← Liftoff with Keith: Conversations with Super Founders and Growth Experts sharing useful insights
Liftoff with Keith: Conversations with Super Founders and Growth Experts sharing useful insights
VC Secrets: 25-Year Partner Reveals Startup Truth | The Liftoff with Keith Newman
00:36:06
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David Hornick
Foreign.
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Podcast Host
This episode is brought to you by the outstanding team at Compass Strategic Advisors, your trusted partner in driving strategic growth. Whether it's expanding into new territories, launching products, rebranding, or hiring key staff and board members, they offer the expert guidance every step of the way. With a versatile approach and a proven track record, Compass is the go to resource for both startups and established companies looking to scale with confidence. Thanks and show your support for this podcast by sharing some sponsor appreciation. Check these guys out@bww.compass-strategic-advisors.com but I get to welcome David Hornick to Liftoff and I'm just so happy to have you. I wanted to have you on as a guest for a while. David, I'm Approaching Episode number 100. Yeah, it's been a, it's been fantastic. And you're just one of the. That I look at that's in the venture community, has sort of seen it, been there, done that from this catbird seat we call Silicon Valley. And you've just provided so much great counsel to the firms that you've dropped a check in to a few companies that I could drop splunk, fastly, GitLab, ebites, ebates, we pay bill.com many more. A cool, diverse group of folks. And I look at all those names, I think of how lucky they are to have you as a, as an investor with August Capital Capital and now with Lobby Capital. So really welcome to lift off. Thanks for joining today.
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David Hornick
Yeah, thank you. Very kind. What is amazing about this business is you get to work with these astonishing entrepreneurs and they let you be part of the journey, which is great.
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Podcast Host
Yeah, it's really amazing, right? Instead of being one journey at your own company, you're sort of riding shotgun in 10 companies at a time. Did I get that background right? And take me through just so we set the proper foundation, the transition from August to lobby and your role now and by the way, doing it for 25 years, you just celebrated that anniversary. I saw your recent post. So officially an og.
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David Hornick
Yeah, I don't know. I mean, at least O as in old. You know, I would have never guessed that I'd be in the venture business. I was, I went into college thinking I was going to be an attorney. I went to law school, I became an attorney. I was representing companies and originally as a litigator, I was doing all these things that I thought were the natural path. I didn't have any sense that the business world was interesting or that I would like it or that I would be involved in it in any way. But back now, almost 30 years ago, I found my way back to Silicon Valley as the Internet was exploding, and I started working with startups. And then I realized, oh, my God, startups are astonishing. Like, here are a group of smart people who see some problem they want to fix, and they say, well, we could fix this. And we just did this thing or this other thing with technology. It would make the planet a better place in some way or other. And I thought, wow, like, this actually works. You can actually have an idea and implement it and raise money and hire people and go from 2 people to 200 people to 2000 people and build something that really changes the world. And so I was addicted. Like, the second I started working with startups, I was addicted. I thought, this is. This is extraordinary. And then in 2000, I got really lucky. And the founder of August Capital, a guy named Dave Marquardt, the only private investor in Microsoft, he sat on that board for 33 years. One of the, like, true OGs of the venture world. Legend, yeah, complete legend. And I had. I had been representing a company he'd invested in, and after one of those board meetings, he said to me, david, have you ever thought about the venture business? I was like, yes, of course I've thought about the venture business. Your business is amazing. You can just sit around all day with these extraordinary entrepreneurs and help them build big businesses. And so. So I said, yeah, I'd love to talk to you about that. And after a bunch of months, he finally said, look, we can't come up with a good reason not to hire you, so I guess we'll let you join us. And then they gave you good at it.
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Podcast Host
Then they gave you the navy blue suit and the khaki pants. That was the standard of the day. Now it's transformed, right? We've. We've innovated on that outfit.
