The Exchanges

Q Now, can you give us a little walkthrough of your career so far and how you ended up at the amazing Betaworks? Sure.

A So I started out as a computer programmer. Um, I studied cognitive science and, and computer science in college, but I was, I had programmed since I was probably about 13. And built a bunch of products. Um, I, my, I started out totally outside of the startup and investment world at a company called Schrammel Crow, which is a real estate Um, and then worked there for about five years. Knew that I wanted to do something in startups. I had built lots of stuff on the side, but never really started a business. Um, I went to business school and ended up working at a company called Hot Potato, which was a consumer social network, which, uh, ended up getting acquired by Facebook.

AI assessment note: “So I started out as a computer programmer. Um, I studied cognitive science”

Q Okay. And, and what, why do you like the seed investing side of the, the venture industry? I mean, why do you think this is the area of most opportunity?

A So I think, I think there's two ways to look at it. One is why seed investing and not starting a company. And the other is why seed investing and not later stage investing. So for me, I came from the operating side. So I was working on building things all the time. I love the act of that very first, um, Early part of starting a product, before it's even a company. I, I really enjoy that part of the process, and Betaworks on the seed investing side really focuses on, on that, both on our, on our seed investing side and on our company creation side, on those very early days of the company, shaping the product and building the community around it, and figuring out, um, kind of Should be of the product of the social network. And that's the area that I really, that I, that I enjoy. The advantage to me, uh, working on the venture capital side versus building at the moment is that I get to work on lots of different things. So I get to work on a company, one company one day and another, another day and help them out. And, and that's really enjoyable for me.

AI assessment note: “I love the act of that very first, um, Early part of starting a product”

Q And then moving to the second part of Ryan's question, when trying new products, both as an investor and as a user, what gets you excited? Is it the design? Is it the ability back end? What is it for you?

A So I think I, I have a specific thought here and I, it's, it's designed, but maybe not in the way that a lot of people think about the design. So I think when I first heard, okay, this What I, what really gets me when I products both on the investment side and just as a user are, are, are experiences that are designed or apps or whatever they are that are designed that feel so native and surprise you at how you didn't even realize you wanted that feature. So I will, um, I think of a couple of examples. I think that I, we were just talking about, about the video streaming apps when Periscope And they had the feature with the hearts. It's this really subtle thing, but I've done a bunch of, I've done a little bit of video broadcasting. I shouldn't say a bunch. And one of the things that's really frustrating is when you, like I said, when you ask a question, you don't get the immediate feedback. Even if someone's typing in a response, you don't know that they're typing. And so you just sit there and you might be sitting there waiting for nothing, or you might be sitting there waiting for a question because someone's typing it. And I thought that the, that subtle response Notion that when you touch the screen, it's going to immediately give the broadcaster feedback is, I think, an example of the types of things that we look for. What's native about the thing you're doing? In that ca…

AI assessment note: “it's design, but maybe not in the way that a lot of people think”

Q Okay. And, and what, why do you like the seed investing side of the, the venture industry? I mean, why do you think this is the area of most opportunity?

A So I think, I think there's two ways to look at it. One is why seed investing and not starting a company. And the other is why seed investing and not later stage investing. So for me, I came from the operating side. So I was working on building things all the time. I love the act of that very first, um, Early part of starting a product, before it's even a company. I, I really enjoy that part of the process, and Betaworks on the seed investing side really focuses on, on that, both on our, on our seed investing side and on our company creation side, on those very early days of the company, shaping the product and building the community around it, and figuring out, um, kind of Should be of the product of the social network. And that's the area that I really, that I, that I enjoy. The advantage to me, uh, working on the venture capital side versus building at the moment is that I get to work on lots of different things. So I get to work on a company, one company one day and another, another day and help them out. And, and that's really enjoyable for me.

AI assessment note: “I love the act of that very first, um, Early part of starting a product”

Q talking of Ryan Hoover, we've mentioned him a few times. Ryan actually submitted a question for you today. The question that he submitted is what product or app has impressed you the most in the past year? And what really gets you excited when trying new products, both as an investor and as a user? So let's break that down. What has impressed you the most in the past year?

