The Exchanges

Q The sign of a beautiful start, but you mentioned that the building of companies that Pejman projected the vision of. So with that in mind, I'd love to discuss the launchpad program that you have at PEAR. So can you, can you tell me a little about this, and why you chose to do it?

A Yeah, so the Launchpad program is a program we run for 10 weeks in the summer out of our office space, which is a little bit eclectic and quirky hacker space in Palo Alto. It came out a little naturally, just like the fun. We work, we have another program called Garage, where we work with Stanford computer science students for nine months during the year. We just mentor them. It's very low key. There's no exchange of equity or Funding or anything is just a low key way of helping them get projects off the ground. And there's no expectation of any company coming out. So we started doing this in 2013, 20 14 academic year. And at the end of the 2014 academic year, some of them were like, hey, we want to keep our project. We want to stay here for the summer. And that's how launch got started. Uh, we had a handful of teams. They're all very techie, all from Stanford, And we worked with them very closely for the summer. We decided at the end of the summer to invite our venture friends to give them feedback, and they gave us feedback saying, oh, these are great teams, this is so great. So we decided to take it more seriously, and it's been growing, not necessarily in size, but in the amount of effort that we put into it during the year, and especially during the summer. So, you know, last year we had about 13 companies 11 of them ended up raising a seed round from great people. Accel, …

AI assessment note: “Launchpad program is a program we run for 10 weeks in the summer”

Q The sign of a beautiful start, but you mentioned that the building of companies that Pejman projected the vision of. So with that in mind, I'd love to discuss the launchpad program that you have at PEAR. So can you, can you tell me a little about this, and why you chose to do it?

A Yeah, so the Launchpad program is a program we run for 10 weeks in the summer out of our office space, which is a little bit eclectic and quirky hacker space in Palo Alto. It came out a little naturally, just like the fun. We work, we have another program called Garage, where we work with Stanford computer science students for nine months during the year. We just mentor them. It's very low key. There's no exchange of equity or Funding or anything is just a low key way of helping them get projects off the ground. And there's no expectation of any company coming out. So we started doing this in 2013, 20 14 academic year. And at the end of the 2014 academic year, some of them were like, hey, we want to keep our project. We want to stay here for the summer. And that's how launch got started. Uh, we had a handful of teams. They're all very techie, all from Stanford, And we worked with them very closely for the summer. We decided at the end of the summer to invite our venture friends to give them feedback, and they gave us feedback saying, oh, these are great teams, this is so great. So we decided to take it more seriously, and it's been growing, not necessarily in size, but in the amount of effort that we put into it during the year, and especially during the summer. So, you know, last year we had about 13 companies 11 of them ended up raising a seed round from great people. Accel, …

AI assessment note: “we want to stay here for the summer. And that's how launch got started.”

Q My word, that is one phenomenal hit rate, which a massive congratulations for. A very interesting element of that though, the portfolio founder of yours in Matta at Heap asked, and it's how do you decide in those very, very early days Which are the ones that are worthy of spending the time on, and what the criteria is at such a nascent early stage of company building?

A Yes, that's a great question. You know, I'm very fortunate to be partners with Peshman, who's the ultimate reader of the human being. When there is nothing, there's just a couple of founders, or maybe there's just one founder. Sometimes we have one founder only. There's no product. Maybe there's not even a prototype, and There's definitely no customers, right? So there's no traction, there's no curves, there's nothing. There's just the person, and the will, and the idea. That's the people that we bring into Launchpad. So it's really, really, truly very early, right? And the only thing we're judging is the human being, and the founder, and whether we think they are obsessed, hungry to achieve something. That's the At the end of the day. Again, Peshman has almost a sixth sense to do this, and I'd like to say I'm becoming the apprentice really quickly.

AI assessment note: “the only thing we're judging is the human being, and the founder”

Q you said there about kind of is the risks that stop you from getting to the next stage. And the next stage obviously kind of being the presentation to VCs and the ultimate funding. I'm intrigued. Jason Lemkin, a friend of mine and SaaS investor in the Bay, always tells me the best investors know the benchmarks to get the next round. Is that something you'd very much agree with?