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David Hornick
But no, it's true, actually. I mean, when I was a lawyer, this is what I wore. I wore a T shirt and jeans every day. And suddenly I joined this venture firm, and my partner, Dave, wore a suit every day. He was like, su. Super old school. And so I bought khaki pants and I wore shirts with collars, you know, but ironically, I'd been working at August Capital for a couple of years, and I would go to all these conferences, and when I went to conferences, I'd put on my T shirts and I put on. And one day I came back from one of these conferences and I was like, why is it when I meet the people that matter to the venture business, the entrepreneurs. I dress like this and then when I come back to the office, I dress in this costume that has nothing to do with who I am. And so literally from that day forward, I stopped and you know, I've been wearing a black T shirt to work every day since. That's, you know, 20 some odd years ago. But it was, it was really a transformative moment. And my partner sort of looked at me like, hey, don't you want to be part of this team? And I was like, no, I want to be the team that wears T shirts and funds amazing, you know, young entrepreneurs who are changing the world. I have never looked back.
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Podcast Host
Well, whatever worked. You got the deal flow you wanted, I think so you've been down a great job. And, and again, on that point, between August and, and yeah, for sure.
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David Hornick
So, so I joined August Capital. The firm had been in business for, for a handful of years. I came on as kind of a junior partner. My partners had been at the business for, for, for quite some time at that point. They built amazing companies, they'd raised lots of funds and over the Next, you know, 10 years, many of them retired. We brought in new people and over the course of that time, I ended up helping to co manage the firm with my partner Eric Carlborg. And we really transformed the firm. But when we finished investing August 8th, our eighth fund. No, August 7th, our seventh fund, we said, you know, do we want to go raise August 8th or do we want to think about it, do something different? And, and at that point, Eric and I sat down and said, well, let's, you know, what would be the firm we'd want to build if we were starting from scratch. And, and that became Lobby Capital. We had been running this amazing gathering of smart people called the Lobby was this sort of set of gatherings of, of entrepreneurs and investors that had been coming together and people were really, really drawn to this community. And we said, well, let's call it Lobby Capital. Let's raise a small fund where we're deeply involved in all the companies we invest in and, and just go help build great companies. And so we, instead of raising an 8th of August capital fund, we raised the first Lobby fund, Lobby one. And, and it's been great.
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Podcast Host
No, Lobby's been a great brand for a while with the events and you already have some great buzz with the venture firm. Rather than getting into all the nuances of what it's like to be a part of an older fund and then a newer fund and all that. How has things Changed from the old days of August and what it took to be a vc, a successful one, to what it's like now in the days of, well, just today. I don't want to color it just being a great VC today.
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David Hornick
I mean, the world has changed a lot. When I started in the venture business, there was no such thing as a seed fund, right? There were no, there were no pre seed funds, there were no seed funds, there were no mango seed funds, there were no late seed funds, There were none of them. My friend Josh Koppelman was an angel investor and at one point he said, well, why don't I invest other people's money as well? Why don't I create a fund for those seed investments? And he raised that first seed fund, you know, first round Capital and really launched that. Well then now are a thousand early stage funds. And when I started in the venture business, there were a very small number of late stage funds, right. If you wanted to raise that money to go free public, you know, there were Meritech was this extraordinary fund and if you could get Maritech to invest in your company, you were set. And if you couldn't, it was like, oh, who else is there? And now there are literally billions of dollars begging to get into the next great late stage company. So the amount of capital is just disproportionately large. And the byproduct is that it's quite competitive now, right? It used to be a, it used to be a little, little industry. You know, we were all on Sandhill Road and we'd see each other at parties and we'd give each other deals and we'd share deals and all these things. It's now, it's quite a bit more competitive. You know, there just isn't the ability to say, hey, do you want to do this deal with me? You're trying to win those deals and work with great entrepreneurs and then when they work it gets very competitive because there are all sorts of dollars that want to invest. And so I think that's in many ways great for entrepreneurs to have lots of potential sources of capital. But it's confusing, it's hard to know who are great investors and what they're going to do to help you build a big business, etc. I have just stayed heads down on the same thing, which is I'm a relationship investor. I build relationships with extraordinary people, I try and help them be successful. And so if what you're looking for is someone to join you in that journey and give you good advice and all of Those things, I'm your guy.
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Podcast Host
And I think the skills kind of speak for themselves. But what do you lean most into? Is it on the tech side, the engineering side, the idea side, or are you trying to develop the founder with the right set of, you know, management, how to grow the business, manage the business, build a culture, et cetera?
