25
SPEAKER_04: Yes, uh, that was actually my dissertation.
56:28
SPEAKER_04: That how you can how you can analyze or predict the success of a business using psych back then not psychometric but psychological factors.
56:39
SPEAKER_04: Um it wasn't a great scientific word, I'm not, I'm not gonna lie to you.
56:43
SPEAKER_04: Uh, but this was the the the original point when it was started.
56:47
SPEAKER_04: This was the uh the zero patient when I just started to see those patterns.
56:52
SPEAKER_04: And for years after, you know, I wasn't wasn't dealing with it.
56:55
SPEAKER_04: I was like, that's that was a good dissertation, it's a good idea.
56:59
SPEAKER_04: Um after that, I had a bigger business after I went to VC.
57:03
SPEAKER_04: And during my days as a VC, this is where it just was just catching up to me.
57:08
SPEAKER_04: So just take us through that VC chapter for a little bit.
57:11
SPEAKER_04: How did that come about?
57:12
SPEAKER_04: So nobody tells you that how miserable it is when you exit the business and you sit at home, and uh you are just like, okay, and what now?
57:24
SPEAKER_04: What now?
57:25
SPEAKER_04: First time in my life, I have enough money to support my parents.
57:29
SPEAKER_04: I have enough money that I don't need to worry about the rent, I don't need to worry about the food.
57:33
SPEAKER_04: What's next?
57:34
SPEAKER_04: And one day, you know, the phone was just ringing, and uh a guy who I knew from Exeter, by the way, he was like, Hey man, you know, you you had this couple of companies, uh, and I just wanted to catch up with you because we are working on a deal.
57:46
SPEAKER_01: So was it the it was the parallel investment and education business that you'd exited at that point?
57:52
SPEAKER_04: No, it was after.
57:53
SPEAKER_04: It was it was it was after, it was after.
57:55
SPEAKER_04: And uh, and basically he told me that they're working on a deal, which is a relatively similar idea than what I was working on, and they just have a very like a feeling that something is fishy, but they just can't get their head around that.
58:11
SPEAKER_04: And it was a very funny request because he said that hey, you're a founder, you guys are screwing over people all around the globe.
58:19
SPEAKER_04: Would you mind joining us just for half an hour as an external expert?
58:23
SPEAKER_04: We'd be happy to pay you, whatever.
58:25
SPEAKER_04: Um, and just just you know, give a second thought that what's what's going on here.
58:34
SPEAKER_04: Because it there is something what we don't see.
58:35
SPEAKER_04: And I was like, oh, okay, you know, I never worked in VC, sound sounds sounds interesting.
58:41
SPEAKER_04: I got there and uh I got the taste of it.
58:45
SPEAKER_04: I got the taste of it.
58:46
SPEAKER_04: It was like 10 minutes, like, oh okay, uh that's what you're looking for, and that's what the guy's not telling you.
58:51
SPEAKER_04: Uh and it was really interesting because I think the VC work is a combination of being a detective and being a psychologist.
58:59
SPEAKER_04: You are solving cases in a human way or in a financial way.
59:04
SPEAKER_04: Super interesting job.
59:05
SPEAKER_04: Super interesting job.
59:07
SPEAKER_04: Financially, I would say rewarding, as all finance jobs are rewarding, but the case is what you're working on and the thinking outside the box way of every single time, every single deal, every single conversation.
59:25
SPEAKER_04: It's just it's just fascinating.
59:26
SPEAKER_01: And what was the thematic world that that that venture capital firm was focused on?
59:31
SPEAKER_01: Where were they particularly trying to invest?
59:33
SPEAKER_04: So basically they were pre-seed investing in European and US market, uh, completely sector agnostic with a little focus, with a little focus on cybersecurity.
59:41
SPEAKER_01: That's interesting.
59:42
SPEAKER_04: And uh and I was like, hey, can I uh can I think that's the thing.
59:45
SPEAKER_01: So the deal flow would come from any direction of any literally any type of business.
59:50
SPEAKER_04: Totally, totally.
59:52
SPEAKER_04: And uh and you know, after after I joined, like three months in in VC, I had this like cartoonish light bulb moment that first of all, that's why we never ever managed to raise VC funds, despite V applied and we had a couple of like super rejecting conversations.
1:00:10
SPEAKER_01: And second, um And what was the why?
1:00:14
SPEAKER_01: Why didn't you what was it that didn't fit with them?
1:00:17
SPEAKER_04: Scalability.
1:00:19
SPEAKER_04: If if I need to summarize it in one word, scalability.
1:00:22
SPEAKER_04: There was a lot of like uh unorganized, haphazard thing going on, even in the deal structure, you know, in in in my previous businesses, that sometimes we had a very good month, we were all happy, and the next month was really like and after another great months.
1:00:37
SPEAKER_01: I think that's a really important lesson for people out there listening.
1:00:40
SPEAKER_01: Like, if if you're gonna invest enough time and effort into building a business, make sure it's one that's worth building.
1:00:46
SPEAKER_01: If you solve a problem that's not big enough to succeed in and can't be scaled either because you're it has to be too limited to you or the target market's never gonna be big enough.
1:00:56
SPEAKER_01: That's not the idea.
1:00:58
SPEAKER_01: You've got to find one that is scalable, otherwise, it's not worth the time, energy, and effort.
1:01:02
SPEAKER_04: I mean, I I would have the caveat here that uh maybe, you know, not all businesses have to be unique ones.
1:01:10
SPEAKER_04: If your dream is to solve a super niche problem on a really teeny tiny market, it's perfectly all right to operate a cash cow SME.
1:01:18
SPEAKER_04: But just be well aware that this cash cow SME, a barbershop, for example, do not apply for venture capital funding because you will have a terrible experience.
1:01:28
SPEAKER_04: People are gonna reject you immediately, and people will be like, why would you even apply?
1:01:33
SPEAKER_04: This is not our cup of tea.
1:01:35
SPEAKER_04: We are investing in high-scale companies, yeah.
1:01:38
SPEAKER_01: 99 failures in one unicorn.
1:01:40
SPEAKER_04: Yeah, yeah.
1:01:40
SPEAKER_04: And that's that's the uh that's the most important mathematics in VC.
1:01:44
SPEAKER_04: And that's why it's so so different from any other any other stuff in finance.
1:01:49
SPEAKER_04: Because if you ask uh a stockbroker or a trader, what's your worst nightmare?
1:01:53
SPEAKER_04: You know, making a bad decision and sticking with it.
1:01:55
SPEAKER_04: I'm like, ah, if you ask a venture capitalist, what's your worst nightmare?
1:02:00
SPEAKER_04: Missing a great opportunity.
1:02:03
SPEAKER_04: And uh when when I was in Boston, I was connected.
1:02:07
SPEAKER_04: Sadly, he died uh a couple of years ago.
1:02:10
SPEAKER_04: Um, an absolute legendary venture capitalist, and he told me that the first pitch deck of Zuckerberg landed on his table.
1:02:19
SPEAKER_04: And he had a coffee with the guy, and he was like, Look, I mean, it's social media.
1:02:25
SPEAKER_04: You never gonna do that.
1:02:28
SPEAKER_04: I just don't see that you, Mr.
1:02:30
SPEAKER_04: Zuckerberg, can run such a company.
1:02:33
SPEAKER_04: Thank you, no, thank you.
1:02:35
SPEAKER_04: And uh that's immediately like a heartbreaking story.
1:02:38
SPEAKER_04: But the real heartbreak comes when every single day people send you connection requests on Facebook, your neighbors organize the barbecue on Facebook, your daughter is pinging you why you are not on Facebook.
1:02:52
SPEAKER_04: And he told me that every single day you wake up with this experience that doesn't go away, doesn't it?
1:02:59
SPEAKER_01: It follows you around.
1:03:00
SPEAKER_04: Could have, I could have been part of that.
1:03:02
SPEAKER_04: Not to mention how much how many billions he could have made.
1:03:05
SPEAKER_04: And that's a fundamental difference.
1:03:07
SPEAKER_04: That's a fundamental difference to any other finance, what we know private equity, asset management, investment banking, so on and so forth.
1:03:14
SPEAKER_04: These people don't mind the failure as long as there is the one out of the 99 which is delivering on the portfolio.
1:03:21
SPEAKER_01: Everything, everything that preceded that chapter, pun intended, um was uh just logically would align you to the VC world, just the way you thought, the way you collected information, the way you evaluated things, that would have felt like the perfect fit for you, but it but it wasn't to be forever.
1:03:39
SPEAKER_01: You wanted to go onto the other side of the desk again?
1:03:41
SPEAKER_04: Yes, once an entrepreneur, always an entrepreneur.
