The Exchanges

Q what signals do you look for to figure out where you're going to go to? And also what signal told you that jet was interesting because a lot of people probably said, don't even think about doing this. Like you're, you know, you're, I imagine a lot of people are like Amazon or Walmart or someone already owns the space. What are you crazy? This is like an impossible feat.

A Yeah, no, it's two different things. I mean, I think with Jet, I had been intimately involved in retail, you know, with diapers.com and wag and selling it to Amazon and working inside Amazon. And I just felt like huge market, huge tailwind. It's the e-com is going to continue to grow at double digit for the next five, 10 years. Um, and I just believe that there wasn't, you know, it wasn't a winner take all that there was room for another player. Um, and I thought we can raise a significant amount of capital and hire a great team. So We had this really big vision with this tailwind, raise a ton of capital and have a great team. I thought if you do those three things right, good things will happen. I don't know what's going to happen. Either it works, your exit, a strategic wants it. Like if you're in the right market at the right time, you have a great team and you've invested the capital wisely, you've got an asset that in worst case is going to be worth more than the capital you raised. That's, that's my mentality with these things. Um, in, in anything you do, right? It's like, there's the worst place to be is sort of in that no man's land where like you, you spent, um, not a ton of money. You don't have the best people, but you spend enough money that is kind of expensive for somebody to buy as a strategic It's not really worth it. You know, people tend to buy is the barbell …

AI assessment note: “huge market, huge tailwind. It's the e-com is going to continue to grow”

Q and you talked about how, what the next evolution of that might be. The restaurants on wheels, that solves a bunch of problems. You talked about transportation, right? Huge TAM flying cars. That might be where the puck is going. We see that Google funded, you know, Kitty Hawk and we, and you know, Uber was working on it. A bunch of people working on this. Maybe there's something there.

A Um, I'll give you a couple more. Yeah, give us more. So one, I think conversational commerce. So in retail, I think the next big step change is the idea that you would use text and voice to order anything you want in a very conversational way. So imagine, you know, talking to the, to someone that is as knowledgeable as the most knowledgeable person in that area on the showroom of a specialty retailer. You want to buy a TV? It's like you're there at Best Buy talking to the TV expert, you know, and you're just conversing and somebody at the same time who knows you as well as your best friend. Um, so hyper personalized, this idea of getting to one best answer. Um, the idea of like search engine, 20 years from now is going to be laughably like the cassette tape. It's like, wait, so dad used to like go, you wanted to buy a toast and you typed in toaster in this like search engine and you had 10,000 responses and you had to like read reviews and look at all this and search and filter. That's not the way it's going to be done. You're basically just going to say, hey, I need a, I need a toaster. Um, how much? I don't know. What, what's a good amount? Uh, 200 bucks, you get a great toaster. Really good. Ok, great. Wanna make a recommendation? Boom. Buy it. And it just ships it, right? Like, it's gonna be very conversational. And the, the, we talk a lot about personalization in retail, b…

AI assessment note: “I think conversational commerce. So in retail, I think the next big step change”

Q So substantially larger, although both are quite large. This idea of being able to hire the best in the world and being able to hire people to do, to To do a lot of the work that they specialize in. Could you have done that if you were bootstrapping your companies?

A No. I mean, that, that's why, you know, we started, Alex and I, um, A-Rod just started a venture fund called VCP, Vision Capital People. We believe that there's a really big hole in the market for people with big visionary ideas to get a big infusion of capital early, like when they have nothing, so they can go out and hire the very best team in the world. I think a lot of startups, it's a little bit of chicken and egg. How do you get the capital unless you have the team? You can't hire the team until you have the capital. But you don't get enough capital until you prove it, and so you get a million bucks, then you get five million bucks, then you get ten million bucks, and each step of the way, you're sort of on a tight wire. You know, you're basically like, one little thing goes wrong, suddenly investors lose confidence, or you over promise and under deliver, lots of things go wrong. We basically say no. Vision capital people. You have a big vision. We know this could be a really big idea. We know somebody's going to do this at the right time to do it. Let's not undercapitalize it. Here's a ten million seed. Go out and hire the best team in the world. That puts you in a position to have the best shot of a really successful business. And if you got the best people, you got the capital, and you have the vision right, you're a player now. You're kind of like, worst case, you're …

AI assessment note: “No. I mean, that, that's why, you know, we started”

Q actually become a pretty big deal. Cause these franchises have appreciated like crazy because there's only whatever, there's only 30 of them and, uh, there's sort of more billionaires than there are teams. So give me a pie chart. Is this, what percentage of this was just I just want to have it. It's like art versus this is actually a good business decision. How do you think about that?