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David Hornick
Yeah, I'm a people person. I think there are lots of amazing technologists. We can find great advisors. I mean, the reality is that there are great advisors for every piece of the, of the entrepreneurial process. What I want to be is someone who is a confidant, who is someone you can lean on to get good advice, who is, who can help introduce you to amazing people, will help accelerate your business, who can be a shoulder to cry on because it's just a brutally hard, you know, game to be an entrepreneur. Someone who will celebrate with you. I mean, so I'm a, I'm a skin builder.
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Podcast Host
When it gets into a competitive situation for a hot company that you want to get your term sheet, you know, done with them, how do you communicate that? And I know it's getting into a little bit of a squeezy thing. You have a great reputation, it speaks for itself. But I mean, in a competitive deal where everyone's offering money, that becomes the commodity, right? So now it becomes, have I been able to establish a relationship in a couple of meetings? And, and hopefully you have, but I would also think that it's, it's a little bit of the relationships. You can introduce the person into it. So, so what's else, what else is in the, in the toolbox required today if I were to go start or join, lobby or start a fund?
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David Hornick
Yeah. I mean, when I give someone a term sheet, I say, here's a list of every entrepreneur I have ever backed. Call any one of them. Right. I'm not cherry picking, I'm just saying, like you should, in the same way that I have just spent weeks trying to get to know you and doing diligence on you and trying to understand how you think about this business. Here are all the people I've worked with, they can tell you what it's like to work with me. Here are the ones that have gone public, right. If you want to talk to the ones that went from 10 people to thousands and went from a 10 million dollar valuation to a 10 billion dollar valuation, great. Here are those people. Here are the ones where it didn't work at all. And what did that look like? And how was I helpful or unhelpful? And here are the ones. But talk to them. Like, do the work to talk to them. And when people, when people do that work and talk to the people that, that I've worked with and that other investors have worked in, then they get a very clear sense of what it's like. And, you know, there are people who think it's their job to tell you how to run your business. There are people who think they're your boss. They're people who think I am not those people. I am someone who is your, you know, is your confidant, is your coach, is your friend, is your, you know, and if that's ultimately, I think every entrepreneur should want that. But what I say is if when you talk to these folks, it doesn't sound like you're a cup of tea, then I'm not your guy, you know, even.
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Podcast Host
What if I want to get a term sheet from you? What, what do I need to impress upon you? Turning the, turning the table a little bit. What is it that you're looking for? Right. There are a lot of people that say they bet on the jockey more than the horse as the old Sequoia rant about the market. The market. Right, Tam? And what, what is it for you?
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David Hornick
Yeah, I mean, I am a people person. I 100% am looking for smart, engaged people. I want them to be intellectually curious. I want them to be compelling, charismatic. There are lots of versions of charisma. You don't have to be like this flashy, flamboyant, charismatic person. You can be a quiet, slow burn, charismatic person. But in the end, you, you need to be able to convince people to do all sorts of crazy things that are, that aren't immediately obviously in their interest. Right. So you need to be able to hire people and you need to be able to sell product, and you need to be able to sell your vision and all those things. So I'm looking for people who truly believe that what they're building is important, that they're listening, that they're adapting to the things that they're hearing and that they're really engaging in. How can they, you know, how can they be the very best version of themselves possible?
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Podcast Host
I love it. The phrase willing suspension of disbelief comes to mind as that's what a CEO sort of that, that unique skill. Is there anything else that you would pull out of that as you're doing that? That check to see what company you want to be a part of or you're getting, you know, pitches or decks. What's going to get Signal to all that noise. I don't even want to ask how many requests you can't.
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David Hornick
Yeah, I mean, it's a lot. I mean, it's. You know, I look at a thousand deals in a year to do one, so maybe two. I do think the market matters, right? I mean, it's very hard to build a giant business on a tiny market. And so I'm looking for. People are solving big problems, not small problems. Now problems can get bigger, and with great solutions, you can build a bigger, you know, opportunity. And so, you know, I think it matters who you're. What are you building and who are you selling it to? And do they want it and do they need it? And sometimes they don't know it, but when you get it in front of them, they're like, oh, my God, I need that. And other times, the second you describe it for them, they're like, if. If that existed, I would. I would buy it in a heartbeat. Right. When. When I was looking at Splunk, it was three founders and an idea, and they said, wouldn't it be great if there was a search engine for log files that just allowed you to search across your systems?
