← The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: Inside KKR's Monster $8BN European Fund | The $500M Turkey Gamble That Went Wrong | Do Andreessen & General Catalyst Scare KKR? | Will AI Kill the PE Model? | Can The PE Model Survive without IPOs and Where is the Liquidity with Philip Freise
01:01:32
Philipp Freise is Co-Head of European Private Equity at KKR, where he manages the largest private fund in Europe with $8BN in the latest fund. Philip has led KKR's investments in FGS Global, Superstruct, Axel Springer SE, BMG Rights Management,...
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- [00:00]
Philip Fries
I'm a free marketeer. I think tariffs are not the answer. We need to work on the underlying issues in our Western democracies. To try to raise money through tariffs is not the right approach. In Turkey I think we lost around 500 million. What we didn't see was rule of law was a bit of a flexible concept there and quite frankly we have so much going on in Western Europe. We just don't take the risk. We stay close to what we can control.
- [00:22]
Harry Stabbings
Do you believe the US dollar will be the reserve currency of the world in 10 years?
- [00:27]
Unknown
You are listening to 20VC with me Harry Stabbings and we have a titan of the private equity and growth world. Joining me in the show today we have Philip Fries, co head of European Private equity at the monster that is KKR. At KKR, Philip manages the largest private fund in Europe with $8 billion in the fund just for Europe. At KKR, Phillips led investments in FGS Global Superstruct, Assel, Springer, BMG Rights Management. Get your guide who we just had on the show now. This was an incredible show that spanned everything from aging demographics to the rise of China in European auto industries to the future of the private equity industry. I cannot thank Philip enough for joining me and I'd love to hear your thoughts. You can let me know by emailing me harry0vc.com but before we dive into the show today, I love seeing the team come together to make this show happen. What I don't love is trying to keep track of all the information, the data and the projects that we're working on across dozens of platforms, products and tools. That's why we use Coda, the all in one collaborative workspace that's helped 50,000 teams all over the world get on the same page. Offering the flexibility of docs with the structure of spreadsheets, CODA facilitates deeper teamwork and quicker creativity. And their turnkey AI solution, the intelligence of Coder Brain is a game changer. Powered by Grammarly, Coda is entering a new phase of innovation and expansion, aiming to redefine productivity for the AI era. Whether you're a startup looking to organize the chaos while staying nimble or an enterprise organized organization looking for better alignment, Coda matches your working style. Its seamless workspace connects to hundreds of your favorite tools including Salesforce, Jira, Asana and Figma, helping your teams transform their rituals and do more faster. Head over to Coda iO20VC right now and get six months off the team plan for startups for free. That's Coda. Coda and get six months off the team plan for free. Coda iO20VC and while Coda keeps the engine running smoothly, Shopify puts the pedal to the metal when it's time to sell. When I was 18, I dreamed about being an investor with zero contacts in the industry. And through persistence, I'm now living that dream. Maybe you're dreaming of your own business. And that's where Shopify steps in. I spend my time exploring successful businesses online. Often there's a business behind the business driving success for millions. That's Shopify. Powering 10% of US commerce, Shopify offers beautiful templates, AI tools for product images and descriptions, easy marketing campaigns and 24. 7 support their number one checkout boosts conversions by 50%. Fewer abandoned carts, more sales. Winner turn dreams into success with Shopify. Go to shopify.com 20vC for your $1 per month trial today. That's shopify.com 20v. And while Shopify helps you drive sales, don't forget what really keeps those customers coming back. Trust is the ultimate currency in business. And today customers expect it faster than ever. And that's why over 10,000 global companies trust Vanta. Vanta automates up to 90% of the work for in demand compliance standards like SoC2, ISO 27001 and more. Using smart AI to centralize workflows, manage risk and get you audit ready in weeks, not months. So you can stop chasing paperwork and start clos deals. And a new IDC report found that Vanta customers achieve $535,000 per year in benefits. That's insane. And the platform pays for itself in three months. I had no idea about these. Whether you're growing fast or just getting started, Vanta connects you with trusted auditors and experts support to help you build trust with customers. Get $1,000 off your first year@vanta.com 20VC that's vanta.com 20. Now arrived at your destination.
- [04:37]
Harry Stabbings
Philip, I'm so excited for this dude. Listen, I wanted to make this one happen for a while. I've heard many good things from Henry and from Johannes at get your guide. So thank you for joining me, Harry.
- [04:45]
Philip Fries
It's great to be here. Thank you for having me.
- [04:46]
Harry Stabbings
Now when I was chatting to Johannes, he was like you gotta start with the venture park days.
- [04:50]
Unknown
I was about probably 4 or 5 years old.
- [04:52]
Harry Stabbings
Not to age you, that's a really unfair start.
- [04:55]
Unknown
But it was before the samwas and so I had to start here.
- [04:59]
Harry Stabbings
What are your biggest takeaways from the venture part days in that really early web 1.0.
- [05:04]
Philip Fries
Yeah. Just for your listeners to put this in context, you're absolutely, absolutely right, Harry. This was 1999, so this was rock and roll days, the wild west of venture investing in Europe, really. And I had been a young kid at McKinsey in New York and had encountered Thomas Mittelhoff, who was that very visionary CEO at that time at Bertelsmann, who loved idealab, you remember, which is still, Bill Gross is still going strong today and really wanted somebody to back to bring that to Europe. There hadn't been anything like this in Europe and there wasn't anything. And so we went there in 99, 2000, we raised a pretty big round. Goldman was our lead investor. There was a lot of people involved. And if you ask me today, what's the lesson? I think in bull markets you just got to keep perspective and humility and not take yourself for a genius. So many of us back then, once we had raised whatever it was, 100 million, thought that was the end of it. I learned very quickly a few months later when the dot com bubble crashed and the new market in Germany crashed, that the most important thing really was the investors I had on my board. Because there were two camps. One did this to have a quick turnaround, to have a quick ipo and the other ones wanted to do it literally for eternity. The big corporates, Telefonica, Bertelsmann, they just wanted this to be their window into venture and innovation. And I spent as a young founder, I think I was 26 at that time, all my time intermediating between these two camps. So my lesson learned is this. And I'm applying it manically in everything I do and I know Johannes does as a founder. The investors you choose are so important. So of course it makes a huge difference. You know, if you're the founder of Helsing and you choose Daniel Ek because Daniel Ek understands this long term business building means, you know, and you don't want those kind of fastback, financial orientated early stage VCs that, you know, when the shit hits the fan, that drop you very quickly. And I learned that lesson very quickly.