A Yeah, it's probably 80% the former, 20% good investment. Like, yeah, it's, it's, Not so much about being a great investment, just not going to lose money. And I'm going to have a lot of fun. Anytime you can have a lot of fun and not lose money. Like I love going to the horse track. You have a lot of fun, but you also a lot of money. I kind of like this, you know, where it's, it's, uh, have a lot of fun and maybe make a little bit of money too. It's like perfect, but I I'm excited about. You know, just innovating using, I think there's a lack of like real innovation in sports in general, like applying sort of a technology mindset, like How do you bring augmented reality to the entertainment experience? How do you move to, like, dynamic announcing so you can choose your announcer? Dynamic real-time ticketing. I want people to be able to move to any open seat in the stadium at any time. Like, I've got all these, like, tech ideas on how to augment the experience, and it's just fun to have a platform to be able to You know, why these things and try and, and even, you know, what's the money ball version of, of in basketball too, you know, like as a mid market team, how do you win? What's the strategy? Thinking that through, uh, how do you, uh, apply the same techniques of vision capital people? Like what's the, what's the mission? What are the values? What do you stand for? How do yo…

AI assessment note: “Yeah, it's probably 80% the former, 20% good investment.”

Q And are you just going to run this like a company? I mean, like, because you're incredibly successful at running companies, but you don't, I mean, you know a bit about sports, I imagine, but like, this is like a total, this is totally outside of everything that you've done. You've done econ.

A I love the challenge because every business that I get into, I don't know anything about it. When I start, I didn't know anything about retail when I did divers.com. You know, I didn't know anything about the pit. When I started that I started a bunch of startups. Recently. I don't anything about that. I'm starting and building the city. I'm doing a reality TV show. I'm doing these things. And you know, it comes down to vision capital people. It's you have to have the vision and you just think about it, share it with people like a piece of clay. You keep molding the vision molding. Like, wow, this is a big vision. Everyone agrees. This is freaking huge. Okay, great. How are we going to capitalize it? Great. That's what I do raise money. I have lots of Connections with investors have raised over a billion dollars. So like, okay, we're going to capitalize it. And then the third part is the most important and the hardest to get right is people, the P part. And it's finding a great CEO and a great executive leadership team, setting the values, setting the mission to corporate culture. Getting the org structure right. Getting the right people in the right spots and creating a culture where you get the very best out of each person that you bring in. Then you kind of just sit back. Then you're there as a strategic advisor. I think if you try and, you know, micromanage and make decisio…

AI assessment note: “it comes down to vision capital people. It's you have to have the vision”

Q Do you feel like when you meet people, is there something you're just like, ah, I wish more people had X. What is X for you that you feel like is in short supply?

A You know, I mean, what you said there, so when I say, you know, passionate and optimism, I think Um, optimism is, you know, uh, the sort of the optimism that allows you to be bold and take risk, and it's that optimism that you believe not only great things can happen, um, but also believe that people are good, like your starting place is that it's just an optimistic view of the world. I think that's really important, and it allows you to trust, which is one of the core values And, and, and in all my companies, I think trust is really important. If you want to create a culture where the company trusts the employees and the employees trust the company, that's really important to create an environment where people are happy and feel empowered and they feel a sense of ownership. Trust is. So I have this idea that, you know, a lot of people say, oh, trust, of course, trust, but verify. And I don't believe in the, but verify. I think you start out trusting people, um, and until they prove otherwise. And it's very, Risky because you can get burned, but I've seen the power of the upside of trusting somebody before they've necessarily proven that they deserve it. It's incredibly powerful motivator. Um, and I've seen it in my personal life. I've seen it in business. People want to, they want to run through a wall for you when you like, wait, you trust me, but you can, I can burn you. I c…

AI assessment note: “optimism is, you know, uh, the sort of the optimism that allows you”

Q into? And would you also be trying to do the same type of bet? Like, do you think you could raise the large amount of money just through charisma and hustle and vision, uh, without having the reputation? So take us, take us to it through a scenario. What do you think you would be interested in working on or building if you were 21 again today without the reputation?