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Podcast Host
Yeah.
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David Hornick
When I introduced them to people building these systems, every single person said, if that existed today, I would buy it and I would use it every day. And then I just said to the guys, like, okay, can you build it? You know, they're like, yeah, yeah, build it.
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Podcast Host
You know, can you really build it, though?
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David Hornick
Yeah, it took a while. It was harder than. It was harder than any of us anticipated, but it was so valuable when it was built.
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Podcast Host
So how much has that story changed from Splunk? Because you typically meet with early, early stage, a few guys, gals who are running companies now. So the personalities may have changed, but it would seem to me that maybe the time it takes to go from initial introduction and pitch to final deal, you almost do, like, the same amount of diligence and homework and meetings, etc. Or has that changed a little bit?
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David Hornick
It just depends. I mean, it is surprising how quickly some of these deals move. And I think it's a bad idea. And it's not just a bad idea for. For venture capitalists, it's a bad idea for entrepreneurs. Right. Because you should take the time to get to know the people who are going to work with you. Right. I mean, the founder of Bill.com, rene Lacert, and I have worked together now for almost 25 years.
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Podcast Host
He's amazing. Yeah.
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David Hornick
That's a long time. Danny Shader's, board I've been on for 15 years. Right. I mean, I've been on these boards for four years. So you should probably take the time to get to know the people who you're going to be working with.
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Podcast Host
Yeah. It's funny, the fundraising process gets known as like a dating, you know, equivalent, but you typically don't date people for 15, 20 years.
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David Hornick
No, Renee and I are totally married at this point.
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Podcast Host
Yeah. That's great. Well, congratulations to you guys. I think it's fascinating the time we're in two now, David and I, I want to get your perspective just from a macro. Right. You can go deep into it as you want to, but the, the AI wave, whether it's a tidal wave or not, Remember the old book Megatrends? Because we go back, this is certainly a mega trend. I don't, you know, I don't think there's much doubt about that. But where do you think things shake out with AI? Like, is it Internet 1.0 size kind of a wave? Is it bigger? How does it start to, like, how do these dimensions start to evolve?
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David Hornick
Yeah, I mean, there's a big debate. It's not a useful debate, but it's a big debate in, in the tech world about, like, oh, is AI the most important technical innovation of our lifetime? You know, oh, is it? And my view is that absolutely not. Because the Internet came around in our lifetime and the Internet is the thing that's enabling all of the true value that AI is creating. So, no, the enabler was the Internet. Now, does that mean that this is a less big wave? Like, no, it's a very different wave than the Internet. The Internet trans. Transformed everything. Right. Suddenly we went from disconnected to connected, and that changed everything and everything. Now we're going to go from, from, you know, not AI to AI enabled and it will change everything. But the difference is that there was no behemoth that owned the Internet. Right. The Internet became this loose affiliation of lots and lots of solutions that sat connected through the Internet. We are at risk in some ways of this AI wave being a handful of behemoths that really control all the value. And so there, you know, there are a couple of new and emerging companies that look like they, they will be the winners. It seems that a OpenAI is clearly among them. It's very likely anthropic is one of them. But the problem is then it's almost impossible to imagine that Microsoft doesn't have an important stake in this, that Google doesn't have an important stake in this I don't know when we will see the Google, sorry, the, the, the Amazon solution that is going to, to take over, but you know, it's coming, right? And so what space does that leave for our little startups to get started and take hold and build value, et cetera. And I think it's very early in the cycle, but I think this one may be different and there may be fewer opportunities for these sort of vertical applications that have always been powerful and enabled by these waves.
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Podcast Host
Interesting, with two questions off of that. So it does feel like a lot of the mega players call it the scale hyperscalers or the Fang companies, however you want to look at it, right? Like they're doing their own thing and they're hedging their bets by investing big into one or two of the partners. So it's almost like a whole different level of chess being played. Does that, does that scare you from the standpoint of investing in new companies that aren't aligned with some of those companies? Because it's sort of the David and Goliath story, right?
