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- [00:00]
A
When we last chatted you said that on the programming side it had gone from Java and Python to English. The English language computer programming or writing.
- [00:08]
B
Software was always about automating what computers can do for you if you go way, way back when it was all about machine code or machine level programming. Right. We invented compilers. Compilers allowed us to use Python and languages which were a little bit more English friendly. I think what LLMs have done is fundamentally removed any syntax barrier that Python enforces or JAV enforces and you can just in straight plain English describe what you want to do and get it done. There is no engineering roadblock in creating some kind of software or automation. If you are not doing it, I think you're falling behind.
- [00:45]
A
How are you using the English language in order to program processes to help your business?
- [00:49]
B
I've built my own automations to Go scan through LinkedIn, scan through X and find those kind of social signals for people who might be potential founders. I'm meeting people who are so much earlier in their founder journey me than I ever could have before.
- [01:06]
A
Vivek, I've been very excited to chat. Welcome to the How Invest podcast.
- [01:10]
B
Thank you for having me. You've had some of my favorite LPs and people I know really well, so I'm honored to be here alongside them.
- [01:16]
A
Thank you for coming by. So you've been a VC for roughly a decade, also two time founder. When you look at startups, you said that there's no such thing as investing too early in a startup. What did you mean by that?
- [01:30]
B
Well, I prefer to back founders and their ambition before it's consensus, before it's been priced in by the market, before traction is obvious. And that's all. I mean, I just love to engage with founders as they're thinking about their business, as they're starting to conceptualize what they want to build. And to me that is a perfectly fine stage to partner with founders. It also has this really fun advantage of being able to collaborate with them, learn a lot more about their thinking process and how they make decisions, how they navigate complex data and the like. So for me it is more about partnering with founders as they are so early in the journey. Haven't really fully started. To me that's when their alpha is highest, that the market hasn't fully caught on to those founders and frankly it's more fun.
- [02:29]
A
You're able to be part of the drafting process of how they conceptualize their business, how they start and how they grow into these kind of large unicorns.
- [02:39]
B
Yeah, and to me, you know, I don't think of that as an opportunity to meaningfully change the business. I don't think that's the role of a vc. We obviously provide input and some of what we see in the market. But eventually we are backing founders who have deep insights into markets that they really know their market better than others or have an insight into their market better than most. So my role is not to influence their business and their choices too much, but really become more of a thought partner. Help them think through their business, the challenges, help them verbalize it, help them bounce their ideas off of me. And so to me, that is the opportunity for me to provide value, but also at the same time learn so much about how they think. And as I look back at some of my most successful and favorite investments, it's been that where I've just been able to build that kind of a repo with the founders over years, that that's lasted over many, many years. Years even when the company has gone on to raise significantly more capital certainly outgrown me. But some of the bond that we form early on lives on, especially as venture has gotten such a fraught asset class. It's the time where you can generate most alpha as well. Not every VC is engaging with founders before they have incorporated, before they have started companies. And I just think that's an opportunity to drive outsized returns for LPs as well.
- [04:18]
A
It's a basic economic principle of how do you capture a lot of value? You have to create much more value. How do you become a billionaire? You build a $20 billion company. How do you become a DECA billionaire? You build a $200 billion company. It's pretty straightforward, but it starts with that. You have to be able to create that value before you capture it.
- [04:35]
B
If you're waiting for signal such as market traction and the likes, then look, every VC will say they create value and every VC says they create value and before investing. And I think mostly every VC believes it. So I don't think they are full of it when they say that. But it's harder, increasingly harder to do that when the business is crystallized and when the company's already in market. You can make an introduction year or there, but I think that is far less meaningful than to founders, than true thought partners and true people who will truly challenge them on their assumptions. They find very few of those. And as a result, you see too most founders crave the founder to founder networks and they want to engage with other founders because they find that in other Founders and as a vc, if I can provide that to them, that is my opportunity to to provide value to them.
- [05:34]
A
Like value add. The term thought partner also gets thrown around in the venture ecosystem. What are the specific do's and don'ts for being a great thought partner to a founder?
- [05:44]
B
That's a great question and I don't think I have the right answer. My approach to it is my role in those situations is not to change their minds or to influence their business. Because I believe this, I know less than founders in every instance. I just don't know enough about their business as much as they do. For me, being a really good thought partner is asking questions that make them think and some of it is creating a bond, creating that trust relationship. Because founders naturally are inclined to be in sales mode when they're talking to investors. So you have to somehow get them out of that and start to become really candid and transparent with you first so that when you ask them questions, questions that make them think they are truly inclined to think rather than give you the salesy answer. They always have the salesy answer for most questions. But I think there are enough questions that are thought provoking and can challenge their thinking and founders truly appreciate that. And at least my commitment to founders is if they pitch me, at the least that's what they get. They get a thought provoking enough conversation that they can leave with enough to go back and think more about. I'm not going to be a silent listener only or I'm not going to be a passive participant in a pitch process. I'm a very active thought partner in those pitches.