- [07:07]
Harry Stabbings
I think another really you'll learn one, that I don't sit to schedule and two, that I literally just use this as a way to get better as an investor myself. But one thing that also I find really challenging is you have a failure or a mistake and you let a past failure impact a future decision. So you invest in healthcare, lose money and you go all healthcare is shit. How do you think about Retaining purity of mind despite success or failure. Impacting your mindset.
- [07:33]
Philip Fries
Rigorous analysis. And you want to reflect your rigorous analysis with as many great minds as you can. There's nothing as helpful as a good failure. Without that good failure, you cannot become a world class founder and investor.
- [07:46]
Harry Stabbings
My biggest failure was I lost in Pakistan. In the good times, I thought I knew more than most people did about emerging markets. Alas, I did not. And I got taught a hard lesson, learned many things. What would you say is your most painful lesson and what did you learn?
- [08:00]
Philip Fries
I'm right with you. We lost a whole bunch more in Turkey. I think we lost around 500 million back to a company called Unroro, which we thought was this incredible kind of logistics shipping player in Turkey. Remember the days where everybody thought that's the next frontier. Great demographic, 100% incredible innovation, increasing middle class. Increasing middle class. You know, what we didn't see was rule of law was a bit of a flexible concept there. So what we thought was a protected player. Suddenly there was some other entrant that came in, even though that wasn't really possible and we lost our shirt. So I'm with you in Pakistan, similar experience.
- [08:40]
Harry Stabbings
Does that mean then that you don't go into emerging markets in the future? I just take a pretty blunt view that I'm like, hey, it's hard enough to build a business. Add in political risk, currency risk, I don't need to take that risk.
- [08:51]
Philip Fries
At kkr, we made exactly the same decision. We tried also Africa, Ethiopia, where we the largest growers of tulips and roses that didn't work out for similar reasons. And quite frankly, we have so much going on in Western Europe. We stay close to what we can control.
- [09:07]
Harry Stabbings
You said there about taking the risk. Another risk that you can take is market timing risk. I'm probably expected to take market timing risk more than you, given being much earlier. Are you willing to take market timing risk and suspend disbelief or do you need to see now is the time for this?
- [09:24]
Philip Fries
Many people thought at KKR in Europe we were crazy when we leaned in and invested, I think a third, if not 40% of our current fund during COVID So in 2020, we made some bold decisions because we don't know what that virus would yield. But I've learned a long time that you have to focus on what you can control. So I give you an example. We invested in Vela, the other haircut brand with l' Oreal, and there were seriously people who questioned, well, once this pandemic is over, will people still go and get their hair colored. Having three daughters and three sisters, I absolutely was convinced there's not going to be a problem. And so we invested. And there's many more examples like this. So yes, those types of uncomfortable decisions we took. And I'll tell you why. After the great financial crisis, we were pretty much like the rabbit in the headlight. We didn't invest anything. The only investment in 2009 we made was BMG. When I took the decision to invest with Bertelsmann into music at a time, quite frankly, when music was in free fall, that was a great investment. In the end was a courageous. But probably I could only do it at KKR because we didn't make any other investments. There was no large investments. But then the crocodile tears came later. We saw that yes, there was a great financial crisis, but those types of disruption are exactly when you should go in. And we didn't. And during COVID there was no discussion with our founders and our leaders around, should we invest now? There was the opposite discussion. There was a very reflected, top down encouragement. Don't be afraid. Talk to us about what you can control. Let's deploy.
- [11:00]
Harry Stabbings
What do you think was the boldest bet you made in that period? 40% is a lot. What do you think was the boldest?
- [11:05]
Philip Fries
What we do is we partner a lot with companies. We don't just buy outright. So the decision at that time, Coty was the holding company that owned Vella. And we had seen again, I give my oldest daughter the credit for this. One of the Jenners had her cosmetics brand just sold to Coty, which was an unbelievable Instagram success. And Coty got a little bit in trouble. They were over leveraged. We took a 10% stake in the company and then bought out the majority of Vella at the same time. So it was kind of a combined transaction, that leap of faith to do that in the midst of the pandemic. Because they had in their mix also a travel retail business, for instance, which you know, for cosmetics, etc. You could ask, okay, when are these airports going to open again? That was a bold decision. In conjunction, these two investments were very sizable in the fund.
- [11:53]
Harry Stabbings
You said they're about 40% of the fund in Covid, I was always taught and again, I really am a student of investing. I've loved it since I was 13, which is why I had no friends in school. But temporal diversification is everything. And actually really discipline in terms of deployment cycles is crucial. How do you feel about sticking true to temporal diversification and a three year Fixed cycle and venture. I don't know what it is for you versus actually just moving faster and putting 40% out.
