The Exchanges

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

A The most recent investment is a company called Tally. Uh, so what Tally is, is a way to, uh, manage your credit cards, uh, so you don't have to worry about it, worry about it. Um, what you do is, uh, rather than trying to remember the five, uh, payment due dates for your credit cards, you pay Tally once, and then Tally turns around and pays off your credit cards. In doing that, they make sure, one, you never incur late fees, and two, they pay off the highest APR balances first to ultimately save you money. On top of that, what they'll do is they'll offer you the tally credit line. For a variety of different reasons, credit cards charge APRs that are artificially high relative to the underlying cost of that credit for each individual. Tally is able to avoid that and offer ultimately a far better rate Uh, which again, saves money for, for their customers. The reason why, or the reasons why we made the investment really kind of boils down to three things. You know, one, the market is, is massive. There's over seven hundred billion dollars of credit outstanding out there. Um, it doesn't take a lot of customers for Tally actually to become a really big business. You know, two, uh, the consumer lending space can be a really competitive space, particularly from a customer acquisition perspective. But we felt like Tally had this really unique angle and this unique insertion point for h…

AI assessment note: “The most recent investment is a company called Tally.”

Q And we, we have Albert Wenger from USV on the show actually discussing installation and deployment phases. Uh, so would you say you very much agree with him in prefer, preferring to invest in the deployment phase over the installation phase on emerging platforms like AR and VR?

A I think ultimately that's where the really big wins will come in the longterm. Absolutely. Yeah. I think of it a little bit akin to, uh, GPS, uh, You know, going back 10 years. When GPS was first emerging as a technology, people were focused on, you know, building that enabling technology, and there were interesting companies who, who tackled that, um, you know, with these sole purpose devices like Garmin and others. But what really unlocked the value is when that technology was embedded in these mobile phones, that got out to everyone in the world. And that, that's what allowed companies like Uber. That's what allowed companies like Yelp. And if you think about the type of value that they brought to the world, Uh, it was those applications that were really special.

AI assessment note: “I think ultimately that's where the really big wins will come in the longterm. Absolutely.”

Q Fair enough. What value do you think is the key in bots then? If you were to say, what's the use case for bots, what would you respond to?

A The one use case that I find more compelling, at least in the near term, is around these applications that are really native to the communication experience, right? It's not booking a taxi or booking an Uber that I think is native to that experience, but it's things that happen between two individuals or a group of individuals when they're communicating. Things like Giphy, where I want to convey an emotion, I want to convey a feeling. Oftentimes, A GIF is going to be more effective means of doing that than me trying to articulate it myself. Applications like that. Payments is another one where, you know, again, in the context of a conversation between two individuals, I want to send money to you. Um, it would make sense that I should be able to do it in that setting. Um, but these single player experiences, it's just harder again for me to, to believe that, um, at least today, these messaging platforms are good, uh, context for, For trying to tackle those challenges.

AI assessment note: “The one use case that I find more compelling, at least in the near term”

Q What's your favorite blog or newsletter? What's the must reads when they come in?

A So I'm going to cheat and name two. Industry side, in the technology world, my favorite email to open is Nuzzle. I find that when I go to Twitter, it's just really hard for me to, you know, find the signal from the noise, and what Nuzzle does is basically it filters all the news through the contacts of my friends that I follow on Twitter or through my friends on Facebook, and as a result of that, I find That it's the place that I find the most interesting content, uh, related to the technology world. Um, outside of the technology world, I'm a huge fan of FiveThirtyEightBlog. Um, I have varied interests. I love sports. I have a deep interest around politics, and FiveThirtyEightBlog was, you know, started by Nate Silver, who, uh, became famous predicting the last two presidential elections, and, uh, they write about these topics, but they write about it from a perspective of using data, uh, to draw conclusions and to predict the future, uh, Uh, which I find really fascinating.

AI assessment note: “my favorite email to open is Nuzzle”

Q And we, we have Albert Wenger from USV on the show actually discussing installation and deployment phases. Uh, so would you say you very much agree with him in prefer, preferring to invest in the deployment phase over the installation phase on emerging platforms like AR and VR?