- [07:12]
A
Great investors are able to be. Instead of when somebody comes to you with a problem, instead of making it a bigger problem, where the founder now has to calm you down outside of net calming himself or herself, they also, they absorb that shock. So there's a crisis going on in the company. A great investor will actually say, okay, this is a situation, understand it's bad. Here are some solutions. Instead of going into kind of victim mode themselves so that the other party has to do that gets just a pattern of reinforcement behavior. If a founder gives you one vulnerability, maybe there's a new competitor in the market. And seeing how you react to this piece of news, whether you go into kind of the sky's on fire and running around like a chicken with your head cut off, or whether you think logically about it or rationally about it, I think as you kind of reinforce positive behavior with the founder, I think it goes deeper and the trust builds through those kind of interactions.
- [08:08]
B
Absolutely. I think the adage that VCs can be a therapist to founders is so true. The highs are the highest and the lows are the lowest for founders and you have to be a little bit of a moderating force on both of those ends of the spectrum. So, so not let founders get too, too carried away with some great news. And you don't want to be a dampener necessarily, but it's certainly a moderator of both the highest of highs and the lowest of lows, which is such a natural part of the founder journey and it's lonely. You can't share that with your employees. You can share that with your co founders, but at the same time the co founders are going through the same emotions as well. So as a vc, you really have the opportunity to be a little bit more level headed and truly finding a way to support even the most challenging situations for them.
- [08:58]
A
And you can't share with your employees because they're relying on you, they're outsourcing their courage to you. So if you don't have that courage or you show any vulnerability that affects.
- [09:07]
B
The spirits of the company and there's a fine line, you obviously don't want to be putting on too much of a show because employees are hopefully you have really smart people working in your company and they'll see through it all as well. And so if you're sugarcoating everything, I think that's not good either. There's a fine line there. But if you're taking every single problem to your team and trying to solve it, I think people are going to view that as lack of leadership as well. And so you need to have other avenues to do that.
- [09:40]
A
The other part of being a great thought partner is paradoxically pushing back, giving negative feedback and pushing back on founders. Tell me about the best practices on that.
- [09:52]
B
The best in the business that do this, do this by asking questions instead of telling founders what to do. I think most people don't respond really well to being told what to do. But if you ask, especially founders because they're just so entrepreneurial and so self driven by definition. So it's about asking the questions that help them think and help them.
- [10:19]
A
See.
- [10:19]
B
The pushback or identify what a different path might be. And in cases leaning on anecdotes or stories or pattern matching that we have the advantage of, that founders might not. Any input or addition is usually from experience or some kind of pattern matching that we can draw on. But most of it I try to emulate the best in the business who really just ask good, thoughtful questions that'll help founders see a different path.
- [10:51]
A
And Ray Dalio, who I'm scheduling with, so I'm preparing for my interview, he has this great concept of believability. Within Bridgewater, everybody had their believability. So even a first year analyst, if they had just graduated computer science from Stanford and they were in a class on a very cutting edge technology or form of engineering, they might be more believable than the CEO or even in the vc. So everybody has their edge. And being transparent about where you have an edge and where you don't also leads to your overall believability because there's, there's, there's a sense that you know where your believability lies.
- [11:28]
B
Yeah, absolutely. I mean, I'm on the board of a company right now that is consumer hardware, you know, very, very non mainstream. But one of the challenges they face is in supply chain and certainly way outside my area of expertise and not an area where I should overly see my role as an influencer in their business decisions. But what I can provide is asking enough questions to educate myself. And as I do that, I think founders can see perhaps questions that they have not been thinking of or not been asking as they try to solve their supply chain issues. So if I try to position myself as an expert in that, I certainly lose credibility and not something I intend on doing. And part of being a great partner is not making it about yourself. I think VC is a business of high egos, unfortunately, and a lot of those high egos try to make it about themselves. And the more you can make it about the company, the better. So it's about being curious enough, asking the right questions, helping founders think about it differently and from different perspectives and different reference points. I think if you can do that effectively and stay contextualized, be a good listener, I think that's the best thing you can do, or best thing I found I can do as a vc.
- [12:52]
A
I've recently changed my views on ego in the last couple of years. I used to think it was wholly a bad thing and then I, I just saw with my own eyes very high ego people succeeding and I started asking why. Why do you think ego could be positively correlated with success as a startup founder or as a venture capitalist?
- [13:15]
B
That's way more of a psych question than I am an expert on. But if I had to venture a guess here, I think it's got to do with relentlessness and perseverance. And people with higher ego are more are going to be less open to just giving up. They can't see themselves fail necessarily and can push way beyond what is normal or reasonable even. And founders are by definition working on things that are unreasonable, that their expected value is negative in every situation. And so they're doing things that are irrational. And the only way they can do it is if they have this outsized ego of I can do this. The reason we will win, because I'm the best in the world at this. And so there is that need for some level of ego to be relentless in the face of what's obvious. The obvious fact is that most companies are destined to fail. And so for founders to be relentless, they have to have a high ego. And the Same goes with VCs. VCs are taking bets on things that are likely to fail. We are creating portfolios of companies where 80% of them perhaps are going to fail. And so we have to have this belief that we can invest in the next and support the next multi billion dollar company, create a 10, 20, $30 billion outcome. And to do that you have to have some irrational ego, irrational self confidence.
