The Exchanges

Q the few startup studios that has actually worked. You guys had hymns come out of it, which is like a breakout success public company. And, um, And what, what are the, some of the other ones that have come out of atomic that are big? I know there's the, there's some that have sort of spiked and I'm not sure where they're at now. They didn't kind of go full.

A Yeah. Like, like, we've, uh, we've created a ton of different companies. Um, bungalow has been doing incredibly well. We just announced a huge raise for that company homebound, which is kind of revolutionizing construction and how that's done with the marketplace dynamic replicant, which is using AI to transform call centers. Radiant, which is kind of, um, cloud software for screens for B to B applications. So we kind of touch all sorts of industries. We have now actually a few dozen companies that we've started. Uh, so we operate across everything and a lot of our companies are doing really well. We're, we actually try to keep a lot of our companies stealth because people have started to try to copy them. And by the time we announce them, they've usually raised pretty significant funding. So a lot of them are, are under wraps, but We tend to do a lot in healthcare and telemedicine. We do a lot in prop tech. We do a lot in FinTech, education, AI, and then marketplaces.

AI assessment note: “bungalow has been doing incredibly well... homebound... replicant, which is using AI”

Q Did you, when you, when you were starting this, how much of your own money did you put up to do this? And were you like, all right, uh, You know, I made this much money. I'm willing to lose a million dollars over the next two years to see if I can make this work.

A Yeah, it's a good question. So my general philosophy with things is you shouldn't sell what you wouldn't also buy. So I wanted to prove to myself that this would work before raising outside capital. So the first year or so of Atomic, I did it with my own capital, which was roughly on the order of what you described. And then once I was convinced, okay, I think this is working. I think we can pull this off. I think this model is going to work. Then we raised our first fund. And our first fund was, you know, roughly the first, first part of the first fund was roughly a ten million dollar vehicle that was primarily individuals. And we had some great founders of venture capital firms involved, like Marc Andreessen and, um, Iden Senkit and Peter Thiel and people like that, that helped us a lot in the early days. Um, and that helped us prove out the model from there. And since then we've raised much, much larger funds.

AI assessment note: “I did it with my own capital, which was roughly on the order of what you described.”

Q And that is, is it nine months and 300,000 dollars? Is that right? Or 250,000 or something?

A Um, so we have multiple stages of investment. The first check that we'll write to kind of get something going and do some initial research and homework is around a quarter million dollars, but it could range from a 100,000 to 400,000. And then if that goes well, we can write a check that's usually two million dollars, but again, it could be one to four million dollars. And then from there, we can actually write a check that could be three to eight million dollars, um, that sometimes we do with other VCs, sometimes we do on our own, kind of depends on the circumstances, depends on the needs of the company and What we need to get to the next set of milestones. Um, but that's kind of how it works now. That's been evolving over our funds and our first fund. It was smaller. So we obviously only did like the early rounds, which is what Sean is describing. And then as it's gotten bigger, we were able to get the companies further, which is why we can keep them self longer. And now when they come out, they usually have raised these really big rounds.

AI assessment note: “is around a quarter million dollars, but it could range from a 100,000 to 400,000.”

Q that can be democratized and, uh, and other, if, if a few people have that desire and they've pushed out to that limit, other people would want it if you can make it accessible, cheaper, and more available to them. That's a, that's an amazing one. I think there's tons of great ideas there. Uh, what's another, what's another framework or, or sort of pattern you've seen for great ideas?

A Yeah, so one that I think is, is pretty interesting, that's also I would put in like the tried and true bucket, is if you take something that people consistently do, and they have to do, and they feel like they have to do it, but it takes a lot of steps and or time, and you dramatically simplify it, and you make it a lot faster to accomplish the same thing that they feel like they have to do. So some good examples of this would be, for example, booking online travel. You know, it used to be so hard to do. You'd have to go to so many different sites. The Kayak founders had the vision of let's just pull it all into Kayak.com. You go to one site, you see it all in one place. They made it really easy.

AI assessment note: “take something that people consistently do... and you dramatically simplify it”

Q Um, so what's real to you? What do you think is real?

