The Exchanges

Q Interesting. Okay, a guy like you, you're launching all these companies, you're involved. I imagine you like going all in on something. Why pause and take time to write a book? How do you do that?

A Yeah, that's a, that's a, that's a really good question. So I spend, I spend most of my time these days investing in companies, advising companies, mentoring, sitting on boards, and things like that. Um, over the years, my co-author Raj Bhargava and I, um, who also does many of the same things, uh, we're realizing that while we were advising these companies that ultimately the questions that Came down to a reasonable set of similar questions, the problems that startups run into, a small set of similar problems, the attitudes, the, the issues, and we kept saying to ourselves, why doesn't somebody just write these things down, and It fell on us. Eventually we said, okay, it's going to be us. Nobody else seems to be doing so. Why don't we go ahead and do it?

AI assessment note: “we kept saying to ourselves, why doesn't somebody just write these things down”

Q Number one, number one idea doesn't matter as much as great execution. Number two, starting slow as a, you know, can be a good thing. You don't have to focus on raising capital. What's the third, would you say?

A The third is teams. Sort of, sort of an obvious thing, although, um, a lot of people don't really think through who the founding team is, who the first employees are. Um, they, they hire people who are available. They pick up people because, oh, it's my buddy, my drinking buddy. I'm going to do it with him, or I once worked with that guy, and I think he can write 10 lines of code. Um, and that's not the way to do it. I mean, you, you should, you should think about your team. You should fill the In your team with weaknesses you have, not fill in with strengths that you have, you know, build a strong team, initial team that can do everything you need at the beginning and then at the founding stage, add more people on that, um, uh, that can then fill in new roles and expand the team without any overlap.

AI assessment note: “The third is teams. Sort of, sort of an obvious thing”

Q in mind, you know, I have a lot of friends spread across the country that are great at raising capital. They're really smart, but their idea just isn't that great, or they're not executing on it well, but they can pay themselves comfortably for many, many years, so they're not incentivized to shut it down. For people in that kind of situation, how can we accelerate the shutting down process?

A Uh, tough one. Um, you know, most people don't realize that once you take venture capital, you are stuck. You're going for an exit, and that's what everybody wants. Of course, they also have, uh, you know, inflated views of what that exit is going to be. Um, but no, speaking as an angel investor, no investor wants to be involved in a company that the founders don't want to be involved in. So, you know, it's just, it's just going to take a long time to die, and it's going to be a long, painful death. So, so the best way, as hard as it is, is to go to your investors and to say, look, I want to find a way out here. You know, we can transition this to other leadership if you really want to, um, or we can shut it down. I can find a way to distribute some of this income to you guys to offset your investment expense, but I'd say hit it head on, Because it's just no investor wants to be in that situation. It sucks.

AI assessment note: “the best way, as hard as it is, is to go to your investors”

Q for you. I have nowhere near the experience you have, so I'm curious how you're going to respond to this. When my first company, when I essentially returned as much capital as I could and then moved on, I quickly learned I am much more effective at buying companies and growing them than I am at starting them from scratch. What is more effective in your opinion, buying or building?

A Uh, well, uh, I don't think there's one answer to that. I, I hate to say it. I, I've actually acquired, um, I've probably acquired a dozen, 15 companies over time, and if you do them right, uh, Um, they're incredibly high leverage. Um, there, there are issues, of course, with doing it, and you have to be able to, to cut and add and, and make quick moves. As you know, you have that, you have that experience. Um, but when you're building something, when you're, when you're, when what you're working on is sort of core to your long-term strategy, um, I feel like there's no, no better value of developing that in-house, of creating that yourselves, because you can't get your hands around the, the technology, or the customers, or the employees, or the internal talent, um, by acquiring. It just, you never really, um, never really adopt it as core. But if it's not core, then it's perfectly reasonable. Perfectly reasonable, and of course, faster to acquire, and you know, I'm, I don't know if, how you feel about it, but it's also pretty fun. M&A is, is a lot of fun.

AI assessment note: “I don't think there's one answer to that.”