The Exchanges

Q And then the biggest miss and have you avoided the FOMO?

A Yes. So the biggest miss was Uber and Travis Kalanick was actually in my office with Talking about his angel portfolio years ago, we both had a healthcare IT company. He was in Cario and I was in practice fusion. And I brought him in to talk about, you know, how we can help those two work together more constructively. And we went through Travis's angel portfolio and Travis said, you know, there's this company called Uber cab, and I think you should really take a look at it. I might be the CEO. And I said, you know, I hear you, but I've seen a couple of those already. And here's the issues and the regulatory problems and all that. And it's like, yeah, but you know, I'm really kind of thinking about this and I kind of blew it off. And then we hear we have Uber today, right? So that would by far be my biggest miss. And in terms of, you know, fear of missing out, we are a boutique firm. And so we get rewarded for what we do, not what we don't do. There are other firms with billion dollar plus portfolios, and those firms have to, they have a capital deployment problem where they just need to find places to park their capital. We don't have that. We just have to be highly selective. And so for me that I, I try to be very selective and we try to be smart about our investments, but we don't We know we don't have to be in every single deal.

AI assessment note: “So the biggest miss was Uber and Travis Kalanick was actually in my office”

Q So how do you be thesis driven, but still have the wider scope of not missing out on the anomalies?

A Well, that's where having ADD just helps you immensely, because if you're, if you have a little ADD, you can't help yourself. But look at all these other things. And so while I say I'm thesis driven, I'm not, if I'm looking at, if I'm diving into life science or healthcare services or whatever, I'm always looking at some different opportunities, right? And those are often the most interesting. And so my, one of my latest investments was in the autonomous driving space. It's a full autonomous driving sort of system, including the new, a new LIDAR system and the software and everything that bundles with that. And that hasn't been announced yet. But, you know, probably will be soon. So that was not in our thesis area, right? We were looking at AI, and we were looking at, you know, different applications, and I had a call from a friend that I really respected saying, can you help this entrepreneur, and here's what he's dealing with, and I said, absolutely, have him come in. I'll, I'll talk to him, right? I started helping him, and I was just so blown away by that, by him as a person, and then what I learned, because again, is you're kind of pulling the You're learning more and more. And as you're helping that entrepreneur and you're getting resources to him to help him figure out what he needs to do, you're, you're just hearing this validation, right? That this is really the next g…

AI assessment note: “while we are thesis driven, we are always, always, you know, keeping our eye open”

Q And then the biggest miss and have you avoided the FOMO?

A Yes. So the biggest miss was Uber and Travis Kalanick was actually in my office with Talking about his angel portfolio years ago, we both had a healthcare IT company. He was in Cario and I was in practice fusion. And I brought him in to talk about, you know, how we can help those two work together more constructively. And we went through Travis's angel portfolio and Travis said, you know, there's this company called Uber cab, and I think you should really take a look at it. I might be the CEO. And I said, you know, I hear you, but I've seen a couple of those already. And here's the issues and the regulatory problems and all that. And it's like, yeah, but you know, I'm really kind of thinking about this and I kind of blew it off. And then we hear we have Uber today, right? So that would by far be my biggest miss. And in terms of, you know, fear of missing out, we are a boutique firm. And so we get rewarded for what we do, not what we don't do. There are other firms with billion dollar plus portfolios, and those firms have to, they have a capital deployment problem where they just need to find places to park their capital. We don't have that. We just have to be highly selective. And so for me that I, I try to be very selective and we try to be smart about our investments, but we don't We know we don't have to be in every single deal.

AI assessment note: “So the biggest miss was Uber and Travis Kalanick was actually in my office”

Q So how do you be thesis driven, but still have the wider scope of not missing out on the anomalies?

A Well, that's where having ADD just helps you immensely, because if you're, if you have a little ADD, you can't help yourself. But look at all these other things. And so while I say I'm thesis driven, I'm not, if I'm looking at, if I'm diving into life science or healthcare services or whatever, I'm always looking at some different opportunities, right? And those are often the most interesting. And so my, one of my latest investments was in the autonomous driving space. It's a full autonomous driving sort of system, including the new, a new LIDAR system and the software and everything that bundles with that. And that hasn't been announced yet. But, you know, probably will be soon. So that was not in our thesis area, right? We were looking at AI, and we were looking at, you know, different applications, and I had a call from a friend that I really respected saying, can you help this entrepreneur, and here's what he's dealing with, and I said, absolutely, have him come in. I'll, I'll talk to him, right? I started helping him, and I was just so blown away by that, by him as a person, and then what I learned, because again, is you're kind of pulling the You're learning more and more. And as you're helping that entrepreneur and you're getting resources to him to help him figure out what he needs to do, you're, you're just hearing this validation, right? That this is really the next g…

AI assessment note: “I think you have to have sort of, I would say it's steerage.”