1:03:44
SPEAKER_01: Does that so despite you having a a really not having the relationship with that word as a child, is that the word that fits best now?
1:03:53
SPEAKER_01: That's how you identify yourself?
1:03:55
SPEAKER_04: I think uh, you know, I'm 31, first of all.
1:03:58
SPEAKER_04: So uh hopefully many, many, many more chapters, many more years to come.
1:04:04
SPEAKER_04: But uh, if I need to give you the the single one definition that who I am, I would say I'm a good kid.
1:04:10
SPEAKER_04: But beyond that, uh I say that I'm I'm an entrepreneur.
1:04:15
SPEAKER_04: I'm an entrepreneur.
1:04:16
SPEAKER_04: I'm identifying problems, I'm assembling a good team who can solve this problem, and after I'm selling the solution for the people who are struggling.
1:04:24
SPEAKER_04: That's what I do.
1:04:26
SPEAKER_04: I worked in Costa Coffee, I wasn't an entrepreneur there, I worked in VC, I was an investor there, but ultimately somehow I always get back.
1:04:35
SPEAKER_04: I always get back to this one.
1:04:37
SPEAKER_04: And uh, and you know, the the moment when I realized that I need to quit as a VC and I need to found ETA.
1:04:44
SPEAKER_04: How long was that period?
1:04:44
SPEAKER_04: A couple of years during that?
1:04:46
SPEAKER_04: Yeah, a couple of years, a couple of years.
1:04:47
SPEAKER_04: And uh when I realized that, you know, I need to quit and I need to I need to found this company, I need to solve this problem no matter the cost.
1:04:56
SPEAKER_04: Uh, it was really funny when uh I read an article in the Harvard Business uh Journal that 65% of startups fail due to team-related issues.
1:05:06
SPEAKER_04: And I was like, this is impossible.
1:05:08
SPEAKER_04: I mean, wherever I went, you know, the VC network, everybody was loud about that investors invest in people.
1:05:14
SPEAKER_04: And I was like, this just it doesn't add up that 65% of what we lose is goes down to the people.
1:05:23
SPEAKER_04: Meanwhile, the entire industry is saying that we are investing in people.
1:05:29
SPEAKER_04: And uh in one night, you know, I analyzed my own in my own all my own investments as an angel investor, as a VC, every single failure.
1:05:39
SPEAKER_04: And I was giving a call to guys, and and what I found uh you know in in the morning after a couple of coffees, that ninety three percent of why my investment failed is down to the paper.
1:05:54
SPEAKER_04: If we don't solve this problem, we're never gonna bypass the current standard in the industry, like the Best venture capitalist can get it right, two out of ten.
1:06:03
SPEAKER_01: So give us some real examples in terms of that.
1:06:06
SPEAKER_01: So when you say an issue that relates to the people, what would that present as?
1:06:10
SPEAKER_04: Let me tell you uh a couple of couple of stuff what I found.
1:06:14
SPEAKER_04: Um, you know, we are always labeling, as I said, with with ultimate simplicity, that this company failed because they never found product market fit.
1:06:21
SPEAKER_04: We invested in their precede round, but they never found a product market fit.
1:06:25
SPEAKER_04: They slowly died.
1:06:26
SPEAKER_04: I gave a call to the founder as asking that, hey, um, I mean, in my books, it says that you never found product market fit.
1:06:33
SPEAKER_04: Would you mind telling me like as many details as possible what happened?
1:06:38
SPEAKER_04: Can we just make your co-founder to join?
1:06:40
SPEAKER_01: I'm sure they loved getting that call.
1:06:42
SPEAKER_01: Let's go back over that chapter again.
1:06:44
SPEAKER_04: I'm not saying everybody answered to this call, but uh but basically it was really shocking that uh can we get also your co-founder?
1:06:52
SPEAKER_04: Oh no, no, I don't talk to this guy.
1:06:54
SPEAKER_04: Interesting.
1:06:54
SPEAKER_04: Why is that?
1:06:56
SPEAKER_04: And you realize that conflict, misunderstanding, miscommunication, breaking chemistry, burnout, lack of synergistic support, ego, tunnel vision, all goes back to the people.
1:07:11
SPEAKER_04: We label it as a financial disaster, but actually the root of this problem is the people, their behavior, their interaction with each other, their harmony, their misalignment.
1:07:23
SPEAKER_04: And when I was going through on it one by one, piece by piece, I realized that all of it goes down to the team.
1:07:30
SPEAKER_04: It's always the team.
1:07:32
SPEAKER_04: There are some you know edge cases when it's not the team, but most of the time it's the team.
1:07:38
SPEAKER_04: And when you combine this with this like huge saying in venture capitalist circles that investors invest in people, you get the problem.
1:07:47
SPEAKER_04: What about we are after?
1:07:50
SPEAKER_01: So when they say they invest in people, uh in the current world, what what do you think they're actually saying when they say that?
1:07:57
SPEAKER_01: Or what do you think they're actually investing in?
1:08:00
SPEAKER_04: I think they are actually investing in people who can work together under tremendous pressure for a very long period of time.
1:08:07
SPEAKER_04: Not just friends who are creating something with ChatGPT or Cloud over a weekend and they make 1500 pounds.
1:08:16
SPEAKER_04: That's an interesting business.
1:08:18
SPEAKER_04: Can you do it for three years together, scale it up to two million?
1:08:24
SPEAKER_04: Everybody can make money with AI, but just a small minority of people can create companies which are making billions and trillions with AI.
1:08:33
SPEAKER_04: And that's why, you know, a company is a group of people if you think about it this way.
1:08:38
SPEAKER_04: All the technology is designed by people, all the sales, the business plan is executed by people.
1:08:44
SPEAKER_04: Difficult decisions like a pivot made by people, AI is there to enhance you, to help your decision making, to write those cold emails or whatever.
1:08:54
SPEAKER_04: But ultimately, AI is not ambitious.
1:08:58
SPEAKER_04: AI is not the 18-year-old guy who is like, you know, crying in the corner, wakes up next day and says that I'm gonna make it successful no matter what.
1:09:08
SPEAKER_04: AI is a tool.
1:09:10
SPEAKER_04: But you need the human who is determined, who is flexible, who is able to think beyond AI.
1:09:16
SPEAKER_04: Because what AI does with the entire startup scene, this is fascinating.
1:09:20
SPEAKER_04: That you know, technology is not a problem anymore.
1:09:23
SPEAKER_04: You can set up your website, you can set up your technology on Monday morning, and Tuesday you initiate, called email, called LinkedIn, whatever campaign, you have a business up and running, and by Wednesday, exactly by Wednesday you generate revenue.
1:09:38
SPEAKER_04: This is great.
1:09:39
SPEAKER_04: That's the first week.
1:09:40
SPEAKER_04: The second week, when your first customer comes back to you and saying that, oh man, you know, this is rubbish, this is not a worth it, give me back the money.
1:09:47
SPEAKER_04: This is such a detrimental experience.
1:09:50
SPEAKER_04: This is so like so crushing because everybody loves building stuff, but when you actually hear from a people, from people who paid for it that this is useless, this is rubbish, give me, give my money back.
1:10:02
SPEAKER_04: Many people they're like completely crushed.
1:10:05
SPEAKER_04: Completely crushed that oh my god, you know, uh, and this is where they turn into people pleaser, like, hey, hey, uh, what's missing?
1:10:13
SPEAKER_04: How how can I make it up for you?
1:10:14
SPEAKER_04: Can I develop you a custom-made solution?
1:10:17
SPEAKER_04: And this is the exact way, by the way, how many of those AI businesses just fail because they get back so many negative reviews, and instead of saying that, hey, that's what we do, you don't like it, don't buy it.
1:10:29
SPEAKER_04: I'm happy to give your money back.
1:10:31
SPEAKER_04: They they start to manufacture these custom-made solutions, their scalability potential is going down, and they turn it into a microconsultancy.
1:10:41
SPEAKER_04: People, their behavior, and their chemistry.
1:10:44
SPEAKER_01: So we've diagnosed the challenge.
1:10:47
SPEAKER_01: Talk to us about how ETA looks at solving that and how the how the business came to be.
1:10:53
SPEAKER_04: I have the uh 45-minute technological presentation.
1:10:55
SPEAKER_04: If you want to be really boring, yeah, I have the DPT here.
1:10:58
SPEAKER_04: Um, if you don't want to be boring, imagine that we designed a system uh which is an extremely complex psychometric AI.
1:11:06
SPEAKER_04: We analyze the team and we give investors a quantitative, easy-to-digest report about what can break, what's working really well, what can break, and what you can do about it.