- [14:47]
A
If you define a healthy ego as being confident as in what your background has produced, you'll never build something world class because you'll always be on this linear relationship. But if you're like Elon Musk, which I think most people would agree has a high ego and you want to go to Mars and you believe that you could start a space company, it really requires that ego to succeed. And the way that I would look at it is a high ego will lead to higher ambitions and also a lower hit rate. Which reminds me of course, of what it takes to succeed in the venture asset class. So perhaps a VC is better off investing in a lot of high ego. There's something about this kind of power law aspect to ego that makes it a good match for the venture asset class.
- [15:29]
B
Absolutely. And I think that that takes a while to understand. Early on, especially in my career, I don't think I fully understood the power law well enough. And I think it takes witnessing it, seeing it to truly understand what that means and is and the kind of people who are going to accomplish that. I just think for anyone to believe, truly believe that they're going to create multi billion tens of billions or hundreds of billions of value of shareholder value, you just have to have some really high ego.
- [16:09]
A
There's a George Bernard quote. The reasonable man adapts himself to the world. The unreasonable man persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man. So you believe startup ideas are overrated? Why are startup ideas overrated?
- [16:24]
B
I think every. If you look back at most successful companies, they've gone through many layers of pivots in what they are today. And it wasn't the original startup idea, and it wasn't that the startup idea wasn't good. It's that no startup idea is complete. Startup ideas are too abstract at the start. And that abstract doesn't create enough value. To create true value, you have to have relentless iteration and the ability to pivot and be relentless in execution to truly eventually create something of meaningful value. So to me, a startup idea as a starting point, it's worth nothing if not matched with some incredible execution and some truly relentless iteration. And with iteration is when you start to truly get precise enough in what the customer value or what value you're creating as a company for customers, for users to eventually start to drive something meaningful. And I've seen this in my portfolio and as I look back at other companies, seen this multiple times, that the most successful companies have either pivoted dramatically or certainly gone through many, many, many layers of iterations to arrive at what was eventually product market fit. And product market fit doesn't come from a spark of an idea. It just comes from delivering to customers, listening to customer feedback and iterating on what your product is. And so to me, it is about the founders and their ability to truly understand the customers, truly listen to customer feedback, to truly iterate on what customers are telling them both directly and indirectly, rather than just leaning too heavily on what the original idea was.
- [18:23]
A
So you say startup ideas are overrated. Are customer pain points the thing that you're looking for? Is it the customer pain that's underrated? What is underrated?
- [18:33]
B
Yeah, I think the customer pain and the ability to actually solve for that, and the solving for that is usually a lot more nuanced than just the idea itself. You have to solve it in a very precise way. So something that doesn't require deep habit change from customers, a lot of people think that they can change habits dramatically, which is just a false assumption. So you have to somehow fit within customers existing habits, whether it's an individual or a company, and still be able to truly solve a problem, which requires a lot of ingenuity and requires a lot of of trial and error in truly delivering it. Yes. I don't think you arrive at a sharp enough customer pain point through just an idea. An idea is usually a framework of where there may be an opportunity but the sharpness that you need in a wedge in understanding the customer pain point requires a lot of iteration and then solving for it requires a lot, lot more.
- [19:35]
A
A popular startup meme is if I had known how difficult it was to start, start this company, I probably wouldn't have started. And I've thought a lot about this and it reminded me of this concept by Balaji Srinivasan's previous guest Balaji. He talked about this idea maze which is you have to get through this maze of all these nuances like you mentioned, all these problems that are like almost hidden under the neat, the big problem and that 2 to 3 year journey or sometimes 5 to 10 year for hard tech companies, that is the competitive advantage, that is the moat. Most of the problems are not things that you've even thought about or even could think about before you were in the industry. So this idea maze ends up being the competitive advantage on which startups are built.
- [20:17]
B
Yeah, absolutely. My own framework for this is I think of most creative success as a product of the concept or idea, the effort and skill. And the concept is important, but it's worth nothing if there isn't meaningful skill or effort into it. And I think the effort is, that is what you're describing of the 2, 3 year process or in some cases 5 year process of iterating going through that idmas and arriving at enough of a nuance and enough of a moat in being able to deliver that solution. So yeah, absolutely.
- [20:55]
A
If we normalize skill and we normalize that, the market is there and the skill is there. So the person has the IQ or the work ethic. What separates the entrepreneurs that are able to suffer through that two to three years of the five year journey? How do you predict which entrepreneurs, given the same level of skill will be able to, to do what it takes?
