The Exchanges

Q Interesting. Okay. So what do you do to it? 20 10. The company goes to Google. What is it? What does Anar do?

A Um, so I started just, well, I bummed around for a while, and then I started doing, um, Left Coast R&D, which was the company that's been around in the background, was like a holding company, still is around. Um, basically just started doing prototypes for, uh, for, because this is the time when, like, everybody needed an app. Like, this is, like, two 1009, 2010, 2011. Everybody wanted an app. And so, uh, people just came out of the woodwork, like mostly YC companies saying like, Hey dude, like you worked at Remail. Can you help us build this app for us? So I started doing that. Um, and so I did that. It's effectively consulting work for, you know, a number of years.

AI assessment note: “I bummed around for a while, and then I started doing, um, Left Coast R&D”

Q financing around at whatever valuation that happens at. The last part of that, fine. The first part, where the class of stock converts, I mean, most new investors, B, C, D, there's a new Preferred class of stock that's issued for obvious reasons. Have you guys had any of that dynamic set up? And if so, does the new VC try and get you to get rid of that right?

A We haven't yet, mostly because they've then moved on to usually raising using a convertible note or a safe. So our right doesn't actually kick in until they have a price round. Um, but No, I, I would expect that the companies that do well, that go on to do multiple rounds of financing. Yeah, we would have to give up our, um, our dividend right and, and some of that stuff. Um, but we certainly intend to, um, to, to protect our pro rata rights, um, in subsequent funding rounds. And actually a bunch of our LPs are coming in because they think, you know, there'll be some follow on opportunity that they won't be part of. And we effectively facilitate that for the investors.

AI assessment note: “We haven't yet, mostly because they've then moved on to usually raising”

Q financing around at whatever valuation that happens at. The last part of that, fine. The first part, where the class of stock converts, I mean, most new investors, B, C, D, there's a new Preferred class of stock that's issued for obvious reasons. Have you guys had any of that dynamic set up? And if so, does the new VC try and get you to get rid of that right?

A We haven't yet, mostly because they've then moved on to usually raising using a convertible note or a safe. So our right doesn't actually kick in until they have a price round. Um, but No, I, I would expect that the companies that do well, that go on to do multiple rounds of financing. Yeah, we would have to give up our, um, our dividend right and, and some of that stuff. Um, but we certainly intend to, um, to, to protect our pro rata rights, um, in subsequent funding rounds. And actually a bunch of our LPs are coming in because they think, you know, there'll be some follow on opportunity that they won't be part of. And we effectively facilitate that for the investors.

AI assessment note: “We haven't yet, mostly because they've then moved on to usually raising using a convertible”

Q So what you talk about, you know, these kids that go through and they get really good at school and then they never turn their head up and go, wow, this could have practical applications outside of academia. Let me get out. Why didn't you have that moment? Why didn't you ever have a moment to pull your head up?

A I think, I think most of the time people do what they, everyone else does, you know? You do, you get praised for doing something, for going to school, getting good grades, and you think, well, you know, you get good grades in middle school, what do you do? Well, you go to high school, you get good grades. Well, if you get good grades in high school, what do you do? You try to get into the most competitive college. All right, you got into the best competitive college, you get amazing grades, then that's when most people are like, You know, I'm going to go out and make some money and, and, and, you know, try a career. Whereas I was sort of just stuck on that. I was like, well, you know, I guess I needed to prove how smart I was.

AI assessment note: “I was sort of just stuck on that... I needed to prove how smart I was.”

Q So following this logic forward, which is, this is what everyone else is doing. I want to go be the best at it. I get a PhD. I go at the next level. And I guess actually at Cornell in 2007, you didn't take the next step, which is full-time work towards tenure path. What happened?