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David Hornick
Well, you have to worry about it, right? You have to worry that you're funding a thing that will be stepped on, right? The opportunity, the resources, the scale of these giant companies is infinite. And so, you know. But you always have had to worry about this, right? I mean, you know, Amazon's a perfect example of this. In recent years, if you have built applications that sit on the kind of delivery stack that Amazon AWS lives in, every time they have a reinvent conference, they announce a set of features that kill hundreds of startups. Dozens, if not hundreds of startups, right? And so that's a huge problem for, for the startup world. You have to be very careful and thoughtful if you're going to build something in and around the AWS stack. And so I think that we're going to have a similar problem here where if you think. Right. Can Harvey maintain its differentiation in the legal world or will it just be the case that in the end Anthropic will be just as powerful, if not more powerful in solving legal problems as a Harvey in the legal vertical? We don't. Great answer to that yet. But, but it's. But it's going to get answered. Right?
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Podcast Host
Right. Super apps, regular apps, vertical apps, or do you move out of the apps world entirely and look at tools and services and. Because someone's got to educate the world on AI, right? So who's going to help small business start to adopt that? I know it's fairly easy in some parts, but That's. That's an interesting thing you get to look at. How about with. With. You're a former lawyer. You. You're looking at a company. You mentioned Harvey, which is a very hot AI startup. I don't know if you've invested in them or not, but how do you evaluate that? That's a very hot category. Is that something that you look at and say, well, that might be safe because I can't see AWS trying to crush that market, but maybe ServiceNow jumps in or Oracle jumps in, or Google wants to do something.
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David Hornick
Yeah, I mean, historically, what I would say to you is, gosh, I wouldn't want to sell to lawyers. Lawyers are terrible customers. Like, I've been a lawyer. I've been in law firms. Like, law firms are bad buyers. There have been some businesses that been built on top of lawyers as buyers, but as a general matter, I don't think that's a great. A great vertical. And yet, you know, it would appear that Harvey's off to a great start. Do I think that they can maintain their differentiation? I don't know. Like, in the end, you're either going to be technically differentiated because you have some kind of large language model that is better or different based on the thing you're attacking, or you're going to be differentiated because of data. You have some better or differentiated data source. And it's conceivable that by being the LLM of choice for the legal industry, that Harvey gets better over time in ways that an open AI or an anthropic can't. I don't know that. That's a great bet. So, you know, we're trying to figure that as we look at companies. That's what we're trying to figure out. We're trying to figure out how, you know, how can these companies, these little companies, maintain some differentiation and moat from these gigantic behemoths?
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Podcast Host
Any thoughts on that? Answer to your own question?
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David Hornick
I mean, data, ultimately, if you have a unique data source, if you're uniquely positioned so that you're, you know, so that your artificial intelligence platform is better informed than the competition in ways that can be maintained, I think you'll be able to create something interesting. But we'll see.
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Podcast Host
Yeah, I know you're very socially conscious and active too. Is that start to end? Take a place in the lobby discussion of companies that they want to invest in? I mean, yes, you have a great potential business opportunity, but are you doing something right by employees, by your community, by the community writ large?
- [25:00]
David Hornick
Yeah. I mean, I think it's tricky. I'll tell you. My, my kids could not be more anti AI if they tried. They believe that AI is a scourge. They believe that the environmental toll that AI has already started, you know, started accelerating is a catastrophe and that they don't want to have anything to do with, et cetera. So that's very tricky right now. Maybe that means we should be investing in the next generation of nuclear power because it can start solving these problems, but it doesn't solve the, how much water is being consumed in the cooling of these devices. So how do we solve that problem? Right, So I think with every technology wave there are important technologies that are, that both are valuable and create, you know, life changing opportunity, but also are, are a net positive for the planet. I will continue to look for those.
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Podcast Host
Yeah, but they present, they present some new challenges, problems as well that need to get solved.