A So to me, you know, I think One indicator to look for is where are developers signing up? This is also true with companies, by the way, whenever there's platforms that are built and this is true for like enterprise companies or like app stores, where do the developers go? Where the developers go usually works and is a good place to invest. And I think that's true of crypto as well. So on that thesis, I think Ethereum is a great place to go. Solana seems to have a lot of developer interest. I think there's a lot of other places. Um, you know, one that I was kind of early involved in and helped get off the ground, um, was one called Terra and Luna that just launched a new mainnet that had like 50 to a hundred apps just launched that are super interesting. They're very interesting to me because they're solving a different problem Then a lot of other people in crypto are solving fundamentally.

AI assessment note: “One indicator to look for is where are developers signing up?”

Q What does that mean? Sorry, go ahead. Go ahead.

A Um, so a lot of, you know, if you were to kind of knock crypto, if you were like a macroeconomist and you were like, wow, what does the world look like? 10 or 20 years from now, if this really catches on the big critique, what would be, well, if this is digital gold, imagine what would have happened to the world if everyone just held gold and nobody put money into a bank. There'd be no jobs. There'd be no economy because people put money into the bank. The bank lends out money to companies and to people that money gets spent. It creates jobs. Those people spend the money and it goes through the economy and it just has this domino effect. That's really important for the whole like system to work in crypto. Someone puts it in crypto and it stops and it doesn't keep traveling through the economy. It's not a productive asset. So you basically take a productive asset and you make it unproductive. And I feel like for like decentralized crypto to work and scale in the world, that's gotta be fixed somehow. And the Terra and Luna people are very, very attuned to this problem. So instead of just focusing on purely technical things like, you know, NFTs or, you know, new apps they can build or APIs or smart contracts or things like that, they're actually thinking about You know, how can you lend crypto? How can you borrow against crypto? How can you invest in stocks? You can invest in stoc…

AI assessment note: “basically ways to make crypto productive in a decentralized way within the crypto ecosystem”

Q And at its peak, it was worth it, like he took it public, it was worth like six billion or something like that, like many billions?

A Yeah, it ended up being worth billions at its peak. Um, he basically, yeah, he grew it on his own, took it public, it did really well, and then, you know, two or three years after it went public, he decided, I don't want to be a public company CEO, and he Got off of that. Started doing investing and being on boards, but I got to see that grow just from like an idea in my parents' sitting room to, you know, thousand plus person company to public company, and I just got hooked. So I started starting companies at age 15, and I've just been hooked. It's just been in my DNA ever since. Technology has been in my DNA.

AI assessment note: “Yeah, it ended up being worth billions at its peak.”

Q scientist who would basically study, let's say they're copying Pinterest. He would send out an email to the Pinterest of Africa and the Pinterest of Germany and be like, Pinterest changed their button size on the top right from this to this. Do it. Have you ever thought, what do you think about those guys? And have you ever thought of doing that strategy where instead of invention, let's copy.

A Yeah. So, it's just not our style. It's a very different style. First of all, I think the kind of talent you can work with that you can motivate to just copy other people's ideas. I think it's very different than the kinds of people we're able to attract at atomic and work on our companies. You know, it's more of a mercenary probably than a mission driven approach. We pride ourselves in everything that we've done has been innovative. It's been original. We haven't been copying other people's ideas. It's not in our ethos to do that. So And the processes and how it operates is very different, and the culture is very different fundamentally as a result. So I do think you need to pick one of those two things. Would it be easier to build something that just copies other people's ideas? Yeah, it would be easier, but it probably wouldn't work as well, because I don't think just copying other people's ideas is as valuable, and I don't think that it would work as well anyway, but it's also just far less interesting to me. It seems like the ideas that worked well for them were the ones where there was like a local network effect in the U S that hadn't gone to Europe yet, and they did it in Europe before the U S company could go to Europe. Um, but there were a lot of companies that they copied that they had a hard time because they kind of installed someone who.

AI assessment note: “it's just not our style. It's a very different style.”

Q Yeah. Yeah. How much of that story is true?

A Yeah. So, you know, it's interesting. First of all, it's definitely true. It wasn't told when I was at eBay, partially because I don't like that much attention and I don't claim credit for a lot of things while I was there. I was just catching up with like a reporter that I liked and I told him this story and he was like, this is amazing. Why hasn't anyone written about this? And ended up getting written up and eventually the story got told, but, um, yeah, I'm a pretty impact. Motivated person overall. And I had just heard all these stories about founder friends that had sold their companies and they, they sell to the acquirer and they languish and they actually kind of become depressed. They're just kind of like, they lose their mojo. They're just like, what am I doing? What's my life becoming? They almost become like robotic. And I was just like, you know what? Life's short. Like I'm, let me figure out how to use this experience for the good of the company of me. I'm proud of what I built. I want to see it succeed. Let's figure out how to do that. And I went and, you know, there's some funny stories about things that we did while we were at eBay to try to maintain our culture. We, at one point I, I rallied the troops. We had this house. They tried to put us in cubicles. I had the whole company rise up and go and rip down the cubicles and throw it on the front lawn. And we alm…

AI assessment note: “First of all, it's definitely true.”