- [12:17]
Philip Fries
It's an excellent question. What I told you is just a variety of. On the, on the theme of linear pacing because we typically have five to seven year cycles on average it's probably more like four or five. But we very much believe in. You got to have the discipline of linear deployment because it avoids that issue. So even though Covid hit in 20, you know, if you have a four year cycle, you have to deploy 25%, right? Most people didn't deploy anything. We took the decision to go 10, 15% above. But then we got lucky because in 21 we didn't invest in almost anything. And as you know, my market went very exuberant when Covid gave way to that incredible wave of liquidity. The answer to your question is it's incredibly important that discipline to deploy linearly over three years in your world and five, four, five years in ours.
- [13:06]
Harry Stabbings
This is such a fun show for me to do because I have to say venture in itself is a little bit uniform, especially after you've done as many great interviews guess as I've done. And yours is a different world. It's a world that I don't know as well. So it's like a real learning curve for me. So when we look at. I heard your other shows and you said you spent a lot of time on portfolio construction and I was like, great, that's a super place to start to understand where we're at. How large is the fund then as a starting point?
- [13:31]
Philip Fries
4 KKR is an $8 billion fund. It's the largest standalone investment fund in Europe. As you know, I'm a massive voice for Europe. It's been not always easy. It's tough sometimes to, you know, make the case that we should invest in Europe. But it helps us to have that vehicle because it actually very much helps you in that discipline to say as a global investment firm, Europe is on the map. We got to deploy relative to a global fund which can just make the decision to deploy in another geography. In terms of your question on portfolio construction, it is so important because traditionally people didn't really think about themes. They didn't think about growth versus cash flow, didn't think about the underlying industries, the geographies. So we really focus on that and also many people in my industry, and I know you're going to reflect on that in our conversation, sometimes lack is the discipline to say, hey, you know, in a fund of 8 billion typically you have around 15 investments. Okay, so of these 15 investments, when you start selling some of them, when you start insisting that they should be better, and when do you just keep them for the long term because they're your winners? Often if you make that a work of love for the individual investors in the fund, you start losing perspective. You have to top down as the lead of the fund, make those calls to say, hey, you know my space company in Bremen, which is ohb, we just did that investment that's going to be a big winner given everything that's going on. And then there's five others which are great, but honestly they do not compound in value consistently by more than 20% or so. And at some point if somebody calls you and says hey, we would like to buy that company, you just have to force yourself to sell it.
- [15:14]
Harry Stabbings
Do you believe then that PE in your business very much aligns to the power law nature that my business does, or is it much more in the consistent 3 to 5x get your money back always and 3 to 5x everything.
- [15:27]
Philip Fries
I do believe we overlap in quite a few things. What is different is our business model is not to have two massive winners and then have most of the others be failures. You have to be pretty consistent. Nonetheless, you need to have some real winners because you always will have one or two which are not great. So it's a common misunderstanding that my industry is sleepy, boring and just aiming for those doubles over five years. If we do that, we don't do our job really.
- [15:55]
Harry Stabbings
If we think about 15 companies in the portfolio, as you mentioned there $8 billion fund. What's the average check then? 400 to 600 million. 400 to 600 million. How does this structure work in terms of ownership? Are we taking majority? Are we buying?
- [16:08]
Philip Fries
In the last 10, 15 years, three quarters of all the investments we have made are partnerships. So I didn't just buy something outright, but I went into for instance in Breme Ohb, we are 30% shareholder or weild in Germany, which was the synthetic flavor business, 35% reserves.
- [16:27]
Harry Stabbings
Do you have a similar most venture firm, say especially early stage, we have a one to one initial reserves. Do you have a reserves pause?
- [16:34]
Philip Fries
Always do, but it's more like 10, 15% of the fund. So you would of 8 billion, you would retain let's say a billion or so as a reserve because we do not need as much capital for follow on rounds. Because in terms of the maturity of these companies, these are the Spotify, these are very big companies that do not necessarily need any more rounds? It's more for the follow ons. It's typically for acquisitions. So if they want to buy something.
- [16:59]
Harry Stabbings
What about capital intensity? How much does that factor into your decision making about getting involved? You said that they probably won't need to raise more. I never have met a company that doesn't need to raise more. How do you think about the future cash burn of a business when investing?
- [17:13]
Philip Fries
Yeah, it's extremely important. If you think about everything we discussed about the crisis. You have to sustain the discipline of capital allocation for the founders and the CEOs of these businesses.
- [17:25]
Harry Stabbings
Does the model work in an AI world? And what I mean by that is when you look at, especially on the model side, these companies are just cash incineration machines. Regardless, when you look at anything like Harvey and Legal, which has raised a huge amount of money very quickly, they just require so much cash and so much more. Does the model still apply?
- [17:44]
Philip Fries
It's fantastically intellectually inspiring and interesting. Because we are the largest owner of fertility clinics in Europe. We are expanding very quickly and very broadly in different geographies in different areas. I know Elon likes talking about this. Right. The demographic trends are not great. People do not have children anymore. We are extending lifespans. But to answer your question, those are businesses that will not be replaced by the AI models. These are real businesses that still very much need the cash to open more clinics. I know I sound like a younger version of Warren Buffett now, which is crazy, but he's right. Things are looking different, often every five years. But if you separate the noise from the reality, the underlying principles of capital allocation has to be very thought through and rational. It hasn't changed. You will have some AI models where you need lots of capital. It makes a lot of sense to invest in there. And you have some others which don't.
- [18:41]
Harry Stabbings
Do you think the principles are the same? I've been again a student of venture for 15 years and I was always taught that 0 to 10 million there are was gold standard. In 18 months we have three companies that have gone from 0 to 100 million naira in a year.
- [18:56]
Philip Fries
Yeah, that's the AI magic. It's incredible.
- [18:58]
Harry Stabbings
And so do the principles actually apply if the revenue and company scaling is like never ever seen before in history.