1:11:18
SPEAKER_04: The report is, I mean, they always try to push that the report become available for founders as well, because as you can imagine, for them, it's a goldmine opportunity to actually.
1:11:27
SPEAKER_01: So that the customer is the VC, the investor who's considering.
1:11:32
SPEAKER_01: So we're DDing the cultural composition of the team here in terms of what you're investing.
1:11:37
SPEAKER_04: Screening, DDing, and also we have a large chunk in portfolio management as well.
1:11:42
SPEAKER_04: Because uh, I mean, founders uh there's no better way of saying this, they just lie all the time.
1:11:50
SPEAKER_04: I spent a good good uh good you know part of my life in VC, so there's no no better way of there's no better way of saying this.
1:11:58
SPEAKER_04: You know, what you see in TechCrunch, in Forbes, that oh my god, you know, this guy said that he has uh half a million ARR, meanwhile, he had just 50k arr, so on and so forth.
1:12:08
SPEAKER_04: That's just the tip of the iceberg.
1:12:10
SPEAKER_04: I've met people who literally lied about their relatives.
1:12:14
SPEAKER_04: They try that they try to claim that I am the uh secret son of Bill Gates.
1:12:19
SPEAKER_04: Who does not want to invest in the secret son of Bill Gates?
1:12:23
SPEAKER_04: Just imagine the connections, just imagine that your uh you know, secret father owes you a couple of favors.
1:12:28
SPEAKER_04: You can pull the strings, you can make a deal with Microsoft, an enterprise deal very quickly.
1:12:33
SPEAKER_04: Um, long story short, long story short, in portfolio management, you know, there's a lot of ego.
1:12:40
SPEAKER_04: It's really difficult as a founder who just received five million investment to sit down with my investor, look into their eyes, and say that, hey, uh we are in trouble.
1:12:51
SPEAKER_04: We are in big, big trouble.
1:12:52
SPEAKER_04: Over the last three months, we missed all the targets.
1:12:57
SPEAKER_04: The market is slowly but surely evaporating under our feet, and we don't know what to do next.
1:13:03
SPEAKER_04: I need your help.
1:13:04
SPEAKER_04: This is an extremely rare conversation in VC.
1:13:07
SPEAKER_04: Most of the time, it's like, hey, yeah, everything is going fine.
1:13:10
SPEAKER_04: Oh, the numbers are going down, minor step back in a major operation.
1:13:15
SPEAKER_04: We're gonna hire this amazing chief revenue officer, you know, this guy was five years at Oracle.
1:13:19
SPEAKER_04: He's gonna, he's gonna, he's gonna, you know, we bounce back, very not.
1:13:23
SPEAKER_01: Well, and and in that scenario, the person saying it, there's a good chance they believe it too, because they almost have to.
1:13:30
SPEAKER_01: So uh some won't, they're just hopeful.
1:13:32
SPEAKER_01: But others are so committed to like the the narrative they've created themselves.
1:13:36
SPEAKER_01: Oh no, this will definitely solve it.
1:13:38
SPEAKER_01: Because in order of leaving that business forward, you've got to have that conviction that this is definitely gonna be the right investment, even if you're proved it's not, time and time again.
1:13:46
SPEAKER_04: Well, are they liars or delusional?
1:13:48
SPEAKER_04: It's a very good question.
1:13:49
SPEAKER_04: Uh a bit on both.
1:13:50
SPEAKER_04: A bit on both.
1:13:51
SPEAKER_04: That is a there's a fascinating thing.
1:13:53
SPEAKER_04: What we needed to basically overcome in early days when we created the test.
1:13:57
SPEAKER_04: And this is the so-called confidence bias.
1:13:59
SPEAKER_04: I don't know whether you know what confidence.
1:14:02
SPEAKER_04: So basically, you you need to have confidence bias as an entrepreneur, because otherwise you wouldn't do what you do.
1:14:09
SPEAKER_04: Um, if you take a look at mathematically, 99% of startups fail.
1:14:14
SPEAKER_04: 99% of new businesses, car wash, startups, scale up, AI, deep tech, climate tech, math tech.
1:14:20
SPEAKER_04: It just fails.
1:14:21
SPEAKER_01: So and the vast majority is in the first like 18 months as well, isn't it?
1:14:25
SPEAKER_01: It's so it's so fair.
1:14:26
SPEAKER_04: So if you are a logical human being, you you end up with the conclusion that I shouldn't do this.
1:14:33
SPEAKER_04: You need to have this like God complex that I am the one.
1:14:36
SPEAKER_04: I'm the 1%, I'm the chosen one.
1:14:38
SPEAKER_01: You need to believe it into exist.
1:14:40
SPEAKER_01: So um it was our five-year birthday yesterday.
1:14:43
SPEAKER_01: Oh wow, congrats, man.
1:14:44
SPEAKER_01: This is awesome.
1:14:46
SPEAKER_01: Um and I sent a note out to the team that I talked about creating a£100 million natural capital portfolio, and I literally remember the people that laughed.
1:14:57
SPEAKER_01: And we're sat just shy of half a billion now.
1:15:00
SPEAKER_01: But five years ago, they were right to laugh.
1:15:02
SPEAKER_01: So within the sector, you would still see a press release for a£10,000 project because there was nothing, genuinely, there was nothing at scale of a million or two million or ten million.
1:15:12
SPEAKER_01: So me rocking up and going, no, no, we're gonna be a hundred million pound business like quickly, everyone was right to laugh.
1:15:18
SPEAKER_01: They were.
1:15:19
SPEAKER_01: They're not laughing at that now and the sector as a whole.
1:15:22
SPEAKER_01: So we we sat on stage yesterday with uh Martin Berg, who runs climate asset management, they're a billion-pound fund, and Richard Kelly, who looks after Foresight, Sustainable Forestry Fund, they're in the hundreds of millions and they're backed by a multi-billion pound asset fund.
1:15:36
SPEAKER_01: These things didn't exist five years ago, but you have to believe it into existence first.
1:15:40
SPEAKER_04: Totally, totally.
1:15:41
SPEAKER_04: And you know, that's why it's so difficult scientifically to assess these people.
1:15:45
SPEAKER_04: Because um because you are working against tremendous confidence bias.
1:15:50
SPEAKER_04: They believe that you know they are the one.
1:15:52
SPEAKER_04: And deep down, you know, if you go to the root of that personality, they believe that you know they can do it.
1:15:58
SPEAKER_04: And sometimes they do it, sometimes they don't.
1:16:01
SPEAKER_04: What's the difference?
1:16:02
SPEAKER_01: And they're lensing outliers.
1:16:03
SPEAKER_01: Like you so you you're you're screening for the piece that doesn't fit the model?
1:16:08
SPEAKER_01: So so you say about we designing this process.
1:16:11
SPEAKER_01: So got the idea of the business initially sort of incubated in your dissertation.
1:16:15
SPEAKER_01: How did you turn that into a reality?
1:16:17
SPEAKER_01: So when you say we, who built the screening, the tool, the process, the system, where did that all come together?
1:16:22
SPEAKER_04: Thank goodness it wasn't me.
1:16:23
SPEAKER_04: Otherwise, we couldn't talk about the business nowadays.
1:16:25
SPEAKER_04: Uh, but I basically recruited my team, two people with PhDs in behavioral science and psychology, and uh, my all-time partner in crime, my all-time you know, technological co-founder, Chris.
1:16:37
SPEAKER_04: He was the first one who knew about the business.
1:16:39
SPEAKER_04: I was like, hey, I'm gonna build this.
1:16:40
SPEAKER_04: We uh just just really, really need it.
1:16:43
SPEAKER_04: We really need it.
1:16:44
SPEAKER_04: Half an hour conversation, he was like, you know what, you build it, I'm in.
1:16:47
SPEAKER_04: But you know that we need more psychology than with all due respect what you can provide.
1:16:52
SPEAKER_04: I'm like, okay, great.
1:16:54
SPEAKER_04: I got the idea.
1:16:55
SPEAKER_01: And uh you probably thought about nipping off and doing a PhD in psychology first before doing Honestly, honestly, uh it turned in my mind.
1:17:04
SPEAKER_04: Thank thank goodness, thank goodness, you know.
1:17:07
SPEAKER_04: Uh my girlfriend now, fiance, who uh is back then was doing a PhD uh in biochemistry.
1:17:13
SPEAKER_04: You know, I sit down with her and I was like, hey, uh, I'm always like a guy that if I need a knowledge, I go to a place where I can acquire the knowledge.
1:17:20
SPEAKER_04: How about exactly as you said, starting a PhD in entrepreneurial psychology, which back then was a very niche but moderately hot topic.