- [21:17]
B
Yeah, well, I think that's. I look for a few different things in founders to me which are predictors. Number one is the scrappy people who are able to do a lot with very limited resources, are able to move, are able to and are going to be able to move mountains and bend reality to suit them. I think that is the number one characteristic that I'm looking for in founders. Now there isn't any exact science to predicting that. I think you learn from some past experiences, but also the vigor with which they approach the particular problem. The second, and this one to me is really important, is true intellectual honesty. I meet with so many founders who are unable to be intellectually honest with themselves and if they're Unable to be intellectually honest with themselves, they're constantly going to be fooling themselves about where they stand relative to the market and where they stand relative to customers. And they're looking for metrics that support their story and support their case, rather than looking for true product market fit. And I think the founders that are truly intellectually honest with themselves are those that are going to be chasing product market fit with a relentlessness that other founders are not. And I think if you are, that it becomes meaningfully easier to stay the course because you are now listening for the right metrics rather than trying to craft a story. And you are seeing incremental gains in customer adoption or in customer pleasure or customer love that you just wouldn't if all you're trying to do is tell the story better. So to me, it's a combination of am I a founder who is going to move mountains and change reality or bend reality to suit me? And vigorously intellectually honest with myself. And if you don't have those two capabilities, I think you just can't be a good startup founder. So to me, going back all the way, the reason I like to invest early and the earlier the better almost is because I think that's the part of the founder life cycle that you can truly evaluate that once the founder starts to get into true company building and storytelling and treats investor conversations as pitches, it becomes increasingly hard to truly determine or truly understand who they are as people behind all of that. And I think you can do all of that when you're talking to them without a slide deck. You're sitting in a room across from a person and having a conversation. I think that's when you can determine and ascertain a lot of that.
- [24:03]
A
I had this thought experiment that I thought about for probably over a decade. The Nepo kid. So a kid nepotism comes from a lot of money or a lot of connections. And he goes and he pitches this terrible idea to VCs, let's say Airbnb for Docs. No offense to Rover, any company, but let's say he pitches this. I believe that with enough meetings and with an openness to enough feedback, that could actually turn into a high quality top tier startup idea. We'll put team to the side, but in terms of just idea, if you just have some semblance and some connectivity, you could actually iterate yourselves into a tier one idea. What do you think about this? Introducing your new Dell PC, powered by the Intel Core Ultra processor. It helps you handle a lot, even when your holiday to do list gets to be a lot because it's built with an all day battery plus powerful AI features that help you do it all with ease, from editing images to drafting emails, to summarizing large documents to multitasking. So you can organize your holiday shopping and make custom holiday decor and search for great holiday deals and respond to holiday requests and customer questions and customers requesting custom things. And plan the perfect holiday dinner for vegans, vegetarians, pescatarians and Uncle Mike's carnivore diet. Luckily you can get a PC that helps you do it all faster so you could get it all done. That's the power of a Dell PC with Intel inside backed by Dell's price match guarantee. Get yours today@dell.com holiday terms and conditions apply. See Dell.com for details.
- [25:43]
B
Yeah, I mean the mom test is essentially a variation of what you're describing here too, right? If you go to your mom for feedback on your product, you're not going to get any good feedback. And so yes, I think founders who are truly open and truly seeking that feedback are the ones who are going to refine their idea well enough. So I like that framework of the Nepo baby. Interesting that you bring up Airbnb for dogs. I don't know if you know this, but my partner at PSL started Rover.com and Rover.com started and has grown it got acquired recently for two and a half billion dollars.
- [26:23]
A
That's hilarious. I take back my example. I just wanted to generally understandable meme this. I feel like Uber for Dogs is itself a meme. But I take that back. Two and a half billion dollars is a great outcome and congrats to your partner. Obviously the Nepo. The Nepo baby. The Nepo baby thought experiment implies that you're super connected and obviously I know both of our backgrounds, we come from the opposite of a Nepo baby. But there is something about that in that in the pre seed stage, if you surround yourself with the right information diet and the right people around the hoop, you will get better and the market and your advisors will pull you.
- [27:03]
B
Into a great idea that requires another assumption to be true, one that this Nepo baby is truly open to that. I think if the Nepo baby is so defensive of their idea or so defensive of their if anyone's defensive of their original idea, then they're not going to be open to that refinement. And there's an assumption that they're surrounding themselves with the right network of people who are going to push them rather than yes, Manning or Yes, manning them. And I think if you have the right combination. Yes, absolutely. Then you have the position to refine yourself. But I don't think you see that very often of people from that position of power being that open to.
- [27:50]
A
Yeah, we see. Me and my business partner Curtis have talked a lot about this and I hate overly determined or overly simplistic model, but does seem like second generation family office, which is essentially Nepo baby. They fall into one of two camps, like extremely driven, wanting to continue legacy or basically debaucheros, want to spend, you know, get cars and, and go party there. There doesn't seem to be much middle ground. It's kind of crazy. I'm not sure why that is, but there seems to, it seems to lead to these polarizing results and we've seen both and I've talked to people in both camps, but there, there is to, to be in defense of Nepo babies there, there is a, a good chunk of second generation that is extremely impressive. And of course they have the DNA, the connections, all these things that make.
- [28:37]
B
Them super cool, successful and not to be underplayed. They also have the ability to take risk so much higher than someone who's not in that position. Right. So I think that they can just also give it their all and don't have to worry about a paycheck for a long, long time and can take much, much deeper risk. So absolutely. I think there's. You see a lot of successful and great founders coming out of that kind of background.