A Yeah, I think, I mean, I would definitely agree with it. I mean, sometimes there are no benchmarks because you're a completely different company. You're a revolutionary company. Like what was the benchmark for say Uber when there was no thing equivalent, for example, but for most cases, of course there are benchmarks, right? And that's the way the next stage investors think about it. Of course, they'll think about product and people, but when they're measuring your traction, they have some sort of understanding of the minimum levels you have to be. So yeah, I believe it is very important. It's my job to make sure that we're up to date as to what we have to achieve to get to the next level.

AI assessment note: “Yeah, I think, I mean, I would definitely agree with it.”

Q Absolutely, but you also said one of the key components was kind of seeing that innate ambition within the founder. One of your own founders from Launchpad, uh, I did my research for sure, I promise you, it's not stalking. Uh, Nikki at Nova asks, what's the bigger driver of success? Is it Operations, or is it vision, and how do you balance the tension between the two?

A I mean, I think great CEOs have both, right? And it may not necessarily be that they're good at both, but they know that they need both in the company, um, when you have a vision, and, and we really look for that on a founder or somebody that has an ultimate vision, right? Like, I want to change something, or I want to be something big in something. That's really important to us, but they know that They have to be, you know, almost operationally anal from day one to make it happen, right? And they're measuring their success day to day, even at T zero when there is nothing, right? Some people are afraid of making plans or really measuring success at the very early stages, but we've seen in and out that people that are obsessed and that want to achieve that mission, they actually do that day one. So like I said, sometimes They need to surround themselves by other people that help them on the operational side, but they know it's important, right? And that they have to do it. It's not something that you have to tell them.

AI assessment note: “I mean, I think great CEOs have both, right?”

Q you said there about kind of is the risks that stop you from getting to the next stage. And the next stage obviously kind of being the presentation to VCs and the ultimate funding. I'm intrigued. Jason Lemkin, a friend of mine and SaaS investor in the Bay, always tells me the best investors know the benchmarks to get the next round. Is that something you'd very much agree with?

A Yeah, I think, I mean, I would definitely agree with it. I mean, sometimes there are no benchmarks because you're a completely different company. You're a revolutionary company. Like what was the benchmark for say Uber when there was no thing equivalent, for example, but for most cases, of course there are benchmarks, right? And that's the way the next stage investors think about it. Of course, they'll think about product and people, but when they're measuring your traction, they have some sort of understanding of the minimum levels you have to be. So yeah, I believe it is very important. It's my job to make sure that we're up to date as to what we have to achieve to get to the next level.

AI assessment note: “I would definitely agree with it.”

Q What's your approach to board seats? You mentioned, obviously, your roles with the companies there. Is it something that you very much advocate for when making investments?

A Well, I do. I do believe in board seats. You know, I think when the companies buy people having a board, it's a little, it sounds a little ridiculous, but I think getting together with your companies very early in a monthly basis, checking where we are, what we need to do, what do we need to, you know, who do we need to ask for help? It's really, it's critical. It's absolutely critical for the success of companies. I think, you know, we've looked at the data out of Crunchbase, which, you know, there might be some error, but, um, you can see like a general company, a seed company that maybe, you know, angel funded and has some sort of party round and there's no clear lead venture person has a much lower chance of getting to a series A than a company that has a lead seed fund behind it. Right. And it's, I think, because we, not just us, but I think our community, they, we take our job very seriously. We just, you know, it's my job to make sure these companies make it.

AI assessment note: “Well, I do. I do believe in board seats.”

Q intrigued with the kind of growth of the platform and the success of it, as you said there. I'm intrigued with the commoditization of capital that we're seeing in recent years. Do you think this is the way VC is moving in terms of the platform approach with these incredibly tangible supplementary elements of the business, which make it far more than just capital? Is that the way we're moving?

A Well, that's certainly a way, certainly our way, and certainly a way how many people are going. You know, I think we obviously in recent started this platform movement and they have, they're investing in a stages that are different from what we do. We're at the very ground zero and we want to be the best at taking these people that really are starting at zero and getting them to their, to want their first customer or to their first thousands of users, et cetera. Right. And all what we've been doing over the last four years is surrounding us by people, Putting processes in place, trying to replicate some of the successful things that we've seen in our companies so that the new companies coming in can get there faster and more efficiently, right? And it becomes a platform of some sort if you think about it. At the end of the day, to be honest, what we do is, you know, you can automate and replicate some of it, but it's a very intensive services business, right? It's people. Everybody's different. Founder has a problem, and they really need that human contact with one of us, so, you know, I think this platform needs to be scaled with great people. It's not a product venture yet.