A Because I realized that a bunch of professor tenure track professors are really miserable. And even the ones who are tenured, they don't seem that happy. Like most of the time, and there are exceptions, but a lot of the time what you end up doing as a, as a professor, like a tenured professor is you don't actually, people get into academia. The piece I liked was doing actual research and like coming up with new things and testing them out and, you know, seeing, um, but if you actually become a tenured professor, you don't actually do very much of that. Most of the time, if you, if you want to become a, and here's my recipe for becoming a successful professor, be amazing at writing grants. Um, like that's basically the main job. Like people underestimate, particularly in the U S but also elsewhere, how similar, uh, being a professor is to being a startup, like a venture backed startup founder. Cause essentially what you're doing all the time is going out, grabbing money, getting the best people, And trying to get your projects, you know, financed, built and done or published in the case of academia. So what happened to those people? And I was like, yeah, this is not for me. And, and like partly also I was like, I needed to be sort of closer to impact. Like, I think that's part of the problem is you look at some of this research that gets done and you're like, what, like, this is…

AI assessment note: “Because I realized that a bunch of professor tenure track professors are really miserable.”

Q All right, and before we wrap up, back in September, before the world changed, September, 2019, you articulated, you're about to set out and start raising Fund Two for Tiny. Then, then the world shuts down. How's, how's Fund Two going?

A Fun too. We're just about to start fundraising. Uh, it, it, we were going to start going to market honestly in, uh, I guess in February, that was the plan. Um, but then obviously COVID hits and it, it seemed a little, um, Inappropriate to start calling family offices and ask for cash when they were probably worried about whether, you know, what was going to happen to their grandparents and what, what they were going to do with their kids at home, homeschooling them. So we put that on hold, but we're about to go to market now. Um, you know, we're doing, uh, we're being public about the fact that we're fundraising so we can sort of advertise it. So if you want to go to tiny seat.com slash invest, you'll get, that's the fastest way to get ahold of me these days is to go in there and put your details in. What's your, a lot of details about, you know, How things are going so far, you know, why we think the way we think is gonna, is gonna work out in terms of investments.

AI assessment note: “We're just about to start fundraising... So we put that on hold, but we're about to go to market now.”

Q Why is that vague? I feel like that's pretty standard. I mean, that's very clear in any safe you look at today, any convertible note, even a priced early seed round. That's all very clear.

A Yeah, but, but you have to understand, like, not everybody follows those outside of like the sort of established ecosystems. Not everybody follows those like standard paper trail stuff. And a lot of the time these companies are, you know, the funding structures are kind of vague to start with. It's more like, Hey, I want to build this thing. Like maybe the investor is in fact just paying the salary for somebody on their team for 18 months while they're doing something without really establishing any kind of formal, even corporate structure. Um, in order to get it done. And that can be like, you can be in a position where like they built something cool. Now they need to go raise some more money in order to, to really grow on, but they don't actually. All right. They're unable to, because they, the investor wants to own, feels like they should own 90% of the company, which is, you know, obviously untenable if you were effectively were a seed investor.

AI assessment note: “not everybody follows those outside of like the sort of established ecosystems.”

Q Okay. Well, this maybe is a precursor to what you started in 2014, which was app aftercare, which is essentially, you know, if you work on a tool and these developers pass it off to you, then stop responding to all your emails. You've got to be able to maintain it and grow it internally with your team. Was, was that sort of frustration, the, the seed behind app aftercare?

A Yes. So, so the thinking there was really that, and like, in the, in the, in the time, a bunch of companies had done this. They already built an app, usually with an outsourced team, and then, or a lot of them had. And then, um, they'd get to a point where they're like, okay, it's done now. Like the, the agency you remember did it, handed over the app and the code and said, sayonara. And in some cases, those, uh, relationships weren't that great by the time the app got delivered. Um, you know, there, there might have been some miscommunication or budget overruns or whatever. So what we basically said was like, okay, your options at this point is to hire your own iOS and or Android developers in house, but that's quite expensive. Just in order to maintain an app that's effectively already done. So we said, all right, for a fixed monthly fee, we'll handle that for you. Like we'll do, we'll instrument the app. We'll fix it. If it crashes, we'll make sure it's this much uptime, blah, blah, blah. And then, um, yeah, we were basically like, like a service that said, all right, you have an app. We'll maintain it for you so you don't have to hire someone in house to do that. And we will add sort of minor tweaks and things to you.

AI assessment note: “Yes. So, so the thinking there was really that”

Q Interesting. Okay. So what do you do to it? 20 10. The company goes to Google. What is it? What does Anar do?