- [29:04]
A
So from Nepo babies to the market today, so you play in the pre seed and seed and you don't live in a bubble. You have to hand these over to Series A investors. What does it take to raise a Series A Today, October 2025?
- [29:22]
B
Series A investors have always, I mean, I feel like they've always looked for founders who can do the most with the money they've raised so far. And I think in October 2025, two things are very different from times prior. One, seed rounds have been much bigger than historically. So seed rounds have ballooned a lot. So founders just have a lot more money or have spent a lot more money going into the Series A. And over the last few years with Genai, the efficiency has been a lot, lot higher or startups have the ability to be a lot more efficient. So going into the Series A, the expectation is that you've just proven a lot more than you were expected to prove five, six, seven years ago. And if you're looking for a metric in ARR terms, the 75th percentile for A rounds is at something around 7 million in ARR, which is meaningfully higher than it used to be five years ago where 1 or 2 million, $3 million in ARR could land you pretty sizably. Valuations have gone up meaningfully as well. So the valuations of the A have as also gone up dramatically. But the expectation is that founders show that scrappiness, show that they can take a dollar of investment a lot further. And founders are both raising a lot more money at the seed and have the ability to take that money a lot further. So the expectation is really, which is an adjustment, I think a lot of founders haven't fully adjusted to this. They still have this framework in their mind of maybe I need a couple of million dollars in revenue. And so founders who are not violently aggressive, trying to be violently efficient with their money are struggling to raise their series as. And so for us as an investor, the opportunity and really the onus is on us to help constantly set that expectation with our founders on what is going to be expected of them as they come out of it. And and most important, most importantly for me it's a little bit about raising that a but more importantly it's the fundamentals. You, you want to be as efficient as you can with your dollars, you don't want to spend your dollars foolishly. And so how can you do that while being aggressive?
- [31:49]
A
And AI is playing into this. How does AI affect the expectations at the series?
- [31:54]
B
A huge right? I mean I think for everything from iterating so shipping MVP and shipping product and doing that iteratively is much faster and much easier and much cheaper. You know, you one engineer can do the work of what would perhaps take several engineers a few years ago. So you see a lot of efficiencies on the engineering side, but that's also true on the go to market side. Whether it is generating marketing copy or filtering sales leads, or creating sales outreach or creating sales collateral, everything has seen efficiency gains with use of AI and that's only increasing further. But already if you as a founder aren't leveraging AI to make every single function in your business a lot more efficient, then you are behind. And I think what that translates into is if you were going to spend a million dollars, you should just be much further ahead in every single function than you would have been five years ago. So your product needs to be a lot more refined, your go to market needs to be a lot more refined, your sales need to be a lot further ahead. AI is increasing revenues in that A lot of customers, a lot of the Fortune 500 and across the board enterprise customers have these big broad, nebulous AI budgets. Right. So they need to go spend money on using AI and figuring some efficiencies in their own businesses. So that just created whole new line items of budget which founders can go after, resulting in higher revenue. To me this is a little bit scary because there is no evidence of that revenue being sticky or that revenue truly being recurring, whereas founders are reporting that as very recurring revenue. So there is a little bit of a double edged sword with that. But that's driving real increase in revenue. Just the fact that there is increased budget certainly from enterprise customers. The second in AI increasing revenue and you need to be good at using AI in order to do this is it helps you identify your sales funnel a lot better. So if a team could navigate 100 prospects a day, 100 marketing leads a day, they can now filter through 1,000 marketing leads, perhaps 5,000 marketing leads. So the funnel, the speed and efficiency of the sales funnel is so much higher as a result, you know, so whether you want to score marketing leads, AI is extremely good at that. Whether you want to create personalized copy for each of those qualified leads, AI is extremely good at that. Whether it is to come up with a plan for how you're going to sell to each of those qualified leads, AI is really good at that. So every step of the sales funnel, you have various AI tools or inbuilt AI automations that have started to show meaningful efficiency gains as a result, also driving revenue high.
- [35:08]
A
So you're not only lowering the cost of engineering, every engineer is now more effective. The same thing happens on the revenue side. So now if, if you could only hire three salespeople with a million dollars or a couple million dollars in seed funding, now those three people could work as if there's 30 salespeople. So it's, it's as if you actually hire 30 salespeople, which is how they get to that $7 million air for.
- [35:30]
B
The Series A. Yeah. And it's almost better than hiring 30, right. Because now you have three extremely enterprising salespeople. You don't have the burden of managing a team of 30 people either. You have three, three salespeople who are entrepreneurial, self starting and so you don't have that burden of managing. You can pivot a little bit more easily based on customer feedback. So the speed of pivoting is a little bit faster as a result too, because you're a lot more nimble with three people as opposed to 30 people. So there's layers of advantages to it, but yes, absolutely. Three people serve as an army if they're tasked with the right AI mindset and AI tools.
- [36:16]
A
Same level of productivity as a 30 person team, but 10 times less complex. Or you could even say more than 10 times less complex.
- [36:24]
B
Yes.