Q In terms of, you said about adding people there, is there ever the case of losing people? What's your take on management churn as you progress through the stages? Do you think everyone's meant for the kind of multitude of the journey, or are some people Series A players, and then not ready for Series C?

A Yeah, some people can scale, and some people can't, and the hard thing about this is that it's seen as a negative sometimes if people can't scale, and I look at this, and I just think, wow, you know, there are people that are really good At starting companies and getting them off the ground. And oftentimes the reason that they're really good at that and the reason they chose that was because they tried to be in a big company and they hated it and they were miserable and it was nothing they ever wanted to do. Right. And so somehow later in their life, they feel like now not being able to be at like that big company and not liking it is some kind of negative issue. And I look at them, I just, I think it's sad to some extent because you know, there are people that are really good at getting things off the ground. There are people that are really good at Scaling the company. And, and, and those often are two different things. And sometimes it can, you can do both. And sometimes people are very good at doing both, but you know, the truth of it is often people aren't very happy at doing both. You know, people are kind of in their elements, right? When they're very early and, and just sort of figuring all the problems and getting everything together and you just see people thrive and then you see them and I see them later and I kind of see them being okay, but you want to get that old…

AI assessment note: “some people can scale, and some people can't”

Q How do you know, how do you know the, how do you know the balance between involved and benefiting the company and too involved and potentially detrimental?

A I always talk to the CEO. I mean, and you have to have a very trusting and direct relationship. And so I, I really, I will ask permission before I really jump in and I'll ask, I mean, how much do you want me involved? I mean, it is a feel thing, right? As soon as I feel like it's, it's, Too much. I always, I go immediately to hiring somebody. So now that I've been doing this for about 10 years, it's pretty easy. Now, as soon as I feel like I know what the person needs to look like to take that job, whether it's, you know, a product person or a marketing person, or as soon as I feel like I have a good sense in my head, I just say, hey, you know what, let's start a recruiting process. I have some people in mind. I'll help you with us. And so I go very quickly into let's hire somebody. And that my job really is just to figure out the needs assessment and then hire that person for them. And, you know, when I've Had companies that have had, had challenges, which are probably all of them at some point in their life, and then really ended up on the other side of that, which is most, which is phenomenal, right? It's all, when you look at what changed, it was the people. It was that we added like a couple of people in different areas that just helped the company take off. And I, you can, I can see that almost every company across the board. And when that didn't happen, it's because ther…

AI assessment note: “I'll ask, I mean, how much do you want me involved?”

Q How do you know, how do you know the, how do you know the balance between involved and benefiting the company and too involved and potentially detrimental?

A I always talk to the CEO. I mean, and you have to have a very trusting and direct relationship. And so I, I really, I will ask permission before I really jump in and I'll ask, I mean, how much do you want me involved? I mean, it is a feel thing, right? As soon as I feel like it's, it's, Too much. I always, I go immediately to hiring somebody. So now that I've been doing this for about 10 years, it's pretty easy. Now, as soon as I feel like I know what the person needs to look like to take that job, whether it's, you know, a product person or a marketing person, or as soon as I feel like I have a good sense in my head, I just say, hey, you know what, let's start a recruiting process. I have some people in mind. I'll help you with us. And so I go very quickly into let's hire somebody. And that my job really is just to figure out the needs assessment and then hire that person for them. And, you know, when I've Had companies that have had, had challenges, which are probably all of them at some point in their life, and then really ended up on the other side of that, which is most, which is phenomenal, right? It's all, when you look at what changed, it was the people. It was that we added like a couple of people in different areas that just helped the company take off. And I, you can, I can see that almost every company across the board. And when that didn't happen, it's because ther…

AI assessment note: “I will ask permission before I really jump in and I'll ask”

Q With this comment, do you think it's fair?

A You know, I don't think it's wrong. I just don't think it's complete. Yes, you find better ways to model risk, but, you know, other people do that very quickly, and actually Climate Corp didn't sell the Monsanto to be an insurance play, right? It was actually a very different thing that they were acquired for, and so, you know, and so you do want to look for the better underwriting mousetrap. I have rarely seen that, to be honest, because most of the data, I mean, people always claim it, but I've rarely actually seen Seeing that better underwriting. I think SoFi is probably one of the better examples, but they've essentially said, we're going to go after people, you know, from top tier schools and great degrees, and that's a pretty, that's a pretty, you know, fair assessment of, you know, credit risk, right? And they're right. The distribution, I think, is probably more important. It's all about acquisition at the end of the day, and acquisition is incredibly important, and we've seen real innovation in fintech. You know, Lending Club figured out a few different channels, but they ended up Direct mail. And direct mail worked again for them, and it's worked for financial services for a long time. When you look at Credit Karma, they're doing, you know, TV and videos and things like that, and Nerd Wallet is content. And they just get really, really, really good at their distributi…

AI assessment note: “I don't think it's wrong. I just don't think it's complete.”