A Um, so I started just, well, I bummed around for a while, and then I started doing, um, Left Coast R&D, which was the company that's been around in the background, was like a holding company, still is around. Um, basically just started doing prototypes for, uh, for, because this is the time when, like, everybody needed an app. Like, this is, like, two 1009, 2010, 2011. Everybody wanted an app. And so, uh, people just came out of the woodwork, like mostly YC companies saying like, Hey dude, like you worked at Remail. Can you help us build this app for us? So I started doing that. Um, and so I did that. It's effectively consulting work for, you know, a number of years.

AI assessment note: “I bummed around for a while, and then I started doing, um, Left Coast R&D”

Q So what you talk about, you know, these kids that go through and they get really good at school and then they never turn their head up and go, wow, this could have practical applications outside of academia. Let me get out. Why didn't you have that moment? Why didn't you ever have a moment to pull your head up?

A I think, I think most of the time people do what they, everyone else does, you know? You do, you get praised for doing something, for going to school, getting good grades, and you think, well, you know, you get good grades in middle school, what do you do? Well, you go to high school, you get good grades. Well, if you get good grades in high school, what do you do? You try to get into the most competitive college. All right, you got into the best competitive college, you get amazing grades, then that's when most people are like, You know, I'm going to go out and make some money and, and, and, you know, try a career. Whereas I was sort of just stuck on that. I was like, well, you know, I guess I needed to prove how smart I was.

AI assessment note: “Whereas I was sort of just stuck on that. I was like, well, you know, I guess I needed to prove how smart I was.”

Q All right, and before we wrap up, back in September, before the world changed, September, 2019, you articulated, you're about to set out and start raising Fund Two for Tiny. Then, then the world shuts down. How's, how's Fund Two going?

A Fun too. We're just about to start fundraising. Uh, it, it, we were going to start going to market honestly in, uh, I guess in February, that was the plan. Um, but then obviously COVID hits and it, it seemed a little, um, Inappropriate to start calling family offices and ask for cash when they were probably worried about whether, you know, what was going to happen to their grandparents and what, what they were going to do with their kids at home, homeschooling them. So we put that on hold, but we're about to go to market now. Um, you know, we're doing, uh, we're being public about the fact that we're fundraising so we can sort of advertise it. So if you want to go to tiny seat.com slash invest, you'll get, that's the fastest way to get ahold of me these days is to go in there and put your details in. What's your, a lot of details about, you know, How things are going so far, you know, why we think the way we think is gonna, is gonna work out in terms of investments.

AI assessment note: “We're just about to start fundraising.”

Q Why is that vague? I feel like that's pretty standard. I mean, that's very clear in any safe you look at today, any convertible note, even a priced early seed round. That's all very clear.

A Yeah, but, but you have to understand, like, not everybody follows those outside of like the sort of established ecosystems. Not everybody follows those like standard paper trail stuff. And a lot of the time these companies are, you know, the funding structures are kind of vague to start with. It's more like, Hey, I want to build this thing. Like maybe the investor is in fact just paying the salary for somebody on their team for 18 months while they're doing something without really establishing any kind of formal, even corporate structure. Um, in order to get it done. And that can be like, you can be in a position where like they built something cool. Now they need to go raise some more money in order to, to really grow on, but they don't actually. All right. They're unable to, because they, the investor wants to own, feels like they should own 90% of the company, which is, you know, obviously untenable if you were effectively were a seed investor.

AI assessment note: “not everybody follows those outside of like the sort of established ecosystems”

Q Okay. Well, this maybe is a precursor to what you started in 2014, which was app aftercare, which is essentially, you know, if you work on a tool and these developers pass it off to you, then stop responding to all your emails. You've got to be able to maintain it and grow it internally with your team. Was, was that sort of frustration, the, the seed behind app aftercare?