- [36:25]
A
When we last chatted you said that on the programming side I had gone from Java and Python to English, the English language. What do you mean by that and how does that affect startups today?
- [36:37]
B
So computer programming or writing software was always about, I guess, automating what computers can do for you. And if you go way, way back when it was all about machine code or machine level programming. Right. So you had to write in ones and zeros. So that's because that's all that machines understand and you're writing ones and zeros. Very few people could do that. We invented compilers. Compilers allowed us to use Python and languages which were a little bit more English friendly, a little bit more natural language friendly. So a lot more people could write code that computers could then go and automate. I think what LLMs have done is fundamentally removed any syntax barrier that Python enforces or Java enforces and you can just in straight plain English describe what you want to do and get it done. So essentially ChatGPT or any other LLM essentially serves as a compiler for English to computer code and therefore English or any language really serves as code. As long as you understand the logic that you're trying to automate or the logic you're trying to implement, there is no barrier anymore. Every single person can create automations. There is no engineering roadblock in creating some kind of software or automation, which is where too one salesperson, if really, really good, should be able to create automations across the sales process, even without tools, without the need for engineering, so that they can have the efficiency of 10 salespeople. This might include let me get my marketing leads from HubSpot, let me create some automation to qualify them and let me get personalized emails or outreach created for each of those qualified leads. All of this can be automated now without the need for engineering, and every single person and every single function can do it. If you are not doing it, I think you're falling behind. And as part of recruiting in my portfolio companies, I insist that we have that kind of mindset that we are recruiting for, for people who can create their own automations, their own software in every single aspect of the business.
- [38:56]
A
Maybe give me a specific example of that in your own business. So how are you using the English language in order to program processes to help your business?
- [39:04]
B
There are a few that I've built myself but then I'll maybe also give you an example of a portfolio company. So for me, like I said, one of the things I like to do is work with founders even before they've formed a company which creates a unique sourcing challenge where most other VCs are sourcing. Companies that are already formed have teams. There are well defined ways to go look for those companies but I'm looking for people who are going to be potential founders. So there's a whole lot of social listening, a whole lot of looking for signal on social media and different kind of ways that you want to look for people's backgrounds to understand whether or not they are perhaps thinking of starting a company or in the early phases of starting a company. I've built my own automations, I call it Scout. I've built my own automations to go to Go scan through LinkedIn, scan through X and find those kind of social signals for people who might be potential founders. And I've seen a remarkable rise in the number and quality of people I'm meeting as a result of it. I'm meeting people who are who have just quit their job but haven't started a company or are starting to really think about much more deeply about a space but haven't yet left their job and starting to engage with people so much earlier in their founder journey than I ever could have before. So. So that's an area that I've seen it myself. We just recently held a CEO dinner for some of our portfolio companies and this thing baffled me so I'll share this. We have a company in our portfolio that is at $25 million in ARR. They were at under $10 million last year, so also growing really rapidly and they have zero people in finance, they have one contractor and that's it in all of their finance function which is inconceivable in your sprior. And the reason they have that is they've just built all of these automations from Stripe to QuickBooks and taken all of their tools and build some automations in between that that they don't need people to do that anymore or they don't need an army of people to do that anymore. So if you have the ability to or the desire to truly go automate, you can go automate a lot of different things if there is enough of repeatability in your process.
- [41:31]
A
Let's say I'm A GP or LP that wants to just start and learn. Start with a project or learn more. How does one go about educating themselves on this kind of every man's coding?
- [41:43]
B
For me, this may be different for different people, but for me, the best first step is just starting, right? You start somehow and figure out the first roadblock you hit, and you learn how to navigate that roadblock as well. If you're looking to learn a lot before you start, I think you can fall in this trap of information gathering, which is such a dopamine hit, and you can get trapped in that information gathering loop rather than actually starting. So to me, it is start, start anywhere. Ask ChatGPT Define a project that you want to do. Talk to ChatGPT about how you might do it, and it'll outline some steps for you, and you can take it to Cursor and build there, or perhaps start in something like Lovable or one of our portfolio companies, AG2. But you can the simplest way would be define a project to ChatGPT, tell it to outline the 10 steps you should take to go drive that process, and it does a remarkably good job at it, and it'll tell you what tools you should open and start.
- [42:44]
A
So set another way. Use ChatGPT to contextualize the framework of what you're asking, and then go and learn those individual tools or those individual steps. Perhaps also using ChatGPT to provide more details on how to do that. But you're using AI to actually bring context to the problem. You're not coming and saying, I want to build this via Lovable and via this integration. ChatGPT itself is contextualizing the problem for you.
- [43:11]
B
That's right. I mean, I think it can be tricky to get too opinionated about the tool to use too soon. So say if you say Lovable or Cursor or Claude or whatever it is that you want to use, and you try to make it about the tool, that then you're restricting yourself too much right off the bat. For some people, that might be good, and it's perhaps better to start in a little bit of a confined universe, but I think it's perhaps the wrong thing to decide on first is the tool to use. I think that the right thing to decide first, at least in my mind, is what is the best way to perhaps build what I'm trying to build and then learning a few different tools rather than being too committed to one tool too soon.