- [19:05]
Philip Fries
So I'm making the bold prediction that you have just seen three of the incredible winners in the space, but they will be not the norm for whatever comes afterwards. When you see those winners, you better invest in double down and triple down. But this doesn't mean that software, you know, SaaS, models and investment that is the bread and butter of many in our industry still will not be good investments anymore. You just have different cycles there.
- [19:29]
Harry Stabbings
Do you ever sit around the table at KKR and think, God, it'd be an easier job if we just stuck money into OpenAI, anthropic Anduril and Helsing and we didn't have to be so operationally involved. We could sell in secondary markets in two to three years for 3X and we could ride the wave very efficiently.
- [19:47]
Philip Fries
No, I have incredible respect for the benchmarks and the Harry's, the Daniel X who found those types of opportunities. But you know, you asked me my lessons learned from VenturePark. I tried Harry. That's what I set out to do. And I learned the hard way that some brilliant minds can do that and some others that are not so much in that space. My experience is the truly outstanding investors in venture are ones with deep vertical experience and real knowledge. I'm a generalist. I've seen so many things and patterns. I'm better in the later stage industry. You look with great admiration at the Excel's benchmarks and indexes and Kleiner Perkins of the world. But that's not our business.
- [20:29]
Harry Stabbings
When we look at 2021, we saw a lot of your D1s, your CO2s, a lot of crossover firms move earlier and earlier. I mean we see kind of insights this day just cover the full spectrum. To what extent do you feel pressured to move earlier and earlier to ensure more and more access?
- [20:45]
Philip Fries
Growth is a separate team. I cannot understate the importance of this. It's not like the same bunch of people does different things. I don't think that the DNA of KKR and of other later stage firms, it extends to what insight does or what growth funds do. It will never extend to venture because it's a different skill set. It's a very different skill set.
- [21:06]
Harry Stabbings
I think Thrive is the one who's able to cross growth and early stage incredibly well. But I totally agree with you. You said there about a different team y decision making. The quality of your decision is the quality of your product in our business. How do you think about decision making today in KKR and what have been your big lessons on how to do it right?
- [21:26]
Philip Fries
There's not one brain which decides we truly are partnership. If you have two or three brains around the table thinking through a tough decision, you always get a better decision than if you just have one.
- [21:37]
Harry Stabbings
Does that not lead to consensus thinking?
- [21:39]
Philip Fries
You have to be willing to challenge each other and to be open about concerns you have. Coming back to your AI point, a lot of this is pattern recognition. Isn't that fascinating? The best investor today in the world, full stop, is Warren Buffett, who is, what, 93 years old? How do you replicate that brain?
- [21:56]
Harry Stabbings
So I do want to chat about the big L in our business, which is obviously liquidity. It's been an interesting few years. I think there's structural illiquidity, which is a real problem and a concern that I have, and it seems to be getting worse in some respects. How are you thinking about exits and liquidity, particularly for the largest of the positions?
- [22:14]
Philip Fries
So, Harry, I'm going to make an old fart type of comment.
- [22:17]
Harry Stabbings
Go on.
- [22:17]
Philip Fries
I've seen at least three, if not four cycles where liquidity goes from unbelievable exuberance like we've seen in 2021, to the drought that we see now. Only for people to say at the peak, liquidity is limitless and the party is never ending. So I don't actually need to sell anything. I just write all my winners to give way to the hangover and the realization that that was a mirage, there's no more liquidity, and then at the bottom, people predict there will never be liquidity again. And it's structural and the world is coming to an end. I literally can walk you through the same sentiment in the great financial crisis after the dot com bust into certain elements, probably also during the euro crisis.
- [23:01]
Harry Stabbings
But we have 3 trillion in locked LP money into private clients.
- [23:05]
Philip Fries
I hear you and you are absolutely right. The party that was celebrated in 2122, in terms of the velocity of fundraising and investing was absolutely artificial, inflated and not sustainable. And the hangover had to be tough. The hangover, I don't think it's structural, it just has to clear the excesses. I remember very well in 2001 how the venture industry had to digest the exuberance. You had many funds which had to halve, right? People gave money back on a grand scale. We haven't seen that yet. And the halving, if you will, of the universe of public companies is also structural. And I'm going to make the point which has led to so many of our partners choosing to be rather with us than to be public. I mean, the space company OHB was a public company. GfK, the market research firm, was a public company. Both of them owned by a family foundation and the family who both had that the public markets are not helping us because they just can't cope with all that volatility. And all that change. So we rather have KKR take it private and be with them for the long term and they help us deal with all of that change. That's a structural factor. That's different from 2001.
- [24:14]
Harry Stabbings
And so that structural factor is that founders are aware that actually they'd be better off in private markets and they want to privatize.
- [24:19]
Philip Fries
That is a structural factor. If you think about my industry, I give you one set for KKR. Over the last 15 years, only 15% of our exits were actually IPOs. 85% of our exits were either strategic exits or some large company came along. So the structural crisis of the IPO market right now is not resulting in a structural crisis for our firm and for our industry. It's slightly different for Venture in terms.
- [24:46]
Harry Stabbings
Of you said about fund sizes halving and the impact you saw from 2001. I think that AI is kind of the OxyContin that actually venture needed. It's like we were just coming to the dip.
- [24:56]
Philip Fries
Absolutely.
- [24:56]
Harry Stabbings
And then it's like, but wait a minute, it's the best time ever. And if you're an lp, there's enough material there to be like, actually they could be right. And so I have to keep going. Do you agree with that?