Q Do you remember how much, like some, what some of the numbers were?

A Well, let's see. We were trying really, we tried a bunch of different price points in terms of like the monthly price for these sublingual drops, ranging from like 79 a month, all the way up to like two 50 a month, as these are our tests, you know, we're testing the pricing that obviously gets you a gross margin, depending on that price. And then, you know, there's a CAC to acquire the customer. And the problem in this case was just the CAC was really, really high. I don't know if it's, you know, a new thing. Customers don't know about it. They need to be educated. Maybe they're skeptical, um, hard to sell over the internet. I'm not sure, but the, you know, we're really good at producing low CACs. We're really good at scaling things. We just couldn't figure out how to get the CAC low on this. We did a lot of different iterations. Um, and you know, the other way that can work is if the churn is really low and you just get payments for a long time, this should be, it takes about A year to three years to fully cure. Um, but it just didn't work out. The math didn't work out. And, you know, that's the kind of thing the world should be that way. It should be that way. And like, you can be an entrepreneur and believe that, and I still believe that, but you'll be knocking your head against a brick wall forever and get nowhere. And there are other problems like that, that you can solve …

AI assessment note: “ranging from like 79 a month, all the way up to like two 50”

Q but every once in a while you'll meet someone who's so amazing that you say to them, well, what's your idea? And how can we, just tell me what your idea is and we'll partner with you. Or, you know, you said something like that. I don't know if it was exactly that. What attributes would a person have to have in order for you to say that to them?

A Yeah, so we're, we're open. You know, the ideas don't necessarily have to come from us. We're totally open if people want to bring their ideas and co-found companies with us. Um, We just kind of ask that they be baked off in a process and that the data wins. We're just such big believers in this distribution over ideas thing that as long as we, if we test their idea and the distribution is great, fantastic. Let's go, let's do it together. That sounds great. But otherwise, you know, we just ask that we do that kind of testing process that we like to do. Um, but some of the attributes that we look for, you know, we really like people that are Just tenacious. They just wake up in the morning. They want to play offense. They have three things they want to get done by the end of the day and they get them done and they knock down walls and they're creative. They have a lot of raw intelligence. They inspire other people. They can hire their charismatic. Um, you know, it depends on the idea, right? Like some ideas that are more technically oriented, obviously you're looking for a slightly different profile, um, versus ideas that are maybe more You know, sales or product oriented. So we are a little bit founder idea or product fit as well. Um, we do consider that, but Um, yeah, those are some of the attributes that we look for in people, but sometimes you meet someone and there's just a…

AI assessment note: “some of the attributes that we look for, you know, we really like people that are Just tenacious.”

Q What's an example of that for you? Do you have an hour? Is there something that stands out to you? That's like your version of that hour with Zuck or how do you engineer it?

A Yeah, it's a really interesting question. So this is something I've never met Jeff Bezos. I'm a huge fan of his, but one of the things that he does that I think that I adopted that I think is a really, really cool practice is you take a look at your prior week and how all of your time is spent. And you, you look at your calendar, you look at each block, each half an hour, each hour, And you, you basically, I basically modified a little bit what he does, but you ask the question, for all of these things that I did last week, what are the things where if I hadn't done this thing, nothing would have changed? And you cross it off the list. And if things keep getting crossed off that list, you probably shouldn't be doing them. You should probably find a way to get out of those kinds of meetings or replace yourself in those kinds of meetings or hire someone perhaps to, you know, take those kinds of meetings for you. Um, because they're not as productive and then really circle the things that really, really mattered. You know, there could be within a week, if, if it in a lifetime, you can have an hour that's worth the cumulative. Some of the hours can certainly have that in a week, right? You can have that in a month. You can have that in a year. So really training your mind toward, you know, what those things are, um, and circling them and having that pattern recognition can make a l…

AI assessment note: “one of the things that he does that I think that I adopted”