- [43:55]
A
You just had a daughter born 12 days ago. First of all, congratulations. As she grows up, what skills do you hope to impart on her? And what skills would you like her to learn this post AI world?
- [44:10]
B
Before she was born, I thought a lot about this. I'd be lying if I've thought about that at all over the last 12 days. Over the last 12 days, I've done nothing but obsess over her. But before she was born, I spent quite a bit of time thinking about this because it's just such a challenging, different time that kids are going to grow up in. To me, as I look at it, I think the hurdle or the roadblock of building and creating is coming down. And I think the skill that is going to be most valuable is persuasion and connecting with people in different ways. And persuasion can be thought of in many different ways. There is the selling ice to an Eskimo type of persuasion, which, which has its benefits and not to knock on that skill. That's not what I mean when I say persuasion. For me, it's a lot more about truly connecting with people, understanding what they need and want at a, at a really deep level and then being able to go build and deliver that. And as I think about how I want my daughter to be learning, I want her to be learning as she grows up in that kind of framework. Again, not knock on the idea of Girl Scout cookies or the likes, which is a really important skill to just learn pure sales. I think it just completely eliminates the need for thinking about what people want. And as I think about what will be the most effective skills over the next few decades, it's going to be the ability to identify, connect with people, identify what they truly really want, and then figuring out how to go solve for that, build that and so on. I want her to be able to identify and think about what people want. And when I think about sales or persuasion, it's that it's truly understanding problems, truly understanding customer problems, defining them really, really narrowly rather than forcing your product onto them. I want her to be able to think that way, or at least help her be able to think that way.
- [46:28]
A
So a mix of high level problem solving skills as well as empathy, perhaps.
- [46:35]
B
It'S captured in empathy, but listening skills, the true ability to listen to other people.
- [46:42]
A
She should start a podcast. When I started my podcast, I was shocked by how little I was actually hearing on the original recording. And I had to train my brain to be a much better listener. And it just. That gap between how much I thought I had heard from the conversation and listening back was shocking to me.
- [47:02]
B
Wow. I mean, I was going to say to you after this podcast just how much I thought you were a great listener. So I'm fascinated to hear that there's been a journey there as well.
- [47:13]
A
So tell me about Pioneer Square Lab. So you invest both in venture studios and startups. Tell me about that.
- [47:22]
B
Yeah, I mean the way we think about ourselves and the reason we started was to partner with the best founders and meet them where they are. And for some founders that means giving them capital and investing in them through a venture fund. And for some founders, it might be providing them an EIR or entrepreneur in residence kind of platform where they can use our studio resources to start a company. And that's what Pioneers Collabs is. We are a venture studio and a venture capital fund. So the studio is essentially an incubator for aspiring founders to come workshop their ideas, validate their ideas in with a lot of resource where they're surrounded with a lot of resources. This may be engineering, sales and a whole lot of different kinds of muscles. And then the fund is a vanilla venture capital fund. We invest in founders, we invest, like I said, nothing is too early for us, but we just invest in founders like any other VC fund would. But what's unique about us is that we want to provide that spectrum for founders. No matter what kind of founder you are and where your risk appetite is, we want to be able to partner with you.
- [48:38]
A
I had Henry Shi, who really popularized this seed strapping term. He wasn't the only one, but he was one of the main vocal parties doing this. He also runs the Lean Startup Dashboard which checks kind of the companies with the most amount of revenue, with least amount of employees. Does that change how you approach venture? And are you building your business to evolve into this kind of reality where you have these unicorns with under 10 employees?
- [49:08]
B
Yes, certainly. And I think we've experimented with that in the studio where we've given ourselves the challenge of how can we, how far can we take a one person company so surround one person with nothing else, just themselves and let's see how far they can take this. And so we are constantly pushing ourselves in the studio on trying to figure out how far one can take themselves on seed strapping. I'm not fully sold on that idea yet. I'm still thinking about it. I think there is a potential for companies not to raise a lot of capital, but capital still provides some competitive advantage in how fast you can accelerate and scale and grow or capture market. And so I think there is still a competitive advantage in a lot of cases, not all cases. And there's an argument for not seed strapping and raising more capital. So at least for now I'm not fully convinced that we are in the true seed strapping type market. But we continue to test and experiment with the idea of how far can you take a company with one or very, very few people.
- [50:19]
A
I don't think his argument is that you could go public just raising a seed round. So I think it's kind of like almost like the small business or the lifestyle equivalent. But there is something to what you said earlier, which is three salespeople could actually outperform 30 salespeople in the old world. And the reason for that is you have this culture of excellence. So everybody is taking everybody at a very high levels. No one is bringing down the entire team versus if you had to scale to 30 salespeople within a couple of years, you have to make some trade offs and then the entire team kind of lags. So there is something about this culture of excellence that you could develop in these smaller teams that have some non linear, some benefit to the overall organization that's not captured just by hiring more people.