A I think ultimately that's where the really big wins will come in the longterm. Absolutely. Yeah. I think of it a little bit akin to, uh, GPS, uh, You know, going back 10 years. When GPS was first emerging as a technology, people were focused on, you know, building that enabling technology, and there were interesting companies who, who tackled that, um, you know, with these sole purpose devices like Garmin and others. But what really unlocked the value is when that technology was embedded in these mobile phones, that got out to everyone in the world. And that, that's what allowed companies like Uber. That's what allowed companies like Yelp. And if you think about the type of value that they brought to the world, Uh, it was those applications that were really special.

AI assessment note: “I think ultimately that's where the really big wins will come in the longterm. Absolutely.”

Q Fair enough. What value do you think is the key in bots then? If you were to say, what's the use case for bots, what would you respond to?

A The one use case that I find more compelling, at least in the near term, is around these applications that are really native to the communication experience, right? It's not booking a taxi or booking an Uber that I think is native to that experience, but it's things that happen between two individuals or a group of individuals when they're communicating. Things like Giphy, where I want to convey an emotion, I want to convey a feeling. Oftentimes, A GIF is going to be more effective means of doing that than me trying to articulate it myself. Applications like that. Payments is another one where, you know, again, in the context of a conversation between two individuals, I want to send money to you. Um, it would make sense that I should be able to do it in that setting. Um, but these single player experiences, it's just harder again for me to, to believe that, um, at least today, these messaging platforms are good, uh, context for, For trying to tackle those challenges.

AI assessment note: “The one use case that I find more compelling, at least in the near term”

Q And I'm, I want to finish today on two subjects and one of them I'm bursting with passion for and another you're very passionate about too. So, so let's start with one I'm passionate about first. Uh, I being the interviewer, sorry, I have the power to start with mine. Uh, so let's go with the rise of bots. Um, again, hype or not and why?

A Yeah, it's interesting. I think this one is probably more hype than reality, at least at this stage. It makes a ton of sense why the big messaging platforms, Facebook, Kik, and others would want to, you know, turn their ecosystem into a development platform, right? I totally get why they would do it. It creates a stickiness. It creates defensibility for them when you've got application developers building on top of that platform. But I feel like at this stage, it's, it's more about the platforms trying to create value for themselves than actually think about the value they're creating for their end users, right? Um, if you think about many of the applications that have been, you know, built today, um, offered, oftentimes it's actually a more cumbersome experience to try to do that in the context of a messaging application rather than going directly to, you know, the app itself. I, I believe, uh, that really well-designed smart software, uh, can be a magical experience. And I find it hard to believe for, at least for utilitarian users, Uh, applications that messaging is going to be able to catch up quickly in that regard. Now, there's a different class of applications. Applications that are, you know, native to the communication experience that perhaps are more, um, you know, valuable, uh, early on, right? If you think about things like Giphy, right, that is something that's ver…

AI assessment note: “I think this one is probably more hype than reality, at least at this stage.”

Q I'm intrigued then, having seen both the, the really early great skyrocket days, and, and the not so brilliant days of Yahoo, what were your biggest takeaways from your time there?

A Yeah, there's a lot of takeaways, but I think two things. The first is, if you're just showing up to work, and your career is a nine-to-five activity, you're very unlikely to do something great. You're very unlikely to do something special. What I came to realize is that, you know, the people who take great ideas and make them a reality are people who care deeply and passionately about what they're, they're doing. And Yahoo, unfortunately, just had too many people who just showed up for work. They were smart people, they were experienced, um, but they didn't have the Passion. They didn't care. Uh, you know, in, in my world today, that's something that we, we look a lot for in founders. The second thing I took out of my Yahoo experience that I think a lot about now is the importance of focus. Yahoo is one of the early, you know, leaders in the portal space, tried to be all things to all people. That's an almost impossible task. You know, you want to be great for everyone. It often leads to just being adequate or average for, for everyone. Um, and so, you know, we, we invest in early stage companies. And I really, you know, push them to be almost overly, uh, focused in the early days, be narrowly focused on a, on a product, be narrowly focused on a customer profile. Um, ultimately, yes, you've got ambition to grow well beyond that. Um, but until you've got product market fit, unt…

AI assessment note: “there's a lot of takeaways, but I think two things.”

Q Yeah, it seemed like two years ago, Ben Evans did the, the PowerPoint on the phone being the sun, you know, central to our ecosystem, and now we're saying, when's it leaving?