- [25:05]
Philip Fries
I agree. And that is why we don't see fund sizes halving. Because exactly of what you said. A lot of these opportunities are so capital intensive because you suddenly have some interesting places to deploy. Now. It doesn't mean that the fundamental underpinning of what we all do doesn't matter whether it's venture or equity. We are the answer to the demographic crisis that Elon Musk is putting his finger on. We have an aging society everywhere. People are retiring ever later, but they have to retire. They have ever fewer babies. So if we don't have a capital stock compounding and accumulating for the benefits of retirees, people cannot pay for their old age. Therefore, what is happening right now is a pretty narrow investor base. University endowments, insurance companies, sovereign wealth funds, pension funds that underpinned our industry and yours are being complemented by ever growing elements that were completely excluding alternatives so far, which is the 401k pensions, the individual investors. You think about it, we have, I think it's $192 trillion of savings that are completely excluding alternatives that are in a high net worth and individual investor base. The innovation that was underpinning Norgesbank, the Norwegian sovereign wealth fund, to allow them to participate in all of this long term investing that we do and investing in these growth companies and creating huge values is now extending itself to individual investors. I think it's 1% of the 192 trillion are invested in alternatives. If that only goes to 5%, you suddenly have $10 trillion. You think about the magnitude relative to the entire institutional investing base. To answer your question, while that whole universe on the left is in dire need of liquidity, there's others who are dying to provide liquidity. So there's a market, right? So what's happening is secondaries as an asset class is going through the roof. They are going and buying fund stakes, providing liquidity to some LPs who need it. And also there's innovations in the industry which I hadn't seen in my lifetime before, where you have Evergreen products. Because if you think about the treadmill system that we have in our industry, which is you have to go every three to five years and present your case again to the LPs then you have a new fund, then you have another new fund that is being replaced. I mean I call it very much the Warren Buffett. I remember still at that time again I was a young Turk at kkr. And our brilliant mind Scott Nuttall, who's now my co CEO, he came up with this idea to go public for KKR by merging with a public LP vehicle actually which hadn't worked because the public markets were assuming that we would lose 80% of every one of our investments. So he said to the public if you value more stability, why don't you become a 30% order of KKR's general partnership, so of our partner economics in exchange for that pool. And that's how we ourselves became owners of a 5 billion pool that had been valued at 1 and that became 10 and that's now now 30. So we are actually the largest investor in our own things. To cut a long story short, what he saw at that time was that Warren Buffett had innovated in an incredible way where he got Geico and other insurance companies to provide the liquidity for all the investments he made because he owns these insurance companies. So all the people who write who have insurance policy, they pay up front, the cash comes in and normally it sits in interest bearing accounts earning nothing. And now he uses that the source to buy whatever companies he buys. American Express. That is now the innovation that we see in our industry on top of this retail money. So basically we, Apollo and others have now taken under our wings insurance companies that provide all this liquidity. So you see, the innovation goes beyond what some people Talk about continuation vehicles, et cetera. It extends to completely new areas of the market.
- [29:03]
Harry Stabbings
Will KKR's Europe fund be $20 billion in 10 years?
- [29:07]
Philip Fries
I think that the answer is not the fund. If you ask me, will KKR Europe's asset under management double and triple over the next 10 years? The answer is yes, because the universe for what we do is radically expanding. When I did the BMG deal, that was a 1.5 billion deal for a 50% stake in that music company. You fast forward 10 years and we had a 10 billion deal to buy half of Axel Springer, which again was a 50, 50 deal with a family. You can very easily see how that could scale further. The capital itself will be doubled and triple. The source of it won't be necessarily a fund. It could be those retail funds that I mentioned, or it could be some part of the insurance capital. So the funnel becomes much bigger. We are responsible for a much broader scope of capital to invest. And the demand for what we do in Europe is also growing much faster. There's more segments of the market want private equity investment.
- [30:02]
Harry Stabbings
To what extent you can share what percent of your LPs are European? I'm very happy to say that I think I probably have 10% of the European, 90% of mine.
- [30:10]
Philip Fries
But I'm going to disclose one thing to you. The large majority is America. You have some pockets in Europe, like Holland and Norway, that are very strong. The Middle east is incredibly innovative and takes a large chunk.
- [30:22]
Harry Stabbings
Do you not find it ironic though, that when we make a huge amount of money from European companies, that we just ship it back to a load of people in the us?
- [30:30]
Philip Fries
First of all, I'm grateful for any capital that comes into Europe, regardless of the destination, because we need more capital in Europe. Mario Draghi is right. We need to invest 750,800 billion a year alone to catch up on innovation, AI, but also to complete in other industries, defense, high tech, et cetera. Nonetheless, for the Future, you absolutely 100% spot on. We got to wake up in Europe. As for instance, Germany has now decided to invest 25% of its GDP and make sure when we make these investments, we build equity value. You know, it's being done here in the UK with the mansion house complex. We need to professionalize together our pension systems and allow more investments and alternatives to build capital accumulation. And that means in 10, 20, 30 years, hopefully we retain a larger percentage of the value creation we make with alternatives investment.
- [31:23]
Harry Stabbings
Are you fundamentally investing in a different, different type of company today? And what I mean by that is, in past generations there might have been a fotolia, there might have been a get your guide kind of similar to me in that respect. And now we have the most terrible challenges with energy, with defense, with infrastructure. You mentioned obviously your space company. I mean we are woefully under equipped when it comes to space. Are you investing in a fundamentally different class of company given this need for capital in all of these very hard but new industries?
- [31:52]
Philip Fries
Mario Drago is right. We are behind in defense for instance. But look in scarcity and hours of need, innovation kicks in. And look at what happened because of the hour of need and that innovation that we in Europe have seen, the US has done by saying 10% of the spend of the Department of Defense needs to go actually in the innovative ecosystem. And space the same. Right? SpaceX was just the result of opening it up to the private sphere that is coming here now. We have had a terrible tragedy in Ukraine for years now and they're still standing. And it's because of the innovative companies like Helsing that have supported them. So short answer to your question is yes, innovation is the answer to these problems. I wouldn't be so negative. They are coming now much faster than some people realize.