1:17:31
SPEAKER_04: And she who was doing a PhD, it was uh second year, she was like, nah, mate, it's not happening.
1:17:37
SPEAKER_04: It's not happening, it's not happening.
1:17:38
SPEAKER_04: And I was like, okay, fair, then we just look for experts.
1:17:41
SPEAKER_04: Um great advice.
1:17:43
SPEAKER_00: Great, great advice.
1:17:45
SPEAKER_04: And uh long story short, it took it took like a good nine months to assemble the team because what we were looking for as expertise and you know, determination to work in this problem.
1:17:56
SPEAKER_04: First of all, there are not that many people who are interested in this subject.
1:18:00
SPEAKER_04: Because, as you rightfully said, it's very difficult in an under the umbrella of psychology because you are looking for outliers among the outliers.
1:18:10
SPEAKER_01: Well, and the existing psychological system tends to push towards clinical psychology, a little bit more sports psychology now.
1:18:19
SPEAKER_01: Yeah, but there's so very few business psychologists, entrepreneur, like in the still really rare.
1:18:26
SPEAKER_01: So our head of people, Andrew, has a PhD in performance psychology.
1:18:29
SPEAKER_01: Amazing.
1:18:29
SPEAKER_01: I do not know of another one in the sector that does.
1:18:32
SPEAKER_01: The own prior to meeting you, the only other person I knew who was anywhere near that was Dr.
1:18:37
SPEAKER_01: Steve Peters, who was the GB performance psychologist.
1:18:41
SPEAKER_01: And and that's not business per se, it's sport first.
1:18:44
SPEAKER_01: So uh my Andrew was one of one for us.
1:18:46
SPEAKER_01: So we're very lucky to have him.
1:18:48
SPEAKER_04: Yeah, yeah.
1:18:49
SPEAKER_04: And uh basically how I found the guy who actually designed the system is a very funny story.
1:18:54
SPEAKER_04: I was in Amsterdam, you know, presenting in a conference, because after a couple of months, when you don't find anybody in your Wilder network, you you're like, hey, then I need to look outside of my network.
1:19:06
SPEAKER_04: So I went to a lot of places and I was openly talking about this idea.
1:19:09
SPEAKER_04: And uh many people criticized me inside the team that, hey, I mean, that's just a terrible idea that you know, you tell them what you want to build, how you can be so sure that they're not gonna build it themselves.
1:19:19
SPEAKER_04: And I'm like, even if they build it, I am so deeply passionate about the problem that I don't mind if someone else is gonna solve it.
1:19:28
SPEAKER_04: In fact, if I was I was hoping for that one day, in one conversation, exactly like with those you know, angel investors back in Exeter, one day I meet a guy who just sits down and says that, oh, what a moron you are.
1:19:43
SPEAKER_04: The technology exists, just sign up 200 pounds per month.
1:19:47
SPEAKER_04: And I really wanted this.
1:19:48
SPEAKER_04: I really wanted this because that would make my life as an investor 100 times easier.
1:19:54
SPEAKER_01: Uh so I people won't believe that.
1:19:56
SPEAKER_01: People hearing you say that won't believe it, but I completely agree.
1:20:00
SPEAKER_01: So um also ideation is easy.
1:20:05
SPEAKER_01: People have so I I am not the only person that thought about putting together a land-based portfolio to restore the environment and grow natural capital.
1:20:15
SPEAKER_01: Thousands of people thought of that.
1:20:16
SPEAKER_02: Yeah.
1:20:17
SPEAKER_01: However, finding the investment, putting the team together, the delivery of it, the execution is the hard bit.
1:20:23
SPEAKER_01: The idea isn't.
1:20:24
SPEAKER_01: So I think share every idea, talk about it, grow it, challenge it, move it forward.
1:20:29
SPEAKER_01: Maybe three people who hear it start different businesses that are better on the back of it as a result.
1:20:34
SPEAKER_01: Or even better, you accelerate forward, and someone who heard you speak early has a business you just happen to need in your supply chain in the future.
1:20:41
SPEAKER_01: So get them all out there.
1:20:43
SPEAKER_01: Ideas are shareable.
1:20:44
SPEAKER_04: Exactly.
1:20:45
SPEAKER_04: Exactly, exactly.
1:20:46
SPEAKER_04: And you know, if someone is, as you said, if someone is stealing it and make the product, sign me up.
1:20:51
SPEAKER_04: Yeah, sign me up as an investor, I will be your first client.
1:20:54
SPEAKER_04: And uh, I was presenting in like a micro psychology conference uh in Amsterdam.
1:20:59
SPEAKER_04: And you know, I was saying that, hey, this is what I want to build.
1:21:02
SPEAKER_04: The models look somewhat like this at the moment.
1:21:06
SPEAKER_04: And um, from the back of the room, after the talk, you know, so many people came, such a genius idea.
1:21:11
SPEAKER_04: Oh, this is great.
1:21:12
SPEAKER_04: Uh when you are ready, just tell me.
1:21:13
SPEAKER_04: And I'm happy to be your first customer.
1:21:15
SPEAKER_04: Where you are, we are nowhere because we don't have the right expertise in-house, but thank you.
1:21:20
SPEAKER_04: I will add you to the email list.
1:21:22
SPEAKER_04: And a guy from like you know, the back of the room, he just came to me saying that so uh that's what you want to build, yeah.
1:21:31
SPEAKER_04: That's the model, yeah.
1:21:33
SPEAKER_04: That's rubbish.
1:21:34
SPEAKER_04: Okay, thank you.
1:21:36
SPEAKER_04: Um what can I do for you?
1:21:39
SPEAKER_04: Well, give me 15% of the company, and I'm gonna synthesize it for you.
1:21:43
SPEAKER_04: I'm like, sure, sure, how you would do that.
1:21:46
SPEAKER_04: And we went to the pub after, and he outlined how he would do that.
1:21:50
SPEAKER_04: Now, I did not have the necessary understanding about psychology, so I was like, sounds legit to me.
1:21:58
SPEAKER_04: Here's the deal work for work with us, not work for us, work with us for three months free of charge.
1:22:04
SPEAKER_04: And if you really can deliver something which I can say it's legit, here's your 15%.
1:22:10
SPEAKER_04: And he was like, Okay, cool.
1:22:12
SPEAKER_04: For the next two weeks, I haven't heard about the guy, like nothing.
1:22:15
SPEAKER_04: And as as a moron, I am, I you know, we haven't exchanged any like so you hadn't even found him on LinkedIn or anything in the world.
1:22:21
SPEAKER_04: No, no, in person, in person, like literally after the talk, he came from the back and you know, just talked to me.
1:22:27
SPEAKER_04: Period.
1:22:28
SPEAKER_04: And for two weeks, nothing.
1:22:30
SPEAKER_04: And two weeks later, I just received uh the most uh like spammy email ever that hey Shoma Piriti, we met on a conference, we talked about that you need such and such.
1:22:43
SPEAKER_04: I was doing some digging, and here is a proposal, let's book a call.
1:22:47
SPEAKER_04: And uh it was like, you know, uh an absolutely fake-ish Gmail address.
1:22:52
SPEAKER_04: And I was like, who's this guy?
1:22:53
SPEAKER_04: And it turned out to be him.
1:22:54
SPEAKER_04: Over the last two weeks, you know, he was just preparing the idea, putting together a proposal, how he would do it.
1:23:00
SPEAKER_04: We worked together for three months, and um, long story short, we realized that we need different types of expertise as well.
1:23:06
SPEAKER_04: And uh, and this is where we were like, okay, we need to recruit another, not psychologist, but behavioral scientist, and uh we can create basically the business.
1:23:15
SPEAKER_04: And um, rest is history.
1:23:17
SPEAKER_04: He's he's still with us.
1:23:18
SPEAKER_04: He's not the most sociable guy.
1:23:20
SPEAKER_04: So uh I would I wouldn't recommend him as a guest on a podcast because he's extremely determined, an absolute genius scientist, but deep down, he's a scientist.
1:23:29
SPEAKER_04: And uh and that's what he needed to work with.
1:23:32
SPEAKER_01: So talk to us about the reality of utilizing the product from both an investor side and uh a team side.
1:23:38
SPEAKER_01: So give us a worked example almost.
1:23:42
SPEAKER_04: So um a good one that how I signed up one of my board advisors.
1:23:46
SPEAKER_04: Um, when we were ready with the product, we refined the models, gathered the data, we had the benchmarking system, we were like, hey, we want to test as many teams as possible.
1:23:55
SPEAKER_04: I really wanted this guy as my board advisor.
1:23:57
SPEAKER_04: He was a renowned angel investor, so he gave one of the companies from his portfolio.