A Yes. So, so the thinking there was really that, and like, in the, in the, in the time, a bunch of companies had done this. They already built an app, usually with an outsourced team, and then, or a lot of them had. And then, um, they'd get to a point where they're like, okay, it's done now. Like the, the agency you remember did it, handed over the app and the code and said, sayonara. And in some cases, those, uh, relationships weren't that great by the time the app got delivered. Um, you know, there, there might have been some miscommunication or budget overruns or whatever. So what we basically said was like, okay, your options at this point is to hire your own iOS and or Android developers in house, but that's quite expensive. Just in order to maintain an app that's effectively already done. So we said, all right, for a fixed monthly fee, we'll handle that for you. Like we'll do, we'll instrument the app. We'll fix it. If it crashes, we'll make sure it's this much uptime, blah, blah, blah. And then, um, yeah, we were basically like, like a service that said, all right, you have an app. We'll maintain it for you so you don't have to hire someone in house to do that. And we will add sort of minor tweaks and things to you.

AI assessment note: “Yes. So, so the thinking there was really that”

Q So what does Tiny, so what does Tiny do today?

A Tiny Seed basically provides capital for companies that are, are, are like that. And so what we saw was, so, so the way to think about it, if you know YC is like, YC effectively filled a pretty big hole in like a five or six, along with a couple other players, like first round capital. And so what they did was they said, you know what, and people don't remember this, but like YC gave very little amounts of money initially. They gave like I think Airbnb got, I'm going to guess, 30,000 dollars, something like that. And so they give you just a little bit of money because you don't need half a million or a million dollars in order to do something like this. And Airbnb showed you didn't. And you could just go out, do something, focus for three months, build, launch, and go from there. And they were obviously hugely successful with that model. Now, what we saw was that there's a lot of companies in and around MicroConf and in those type of environments where what happens is someone is a consultant and they go along and they either see a problem that they have or a client has. And they decide I should, you know, either they've been asked to do something repeatedly, like, you know, fix this problem again and again, or they sort of scratch their own itch in that regard. And they don't build, launch, and get a couple of paying customers, um, you know, in the, uh, into their customer. But…

AI assessment note: “Tiny Seed basically provides capital for companies that are, are, are like that.”

Q What was the environment like in Newcastle in 2003, 2004, 2005? And was there an entrepreneurship club? Was there a program for entrepreneurship? What was the innovation ecosystem like back then?

A There really wasn't one. Although that being said, there's a couple of like, um, so Newcastle is an old mining town. Like the northeast of England is quite economically depressed, or at least it was at the time. Um, and so, you know, like there, there wasn't, there wasn't this sort of a large amount of tech industries, although there was some, and there was some stories about like, um, I think Sage, the big sort of tech accounting type firm got founded in Newcastle. And there's actually a story about I think when we were in undergrad, we had one of the founders come and talk to us. And that was, that was, I remember that. That was very interesting. But, but partly the most memorable part was one of the lecturers, one of the senior lecturers, or maybe he was a professor then. Um, he was actually one of the co-founders of Sage and decided not to do that just because he wanted to, instead he wanted to remain a lecturer at the university. So he turned down being a founder at, uh, At Sage in order to become a lecturer at Newcastle University, which I think economically at least, uh, was a mistake.

AI assessment note: “There really wasn't one.”

Q So following this logic forward, which is, this is what everyone else is doing. I want to go be the best at it. I get a PhD. I go at the next level. And I guess actually at Cornell in 2007, you didn't take the next step, which is full-time work towards tenure path. What happened?

A Because I realized that a bunch of professor tenure track professors are really miserable. And even the ones who are tenured, they don't seem that happy. Like most of the time, and there are exceptions, but a lot of the time what you end up doing as a, as a professor, like a tenured professor is you don't actually, people get into academia. The piece I liked was doing actual research and like coming up with new things and testing them out and, you know, seeing, um, but if you actually become a tenured professor, you don't actually do very much of that. Most of the time, if you, if you want to become a, and here's my recipe for becoming a successful professor, be amazing at writing grants. Um, like that's basically the main job. Like people underestimate, particularly in the U S but also elsewhere, how similar, uh, being a professor is to being a startup, like a venture backed startup founder. Cause essentially what you're doing all the time is going out, grabbing money, getting the best people, And trying to get your projects, you know, financed, built and done or published in the case of academia. So what happened to those people? And I was like, yeah, this is not for me. And, and like partly also I was like, I needed to be sort of closer to impact. Like, I think that's part of the problem is you look at some of this research that gets done and you're like, what, like, this is…

AI assessment note: “Because I realized that a bunch of professor tenure track professors are really miserable.”