A So obviously I'm, I'm impressed with lots of the companies that we've invested in. I'll give you an example of a company that we didn't invest in that I think had, it was really impressive, which is Meerkat. I thought that that was sort of in retrospect now, one of the best product launches I've seen in a while. Uh, I think the product itself was, um, Was well done. And so tightly, it was more integrated, tightly integrated Twitter turned out than even Periscope was, which Twitter had acquired. And, and so I thought that that, that product launch was just It was, I don't know if it was, I think it was a combination of the right time, a really good product. I also think Periscope was, has had elements when I saw that, um, of, of really good products.

AI assessment note: “a company that we didn't invest in that I think had, it was really impressive, which is Meerkat.”

Q And I'd love to delve into a quick fire round now. So deal sourcing, what tools do you use?

A You know, I use, I, I, I would like to say human. Um, beta works is, is a special place partly because I mentioned earlier, we have a hundred people here. We have now over a hundred portfolio companies also. They all have friends of friends. A lot of the ways that we get, uh, new deals is through, through our network. People who come in and do it, say my friends working on something interesting and they come in and demo it. We say, wow, that's awesome. We'd love to, you know, and then we get to know them and ultimately invest. Um, so, so that's a lot of the ways that, that we end up. I don't, you know, in an industry with a lot of technology, there's not a lot of technology. I use, I use product hunt as a way to find investment. We've made investments that were initiated on product hunt.

AI assessment note: “I use product hunt as a way to find investment.”

Q Now, can you give us a little walkthrough of your career so far and how you ended up at the amazing Betaworks? Sure.

A So I started out as a computer programmer. Um, I studied cognitive science and, and computer science in college, but I was, I had programmed since I was probably about 13. And built a bunch of products. Um, I, my, I started out totally outside of the startup and investment world at a company called Schrammel Crow, which is a real estate Um, and then worked there for about five years. Knew that I wanted to do something in startups. I had built lots of stuff on the side, but never really started a business. Um, I went to business school and ended up working at a company called Hot Potato, which was a consumer social network, which, uh, ended up getting acquired by Facebook.

AI assessment note: “ended up working at a company called Hot Potato, which was a consumer social network”

Q And then what's your most recent investment, and why did you say yes?

A Um, so a few, so the most recent investment, I think that's public, is a company called Disruptive Multimedia. So, it's by a guy named, founder named Ryan Leslie, who started out, his, his, he's a rapper, actually, and he had, he had built a product that, uh, If you go to his Twitter accounts, he posts his phone number publicly, and so he built almost like a personal mobile CRM for his fans, where he can communicate with them, they can buy his album through it, but he can also understand where his fans are, and, and have a one-to-one, we were talking before about one-to-many, but feeling like one-to-one communication like Snapchat, this is that same network structure, but, but through text message. So you can actually text with him, and he'll, he'll see it and respond. He's, and he's, uh, He's got, you know, I don't know how many, how many, he's got half a million Twitter followers. I'm not sure if he has that many people who he texts in his contacts, but he's, he'll message people who are in New York and say, hey, I'm going to come to New York and doing this event, and, and you should come by.

AI assessment note: “most recent investment, I think that's public, is a company called Disruptive Multimedia.”

Q And does investing in Gimlet not break the kind of traditional VC rule that it has to be a billion dollar exit? I mean, do you think a podcasting network could be a billion dollar company?

A Um, and so, I mean, I, I don't, I, I, two things. One is I think that Gimlet could, has the potential to be enormous. The, you know, we talked a bit about people listening and the supply and demand of, of content. On the other side, you also have the advertising network. Looks a lot different than when a company like Facebook or Tumblr was launching when brands didn't know how to, how to pay them, right? You didn't know what, what should the ad unit be? What's the native ad unit? In, in the case of podcasting, there are, there's already an established ecosystem of how to do audio ads. And so I think there's actually, in that sense, it's much further along and in many ways can be monetized in a very straightforward way. I think there's, so that's one, just in terms of monetization, that's one Um, bucket. And the other bucket is all of the ways that you can interact with people because it's audio. And you can see, I think, Serial said donate if you want. A lot of, a lot of the, ah, the public broadcasts ask for donations. Because they're sitting in your ears again, and you don't, you can multitask. I think actually those end up being pretty useful and having high conversion rates. So I think there's a lot to be done on the business side, but there's also this existing business model. I think the confluence of those things ends up being, ends up meaning that a really big, great qu…

AI assessment note: “Gimlet could, has the potential to be enormous.”

