The Exchanges

Q In a typical acquired episode, or a typical tech story, it's like, this is the hero's journey, and, like, he wins, right? And, like, you grow up in this, like, amazing, you know, entrepreneurial journey, and you're like, this is awesome. I'm gonna go do the same for that.

A That's not what happens, right? I wish, I wish the story ended that way, um, you know, for his sake. I mean, he borrowed money from the bank, mortgaged the house, mortgaged the car, and the punchline is there are moments in time where the deck is so stacked against you, notwithstanding all your best effort, notwithstanding all the extraordinary sacrifice of the team, or maybe even the brilliance of the idea, it's not meant to be at that moment. And, um, in venture capital, if you fail, the risk is largely on the venture capitalist. I mean, in Silicon Valley, failure is on the part of the founder, so long as you conduct yourself in a way that's honorable, it's a badge of courage that you gave it a go. And we have an institutional structure where the venture capitalists can withstand that loss because they have a portfolio that they can, you know, cushion that with. So I often, you know, young founders will come in and say, well, I just don't know if I can take the risk. You know, they just graduated from Stanford. They have no student debt.

AI assessment note: “That's not what happens, right? I wish, I wish the story ended that way”

Q of why we want to tell, hey, it's a great story. But also, like, what Altimeter ultimately becomes, and this, you know, you guys, I think are Maybe the purest play example. Certainly one of the first, if not the first life cycle investor, you know, it was just not at all obvious that you should go join a hedge fund at this point, right? Like how did that happen?

A Yeah. I mean, so there's a little bit more in between, you know, so September 11th happens, which is, you know, really catastrophic event, particularly for our company. That was an online travel company. And so we negotiated kind of the soft landing with IAC. I won't take you through all the Trials and tribulations, but it was a good outcome for General Catalyst. I thought I was going to go back and join David and Joel. I knew they were two extraordinarily special human beings, and they were going to build something really big, but I had kind of been bitten by the startup bug. A friend named Bejo Samaya, who now runs Lightspeed in India and Southeast Asia, had an idea, and it effectively was, think of Yelp pre-Yelp. And so, Beige and I started this business, um, we bootstrapped it, had a bunch of venture capital term sheets for a variety of reasons, didn't take them, and we sold that business a couple years later to a public company in Seattle. And again, in the first transaction, you know, I'd worked really hard at NLG, and I think I walked away after being the CEO and helping put the deal together with a million dollars, which for poor kid from Indiana, that was game changing. But by Silicon Valley standards today, people would be like, you know, are you clueless? There was a lot of work that went into that. The second business I started with Beige, I think I owned 40% of the…

AI assessment note: “I mean, so there's a little bit more in between”

Q How did you decide on wanting to go to HBS? Did somebody inspire you or encourage you to do that?

A It's a slightly embarrassing story. Like, I didn't really do much research. I remember taking the, you know, the entrance exam like the last day, scrambling to fill out the application. In fact, I didn't even finish the application because I ended up getting an interview, and I remember the person who interviewed me said, this is a unique situation. I can't say that I've ever Interviewed somebody who didn't have time to complete the application. And so he started with, why didn't you have time to complete the application? You're like, well, I'm deputy secretary of state right now. I went through it and it wasn't, you know, it was just, I decided late and I was, I was working my ass off, but I said, now's the time. And we went through it.

AI assessment note: “I didn't really do much research... I decided late... I said, now's the time.”

Q Yeah, that might have been 14. But that moment in time, did you have some insight that you felt nobody else had at that moment, or was it the right time, like how?

A I, I, a few things. Number one, I did have confidence that, you know, I was a decent Investor. Right? So we worked really hard. We're blue collar. There's different ways to prosecute the strategy. I think there's some people who work the cocktail circuit. And, you know, we really were, we're students of, we're anthropologists about like where things were going and what was going to be big. And at the time, there was a lot of pessimism, frankly, about cloud computing. Salesforce, you know, had some quarters where they saw more deceleration than people thought. And there were really, kind of, these obstacles. One was the cost of computing the cloud versus the cost in a data center. But the big one was this perception that, like, I'll never put my customers' data in the cloud. Right. It was really a security issue.

AI assessment note: “we're anthropologists about like where things were going and what was going to be big.”

Q the capital markets business. Cause that feels like something that like, again, if I'm a C, if I'm a Dimitri of modern charge, like that's something that, you know, even as the early stage guys are adding later stage operations, like that you can really bring in a way and have for Roblox for plaid for so many, you know, others, how did that start? And what is that business?

A Well, I think it's, you know, so I'm, I'm talking to a, you know, a well-known venture capital firm's LP meeting tonight about capital markets, what's going on in the public markets, what does it mean for, you know, their venture portfolio, et cetera. That's just fundamentally different, right? And I'm an IPO lawyer, spent 20 years in the public markets. We've worked on, you know, participated in over a hundred IPOs, right? When the equity syndicate desk at Goldman Sachs and Morgan Stanley need to sell an IPO, they call us. Right? They call long onlys, and so we've been in and around that market for a long time. Bill Gurley and Rich Barton and I, going back 20 years, um, were fascinated with how inefficient that market was, with mispricings in that market, with, you know, uh, It's crazy.

AI assessment note: “I'm an IPO lawyer, spent 20 years in the public markets.”

Q Brad, before we wrap here, anything that you want to point listeners towards? Or where could they find out more about you or Altimeter on the internet?

A Yeah, I would say follow me at Altcap on Twitter. I encourage all of our analysts to be on Twitter. I think they're incredible brains and thought leaders and, you know, being online and sharing content. Like, I don't like to be a cheerleader on Twitter, um, but I do like and encourage our analysts to pressure test their ideas. Right? Whether it's, you know, Jammin talking about what's going on in, you know, in software, or whether it's Vivek talking about what's going on in, you know, internet marketplaces, or crypto, or Frida talking about what's going on in China. And so, I think, I always say to people, if they're interested to learn more about Altimeter, just follow this incredible group of analysts on Twitter. But all of this said, we're truly lucky, you know, to be doing what we do. You guys are doing this incredible podcast. About founders and entrepreneurs. This is a rather new experiment in the history of the world, and I think it's yielded. You read the Bill Gates annual letter at the end of every year, and, you know, we live in the most peaceful, notwithstanding Ukraine. We live in the most prosperous. We live in the healthiest period of time in the history of humanity, and, you know, one of the things that scares me is, you know, that people during periods like this, they'll turn against capitalism, or they'll turn against, You know, technology, or they'll turn agai…

AI assessment note: “Yeah, I would say follow me at Altcap on Twitter.”