Q So what does Tiny, so what does Tiny do today?

A Tiny Seed basically provides capital for companies that are, are, are like that. And so what we saw was, so, so the way to think about it, if you know YC is like, YC effectively filled a pretty big hole in like a five or six, along with a couple other players, like first round capital. And so what they did was they said, you know what, and people don't remember this, but like YC gave very little amounts of money initially. They gave like I think Airbnb got, I'm going to guess, 30,000 dollars, something like that. And so they give you just a little bit of money because you don't need half a million or a million dollars in order to do something like this. And Airbnb showed you didn't. And you could just go out, do something, focus for three months, build, launch, and go from there. And they were obviously hugely successful with that model. Now, what we saw was that there's a lot of companies in and around MicroConf and in those type of environments where what happens is someone is a consultant and they go along and they either see a problem that they have or a client has. And they decide I should, you know, either they've been asked to do something repeatedly, like, you know, fix this problem again and again, or they sort of scratch their own itch in that regard. And they don't build, launch, and get a couple of paying customers, um, you know, in the, uh, into their customer. But…

AI assessment note: “Tiny Seed basically provides capital for companies that are, are, are like that.”

Q Was that your first experience working in this ecosystem of there's a VC I have to, you know, pander to a board that, okay. And did you learn anything from that or kind of early, early signs?

A Yeah. Your investors are important. Like, like, um, the money is like, if you give a lot of control to an investor, you have to make sure that they are, you are all aligned about what you're trying to do. So I think, I think some of the problem with, and, and like, Stepping away from this company in general is I think some of the reason why, um, places outside of things like Silicon Valley struggle to establish themselves. There's like, everybody wants to be, Silicon Beach, or Silicon Slopes, or Silicon Lake, or Silicon whatever, right? And, and part of the problem is, is that, um, the, the people with money in Silicon Valley typically made it doing early stage startups, you know, and, and they, they, so they understand it. Versus people in places like, you know, you know, Vancouver, or Chicago, or, you know, DC, made their money elsewhere. And, that can sometimes be a problem. Like, you know, they don't, They just don't have the sort of nose for it. Like they don't know what to, they put too much money into the wrong thing and too little money into the other thing. They grab too little control when they should be grabbing some more and they, and they, and they take way too much control in some cases. And then that can really mess up, um, mess up a company in terms of, you know, incentives and things like there are several stories of sort of friends of mine and We've been in a …

AI assessment note: “if you give a lot of control to an investor, you have to make sure”

Q So what was the status of, of remail kind of post YC or even pre and post YC? I mean, do you, were you guys, were you guys pre revenue still at this point? Yeah.

A So it never really made a lot of money, like, because it wasn't, uh, I think maybe that's, I think we tried, now I'm just clutching at straws of my memory here. I think we tried charging like five bucks for it maybe. There was no such thing as subscriptions at the time. We tried, I think we tried in like the second product. Because the, the, the version between like the desktop version and the, the, the sort of quote unquote final version was one which is sort of a hybrid where like there was an app, but it talked to like a central server and we were going to charge a subscription for the server. I think we tried that. Um, and then I think we tried. I think we tried charging for the app itself just, but not, not much, like five bucks per account or something like that. It never was a real focus to try to make it super sustainable.

AI assessment note: “it never really made a lot of money, like, because it wasn't”

Q What was the environment like in Newcastle in 2003, 2004, 2005? And was there an entrepreneurship club? Was there a program for entrepreneurship? What was the innovation ecosystem like back then?