A Yeah, no, that's a great point. And I think, you know, early on, and a lot of people I think share this, you feel like it needs to be something like really original or something. Nobody's thinking about it. Nobody's doing or something niche or like, And that's kind of what it is. It's niche and the venture capitalists are like, nah, it's not that interesting, you know? Um, and I've learned that it doesn't need to be something like niche or super inventive. It could be just find a really big town, like just say something like, okay, healthcare. Okay. And what's a really big idea. Like where's the puck going in healthcare? I would study where the venture capitalists are investing, what types of companies that do the research, like, Where is the money going? Follow kind of the money. Cause that'll kind of give you some idea of where, where some of these trends are right now. And, uh, you know, with artificial intelligence and telehealth and things, there's like a lot of money pouring into that. So just, I would look at the landscape. I'd study the different companies who's getting funded, who's doing well and think about, is there another angle? Is there something not like inventive or super original, just like a, just a little hook of something different that's not being done. And put together a big vision that requires ultimately hundreds of millions of capital and work backward…

AI assessment note: “I would study where the venture capitalists are investing, what types of companies”

Q know, the same sort of time, you know, two years of runway or whatever it was that like a normal startup has. So how do you think about that? Do you think it's, Hey, look, just a numbers game. It doesn't always work out. Or do you think there's something different in the strategy that maybe they could have done, or you've done differently that, that leads to better results?

A Yeah. Um, I don't know that intimately, do you know the story? And I do think that's probably more the exception than the rule. I mean, I think, wait, listen, startups don't all work. So some of them aren't work. Do I think it had a higher probability of working because it was a big vision. They had a lot of capital and great people. Yeah, I think it, I think it does specifically why it didn't work. The only thing from the outside looking in was were the, the most talented people in the organization fully committed and all into it. That's the only, that's the only thing I wonder. I don't know. Um, obviously you had really talented people, but were they dedicating their, their life to it? You need somebody in these businesses that's sort of like, I'm running this business and dedicating my life to it. It doesn't have to be necessarily the person that's doing the VCP at the top, but who is that person? And, and, and, and, you know, do you have the right team to support? So I don't know the answer to that. That's where I'd probably wonder.

AI assessment note: “specifically why it didn't work. The only thing from the outside looking in was”

Q I like asking these questions because I like knowing, like, what meets your standards, but basically who in this space are you looking at where you're saying that's kind of promising? Is there any, like, one or two companies?

A Yeah, I, I don't, I kind of, maybe I should more, but I, I really spend a lot of time just thinking about, like, A complete, sometimes, sometimes I, if you know too much about a space, it's hard to clean slate and invent because you kind of like get tied too closely into what, what people are doing. So I like the idea of just thinking about it through the lens of a, of a consumer on what is, you know, this trends are happening in telehealth, AI, you know, these trends are happening and then how do you stitch it all together? That's just thinking, sitting and thinking every day, like what's the big idea? And when it's really big, you do know nobody's doing it. And then you can reverse engineer and go back and say, are there any people that are working on certain things that could be helpful to it? But you got to go so big that you know that nobody's playing there. And that's where I think the opportunity lies. It's like, yeah, it's going to need billions of dollars to pull it off. You're going to have to prove it in a, in a, in a, in a small area. Uh, it's gonna be very expensive, but then when you prove it, It extrapolates out to a trillion dollar business, like market cap opportunity. Yeah. Yes. I don't, I don't, I couldn't tell you like, I'm not like tell you all the different little components that exist right now.

AI assessment note: “I don't... if you know too much about a space, it's hard to clean slate”