Q And then moving to the second part of Ryan's question, when trying new products, both as an investor and as a user, what gets you excited? Is it the design? Is it the ability back end? What is it for you?

A So I think I, I have a specific thought here and I, it's, it's designed, but maybe not in the way that a lot of people think about the design. So I think when I first heard, okay, this What I, what really gets me when I products both on the investment side and just as a user are, are, are experiences that are designed or apps or whatever they are that are designed that feel so native and surprise you at how you didn't even realize you wanted that feature. So I will, um, I think of a couple of examples. I think that I, we were just talking about, about the video streaming apps when Periscope And they had the feature with the hearts. It's this really subtle thing, but I've done a bunch of, I've done a little bit of video broadcasting. I shouldn't say a bunch. And one of the things that's really frustrating is when you, like I said, when you ask a question, you don't get the immediate feedback. Even if someone's typing in a response, you don't know that they're typing. And so you just sit there and you might be sitting there waiting for nothing, or you might be sitting there waiting for a question because someone's typing it. And I thought that the, that subtle response Notion that when you touch the screen, it's going to immediately give the broadcaster feedback is, I think, an example of the types of things that we look for. What's native about the thing you're doing? In that ca…

AI assessment note: “it's designed, but maybe not in the way that a lot of people think”

Q talking of Ryan Hoover, we've mentioned him a few times. Ryan actually submitted a question for you today. The question that he submitted is what product or app has impressed you the most in the past year? And what really gets you excited when trying new products, both as an investor and as a user? So let's break that down. What has impressed you the most in the past year?

A So obviously I'm, I'm impressed with lots of the companies that we've invested in. I'll give you an example of a company that we didn't invest in that I think had, it was really impressive, which is Meerkat. I thought that that was sort of in retrospect now, one of the best product launches I've seen in a while. Uh, I think the product itself was, um, Was well done. And so tightly, it was more integrated, tightly integrated Twitter turned out than even Periscope was, which Twitter had acquired. And, and so I thought that that, that product launch was just It was, I don't know if it was, I think it was a combination of the right time, a really good product. I also think Periscope was, has had elements when I saw that, um, of, of really good products.

AI assessment note: “really impressive, which is Meerkat. I thought that that was sort of in retrospect”

Q And talking of habit forming and, and communities, you're also very interested in community building. So what do you think makes a strong community, and what can you do to foster the growth of a strong community?

A Well, so we were talking before about network, and I think that's, What does the thing look like? Where are the arrows pointing? Community to me is the layer on top of that. It's the thing that gives that network life. And so what we look for is engagement is on the data side. It's network density. Um, I remember when we first started talking to Ryan from product time, one of the things that we had done was this network analysis with our data. I had sat down with our data scientists and started mapping out the networks of, uh, this, uh, on Twitter. Because it's so public, of all the products that we were launching. And we kept, and what it does is it puts these, if you picture kind of this network graph, it has the bubbles are different sizes of the people, how densely they're connected with other people on that network. And there was this, not the biggest bubble, but this medium-sized bubble was at RR Hoover, which is Ryan's Twitter account, and I know it at the time. And it kept coming back up, and we're like, well, maybe this is somebody who's a big fan of Betaworks. And then it turns out We started doing the network maps on other companies, and he was showing up there too. And what that revealed sort of in the data was what was true, which is that he was being, he was engaging with other people, not even about the product, product hunt as a product. He was engaging people o…

AI assessment note: “what we look for is engagement is on the data side. It's network density.”

Q And do you think reducing the friction, then, Ensures user retention by making it more of a habit-forming activity, or what do you think, uh, these social networks can do to foster a habit-forming activity in their networks?

A You know, I think, I think that reducing friction makes it easier to do something. I don't know that that's always habit-forming. Um, there's, um, near y'all, and I think Ryan Hoover was involved with the, with the book, Hooked, and that Nice, um, way to think about habit forming activities. That is one of the key things that we look for in our investments is we were very introspective with our early companies that were, that were working with that haven't launched yet. The only thing we have is kind of, um, our view of how we're using the product and how it fits into people's Recurring activity, Weekly recurring activity versus a twice a year activity impacts whether you can really build an engaged community around that product.

AI assessment note: “reducing friction makes it easier to do something. I don't know that that's always habit-forming.”

Q Do you think there's the potential for Facebook to acquire Meerkat and have a rival streaming service?