A Yeah, you know, it's interesting in the venture world and the technology world, uh, the pendulum can swing fast and people tend to follow, um, oftentimes like Lemmings. In any event, I mean, there, there are, There are reasons, you know, legitimate reasons for why I think people are, you know, articulating this view, right? The mobile market clearly is more mature than what it was five years ago. It is really hard to get noticed when you're in the app store, right? And this idea that, you know, the big winners today will be big winners five years from now, you know, is, is a real challenge, right? That being said, you know, I think there are still lots of unmet needs and lots of challenges that consumers face, you know, that workers in the context of their professional lives face that, you Mobile as a platform and as a device is uniquely positioned to solve. I think all you have to do is look at the success of what Pokemon Go has had literally over the last week to realize, hey, there's still massive opportunities to deliver magical experiences to end users by leveraging these devices. You know, a couple other categories in mobile where I feel like there's still lots of value to be created. Um, you know, consumer health. How do I monitor my health? How do I get diagnosed with regards to certain illnesses? How do I treat those illnesses? I think those are all challenges today, a…

AI assessment note: “Mobile as a platform and as a device is uniquely positioned to solve.”

Q On the theme of platforms there and emerging platforms, we briefly touched on AR, VR. Do you agree with the hype cycle around AR, VR? Do you think it has the grounds for such hype?

A You know, long-term, absolutely. I'm very excited about long-term, the potential value to be created from these platforms. You know, if you think about the types of applications that can be created across education, across, um, healthcare, across, you know, the enterprise, there's just so many ways, uh, those platforms, those computing paradigms can create value. That is really exciting. The other thing we have to think about as early stage investors is timing. Uh, being early doesn't always pay, right? And when I think about where we are, And the development of this technology, I think we're still developing the underlying enabling technology. And so I think you can build interesting companies that are focused on building the enabling technology. But what I get most excited about is the applications built on top of that. And it'll probably be some time before those applications really emerge. There'll be some time before you get enough of an installed base to build, uh, you know, big enough business. There'll be some time before those enabling technologies mature and harden such that you can Um, you know, create these special, uh, experiences.

AI assessment note: “You know, long-term, absolutely.”

Q And I'm, I want to finish today on two subjects and one of them I'm bursting with passion for and another you're very passionate about too. So, so let's start with one I'm passionate about first. Uh, I being the interviewer, sorry, I have the power to start with mine. Uh, so let's go with the rise of bots. Um, again, hype or not and why?

A Yeah, it's interesting. I think this one is probably more hype than reality, at least at this stage. It makes a ton of sense why the big messaging platforms, Facebook, Kik, and others would want to, you know, turn their ecosystem into a development platform, right? I totally get why they would do it. It creates a stickiness. It creates defensibility for them when you've got application developers building on top of that platform. But I feel like at this stage, it's, it's more about the platforms trying to create value for themselves than actually think about the value they're creating for their end users, right? Um, if you think about many of the applications that have been, you know, built today, um, offered, oftentimes it's actually a more cumbersome experience to try to do that in the context of a messaging application rather than going directly to, you know, the app itself. I, I believe, uh, that really well-designed smart software, uh, can be a magical experience. And I find it hard to believe for, at least for utilitarian users, Uh, applications that messaging is going to be able to catch up quickly in that regard. Now, there's a different class of applications. Applications that are, you know, native to the communication experience that perhaps are more, um, you know, valuable, uh, early on, right? If you think about things like Giphy, right, that is something that's ver…

AI assessment note: “this one is probably more hype than reality, at least at this stage.”

Q we sound like two very exciting people, don't we? Uh, now we've had, we've had this in a sense the last five years or so with Siri. So what's not, why has it not been the success that it should be? Do you think, I mean, I think the series widely considered not a huge success. Uh, what do you think we're looking for in voice interfaces of the future?