AI assessment note: “that's certainly a way, certainly our way, and certainly a way how many people are going.”

Q Are there fundamental recurring data points within kind of cohorts of companies that you've seen now with Launchpad that are, that are fundamental, no matter what the business or founder type, are there elements which are similar for all that all focus on?

A Gosh, every company, I feel like it's a whole world in itself, especially when it's the first hundred days. But again, I think it's almost the way the CEO or the founding team communicates. It's a great predictor of success. And again, I think being a good communicator, it's obvious, but the people that are concise and size and they come to a meeting and they're like, this is where I am. This is what didn't work. This is what I'm going to try. You know, I need your help with this. Those, I can see that they're going somewhere. The people that may be doing great, but don't talk that way, or maybe not doing well and don't talk that way. That's where I get concerned. Or maybe we don't hear from them. That's the concern.

AI assessment note: “I think it's almost the way the CEO or the founding team communicates.”

Q What's your approach to board seats? You mentioned, obviously, your roles with the companies there. Is it something that you very much advocate for when making investments?

A Well, I do. I do believe in board seats. You know, I think when the companies buy people having a board, it's a little, it sounds a little ridiculous, but I think getting together with your companies very early in a monthly basis, checking where we are, what we need to do, what do we need to, you know, who do we need to ask for help? It's really, it's critical. It's absolutely critical for the success of companies. I think, you know, we've looked at the data out of Crunchbase, which, you know, there might be some error, but, um, you can see like a general company, a seed company that maybe, you know, angel funded and has some sort of party round and there's no clear lead venture person has a much lower chance of getting to a series A than a company that has a lead seed fund behind it. Right. And it's, I think, because we, not just us, but I think our community, they, we take our job very seriously. We just, you know, it's my job to make sure these companies make it.

AI assessment note: “Well, I do. I do believe in board seats.”

Q Absolutely, but you also said one of the key components was kind of seeing that innate ambition within the founder. One of your own founders from Launchpad, uh, I did my research for sure, I promise you, it's not stalking. Uh, Nikki at Nova asks, what's the bigger driver of success? Is it Operations, or is it vision, and how do you balance the tension between the two?

A I mean, I think great CEOs have both, right? And it may not necessarily be that they're good at both, but they know that they need both in the company, um, when you have a vision, and, and we really look for that on a founder or somebody that has an ultimate vision, right? Like, I want to change something, or I want to be something big in something. That's really important to us, but they know that They have to be, you know, almost operationally anal from day one to make it happen, right? And they're measuring their success day to day, even at T zero when there is nothing, right? Some people are afraid of making plans or really measuring success at the very early stages, but we've seen in and out that people that are obsessed and that want to achieve that mission, they actually do that day one. So like I said, sometimes They need to surround themselves by other people that help them on the operational side, but they know it's important, right? And that they have to do it. It's not something that you have to tell them.

AI assessment note: “I think great CEOs have both, right?”

Q intrigued with the kind of growth of the platform and the success of it, as you said there. I'm intrigued with the commoditization of capital that we're seeing in recent years. Do you think this is the way VC is moving in terms of the platform approach with these incredibly tangible supplementary elements of the business, which make it far more than just capital? Is that the way we're moving?

A Well, that's certainly a way, certainly our way, and certainly a way how many people are going. You know, I think we obviously in recent started this platform movement and they have, they're investing in a stages that are different from what we do. We're at the very ground zero and we want to be the best at taking these people that really are starting at zero and getting them to their, to want their first customer or to their first thousands of users, et cetera. Right. And all what we've been doing over the last four years is surrounding us by people, Putting processes in place, trying to replicate some of the successful things that we've seen in our companies so that the new companies coming in can get there faster and more efficiently, right? And it becomes a platform of some sort if you think about it. At the end of the day, to be honest, what we do is, you know, you can automate and replicate some of it, but it's a very intensive services business, right? It's people. Everybody's different. Founder has a problem, and they really need that human contact with one of us, so, you know, I think this platform needs to be scaled with great people. It's not a product venture yet.