- [51:01]
B
100%. And that isn't super new either. Right. If you look back to Instagram when that was acquired by Facebook was under 15 people, I think 11 employees. Yeah. And that concept isn't super new and certainly a lot more popular now. And to me, the more nimble you can stay, the better. We certainly aim for our companies to be nimble. And as we are both investing and creating companies, we constantly think about how we can add more efficiencies and be proficient in using the full power of AI, which I'm sure we are nowhere near great, or using it to its max potential. But how can we maximize the use of AI in every function?
- [51:51]
A
You have a founder background, you started investing into other startups in 2013. What is one piece of advice you would have loved to give yourself in 2013 that could have either helped you accelerate your career, helped you avoid mistakes?
- [52:07]
B
Well, I got this advice from a mentor of mine and I didn't initially take it fully and I did take it a little bit later in life. So the advice would be to take that advice was, and I won't paraphrase, I'll use this language, stop bullshitting. And early on I think a lot of VCs and I certainly did it, are trying to fake it too much, are trying to fake it till you make it, or trying to pretend they know, or trying to pretend like they have the answers to everything. And I think that is really damaging to oneself and certainly also damaging to people you're working with and no way to build a good lasting brand. So I think as I entered this really high eco industry, I fell in this trap of trying to position myself as an expert on a lot of different things. And I, if I look back, I think I would have taken that advice and not done that. I would have tried to learn and as a result I would have learned a lot more. I would have built a lot deeper relationships even then, compounded those relationships even then and built a lot more confidence in the parts of my skills that I did have. I didn't go into it with no skills. I had some skills and I could have highlighted those without seeming like, or trying to seem like an expert in every single thing. Ever since I did start to think that way and changed my approach, I feel like I've learned a lot. I've been open to learning a lot. I've learned a lot both about the venture business but also about the industries that I invest in. And to me that's made me a better investor. It's made me approach this craft as a craft, something that I can hone, something that I can get better at over time.
- [54:01]
A
That's so good. And you basically said the strategy from the 37signals founder, which is build half a product, not a half ass product. So just lead with your strengths. But it's a hard thing to your defense is an extremely difficult thing in the beginning. You don't have as many connections, you don't have as many shots on goal. You want to make everyone account and it's just a, it's this also this sad case where scarcity could oftentimes lead to more scarcity. And that's a very common mistake that people make. It's a very understandable lesson.
- [54:31]
B
Yeah. And the more people can work on fixing that and I think it's just, it's just such a, such an unlock. I think more people will realize that certainly in tech more people are very welcoming of self aware people. People are very welcoming of people who are truly honest with themselves and have skills, but also open to learning new skills and open to knowing where their weaknesses are. I've certainly found everyone I worked with just so open to open to that and welcoming of that.
- [55:07]
A
The way that the analogy that I use is my LLM. So I have a GPLM and I have ll an lplm and I'm constantly trying to get data from everybody. But I'm also trying to fine tune my own assumptions so I'LL throw an idea out there and I'm literally hoping that the person, well, either confirms it or fine tunes it. So I don't even think in terms of like right or wrong anymore. I, I've really honed in and I've really reframed it in my mind into gathering feedback now once in a while. Obviously I'm a human being. Sometimes my ego is hurt. But the closer I get to this analogy of my LLM gathering data and fine tuning my LLM, the more I'm able to learn in the faster pace.
- [55:49]
B
Yeah, absolutely. And this becomes so much more important when you're on the board of a company where you are not just responsible for your own eventual outcomes, but for all shareholders and certainly to the founders, that's, that starts to become so much more important. I'm still learning, I'm still growing on that front. But to me that would be the, the biggest thing I would go tell myself if I could.
- [56:17]
A
You just had a daughter. How does that, how do you expect that that'll affect you as investor, as a business person, as somebody in the business world?
- [56:26]
B
I think it'll make me a much more long term thinker. I start to sense that a little bit more. I've always prided myself in being a long term thinker, but I just think I'll think much, much more long term now because I think 40 years from now means a lot more to me than it would have without her. This is my first child as well. And so I just think I'm going to think a lot more long term. And I already sense a little bit of that in my conversations with people and how I'm approaching situations. And the second, and I think this is the biggest unlock for me is I've just gotten already a lot better at saying no and prioritizing. So I find myself understanding my own priorities a lot better, which is so powerful as you start to realize that there is just so much wasted time, or at least for me, there was so much wasted time in my day that I'm recapturing and approaching the parts of my work that I am giving my time to with just so much more intensity as a result. So the prioritization has spiked for me. The ability to say no has spiked for me.
- [57:41]
A
There's a saying, each baby is born with a loaf of bread under its arm. Meaning that as you have kids, you have this drive, I call it the sixth gear. There's different ways to access it that makes you that much more effective and that leads, it leads to abundance. A lot of people think having children kind of takes away, but it, it puts you in a different mindset and it, and it makes it much more likely to succeed.
- [58:07]
B
Yeah. Yes.
- [58:08]
A
Well, Vivek, I, I really look forward to this conversation. Appreciate you jumping on the podcast. Look forward to continuing this live.
- [58:15]
B
David, thank you so much. I've loved it too.
- [58:17]
A
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