A You know, a couple challenges that Siri's faced. You know, one, being tethered to the mobile device, you know, makes it, makes it more of a challenge for people to truly understand the value of that interaction paradigm, right? Oftentimes, if I've got my phone right there in front of me, you know, a couple taps into an application is going to be easier than trying to talk to Siri, particularly when the underlying technology, the intelligence algorithms behind Siri are still, you know, still maturing, right? Um, and so I think people have been largely underwhelmed by the experience that they've, they've offered today. What makes that different for me? It's all about context, right? So in the, in the car, I'm not going to be grabbing my phone, you know, tapping the phone because obviously it's very dangerous in the context of my home where I'm sitting at the dinner table. I'm not going to have my phone with me, but those are still places where, you know, there's value to be created by interacting with, you know, with computers. And so what's the type of interaction paradigm that That's well suited to those contexts. And I think voice is extremely well positioned to, to serve the needs when people are in those, uh, circumstances, right?

AI assessment note: “a couple challenges that Siri's faced. You know, one, being tethered to the mobile device”

Q I'm intrigued then, having seen both the, the really early great skyrocket days, and, and the not so brilliant days of Yahoo, what were your biggest takeaways from your time there?

A Yeah, there's a lot of takeaways, but I think two things. The first is, if you're just showing up to work, and your career is a nine-to-five activity, you're very unlikely to do something great. You're very unlikely to do something special. What I came to realize is that, you know, the people who take great ideas and make them a reality are people who care deeply and passionately about what they're, they're doing. And Yahoo, unfortunately, just had too many people who just showed up for work. They were smart people, they were experienced, um, but they didn't have the Passion. They didn't care. Uh, you know, in, in my world today, that's something that we, we look a lot for in founders. The second thing I took out of my Yahoo experience that I think a lot about now is the importance of focus. Yahoo is one of the early, you know, leaders in the portal space, tried to be all things to all people. That's an almost impossible task. You know, you want to be great for everyone. It often leads to just being adequate or average for, for everyone. Um, and so, you know, we, we invest in early stage companies. And I really, you know, push them to be almost overly, uh, focused in the early days, be narrowly focused on a, on a product, be narrowly focused on a customer profile. Um, ultimately, yes, you've got ambition to grow well beyond that. Um, but until you've got product market fit, unt…

AI assessment note: “there's a lot of takeaways, but I think two things.”

Q So I want to start with one that's so commonly discussed in VC, and it's whether it's the team or the product that comes first in decision making. Now I know you're very product orientated, so to what extent do you actually place product first?

A Yeah, I guess I'd start by saying I deeply care about product. In my view, it's not, it doesn't really matter how great you are in marketing, at sales, at BD. You know, being great in those areas obviously is important, but can't make up for deficiencies as it relates to, you know, the core product experience that you're offering to your customers and to your users, and so it's something that we really care about. At the same time, we're early stage investors. We're often investing, you know, before a company has product market fit, or when there's really only early signs of product market fit. As a result of that, it's ultimately the people that we're betting on that are going to take these ideas and make it a reality. I'd say there's a couple different things that we look for in the people. You know, the first is what I call this kind of crazy tenacity and unwillingness to lose, right? I think I've got the ultimate respect for entrepreneurs who take a white sheet of paper and try to build something great out of it. It's incredibly hard. And the one thing you can pretty reliably predict is that there's going to be challenges and failures along the way. Um, these are individuals who have likely succeeded their entire life. And so this idea of hitting failure after failure, um, I think is really challenging for most people. And so I think it takes a special kind of crazy to be w…

AI assessment note: “it's ultimately the people that we're betting on that are going to take these ideas”

Q On the theme of platforms there and emerging platforms, we briefly touched on AR, VR. Do you agree with the hype cycle around AR, VR? Do you think it has the grounds for such hype?

A You know, long-term, absolutely. I'm very excited about long-term, the potential value to be created from these platforms. You know, if you think about the types of applications that can be created across education, across, um, healthcare, across, you know, the enterprise, there's just so many ways, uh, those platforms, those computing paradigms can create value. That is really exciting. The other thing we have to think about as early stage investors is timing. Uh, being early doesn't always pay, right? And when I think about where we are, And the development of this technology, I think we're still developing the underlying enabling technology. And so I think you can build interesting companies that are focused on building the enabling technology. But what I get most excited about is the applications built on top of that. And it'll probably be some time before those applications really emerge. There'll be some time before you get enough of an installed base to build, uh, you know, big enough business. There'll be some time before those enabling technologies mature and harden such that you can Um, you know, create these special, uh, experiences.