1:24:03
SPEAKER_04: And uh, you know, we said that, well, there are X, Y, and Z issues.
1:24:07
SPEAKER_04: And you know, he was laughing into my face.
1:24:09
SPEAKER_04: Oh, come on, you know, these guys currently generating 137 months on months growth.
1:24:17
SPEAKER_04: And you are telling me that they just gonna blow up like a volcano.
1:24:21
SPEAKER_04: I just doubled my investment in this team.
1:24:23
SPEAKER_04: Come on, man, go home, have a good night's sleep.
1:24:25
SPEAKER_04: This is going nowhere.
1:24:27
SPEAKER_04: Six months later, in the middle of the night, the phone is ringing.
1:24:31
SPEAKER_04: He was calling me, I was answering.
1:24:32
SPEAKER_04: I was like, okay, why are you calling?
1:24:36
SPEAKER_04: You remember the company you tested six months ago?
1:24:39
SPEAKER_03: Yeah, yeah.
1:24:41
SPEAKER_04: So apparently the CTO left, the CEO just founded a new business.
1:24:49
SPEAKER_04: We, with all the other investors, people who pump money into this, are there and just trying to mitigate this huge pile of whatever turned to dust.
1:25:02
SPEAKER_04: I lost my money, so many people lost their money.
1:25:05
SPEAKER_04: There were senior VCs, senior rangers sitting around the board, and nobody was able to predict that this will happen except your silly system six months ago.
1:25:16
SPEAKER_04: So if the board advisor at all is still there, sign me up.
1:25:20
SPEAKER_04: Just because the financial performance is alright in a team, this not necessarily means the team is alright.
1:25:26
SPEAKER_04: There are so many other variables psychologically which can tear into pieces the business that I always say that in the AI era, as an investor, you need to be cautious enough to make data-driven decisions.
1:25:40
SPEAKER_04: I'm not saying that I'm gonna make this decision for you, but I'm going to make visible the invisible, the most mysterious yet most important part uh of the entire business, which are the people, their dynamics, their chemistry, how they work together, what are the potential red flags?
1:25:59
SPEAKER_01: So, in terms of the the interface for the actual team, how how is a team assessed?
1:26:04
SPEAKER_01: How do they feed into the system process?
1:26:07
SPEAKER_01: How are you making that assessment?
1:26:08
SPEAKER_04: How is the model?
1:26:09
SPEAKER_04: So let's suppose you and your team are completing the assessment, each and every one of you shall receive an access code and a test link, complete the test, 10-50 minutes of your time.
1:26:18
SPEAKER_04: And once everybody is done, the report is generated automatically.
1:26:24
SPEAKER_04: So actually, this is where the caveat comes into the picture.
1:26:28
SPEAKER_04: Um, the reason why we are called a psychometric AI, and I I try to explain it, you know, with with with as much simplicity and as much fun as as possible to make sure you know nobody's switching on and like falling asleep.
1:26:40
SPEAKER_04: Um, there are two layers of data what we are gathering.
1:26:42
SPEAKER_04: You remember when I told you that founders just lie all the time?
1:26:45
SPEAKER_04: I deeply believe in it.
1:26:47
SPEAKER_04: Therefore, a simple psychometric test would be insufficient because founders are super smart.
1:26:55
SPEAKER_04: They can figure out easily what's the so-called right answer.
1:26:59
SPEAKER_01: It's why I hate the traditional personality testing things, the red, blue, green, the Myers-Briggs stuff.
1:27:06
SPEAKER_01: Because uh tell me what color you want me to be.
1:27:09
SPEAKER_01: Great, I'll answer the questions as green or yellow.
1:27:11
SPEAKER_01: Because the person you are with your grandparents isn't the same one you are with your best friends or a customer, or and I'm not saying they're disingenuous, they're all real versions of you, but you can turn up or down the attributes you need if you're good at what you're doing.
1:27:24
SPEAKER_01: And founders have to do that on a day-to-day basis.
1:27:26
SPEAKER_01: So exactly.
1:27:27
SPEAKER_04: They are charming, they are smart, they are strategic.
1:27:30
SPEAKER_01: And liars.
1:27:30
SPEAKER_04: And and liars.
1:27:32
SPEAKER_04: There's no no no no better slave, no, no better way of saying.
1:27:34
SPEAKER_01: I think we've got the title for the podcast, All Founders are liars.
1:27:37
SPEAKER_03: Oh my god, okay.
1:27:38
SPEAKER_03: Just blur my face.
1:27:41
SPEAKER_04: But but long story short, this is the so-called intentional level of data what we are gathering.
1:27:46
SPEAKER_04: It's good, but it's not enough.
1:27:48
SPEAKER_04: 80% of the data what we analyze is what's your behavior while you complete the test.
1:27:54
SPEAKER_04: Mouse movement, click ratio, how your reaction time and your entire behavior is.
1:28:00
SPEAKER_04: Changing when the system throwing at you the same question one after the other.
1:28:04
SPEAKER_04: I just asked you a minute ago that do you think you're a good leader?
1:28:07
SPEAKER_04: Yeah, yeah, for sure.
1:28:07
SPEAKER_04: 10 out of 10.
1:28:08
SPEAKER_04: That's what you want to hear because you want to invest into the next Steve Jobs, a visionary, whatever.
1:28:12
SPEAKER_04: So I guess you want me to say I'm a good leader.
1:28:16
SPEAKER_04: Click.
1:28:17
SPEAKER_04: Do you think you're a good leader?
1:28:21
SPEAKER_04: What's going on here?
1:28:22
SPEAKER_04: I just answered this question.
1:28:23
SPEAKER_04: Like I guess I need to answer the same way.
1:28:30
SPEAKER_04: Maybe that's a glitch in the system.
1:28:32
SPEAKER_04: Um, I am a good leader.
1:28:34
SPEAKER_04: You see the difference in my reaction.
1:28:38
SPEAKER_01: And do the questions that are presented vary based on the behavior that's uh given?
1:28:44
SPEAKER_04: The qu uh funny thing is that we designed an entrepreneurial persona specific test.
1:28:50
SPEAKER_04: So I always say that if you want to learn about yourself like a 360-degree persona, don't complete our test because we just focus on the entrepreneurial attributes.
1:29:00
SPEAKER_04: All the questions are feedback to the proven to be predictive factors.
1:29:05
SPEAKER_01: So is it prominently focused on the leadership team rather than it wouldn't drop down to sort of the technical layer or the delivery side?
1:29:11
SPEAKER_01: It's very much the senior leadership team of a company.
1:29:14
SPEAKER_04: The original test, yes.
1:29:16
SPEAKER_04: Nowadays we have, you know, wide variety, wide variety of different assessments because we are, as part of our portfolio management help, we have companies to recruit.
1:29:25
SPEAKER_02: Yeah.
1:29:25
SPEAKER_04: The first five people you hire are going to determine whether your business is going up or going down miserably.
1:29:32
SPEAKER_04: And uh it's it's a very, very scary decision because you when when you recruit your first employee, in a way you are looking for an entrepreneur, but you're not looking for a proper entrepreneur because an entrepreneur would work on their own business.
1:29:46
SPEAKER_04: You're looking for someone who is entrepreneurial enough to be your first follower.
1:29:52
SPEAKER_04: And psychologically, finding this person is extremely challenging.
1:29:55
SPEAKER_04: Because normally what you're looking for, oh, uh, you founded such and such business.
1:29:59
SPEAKER_04: Never forget, once an entrepreneur, always an entrepreneur.
1:30:01
SPEAKER_04: And you want your first employee to be with the business a very long time, to be loyal, to be loyal to your idea, not start, you know, working on some side hustles.
1:30:11
SPEAKER_04: So the original Moodles were just focusing on, you know, the co-founding team, the managing team.
1:30:17
SPEAKER_04: And as we started to work with different clients, like a PE firm, when we signed up our first client as a PE firm, you know, they presented a very interesting request that, okay, so we want to assess 27 people.
1:30:30
SPEAKER_04: And we're like, 27 co-founders?
1:30:32
SPEAKER_04: What are you talking about?
1:30:33
SPEAKER_04: No, no, no, no, no.
1:30:34
SPEAKER_04: The managing board, no executive directors, you know, board advisors, C-level executives, the founders, chairmen, so on and so forth, because we really want to see what the dynamics are.
1:30:45
SPEAKER_04: This business is awful.
1:30:47
SPEAKER_04: It's a recipe for disaster, but we don't know why.
1:30:55
SPEAKER_04: No, we created our own definition of good.
1:30:58
SPEAKER_04: And uh, and you know, that's why I'm saying that we created a proprietary technology.
1:31:02
SPEAKER_04: We're extremely secretive about that.