AI assessment note: “that's certainly a way, certainly our way, and certainly a way how many people are going.”

Q My word, that is one phenomenal hit rate, which a massive congratulations for. A very interesting element of that though, the portfolio founder of yours in Matta at Heap asked, and it's how do you decide in those very, very early days Which are the ones that are worthy of spending the time on, and what the criteria is at such a nascent early stage of company building?

A Yes, that's a great question. You know, I'm very fortunate to be partners with Peshman, who's the ultimate reader of the human being. When there is nothing, there's just a couple of founders, or maybe there's just one founder. Sometimes we have one founder only. There's no product. Maybe there's not even a prototype, and There's definitely no customers, right? So there's no traction, there's no curves, there's nothing. There's just the person, and the will, and the idea. That's the people that we bring into Launchpad. So it's really, really, truly very early, right? And the only thing we're judging is the human being, and the founder, and whether we think they are obsessed, hungry to achieve something. That's the At the end of the day. Again, Peshman has almost a sixth sense to do this, and I'd like to say I'm becoming the apprentice really quickly.

AI assessment note: “the only thing we're judging is the human being, and the founder”

Q Are there fundamental recurring data points within kind of cohorts of companies that you've seen now with Launchpad that are, that are fundamental, no matter what the business or founder type, are there elements which are similar for all that all focus on?

A Gosh, every company, I feel like it's a whole world in itself, especially when it's the first hundred days. But again, I think it's almost the way the CEO or the founding team communicates. It's a great predictor of success. And again, I think being a good communicator, it's obvious, but the people that are concise and size and they come to a meeting and they're like, this is where I am. This is what didn't work. This is what I'm going to try. You know, I need your help with this. Those, I can see that they're going somewhere. The people that may be doing great, but don't talk that way, or maybe not doing well and don't talk that way. That's where I get concerned. Or maybe we don't hear from them. That's the concern.

AI assessment note: “I think it's almost the way the CEO or the founding team communicates.”

Q Speaking of that kind of operational rigor from day one, I know that's a big element of focus for you. I've always been told that it's not what you, it's not that you measure full stop, but it's what you measure that's important. I can see them with that kind of focus for you. How do you look to determine what And how does it vary from startup to startup?

A I think one of the key things that you, we have to do and founders have to do is to figure out what do I have to prove to move to my next step, right? What are my risks that I have? And what do I have to show that I can do? And that's the only thing that matters. I think as a founder, you can always be busy, but the only thing that matters is the hardest thing. And a lot of many founders will tend not to do the hard things first. Right. They want to like, it's because you feel more comfortable doing the easy things first, but it's not like a test, not in startup life. You only make it if you answer the most difficult question, right? No matter how many other questions you got.

AI assessment note: “figure out what do I have to prove to move to my next step”

Q Speaking of that kind of operational rigor from day one, I know that's a big element of focus for you. I've always been told that it's not what you, it's not that you measure full stop, but it's what you measure that's important. I can see them with that kind of focus for you. How do you look to determine what And how does it vary from startup to startup?

A I think one of the key things that you, we have to do and founders have to do is to figure out what do I have to prove to move to my next step, right? What are my risks that I have? And what do I have to show that I can do? And that's the only thing that matters. I think as a founder, you can always be busy, but the only thing that matters is the hardest thing. And a lot of many founders will tend not to do the hard things first. Right. They want to like, it's because you feel more comfortable doing the easy things first, but it's not like a test, not in startup life. You only make it if you answer the most difficult question, right? No matter how many other questions you got. Right. So that's what we try to figure out. And it takes, it's not instant. It's not like, you know, we fund a company and we're like, okay, this is how we're going to get to the next step. Okay. What do we have to prove? We, maybe you have to prove that you can get one customer to In somewhat inefficient way. Maybe one is too low. 10 customers, let's say, right? And then we're like, okay, we're going to get there in 12 months. What should we be doing today to get back to that point? And can we track or predict that we're on the right path? That's what I try to do with them. We have some companies that are even trying to prove technology. So we don't even know if the IP works. And then the measure is comp…

AI assessment note: “figure out what do I have to prove to move to my next step”