- [32:38]
Harry Stabbings
Do you feel we're taking more risks than ever given the volatility that now exists in the world on a daily basis? We were talking before about some tweets and events that happen that just kind of change everything with a tweet? My point being the world seemed relatively stagnant or plateaued at certain points and now it seems like it is more volatile than ever. Do you think we're taking more risks than ever?
- [32:59]
Philip Fries
Well, you started this conversation with AI. You're right. I mean AI is a fundamental transformation of all the assumptions that we had made around productivity, around the innovation cycles you need in certain industries like healthcare, defense, et cetera. So that alone was already massive. And then at the same time you have this incredible pivot from the post war consensus of how everything works. Right after the second World War there was an institutional ecosystem built with the IMF and the World bank and the United nations and there was a clear understanding of how everything works. And people had forgotten about the 1900-1930 period when it was much more bilateral and it was much more nation states and it was much more everyone for itself. People also thirdly had taken for granted the unique role of the US dollar as a reserve currency. Also that is being questioned now. Ray Dalio fourthly points out that when you have large amounts of Debts accumulated. We are just one step away from a major crisis because debt bubbles at some point get resolved by internal strife, war or massive transformations in the monetary system. So we have four disruptions at the same time. Technology, geopolitics, monetary sphere, and at the same time, huge demographic crisis we talked about. Right. There's a feeling of unparalleled inequality between certain segments of the population and others and certain regions of the world and others. We are investing against an unbelievable backdrop of risk and volatility and uncertainty. But especially in times like this, I remind myself of what Warren Buffett says, you got to focus on what you can control. I have a spectacular founder like Murad at Hamatan. I have a large market that will be transformed by technology. And if I see that there's unparalleled openness to actually institute change for the better, which I think is the case in Europe right now, then I invest. I just have to be able institutionally to be patient and to hold for longer. Because you are not able to predict what's going to happen in three years. It's impossible. So if something goes wrong, you just have to be able to hold long.
- [35:11]
Harry Stabbings
Do you believe the US Dollar will be the reserve currency of the world in 10 years?
- [35:14]
Philip Fries
Yes. I think that it's impossible to replace reserve currencies that quickly. Will the US dollar be the reserve currency in 50 years? I couldn't tell you. I do think in 10 years time, the percentage of reserves the US represents will probably have reduced slightly. The problem that the monetary system has is if you want to replace one thing, you need to decide what you replace it with. Right now the only credible alternative is the euro. And we in Europe, we need to get our act together. It's a fantastic opportunity for us to take larger share.
- [35:46]
Harry Stabbings
You don't think it's Bitcoin?
- [35:47]
Philip Fries
I think Bitcoin is a very interesting innovation and will take larger share, but it's too early now for us to call that that will be the reserve currency of the world. And you know, Harry, why nobody talks about quantum computers anymore. Think about what that means. Right? If we have quantum in terms of all the impact of that and people will just not replace 80% US dollars with Bitcoin overnight. I think Bitcoin will take a larger share, as will the euro, but it's going to be more of a mix.
- [36:13]
Harry Stabbings
We mentioned the kind of four disruptions. The hard thing with disruptions is they change the world in such unprecedented ways that they make a lot of prior assumptions really invalid. We mentioned kind of thematic thinking earlier. I don't like thematic thinking because I think the world is so unpredictable that Covid can happen and industries have changed overnight in ways that we can't comprehend. To what extent do you think thematic thinking and a prepared mind is actually valid in a world that changes so much so quickly?
- [36:40]
Philip Fries
Can I put a Buffettist spin on the idea of thematic thinking?
- [36:44]
Harry Stabbings
100%.
- [36:45]
Philip Fries
I think it's very relevant. If you think about Buffett, he will tell you whatever noise there is in the world. I'm going to look at a few essential elements. I'm going to look at the founders, I'm going to look at the business itself. Is it in a large market? Has it an unassailable position in that market? Is it innovative enough to have product cycle innovation and is it having a good return on capital? And then I'm putting incentives in for these people to just keep running fast at it. I love his thinking. That is a very different thing as saying I invest in energy and I invest in certain industry verticals. He has a human spin on thematics. That said, I do think thematic investing is valid. If you now think in Europe, Draghi is right and there are certain elements where we just have to invest and that for instance, is space and defense. If that is part of your investing theme, then it makes sense because you can't just overnight say, hey, I was a healthcare investor, now I'm a space investor. You need to build. Going back to our original conversation about what makes a good venture investor need to have a thinking, deep thematic.
- [37:51]
Unknown
But do you.
- [37:52]
Harry Stabbings
Sorry, I don't mean to be difficult, but I've met so many space, not space defence companies. Every defense company is trying to be the next obviously Helsing. In Europe I met so many defense companies. I don't know how much Ann, to be fair, but none of the founders that I've met touched Torsten. Even if I knew nothing about defence, which I don't, to be very clear, nothing.
- [38:10]
Philip Fries
I love nothing more than having such a massive consensus with you. Thorsten as a rock star. Yeah, no debate.
- [38:15]
Harry Stabbings
And so if I met all of them, even though I know nothing, I know he's the best.
- [38:18]
Philip Fries
He is the best for sure. Sure. That's the good news about markets and innovation cycles. Henry Krevis was the best by far in his industry. He set up a whole industry. People are fast to copy, people are fast to innovate, they're fast to follow. Thorsten is the best. But in five years time we look back and say, of course, Thorsten couldn't have done it all by himself. There will be more at Hamilton, there will be others.
- [38:40]
Harry Stabbings
To what extent? I always say, if you want to invest in the next Helsing, don't just invest in Helsing. I spend my life with investors who are like, oh, I'm trying to find the next OpenAI the next anduril. Don't just put your money in the winner.
