The Exchanges

Q Okay, and how many people would have started in that batch?

A Yeah, so the funnel goes something like, you know, we, we might speak to a thousand people to get to the batch of 40 individuals, um, and then, you know, what we found historically is that, You know, if you go through that first, uh, three months of co-founder exploration, typically about 70 to 80% of people find a co-founder that they want to work with and, uh, you know, want to commit to. So, you know, like of those 40 people, you know, we might end up with 12 to 16 teams form of, of, um, of two people each. And then we go through a process of deciding which of those teams, you know, we think, uh, have the potential to be venture scale. Um, companies, and so we invest in those. So we might make 10 investments out of those.

AI assessment note: “we might speak to a thousand people to get to the batch of 40 individuals”

Q And how many unicorns or how many hundred mil revenue companies would have EF produced till now?

A Uh, so I think, um, we have two unicorns so far, uh, and we have probably another dozen that I would expect to become unicorns over the next couple of years, you know, that are sort of valued in the mid hundreds of millions. Um, uh, you know, and, and, and we have a lot of companies that are very serious revenue companies. Uh, we were talking before we started about You know, one of my favorite EF companies, Clio, which they tweet out their metrics so I can talk about them. Uh, they're not secret. You know, Clio is an incredible company that, that company we funded, I think in 2016. So before the large language model revolution, but they had a vision about the future of, um, AI and conversation within finance. So, you know, their view was like, you know, if you're a wealthy person, You can go pick up the phone to your wealth advisor and they'll give you advice. But, you know, if you're a younger person, you don't have a lot of money, you know, you can't do that. So they wanted to build a sort of conversational financial advice application for, for everyone. And, you know, they, they start building Clio and, um, uh, they, they were sort of focused on a younger audience. And today that company does over a hundred million dollars of ARR. It's growing like over two X every year. It's profitable. You know, it's like, it's a, it's a beautiful company. I think it's going to be one of …

AI assessment note: “we have two unicorns so far, uh, and we have probably another dozen”

Q And, uh, what has led to shaping up the current global trends specifically to entrepreneurship in the last 16 years? Like what has happened, uh, globally that has led to entrepreneurship becoming, let's say the number one career choice for the most ambitious people, whereas 10 years ago it was banking or consultancy.

A I think it's a few things. So I think one, it is the playing out of that software eating the world thesis that Andreessen How it's laid out, you know, a long time ago now, in 2009, and, and there's a very deep insight in that thesis, which is that if you think about why something like banking was such a popular choice for ambitious people, you know, over the last decade and before, it's really because of the leverage that sitting in those seats gives you, you know, like, you know, if you, if you work your way up the ranks and become a senior banker, the, the ability to direct capital gives you huge leverage. And I think until the rise of, you know, the software enabled economy and, and the internet and mobile enabled economy, it was sort of hard to imagine what could give more leverage than being able to direct capital around the world from a seat in New York or in, you know, Mumbai or London or wherever. I think today is very clear that actually if you can write software that people want to use and you can distribute that over the internet, like that gives you leverage like nothing else we've ever seen. So on the one hand, you have this enormous increase in Uh, scale in the, in the, in the sort of ability to reach scale. On the other hand, you have this radically dropping cost. You know, the fact that, you know, I remember like when we first started EF, we would get founders f…

AI assessment note: “I think one, it is the playing out of that software eating the world thesis”

Q so before, you know, I want to start on your journey, would like, because you have experienced entrepreneurship for a long period of time, what is entrepreneurship like in 20, 24? Because we have seen, right, the mecca of startups, that is Y Combinator, just started in 2008. Which is relatively new, just 16 years ago. And I'm super excited what the next 16 years will hold for entrepreneurship worldwide.

A Yeah. You know, I think one of the funny things about, um, entrepreneurship, and, and I hear this from founders all the time, and I'm sure you do as well, is, uh, I think the best founders are always paranoid about timing. You know, they're like, oh, am I, is it too late? And I remember we, so we started entrepreneur first, or at least we left our jobs and, and we started working on the first version of the idea. Back in 2011. It's a long time ago. And, um, we were obsessed that we were too late, you know, like, oh, you know, maybe the ecosystem is already played out and it's too late. And I look back now from 20 24 and I think that was crazy that we thought that very clearly was not too late. And I suspect, you know, if you fast forward another 10 years and if we're sitting here, we do a reunion episode in 10 years, I think we'll say 20 24 was also very early because I guess a big part of our thesis is that Although it feels like the last 10 years have seen an extraordinary explosion of growth of entrepreneurship, and they have, it still feels to me like it's A relatively small part of the economy. And, but yet when I look to the future and I think about like, what are the technologies that will define the future? What are the activities that will define the future? It feels to me like there are activities and technologies where founders have a competitive advantage. And so, y…

AI assessment note: “I think we'll say 20 24 was also very early”

Q So if you have to, let's say, rate the energy of the builders in the four locations that you are in, How would you rate them today? It's a tough question, but yeah.

A Uh, well, you know, um, the way I've often thought about that, because whenever we've opened a new site, people always say like, oh, how are the entrepreneurs that are different from the entrepreneurs in London or wherever? They were saying, you know, the funny thing is entrepreneurs are so different from the rest of the population everywhere that I actually think that the entrepreneurs across the four sites Even though they're such different countries, they have more in common with each other than they do with their compatriots who are not entrepreneurs. So actually, I think if you think about what are we selecting for, and we're in the very fortunate position that we can be very selective, you know, as I said, you know, we might speak to a thousand people to get to a 40 person cohort. One of the things we're selecting for is that energy. So like, I think maybe in the me, you know, the, the media member of our application pool that might differ across sites, but by the time we're selecting the cohort, Uh, they're actually pretty similar. And in fact, one of the pieces of evidence for this, one of the things I really love about EF is although we encourage people to find a co-founder from within their site, one thing we're seeing as we've become more borderless is actually people are starting companies with EF people in other sites. So we had demo day in San Francisco a couple o…

AI assessment note: “by the time we're selecting the cohort, Uh, they're actually pretty similar.”

Q And what about UK and Europe? How, how big is that of a market and how easy or hardest for a founder to sell in that market?

A I mean, my, my view is that, um, If you're almost everywhere in the world, if you're a startup founder selling software, you should try to think global from day one. I think it is very tough. Um, if you get constrained by your home market, you know, like one reason I think that Israel has been a disproportionately successful startup ecosystem is because Israel is such a small market. So the founders there know that if they, you know, if they think of Israel as their home market, They're gonna cap out very quickly, so they have to think global from day one. I actually think it's very, I think people in the UK should think similarly. Like, there are very few sectors where the UK is a big enough market to be a publicly listed company if that's your only market. Same for Europe. I mean, like, sure, like, the European Union is big, but the truth is, even with the amount of economic integration there, it's not one market. You know, language gets in the way, you know, culture gets in the way. And so I think, you know, if you're in Paris today, of course you shouldn't ignore France, but if you're not thinking about the global market, I think you're making a mistake. Now it's possible. Um, I mean, clearly there are already Decacorns in India that only serve the Indian market. And I think that's, that makes sense. And, you know, over time as the Indian economy grows and grows, I suspect …

AI assessment note: “even with the amount of economic integration there, it's not one market.”