1:31:04
SPEAKER_04: That, you know, what's the secret?
1:31:05
SPEAKER_04: So what's what's the behimored algorithm running in the background?
1:31:09
SPEAKER_04: However, the greatest piece of asset my company has as of today is not the technology, it's the data what we gathered.
1:31:16
SPEAKER_04: Because imagine that if you see our reports, what you see, for example, resilience, one of the one of the factors that we are measuring.
1:31:24
SPEAKER_04: I'm not just telling you, Rich, that your team is seven out of ten in resilience, because that would be a completely useless information.
1:31:30
SPEAKER_04: You would say that okay, it's uh good, bad?
1:31:33
SPEAKER_04: What's the framework?
1:31:34
SPEAKER_04: What's the narrative?
1:31:36
SPEAKER_04: We have target ranges.
1:31:37
SPEAKER_04: Because as of today, we tested 20,000 startup teams over the last four years.
1:31:43
SPEAKER_04: Wow, 20,000.
1:31:44
SPEAKER_04: And we use the data from the best of the best to generate the target ranges.
1:31:49
SPEAKER_04: So when I am saying that your team has a resilience score seven out of 10, I can tell you that compared to unicorns in climate tech, in MadTech, pre-seed seed series A, are they performing similarly or they're performing completely different?
1:32:04
SPEAKER_04: And what is so interesting for investors in the early days that where are the deviations?
1:32:10
SPEAKER_04: So, this is where, for example, in resilience, the early stage climate tech businesses were performing, and my team is here.
1:32:18
SPEAKER_04: What's the gap here?
1:32:19
SPEAKER_04: How I can bridge the gap, why the gap exists?
1:32:22
SPEAKER_04: And this is the real mathematical analysis what we provide.
1:32:26
SPEAKER_01: How do you is there a mechanism for you tracking the tail of that process?
1:32:31
SPEAKER_01: So, for example, if we take it in a so things like this will be more people will be more accustomed to seeing this in a sporting context, right?
1:32:39
SPEAKER_01: They'll know that when there's an amazing book, How to Win the Premier League, which was the guy who built the data system for Liverpool when they won the Premier League, they know if they look at a left back, they know they rate that what they want in a left back will be different from what Arsenal want in a left back or so they each team has its own definition of good, but they know of the hundred left bats they look at, they know in five years they'll make a score at this point, but they'll know how good that person was in five years.
1:33:06
SPEAKER_01: How do you keep that flowing?
1:33:08
SPEAKER_01: So you you make an assessment and they might be three per three units away from another company at this stage, but this company that was better to start with, it might bomb in a year, whereas the one that wasn't very good might super succeed.
1:33:20
SPEAKER_01: So, how do you make sure you track whether that assessment was right or wrong into the future?
1:33:26
SPEAKER_04: Very simple monitoring.
1:33:28
SPEAKER_04: If ever in the history of ETA technologies I tested your company, you are part of our system.
1:33:33
SPEAKER_04: And on a quarterly basis with AI agents, you know, we are monitoring what is happening with your company.
1:33:38
SPEAKER_01: Bravo.
1:33:40
SPEAKER_04: Are you raising money?
1:33:41
SPEAKER_04: Have you managed to close your round?
1:33:43
SPEAKER_04: Are you hiring?
1:33:44
SPEAKER_04: Are you growing?
1:33:45
SPEAKER_01: Did you go past your business wasn't possible pre-AI, right?
1:33:48
SPEAKER_01: Well, sorry.
1:33:49
SPEAKER_01: Only possible with hundreds of thousands of researchers kicking around.
1:33:54
SPEAKER_04: Exactly.
1:33:55
SPEAKER_04: Exactly.
1:33:57
SPEAKER_04: And uh and basically we are monitoring closely what's happening with your business.
1:34:02
SPEAKER_04: And if, according to our success matrix, you are successful, we use your data to create the target ranges.
1:34:09
SPEAKER_04: And that's why I'm always saying to clients that the target ranges are written in stone, not written in stone.
1:34:14
SPEAKER_04: They are changing on a quarterly basis.
1:34:16
SPEAKER_04: And the more data we have, and you know, this is our goal that by the end of this year we reach like a hundred thousand startups being startup teams being tested.
1:34:25
SPEAKER_04: When we reach that number, we will be just so specific.
1:34:30
SPEAKER_04: Like these target ranges will be like extremely precise and just telling you that what's wrong?
1:34:36
SPEAKER_04: What can go on?
1:34:37
SPEAKER_01: And in terms of geographical coverage, uh, where are you working globally at the moment in terms of the VCs you're working with, or is it purely UK focused?
1:34:46
SPEAKER_04: UK, Europe, and US.
1:34:48
SPEAKER_04: We started five months ago our extension in the US.
1:34:51
SPEAKER_04: So we have just a couple of clients there and we are still looking for a strong distributor on the on that market.
1:34:55
SPEAKER_01: And do they tend to work with you on specific deals, or if you engage with a funder, they want you to work across everything they look at?
1:35:03
SPEAKER_04: So we are selling them an NUS subscription because as you can imagine, especially in the first years of the business, what is the real currency for us beyond ARR, the data.
1:35:12
SPEAKER_04: Yeah.
1:35:13
SPEAKER_04: So I really want to incentivize all my clients to push through everything through the system.
1:35:19
SPEAKER_01: Let you do a better job for them.
1:35:21
SPEAKER_04: Yeah.
1:35:21
SPEAKER_04: Yeah.
1:35:22
SPEAKER_04: So when when we properly were able to come up with our first API, the tested team's numbers just, you know, started to skyrocket.
1:35:30
SPEAKER_04: We want to be present in screening, due diligence, portfolio management everywhere.
1:35:36
SPEAKER_04: The more time I test your startup, basically the better for me, because I see the evolution of your team as well, not just your financial data and your real life performance.
1:35:46
SPEAKER_01: And on the on the portfolio management side, if if you do an investor raises the hand and says to you, look, I need you to look at this team.
1:35:52
SPEAKER_01: I've got concerns, etc., if if you identify something in testing, are you at the stage now where you will offer the intervention to fix that in terms of the coaching development, or does that go elsewhere?
1:36:03
SPEAKER_04: Yeah, yeah, yeah.
1:36:04
SPEAKER_04: Absolutely.
1:36:04
SPEAKER_04: If they if they want, you know, I think let me let me just come from a little bit more uh far.
1:36:11
SPEAKER_04: I think the most damaging concept the startup ecosystem ever created is called the so-called founder DNA or entrepreneurial DNA.
1:36:20
SPEAKER_04: Because it makes you believe that's something which is written in your genes.
1:36:24
SPEAKER_04: And uh, if I learned anything from this business that anybody can be a successful entrepreneur, you just need to find the right team which is surrounding you.
1:36:34
SPEAKER_04: Everything is fixable.
1:36:36
SPEAKER_04: If you want, we not just give you the diagnosis, but we can give you like a blueprint how to fix it.
1:36:41
SPEAKER_04: I'll tell you the easiest one.
1:36:43
SPEAKER_04: 60 plus percent of you know, teams what we test, they have massive issues with co-founder misalignment, which means that co-founders sitting in the same boat are rowing in a complete different direction.
1:36:56
SPEAKER_04: You don't need like a 10-hour-long therapy session to fix it, you don't need to sign up to any like online courses to fix it.
1:37:02
SPEAKER_04: What you need is a directed conversation.
1:37:06
SPEAKER_04: They give you six questions and make sure nobody leaves the room until you're not on the same page.
1:37:12
SPEAKER_04: It can be right, it can be wrong.
1:37:14
SPEAKER_04: You don't need to bulldoze people to the ground, you don't need to argue, but you need to make sure that everybody is on the same page.
1:37:21
SPEAKER_01: I always remember being taught um unexpressed expectations is resentment waiting to happen.
1:37:29
SPEAKER_01: Totally.
1:37:29
SPEAKER_01: And um I I am I'm so guilty of that.
1:37:32
SPEAKER_01: I I suck at giving deadlines.
1:37:34
SPEAKER_01: So I'll say, Oh, can I have this?
1:37:36
SPEAKER_01: And my brain and heart goes to, well, that person knows how busy they are, they can set their own deadline.
1:37:42
SPEAKER_01: But then the back of my brain will be like, Yeah, but you'd really would quite like it now or by next Friday.
1:37:48
SPEAKER_01: So write it down, like write it down.
1:37:50
SPEAKER_01: So if I had to try and remember and work at, no, no, no, set a deadline.
1:37:54
SPEAKER_01: In fact, one of my agent triggers as it goes, do you want to put a deadline on this bridge?