- [38:54]
Philip Fries
Well, you always want to back your winners. I completely agree with that.
- [38:57]
Harry Stabbings
And winners compound.
- [38:58]
Philip Fries
Winners totally compound. But it doesn't mean that you can put your entire fund into one winner. This is what we discussed before.
- [39:05]
Harry Stabbings
How much money would you put into a company like concentration of funds?
- [39:08]
Philip Fries
So we are absolutely rock solid disciplined on this. You don't do more than 10% of one fund. I think in terms of underwriting, the absolute maximum is 15%, but it's in that range.
- [39:20]
Harry Stabbings
I love Brian Singerman at Founders Fund. He says the enemy of great venture returns is capital concentration limits. And that's why we did 33% into Airbnb. And I just always remember thinking, my God, that's conviction. 33% into one single company.
- [39:35]
Philip Fries
Yeah, that's absolutely in my industry. Not the right approach.
- [39:39]
Harry Stabbings
Can I ask, we were talking about Europe. Europe has an incredibly fragmented public market.
- [39:44]
Philip Fries
Yes.
- [39:45]
Harry Stabbings
How much of a problem is the complete lack of functional public markets for Europe today?
- [39:49]
Philip Fries
That's a beautiful question. We come back to Mario Draghi. The second thing he said after you got to invest 750 billion a year to catch up is we need a capital market union. We need to come together and do away with artificial limits between 27 nation states in the UK when it comes to concepts like securitization or going public laws. Yes, of course we need a European sec. Yes, of course we need a bit more of one pan European place where people can go public. It's extremely important.
- [40:21]
Harry Stabbings
Completely agree with you. I think a unified European liquidity mechanism would be great. To what extent you worry also about an EU AI act? Bluntly, it's incredibly prohibitive.
- [40:30]
Philip Fries
Well, we are experimenting today and blunt speaking, which I'm happy to experiment in, we absolutely over regulated that space. We need to unleash the power of that technological innovation and not stifle it by too much innovation? For sure.
- [40:46]
Harry Stabbings
Germany has a challenge in the auto industry. Do you worry as much as I do about the rise of BYD Xiaomi in China in bluntly destroying much of the European car market?
- [40:56]
Philip Fries
So I'm going to answer that question indirectly by saying what I'm observing because we own fantastic investments in related industries is the dearth of good engineers. And what we see is when the automotive industry is shrinking because of some of the factors you mention, those people immediately find jobs in other industries which are growing. Whether that is censors, whether that is defense. Of course we need to have a fair playing field between different economic regions in the world. I always worry when certain industries do not find fair conditions to compete.
- [41:32]
Harry Stabbings
Should we tariff the shit out of Chinese cars then? If they are subsidized by the Chinese government in terms of their creation and they are able to flood our market, if we're playing fair, do you not just tariff them?
- [41:43]
Philip Fries
I just think generally I'm a free marketeer. I think tariffs are not the answer. I know that's a controversial statement. In today's world, we need to work on the underlying issues. In our Western democracies, for instance, we have too high deficits. Those deficits lead to exceedingly high indebtedness. We are therefore not crisis prone. To try to raise money through tariffs is not the right approach.
- [42:05]
Harry Stabbings
What do you think is the best way to deal with the the current situation we have in terms of deficits?
- [42:10]
Philip Fries
If you think about 20, 25, 30% of all of our budgets going to two sources. One, you just service the interest of the existing debt stock. It's huge. I mean, in many countries these are higher expenditures than our healthcare or defense budgets. Then it becomes very clear that the only way to restrain that is on the expenditure side, where for instance, on the pension systems and the benefit systems, we do not benefit from the capital accumulation and the wealth creation. It is mind boggling. If you and I were Norwegian, we wouldn't worry a bit about this. Because the Norwegian sovereign wealth fund, through everything they have done, has created such a capital stock that every single person doesn't need to worry about their pension.
- [42:57]
Harry Stabbings
I had Nikolai on the show and he said every single Norwegian is a millionaire.
- [43:00]
Philip Fries
He is a genius and he's doing a great job, by the way, running.
- [43:03]
Harry Stabbings
I asked him if he'd invest in my fund and he said, of course our minimum check is $10 billion.
- [43:09]
Philip Fries
But imagine if we had the German, the British, the French, Norges bank, what that would have meant. And that's the conversation I had with Angela Merkel 10 years ago. It was absolutely possible. We slept through it. But doesn't mean because we missed it, we couldn't do it in the future. We must do it.
- [43:27]
Harry Stabbings
I think one interesting one for me is again, I'm a student of economics and history as well, and it's like, if you look at Japan in the 1980s, their deficit was huge. And the question is, everyone's like, well, we've got to worry about the deficit and we've got to control it. Why can't we just let it go higher? I know it sounds terrible, but they kind of kicked the can down the road in the 80s. To what extent can we not just do it?
- [43:45]
Philip Fries
Now you and I are going to have a hobby economist conversation, because it's a fascinating conversation. You know, the chickens will always come home to roosters. That's what I've learned in economic theory, because here's what we miss sometimes. A lot of this is very much virtual. What's the biggest coin of the realm? What's the biggest currency of our business and of our economy? Trust. Those numbers don't mean anything. But if people convince themselves that spending 20, 25% of an ongoing budget in any country on interest for your debt is too high and you can't pay for innovation, for healthcare, for defense, et cetera, at some point there will be calls for one of two things. Either increased taxation, which typically means that a lot of your value creators leave your country, or radical cuts in spending. We have seen both in Japan and the United States of America, that it's extremely hard for a political system that is elected every four years who actually have the discipline of reducing these expenditures. I mean, Japan still has a structural deficit the way they have. So if you can't really raise taxation and if you can't really reduce expenditure, the only other way to do it to get rid of your interest income, of your interest load, is to inflate away your debt, right? So you do financial repression, which means you force your interest rates to be below the rate of inflation, which means in real terms everybody who has assets loses. And that is a very inflammatory way of dealing with it. We know what that meant in the 30s, right? And quite frankly, we're having a philosophical debate now our generation. So the people that are not retired yet will ask the questions. The statistics I give you, Italy as an example, are that in a few years time, every fourth person is a person in pension age. So over the age of 65, how can you sustain any balance between toiling every day and feeling that in your own retirement and you actually will have anything to live from? And then at some point, societies get an imbalance, right? I mean, look at our political systems all over the Western world and the election results, right? Populism rises. This goes much beyond now what we do as a job. But there's a direct correlation between all of this. So I come back to what you and I do every day. There's much of a purpose in it. It's not about just making returns or, or it's actually making pension affordable for millions and millions of people. And we need to have a political system where what we do benefits as broad a population as possible.