Q With this comment, do you think it's fair?

A You know, I don't think it's wrong. I just don't think it's complete. Yes, you find better ways to model risk, but, you know, other people do that very quickly, and actually Climate Corp didn't sell the Monsanto to be an insurance play, right? It was actually a very different thing that they were acquired for, and so, you know, and so you do want to look for the better underwriting mousetrap. I have rarely seen that, to be honest, because most of the data, I mean, people always claim it, but I've rarely actually seen Seeing that better underwriting. I think SoFi is probably one of the better examples, but they've essentially said, we're going to go after people, you know, from top tier schools and great degrees, and that's a pretty, that's a pretty, you know, fair assessment of, you know, credit risk, right? And they're right. The distribution, I think, is probably more important. It's all about acquisition at the end of the day, and acquisition is incredibly important, and we've seen real innovation in fintech. You know, Lending Club figured out a few different channels, but they ended up Direct mail. And direct mail worked again for them, and it's worked for financial services for a long time. When you look at Credit Karma, they're doing, you know, TV and videos and things like that, and Nerd Wallet is content. And they just get really, really, really good at their distributi…

AI assessment note: “I don't think it's wrong. I just don't think it's complete.”

Q In terms of, you said about adding people there, is there ever the case of losing people? What's your take on management churn as you progress through the stages? Do you think everyone's meant for the kind of multitude of the journey, or are some people Series A players, and then not ready for Series C?

A Yeah, some people can scale, and some people can't, and the hard thing about this is that it's seen as a negative sometimes if people can't scale, and I look at this, and I just think, wow, you know, there are people that are really good At starting companies and getting them off the ground. And oftentimes the reason that they're really good at that and the reason they chose that was because they tried to be in a big company and they hated it and they were miserable and it was nothing they ever wanted to do. Right. And so somehow later in their life, they feel like now not being able to be at like that big company and not liking it is some kind of negative issue. And I look at them, I just, I think it's sad to some extent because you know, there are people that are really good at getting things off the ground. There are people that are really good at Scaling the company. And, and, and those often are two different things. And sometimes it can, you can do both. And sometimes people are very good at doing both, but you know, the truth of it is often people aren't very happy at doing both. You know, people are kind of in their elements, right? When they're very early and, and just sort of figuring all the problems and getting everything together and you just see people thrive and then you see them and I see them later and I kind of see them being okay, but you want to get that old…

AI assessment note: “Yeah, some people can scale, and some people can't”

Q And then penultimate question, how do you assess market creation?

A Market creation is really interesting. I think some of the biggest misses I have seen us make or other people make are when we thought, well, I can't see a company buy this company, right? Because it really was a market that Didn't exist yet. And what we've learned is when we, when we say that we stop each other and when you say, no, no, no, that is not the answer, right? Because one time when Apple didn't buy anybody or Microsoft didn't pay anything if they did buy somebody. And so those things change over time. And so what you really have to do is in venture. What you're paid to do is look at the future, really think about what the trends are and what is changing because the biggest opportunities are ones nobody could have predicted. And so what I like to do is listen very intently to the entrepreneur and see if they have really interesting insights that are surprising and that perhaps I disagreed with in the past. So usually when I make an investment, it's when I had sort of one thought in my head and the entrepreneur changed my mind by their own belief system and what they've proven out. And so I think when you assess markets, you really have to be open-minded because the biggest Biggest opportunities are opportunities that weren't obvious at the onset and where new markets are created. They're also the hardest to predict, but they're definitely why we're in this business.

AI assessment note: “listen very intently to the entrepreneur and see if they have really interesting insights”

Q And then penultimate question, how do you assess market creation?

A Market creation is really interesting. I think some of the biggest misses I have seen us make or other people make are when we thought, well, I can't see a company buy this company, right? Because it really was a market that Didn't exist yet. And what we've learned is when we, when we say that we stop each other and when you say, no, no, no, that is not the answer, right? Because one time when Apple didn't buy anybody or Microsoft didn't pay anything if they did buy somebody. And so those things change over time. And so what you really have to do is in venture. What you're paid to do is look at the future, really think about what the trends are and what is changing because the biggest opportunities are ones nobody could have predicted. And so what I like to do is listen very intently to the entrepreneur and see if they have really interesting insights that are surprising and that perhaps I disagreed with in the past. So usually when I make an investment, it's when I had sort of one thought in my head and the entrepreneur changed my mind by their own belief system and what they've proven out. And so I think when you assess markets, you really have to be open-minded because the biggest Biggest opportunities are opportunities that weren't obvious at the onset and where new markets are created. They're also the hardest to predict, but they're definitely why we're in this business.

AI assessment note: “listen very intently to the entrepreneur and see if they have really interesting insights”