1:37:59
SPEAKER_01: So it kicks in there and does it.
1:38:00
SPEAKER_01: Um I I like your observation about the fact that entrepreneurship isn't a DNA thing, it's not encoded.
1:38:07
SPEAKER_01: Are there attributes you found in the recruitment side of things?
1:38:10
SPEAKER_01: So, full disclosure, we adore recruitment.
1:38:13
SPEAKER_01: So Andrew and I are head of people.
1:38:15
SPEAKER_01: We've done more than a thousand recruitments together across multiple businesses.
1:38:19
SPEAKER_01: Um and we've thanks to the marketing team, we get almost a thousand applicants for every job now.
1:38:25
SPEAKER_01: So we are, we are getting we've got far too much, we can't take it all.
1:38:28
SPEAKER_01: We've got far too much talent that we can because there aren't that many cool, exciting places to work in the UK.
1:38:34
SPEAKER_01: If you want to work in nature, tech, data, all those things together.
1:38:38
SPEAKER_01: There's very few.
1:38:39
SPEAKER_01: So we we we get a great opportunity there.
1:38:42
SPEAKER_01: When you're looking at recruitment, are there attributes and skills that you think are just not valued highly enough?
1:38:48
SPEAKER_01: But where you see it in a screen and you're like, that's the person you want.
1:38:52
SPEAKER_01: You really it just shines that that's the attribute you should be running towards more.
1:38:56
SPEAKER_01: Something that's undervalued.
1:38:58
SPEAKER_04: I think you know it really depends on the business.
1:39:00
SPEAKER_04: Whenever we do any recruitment, first we test the entire team which exists so far.
1:39:06
SPEAKER_04: And this is how we can tell that, you know, a candidate is a good match, what you built as a chemistry, as a dynamic.
1:39:12
SPEAKER_01: Because how often have people talked about someone not being a culture fit?
1:39:16
SPEAKER_01: How do they know they're talking about the same thing?
1:39:18
SPEAKER_01: Exactly.
1:39:19
SPEAKER_01: Exactly.
1:39:19
SPEAKER_04: And and you know, this this is the nuance what we are doing.
1:39:21
SPEAKER_04: So whether you need like an excellent salesperson or you need someone who is super organized, it really depends on your organization.
1:39:28
SPEAKER_04: There's no universal answer that, hey, if you know you are the best salesperson, all the doors will be open to you.
1:39:33
SPEAKER_04: Because if a company is recruiting for a tech role and you're a salesperson, you're not gonna get it.
1:39:38
SPEAKER_04: It doesn't matter how good salesperson you are.
1:39:40
SPEAKER_04: Um, I would say that nowadays, in the age of AI, what is absolutely skyrocketing as a demand is face-to-face persuasion, not in a romantic way.
1:39:50
SPEAKER_01: Yeah.
1:39:51
SPEAKER_04: Uh, because and this is coming from the valley.
1:39:54
SPEAKER_04: Um, I talked to one of our clients a couple of days ago who uh you know, I always have these chats with him that you live and breed in the valley.
1:40:03
SPEAKER_04: What happens in the valley?
1:40:04
SPEAKER_04: Many times it comes to Europe in like a couple of months delay.
1:40:08
SPEAKER_01: Tell me what's the future.
1:40:09
SPEAKER_01: Absolutely in the car coming over here.
1:40:11
SPEAKER_01: Started to see the first um stop hiring humans, hire agents, billboards.
1:40:17
SPEAKER_01: In April, when we were in San Fran, every billboard was that.
1:40:21
SPEAKER_01: I literally said the exact same thing this morning that it's it's a few months later, maybe a year later, it starts appearing.
1:40:26
SPEAKER_01: It's coming.
1:40:27
SPEAKER_04: It's coming.
1:40:27
SPEAKER_04: And it's like you know, a glimpse into the future, what's about to happen.
1:40:31
SPEAKER_04: And what he told me, it was just fascinating that um everybody's a little bit like fed up with these super polish, super personalized outreach messages and emails.
1:40:42
SPEAKER_04: And more and more, not just salespeople, but but entrepreneurs in generally, when they are hiring, they're like, hey, let's jump for a coffee.
1:40:49
SPEAKER_04: Let me let me touch you as a three-dimensional object.
1:40:52
SPEAKER_04: Let me shake your hands, let me look into your eyes.
1:40:54
SPEAKER_04: And you know, after 10 seconds, when you just can't have an a proper like eye contact with me, let me just assess you, your body language, your tonality, everything what's not coming across when we are having a video call where you can do whatever you want, deep fake.
1:41:12
SPEAKER_04: So having people to people, like you know, soft skills, I think this is a superpower in the next couple of years, because this is something what AI cannot do and will never do.
1:41:24
SPEAKER_04: And um I have a very, very funny friend who uh is working in enterprise sales, and you know, with all these like AI shenanigans, uh he told us when we were drinking together that look, you guys are in danger, I'm not.
1:41:40
SPEAKER_04: And we were like, really?
1:41:41
SPEAKER_04: How come?
1:41:42
SPEAKER_04: Enterprise sales?
1:41:43
SPEAKER_04: I mean, last when I checked, AI SDRs, you know, AI account executives, and like, yeah, those are very cool, but nobody's gonna buy a 600k contract from an AI agent.
1:41:53
SPEAKER_04: You need the person, grab them, go for a dinner, have a few drinks, shake hands, nine hole of golf, all the standards.
1:42:04
SPEAKER_04: And I was like, that's funny.
1:42:05
SPEAKER_04: That's funny.
1:42:07
SPEAKER_01: So um I think that's probably true.
1:42:10
SPEAKER_01: But I also remember uh no one will ever buy a car without seeing it or driving it, and uh Tesla are doing all right.
1:42:19
SPEAKER_04: Yeah, yeah, yeah.
1:42:20
SPEAKER_01: And um it's it's so interesting how things change.
1:42:23
SPEAKER_01: Nothing's ever done until it's done for the first time, and then someone changes the world in a day.
1:42:28
SPEAKER_01: Um we're we're sat here in relatively early June, and we've got SpaceX IPO coming next Friday.
1:42:36
SPEAKER_01: We've got um Anthropic have now listed their S1, they're gonna IPO by the end of the year.
1:42:42
SPEAKER_01: Knowing what you do about business and entrepreneurship and AI, how are how are trillion dollar IPOs and um and potentially two of them in the next six months, how's that gonna change business in general and how people think about it?
1:42:56
SPEAKER_04: I think there will be certainly more liquidity on the market, which is absolutely necessary because uh there are so many funds who are basically investing unearned money.
1:43:05
SPEAKER_04: And that's just really damaging for the the entire economy when uh, oh, Rich, I'm gonna invest 200k into your business.
1:43:12
SPEAKER_04: I haven't raised that money myself.
1:43:14
SPEAKER_04: So once the money arrives on my account, it will arrive to your account and you know it creates like you know a chain of desperation.
1:43:20
SPEAKER_04: I think that we're gonna see a lot of liquidity.
1:43:24
SPEAKER_04: And uh maybe, maybe we're gonna see some unwanted surprises.
1:43:30
SPEAKER_04: I was there in the Uber IPO.
1:43:33
SPEAKER_04: I was there with uh even a even a more fascinating story, um, Beyond Meat IPO.
1:43:40
SPEAKER_04: With this investment club, which I mentioned to you, we were you know pre-IPO investors of Beyond Meat.
1:43:46
SPEAKER_04: Went up and never returned.
1:43:49
SPEAKER_04: Uh with Uber, the the situation is different because you know they had like a rough start, but they slowly but surely recovered.
1:43:56
SPEAKER_04: Um, I'm very optimistic about both companies.
1:43:59
SPEAKER_04: Um, I'm not an investment banker, so it's not a financial advice or any of that.
1:44:04
SPEAKER_04: But uh I think, as you said, uh it's going to be visible for many ambitious founders that this is possible.
1:44:11
SPEAKER_04: Someone did it.
1:44:12
SPEAKER_04: Elon Musk did it, which is you know raising the bar very high.
1:44:16
SPEAKER_04: But I think what investors should not forget, and uh, and that's a common mistake, even in academia and in practice as well, that we are looking for the next Elon Musk, which is a big trap because no Elon Musk, no Steve Jobs, no Bill Gates can do what they do when they are on their own.
1:44:35
SPEAKER_04: There is a team behind Elon in Tesla, in SpaceX, in OpenAI, who are actually keeping everything in line while he's running the show.
1:44:46
SPEAKER_04: And if you remove these people and just leave Elon on his own, he's gonna fail.
1:44:51
SPEAKER_04: And for sure, with the IPO, I understand that you know his branding personality is more important than what he's actually doing.