AI assessment note: “You know, long-term, absolutely. I'm very excited about long-term, the potential value”

Q And then you hired Doug Pepper. What do you look for in a partner at Shasta?

A So with Doug, you know, we had known him for a long time. You know, we had great conviction that he was going to come in here. He was going to make great investments. He was going to deliver phenomenal financial returns to, to our limited partners, to our investors. And so obviously that's, that's critical, but even more important to, To us than that was that he would be a great cultural fit. The fact that we had known Doug for a really long time, each one of us as a, as a partner was really important to us. We knew that he would come in here and that there would be a, you know, a sense of mutual respect, a sense of mutual trust. Making sure you get that right is critical. Partnerships can be, you know, a tricky organization to run because it's not like there's one single person who's responsible for everything. Making sure that those relationships are positive and Is a really important way to make sure that the organization is successful.

AI assessment note: “even more important to, To us than that was that he would be a great cultural fit.”

Q Yeah, it seemed like two years ago, Ben Evans did the, the PowerPoint on the phone being the sun, you know, central to our ecosystem, and now we're saying, when's it leaving?

A Yeah, you know, it's interesting in the venture world and the technology world, uh, the pendulum can swing fast and people tend to follow, um, oftentimes like Lemmings. In any event, I mean, there, there are, There are reasons, you know, legitimate reasons for why I think people are, you know, articulating this view, right? The mobile market clearly is more mature than what it was five years ago. It is really hard to get noticed when you're in the app store, right? And this idea that, you know, the big winners today will be big winners five years from now, you know, is, is a real challenge, right? That being said, you know, I think there are still lots of unmet needs and lots of challenges that consumers face, you know, that workers in the context of their professional lives face that, you Mobile as a platform and as a device is uniquely positioned to solve. I think all you have to do is look at the success of what Pokemon Go has had literally over the last week to realize, hey, there's still massive opportunities to deliver magical experiences to end users by leveraging these devices. You know, a couple other categories in mobile where I feel like there's still lots of value to be created. Um, you know, consumer health. How do I monitor my health? How do I get diagnosed with regards to certain illnesses? How do I treat those illnesses? I think those are all challenges today, a…

AI assessment note: “there are still lots of unmet needs and lots of challenges that consumers face”

Q And then you hired Doug Pepper. What do you look for in a partner at Shasta?

A So with Doug, you know, we had known him for a long time. You know, we had great conviction that he was going to come in here. He was going to make great investments. He was going to deliver phenomenal financial returns to, to our limited partners, to our investors. And so obviously that's, that's critical, but even more important to, To us than that was that he would be a great cultural fit. The fact that we had known Doug for a really long time, each one of us as a, as a partner was really important to us. We knew that he would come in here and that there would be a, you know, a sense of mutual respect, a sense of mutual trust. Making sure you get that right is critical. Partnerships can be, you know, a tricky organization to run because it's not like there's one single person who's responsible for everything. Making sure that those relationships are positive and Is a really important way to make sure that the organization is successful.

AI assessment note: “even more important to us than that was that he would be a great cultural fit”

Q So I want to start with one that's so commonly discussed in VC, and it's whether it's the team or the product that comes first in decision making. Now I know you're very product orientated, so to what extent do you actually place product first?

A Yeah, I guess I'd start by saying I deeply care about product. In my view, it's not, it doesn't really matter how great you are in marketing, at sales, at BD. You know, being great in those areas obviously is important, but can't make up for deficiencies as it relates to, you know, the core product experience that you're offering to your customers and to your users, and so it's something that we really care about. At the same time, we're early stage investors. We're often investing, you know, before a company has product market fit, or when there's really only early signs of product market fit. As a result of that, it's ultimately the people that we're betting on that are going to take these ideas and make it a reality. I'd say there's a couple different things that we look for in the people. You know, the first is what I call this kind of crazy tenacity and unwillingness to lose, right? I think I've got the ultimate respect for entrepreneurs who take a white sheet of paper and try to build something great out of it. It's incredibly hard. And the one thing you can pretty reliably predict is that there's going to be challenges and failures along the way. Um, these are individuals who have likely succeeded their entire life. And so this idea of hitting failure after failure, um, I think is really challenging for most people. And so I think it takes a special kind of crazy to be w…

AI assessment note: “it's ultimately the people that we're betting on that are going to take”