A You know, I hadn't thought about it. I mean, I think, I think there's a world where that makes sense. If I were Facebook... I don't have a sense of how hard some of, some of these things are. So, so you have Periscope, Meerkat. We had, we had, uh, invested a while ago into a company which then, um, pivoted and merged and, and emerged as a company called Up Close, which is a, another, another, it's, it's, again, a different, slightly different take, um, on, on video broadcasting. It strikes me that there are Subtle differences in each of these that make them really interesting. So for example, Meerkat is not so good at very real time feedback. So it reads, it doesn't always broadcast in real time. I think Periscope is much better. I know that up close is much better at real time. And so what that means is having comments. If you ask a question and it's going to be 30 seconds before the person even hears the question, that that interaction isn't going to work so well. Um, but it's probably really good for a bunch of other use cases. And so I think for somebody like Facebook, my Strong use cases emerge. They have this massive distribution. If it made sense to, to build something like that, or to acquire something like that, I, I could, it's certainly in that social media space. I could see them caring a lot about real time video if, if consumers end up caring about it.

AI assessment note: “I think there's a world where that makes sense.”

Q Do you think there's the potential for Facebook to acquire Meerkat and have a rival streaming service?

A You know, I hadn't thought about it. I mean, I think, I think there's a world where that makes sense. If I were Facebook... I don't have a sense of how hard some of, some of these things are. So, so you have Periscope, Meerkat. We had, we had, uh, invested a while ago into a company which then, um, pivoted and merged and, and emerged as a company called Up Close, which is a, another, another, it's, it's, again, a different, slightly different take, um, on, on video broadcasting. It strikes me that there are Subtle differences in each of these that make them really interesting. So for example, Meerkat is not so good at very real time feedback. So it reads, it doesn't always broadcast in real time. I think Periscope is much better. I know that up close is much better at real time. And so what that means is having comments. If you ask a question and it's going to be 30 seconds before the person even hears the question, that that interaction isn't going to work so well. Um, but it's probably really good for a bunch of other use cases. And so I think for somebody like Facebook, my Strong use cases emerge. They have this massive distribution. If it made sense to, to build something like that, or to acquire something like that, I, I could, it's certainly in that social media space. I could see them caring a lot about real time video if, if consumers end up caring about it.

AI assessment note: “I think there's a world where that makes sense.”

Q And do you think reducing the friction, then, Ensures user retention by making it more of a habit-forming activity, or what do you think, uh, these social networks can do to foster a habit-forming activity in their networks?

A You know, I think, I think that reducing friction makes it easier to do something. I don't know that that's always habit-forming. Um, there's, um, near y'all, and I think Ryan Hoover was involved with the, with the book, Hooked, and that Nice, um, way to think about habit forming activities. That is one of the key things that we look for in our investments is we were very introspective with our early companies that were, that were working with that haven't launched yet. The only thing we have is kind of, um, our view of how we're using the product and how it fits into people's Recurring activity, Weekly recurring activity versus a twice a year activity impacts whether you can really build an engaged community around that product.

AI assessment note: “reducing friction makes it easier to do something. I don't know that that's always habit-forming.”

Q And talking of habit forming and, and communities, you're also very interested in community building. So what do you think makes a strong community, and what can you do to foster the growth of a strong community?

A Well, so we were talking before about network, and I think that's, What does the thing look like? Where are the arrows pointing? Community to me is the layer on top of that. It's the thing that gives that network life. And so what we look for is engagement is on the data side. It's network density. Um, I remember when we first started talking to Ryan from product time, one of the things that we had done was this network analysis with our data. I had sat down with our data scientists and started mapping out the networks of, uh, this, uh, on Twitter. Because it's so public, of all the products that we were launching. And we kept, and what it does is it puts these, if you picture kind of this network graph, it has the bubbles are different sizes of the people, how densely they're connected with other people on that network. And there was this, not the biggest bubble, but this medium-sized bubble was at RR Hoover, which is Ryan's Twitter account, and I know it at the time. And it kept coming back up, and we're like, well, maybe this is somebody who's a big fan of Betaworks. And then it turns out We started doing the network maps on other companies, and he was showing up there too. And what that revealed sort of in the data was what was true, which is that he was being, he was engaging with other people, not even about the product, product hunt as a product. He was engaging people o…

AI assessment note: “he was engaging people on all social networks. So it was really building a community”