1:45:02
SPEAKER_04: Goes beyond the shadow of a doubt.
1:45:03
SPEAKER_04: But don't look for the next Elon Musk when you are investing, look for the team which is mimicking the early Tesla, which is mimicking the early PayPal, which is mimicking the early X.
1:45:16
SPEAKER_04: Because um, because these these connections and dynamics which are leading to success if you're in the AI era.
1:45:23
SPEAKER_01: When you meet a team for the first time, what's the sort of behavior or signal that makes you smile and go, oh, I think quite positively about these?
1:45:31
SPEAKER_01: And contrary, what's the flag that's the usual one you see that you go, okay, we need to have a deeper look?
1:45:37
SPEAKER_01: Is there like an early warning on both sides?
1:45:39
SPEAKER_04: Let me um let me answer you the red flag first, because it's so common.
1:45:46
SPEAKER_04: When a CEO is talking about technology, features, functions, what they're gonna release, what's the roadmap?
1:45:55
SPEAKER_04: I never look into them, I always look at the CTO.
1:45:58
SPEAKER_04: And if I don't see the same passion and enthusiasm on the face of the CTO, I know that something is fishy here, equally when a Just the CEO is lying.
1:46:09
SPEAKER_00: Yeah, yeah, okay.
1:46:11
SPEAKER_04: And uh, you know, uh everybody's lying all the time.
1:46:14
SPEAKER_04: So that's that's that's not not a big deal.
1:46:16
SPEAKER_04: But for example, if I tell you that, oh my god, you know, ETA 2.0 is coming uh next month, and my CTO's face is literally like collapsing while I'm saying this, I always like, that's very interesting.
1:46:30
SPEAKER_04: You, can you talk to me about these features?
1:46:33
SPEAKER_04: Ultimate red flag.
1:46:35
SPEAKER_01: You're so right.
1:46:35
SPEAKER_01: So our head of operations met with a potential partner in the US last week, and and this person brought their chief of staff on the call.
1:46:44
SPEAKER_01: And my head of operations, Dave, was was looking at the chief of staff while the CEO was pitching, and she was just completely bored and disengaged and didn't believe what was being shown.
1:46:54
SPEAKER_01: And Dave was like, What why on earth did why was if that's how they knew she'd present or how she felt maybe it clearly didn't know though, right?
1:47:02
SPEAKER_01: Because if the CEO had known that was what was being expressed.
1:47:06
SPEAKER_01: Fascinating.
1:47:06
SPEAKER_01: All right, that's the red flag.
1:47:08
SPEAKER_01: And on the upside, what excites you where you're like, oh, this team could be special.
1:47:12
SPEAKER_01: What sort of signal do you get?
1:47:13
SPEAKER_04: Respect.
1:47:15
SPEAKER_04: So I I was notorious back as a VC, inviting the entire co-founding team into our office and just observing them.
1:47:23
SPEAKER_04: Thank goodness, you know, we had beautiful like, you know, uh glass, glass doors everywhere, just observing them, how they walk.
1:47:29
SPEAKER_04: Who comes to the room first?
1:47:31
SPEAKER_04: When someone is left behind, someone is going to the toilet, the other people are waiting for him or her, or it's just okay, let's, let's, let's get down, let's sit down, let's corner this investor, we need the money.
1:47:42
SPEAKER_04: And uh, when I see that, you know, people are taking care about each other.
1:47:46
SPEAKER_04: So a very, a very common example of what I noticed.
1:47:50
SPEAKER_04: Um, if you have a super introverted CTO, normally these people are extremely anxious because they are in a new environment.
1:47:59
SPEAKER_04: VCs are traditionally loud, there's a lot going on, they are overstimulated.
1:48:04
SPEAKER_04: And if the other people trying to do their best to comfort him instead of like, you know, schmoozing with me, this is showing me that that's a team who understands how to take care about each other.
1:48:17
SPEAKER_04: That's a team where there's a very strong chemistry, dynamics, synergistic support.
1:48:22
SPEAKER_04: And no matter what, they're gonna stay together.
1:48:25
SPEAKER_04: If I put down an offer on the table that I want to equire you rich, I give you 20 million, whatever, I am from Meta.
1:48:32
SPEAKER_04: You're gonna just gonna show me the middle finger and say that nah nah nah, I stay with these people, I love them.
1:48:38
SPEAKER_04: Respect and just belonging together.
1:48:42
SPEAKER_01: Uh 18 months into starting OC, that literal situation happened.
1:48:49
SPEAKER_01: Not not Meta, but uh a third party literally put that number on the table and said So we we were talking to them about a potential um a deal, and they were like, Well, we could just take you instead, couldn't we?
1:48:59
SPEAKER_01: And do this.
1:49:00
SPEAKER_01: And it's like, no, that's not what we're about.
1:49:03
SPEAKER_01: And um yeah.
1:49:05
SPEAKER_01: Um I've I've adored every minute of this conversation.
1:49:08
SPEAKER_01: Um I I think the way you're building it, what you're building, it just your story makes so much sense when you piece everything together.
1:49:16
SPEAKER_01: I know you say you haven't got this idealised, romanticized version of it, but what you have got is the most incredibly humble, curious evolution of a business.
1:49:26
SPEAKER_01: And that just shines through in everything you do.
1:49:28
SPEAKER_01: So I'm I'm so happy you're in this chapter.
1:49:30
SPEAKER_01: It won't be your last.
1:49:31
SPEAKER_01: You're gonna have 15 others and it'll work their way through.
1:49:34
SPEAKER_01: Um, I love to finish the podcast on the same question each time.
1:49:38
SPEAKER_01: What's the one question I haven't asked you you wish I had?
1:49:55
SPEAKER_04: There is one thing what I believe is very important, and not many people are catching it about EDA technology that was the social impact of what we are doing.
1:50:06
SPEAKER_04: Because we you know, we are not a charity, we are a we are a for-profit business, but we take the social mission of our company very seriously.
1:50:18
SPEAKER_04: And uh, and given your background and given you know what you do, I expected you to ask the ask this question, but you didn't ask.
1:50:24
SPEAKER_04: Um I'm happy to answer if you want to ask the question.
1:50:28
SPEAKER_01: Set the question and answer it.
1:50:30
SPEAKER_04: What's the what's the social benefit?
1:50:33
SPEAKER_04: What's the impact on people of your business?
1:50:39
SPEAKER_04: And the answer is that you know, I was sitting in so many meetings when unconscious bias killed the deal.
1:50:49
SPEAKER_04: We weren't making data-driven decisions, we were listening to our own biases.
1:50:56
SPEAKER_04: The value I'm not gonna mention any names, but a deal when we decided not to invest in a company just because the founder was seven months pregnant, it turned out to be a huge mistake because uh they exited, I think, to Google, don't quote me on this, and we made this decision.
1:51:22
SPEAKER_04: I mean, you know, I try to disagree with it, but the board made the decision purely based on this factor.
1:51:29
SPEAKER_04: And I always say that if back then we had a proper entrepreneurial persona analytics about this person and this particular team, we would have seen that they they are just a raw diamond opportunity.
1:51:45
SPEAKER_04: And we weren't making any decision based on factors which are not predictive, in fact, very stupid to be even mentioned in any investment memo.
1:51:55
SPEAKER_04: And that's just so true on so many levels of venture capital.
1:51:59
SPEAKER_04: Nowadays, if you ask that how we analyze teams, it's like their background, are they college dropouts?
1:52:06
SPEAKER_04: Have they spent five, ten, fifteen years at Google?
1:52:09
SPEAKER_01: It's moneyball again, right?
1:52:10
SPEAKER_01: Yeah.
1:52:11
SPEAKER_01: So it's, you know, they were looking for players who were tall, who sounded right, who went to the right schools, who had attractive girlfriends or boyfriends or whatever that looked like.
1:52:20
SPEAKER_01: They weren't actually based on data.
1:52:22
SPEAKER_01: And then the the m the um Oakland A's rock up and actually look at the things that matter.
1:52:28
SPEAKER_01: What what you're doing in terms of people analytics within business is very similar philosophy to what we've applied to land and nature and carbon.
1:52:35
SPEAKER_01: And I suppose to wrap it up, in the world of liars, data tells the truth.
1:52:41
SPEAKER_01: Totally.
1:52:42
SPEAKER_01: Yeah, I've enjoyed every minute.
1:52:43
SPEAKER_01: Thank you so much for teaching me.
1:52:44
SPEAKER_03: Thank you so much for having me.
1:52:45
SPEAKER_03: Thank you so much.
1:52:46
SPEAKER_03: It was a privilege to be here.
1:52:47
unknown: Thank you guys.