- [26:05]
David Hornick
For sure, for sure. I mean, you know, I, I, I often talk about the fact that, you know, I had the opportunity to, to take an early look at Facebook and you know, is it, would I have regretted it more to have missed it or have invested? You know, like these are tricky, these are tricky questions.
- [26:25]
Podcast Host
Well, right, I know what your LPs would say. I don't know.
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David Hornick
Yes, we're on him. That is unambiguous.
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Podcast Host
Yeah. Well, let me turn the table now to what I really enjoy, David, is your council really to new companies, that startup that precede, as we were joking earlier, they've got the idea, maybe they've got a, a beta app, they've got a little market, maybe a trial customer or two. What, what is it that they need to know that they typically don't?
- [26:54]
David Hornick
I mean everything, it turns out when you're at that stage, unless you've done it before, you kind of have no idea what's coming. Right, right. Because the number of problems you have to solve in any given day is infinite. And then, and then when I talk to repeat founders, they say like, oh yeah, good, I don't have to solve those problems, so I get a whole new set of problems. Right. Because it's not like the technology stays stagnant, your team stays stagnant, whatever. You can hire amazing people, but when one of your employees starts dating another one of your employees, it creates some chaos in your organization. I've seen that multiple times. And you have to deal with it. You know, when one of your employees passes away unexpectedly, it creates real challenges for your organization. We're dealing with that in one of our great companies. Now, when markets shift dramatically, did anyone.
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Podcast Host
Show up at a Coldplay concert?
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David Hornick
Yeah, when you're, when your employees are at Coldplay and featured and it blows up your company. I mean, like, no one had that on their, you know, on their bingo card for what are we going to deal with at the next board meeting? And yet, you know, there is no bigger issue.
- [28:04]
Podcast Host
So CEO replacement's a nightmare. Right?
- [28:07]
David Hornick
But, but look at this. I mean, nobody anticipated when Silicon Valley bank suddenly had a run on its bank and literally went out of business overnight. And some huge fraction of the dollars we had invested in companies were being held in accounts that were no longer available. Yeah, no one had a plan for that. I had a conversation with one of, one of the CEOs I backed as that was happening, where I literally had to pull off the highway to have this conversation about how he was going to solve his payroll problem that Friday. And I said to him at some point, because he was getting a lot of pressure from someone to take their money on really crappy terms because he had no alternative. And I said to him, I will give you a personal loan before I let you do that thing because it's bad for your company.
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Podcast Host
Right.
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David Hornick
He remembers that even though now he has tens of millions of dollars in the bank and the company's doing great at that moment. It was a crisis across dozens of our companies and we had to solve that problem. So I think more than anything, we spend time saying, this is hard. It is a constant game of whack a mole. Get as good advice you can from as many smart people as you can in a reasonable time frame and make a call. You have to make a call. And then you have to always think to yourself, was it right? You can't just make a call and then assume it's right and move on with your life. Because lots of time you get new information like, oh my gosh, that was wrong. We better go fix that thing we've done right. It's always changing. And as you're building a company from zero to a million in revenue is a very different act than a million to 10 and 10 to 100 and 100 to a billion. And the fact that any company can go from a million dollars in revenue to a billion in revenue is amazing. Is shocking. Think of the, the just myriad of problems you've encountered along the way.
- [30:14]
Podcast Host
Yeah, it's fantastic. It brings up so many questions. I wish we had a ton more time. But let me ask you, because I talk about one topic with early stage companies quite often and that's their customer interactions. A lot of times the CEOs come from an engineering background, a technical background, as you know, And I ask them, how many customers have you talked to as you're doing the research to understand is this product, is the market big enough? Is this, is this problem the right, are we solving it the right way? Is it the big enough problem? Inevitably, they haven't talked to enough people. I encourage that conversation all the way through that 0 to 1 and 1 to 10 stage especially.
- [30:50]
David Hornick
Yeah, yeah. Well, we, you know, I teach a class called Startup Garage at Stanford Business School with my partner Colin Wallace. Colin and I met teaching this class and it's the Lean Startup class for Stanford Business School students. And I swear, half of what we do is just say, can you please call more customers? Like, and then report back, how many people did you talk to? What did they say? And you get all this feedback and then you say, okay, great, now build something and put it in front of more customers and see what they say. And then, oh, what did they say? Change it and get it in front of more customers. Like, the buyer is king. You must know who you're selling this thing to and what will create value for them. And if you're doing anything else, it's not a good use of your time.