A There really wasn't one. Although that being said, there's a couple of like, um, so Newcastle is an old mining town. Like the northeast of England is quite economically depressed, or at least it was at the time. Um, and so, you know, like there, there wasn't, there wasn't this sort of a large amount of tech industries, although there was some, and there was some stories about like, um, I think Sage, the big sort of tech accounting type firm got founded in Newcastle. And there's actually a story about I think when we were in undergrad, we had one of the founders come and talk to us. And that was, that was, I remember that. That was very interesting. But, but partly the most memorable part was one of the lecturers, one of the senior lecturers, or maybe he was a professor then. Um, he was actually one of the co-founders of Sage and decided not to do that just because he wanted to, instead he wanted to remain a lecturer at the university. So he turned down being a founder at, uh, At Sage in order to become a lecturer at Newcastle University, which I think economically at least, uh, was a mistake.

AI assessment note: “There really wasn't one. Although that being said”

Q Was that your first experience working in this ecosystem of there's a VC I have to, you know, pander to a board that, okay. And did you learn anything from that or kind of early, early signs?

A Yeah. Your investors are important. Like, like, um, the money is like, if you give a lot of control to an investor, you have to make sure that they are, you are all aligned about what you're trying to do. So I think, I think some of the problem with, and, and like, Stepping away from this company in general is I think some of the reason why, um, places outside of things like Silicon Valley struggle to establish themselves. There's like, everybody wants to be, Silicon Beach, or Silicon Slopes, or Silicon Lake, or Silicon whatever, right? And, and part of the problem is, is that, um, the, the people with money in Silicon Valley typically made it doing early stage startups, you know, and, and they, they, so they understand it. Versus people in places like, you know, you know, Vancouver, or Chicago, or, you know, DC, made their money elsewhere. And, that can sometimes be a problem. Like, you know, they don't, They just don't have the sort of nose for it. Like they don't know what to, they put too much money into the wrong thing and too little money into the other thing. They grab too little control when they should be grabbing some more and they, and they, and they take way too much control in some cases. And then that can really mess up, um, mess up a company in terms of, you know, incentives and things like there are several stories of sort of friends of mine and We've been in a …

AI assessment note: “Yeah. Your investors are important. Like, like, um, the money is like”

Q So what was the status of, of remail kind of post YC or even pre and post YC? I mean, do you, were you guys, were you guys pre revenue still at this point? Yeah.

A So it never really made a lot of money, like, because it wasn't, uh, I think maybe that's, I think we tried, now I'm just clutching at straws of my memory here. I think we tried charging like five bucks for it maybe. There was no such thing as subscriptions at the time. We tried, I think we tried in like the second product. Because the, the, the version between like the desktop version and the, the, the sort of quote unquote final version was one which is sort of a hybrid where like there was an app, but it talked to like a central server and we were going to charge a subscription for the server. I think we tried that. Um, and then I think we tried. I think we tried charging for the app itself just, but not, not much, like five bucks per account or something like that. It never was a real focus to try to make it super sustainable.

AI assessment note: “So it never really made a lot of money, like, because it wasn't”

Q But where would you put a base station in space?

A No, no, what I mean is like, if you need to communicate, if you need to coordinate with the, uh, between the satellites, you're probably better off just having all the satellites communicate down to earth and then have a central point where you coordinate, do all the coordination and send it back up again, rather than effectively trying to have a peer to peer network in space. Um, cause that's not going to be as effective. I don't think, although I haven't thought much about it, but yeah, I mean, every now and again, something comes up and I'm like, no, I could potentially have used this specific weird algorithm stuff. Half an hour later, I'm like, no, actually there's a much easier, faster, and better solution, which doesn't require any of this, you know.

AI assessment note: “having all the satellites communicate down to earth and then have a central point”

Q But where would you put a base station in space?

A No, no, what I mean is like, if you need to communicate, if you need to coordinate with the, uh, between the satellites, you're probably better off just having all the satellites communicate down to earth and then have a central point where you coordinate, do all the coordination and send it back up again, rather than effectively trying to have a peer to peer network in space. Um, cause that's not going to be as effective. I don't think, although I haven't thought much about it, but yeah, I mean, every now and again, something comes up and I'm like, no, I could potentially have used this specific weird algorithm stuff. Half an hour later, I'm like, no, actually there's a much easier, faster, and better solution, which doesn't require any of this, you know.

AI assessment note: “better off just having all the satellites communicate down to earth”