- [31:33]
Podcast Host
David, any other skills or, you know, even advice that you want to impart as you think about the council you share at so many of these, you know, outlets, you know, the class and, and such. But you have me, and it's a people business.
- [31:46]
David Hornick
And so I will say that it is very hard to be successful if you don't understand human nature. If you don't actually take the time to say, like, oh, this is how. This is what motivates people and this is what scares people. And this is. I had one company where the CEO said, I have these two very senior people in the marketing world and I've decided to hire both of them. And I'm going to call this one this thing. And I'm going to call this one this thing. And I said, okay, I think that's a bad idea. He said, well, why is that a bad idea? And I said, well, you have to answer one question for me and then I'll tell you whether it's a bad idea. And he said, okay, what is it? I said, would either of them be happy working for the other? And he said, no, that's why I'm hiring them in these different roles. And I said, well, then one of them will get fired or Quit.
- [32:38]
Podcast Host
He will.
- [32:38]
David Hornick
Why do you say that? Because you're. You can't split that role. One of them will rise to the top, and the other one will have to either work for that person or move on. And so, you know, you'd be better served to just pick which one you think is going to win and give them the role than go through that mishigas when the moment happens. And he said, oh, I think that's fair point, but blah. Hemha, we didn't, you know, and he hired both of them. Of course it happened, you know.
- [33:05]
Podcast Host
And how long did it take?
- [33:07]
David Hornick
It was like under a year.
- [33:09]
Podcast Host
Yeah.
- [33:10]
David Hornick
And then it caused some chaos. And. And the CEO said to me, well, you called that one. I was like, people are people. Right? People want. What is it people? What is it that's motivating them? And what do they want? Who wants to be in charge and who doesn't want to be charged? And what do they. You know, what is important to them? And so I just think people underestimate the importance of understanding human nature and. And how that will play a role in sales and marketing and team building and, you know, all of these things.
- [33:43]
Podcast Host
David, that's brilliant. What about the turnoff that you have when you're meeting with somebody, you love their idea, you love the market, you love, you know, what they represent with their business brain. But there's something else that's just not clicking for you. Does that dissuade you from the deal? Or what's that. What's that element that pops up? And I'll. I'll tease that question a bit because I look at people that they're great at listening, but they don't necessarily hear, like, just the example you said where they're nodding, they're nodding, they're nodding, then they're off to go do whatever the F they wanted to do anyway?
- [34:18]
David Hornick
I mean, look at that happens a lot. I think the reality is that there. There are just some people who will not acknowledge that they don't have an answer for you. Right. And they will. E. And they're either willing to push up against the lines of truthfulness or they're willing, you know, like. And I'm just in no way interested in working with anyone who will even walk close to that line. And so every time I'm engaged with a company, I'm gonna. I'm gonna dig in and I'm gonna ask you questions, and eventually we're gonna get to a question that you cannot answer. And it's not because you're not smart. And it's not because you haven't been, you know, thoughtful and done a bunch of work. It's just. There's no. There is no answer. And when people give me an answer to those questions, they disqualify themselves because it just shows that you're not willing to be truthful about the things you know and the things you don't know. It's perfectly fair to say, gosh, I don't know the answer to that. You. You probably should follow that up with. But here's what I do know, and here's what I think is the answer. But to answer unanswerable questions with definitive answers is to say to me that you are someone who is willing to. To be untruthful, and I am not in any way interested in working with anyone who's even vaguely interested in not telling the truth.
- [35:42]
Podcast Host
Yeah. Well, David, that's a great spot to end. And this has been every bit as fun and valuable as I knew it would be. I really appreciate your time. Good luck with. With Lobby Capital, with the Lobby event that you host and everything else in your life. I really appreciate you taking the time with us today.
- [36:00]
David Hornick
Yeah, thanks. This was great.
- [36:02]
Podcast Host
Thank you. Have a great day.