- [46:26]
Harry Stabbings
Do you think AI will have the productivity gains that people suggest it might do?
- [46:30]
Philip Fries
It's too early to tell. Well, I think it will. However, productivity gains which will be extremely beneficiary to the world don't mean that the challenges I just mentioned will be solved because there will be this disruption phase where many, many people who are.
- [46:50]
Harry Stabbings
Won't they be worsened? Because you'll have more and more people who are removed from the labor force actually. And so even people of working age will not be working.
- [46:57]
Philip Fries
It only works if Norges bank, let's assume Norgis bank, which is the Norwegian sovereign wealth fund, would suddenly be the British bank. And everybody of us has a stake in those companies. So if, if we had a fund that is actually catering to the pensions of everyone which owns 20% of OpenAI, you would be celebrating that development because we find a new balance between work and leisure and there will be different jobs. But you people don't have to trepidate the outcome of this. The problem is right now there is no such mechanism because we don't participate in the value creation.
- [47:38]
Harry Stabbings
You don't think we're going to have massive structural unemployment because of AI in the next 10 years.
- [47:42]
Philip Fries
So the point I'm making, if we in Norway had structural massive unemployment, we'd be fine. We would be fine because Norges bank has led to that structural unemployment. Because they're the largest investor in the AI company and therefore they could redistribute the spoils of it. I do think there will be a transition now where white collar jobs will be impacted. And we need to answer the question on societal level, how do we cope with that in terms of the earnings and the results from the investing to make sure they are broadly based for everyone impacted by this.
- [48:12]
Harry Stabbings
You said about owning 20% of OpenAI, the challenge with the extension of private markets is the wealth creation is shared between a very few number of people compared to public markets where it's obviously available to many more, your Norga's bank and countries of the world. To what extent are you worried that we're seeing the concentration of wealth to few people with the extension of private.
- [48:31]
Philip Fries
Markets, it's a brilliant question and it's the most important question. And that's exactly why our industry, the investing industry needs to open for the many. That's why what I said earlier, the fact that we were only allowing 1% of all the private individuals to participate in our industry, in the alternative investing industry, that is not sustainable. If, if your dad and my dad and others have the ability to save for their own retirement and they can select 5%, 10% of their capital pot that we have now said everybody can have for their future retirement and they allocate it to us and we invest it in OpenAI, it becomes suddenly available to the many rather than the few. So that's the answer. The answer is this broad based participation in the alternatives industry and that is why this is so important.
- [49:33]
Harry Stabbings
Do you think we will see that broad based participation? How does that actually look? That looks like retail backed funds.
- [49:39]
Philip Fries
So I think yes, we will see it. I think if. I mean I remember I was in McKinsey some time ago, but I still have a 401 plan from that. I mean I wasn't there that long but I still have whatever the number is.
- [49:53]
Harry Stabbings
You don't check it.
- [49:54]
Philip Fries
I do and I allocate it every year. I'm just a long term investor so there's no point in checking it every quarter. But if I check it every five years and I reallocated to the same allocation, by the way, I allocate I think 30% to my industry and the rest is S&P 500 and a bit of bonds. But if you do that, imagine everybody was able to do that. I sleep well at night and I look again in 10 years and I see the compounding that has resulted. There's no reason why what America allows or Norway allows shouldn't be available for all of us in Europe. It's just a regulatory question and the question of courage for the political systems to say I go from a pay as you go pension system to one that has a private capital accumulated column.
- [50:45]
Harry Stabbings
Totally agree with you there. I do also think it massively increased education standards actually on company level. Got one brilliant advice which is that if you want your children to give a shit about companies, buy them one single stock because the minute you have any form of ownership, your interest level will go through the roof.
- [51:01]
Philip Fries
Absolutely.
- [51:02]
Harry Stabbings
That's a personal one. On money, how do you think about your relationship to money? Mine's a weird one. I used to think it was everything and then I got it and I realized it's relatively nothing. I mean it's nice to have as a foundational layer, but it wasn't the jar of happiness that I thought it would be.
- [51:20]
Philip Fries
Can I disclose a secret to you?
- [51:22]
Harry Stabbings
Yeah.
- [51:23]
Philip Fries
You gotta go and see the new Brad Pitt movie, F1. The movie, which I think is spectacular. If I had had a say in how we call it, one of our production companies produced wouldn't be called F1. The movie. It would be called. It is not about the money. And you'll see when you see the movie why that's the message that I would give to people when they ask me what my relationship with money is.
- [51:48]
Harry Stabbings
Was it never about the money or was it where you think it is? But then it's not.
- [51:53]
Philip Fries
I just stumbled into. So when I made the decision to leave a high paying job at McKinsey, people thought I'm absolutely crazy because I gave up the safety net for. For no certainty at all. And you know how it is to be a founder. You are one day you think on paper a gazillionaire, and the other day you are broke. It's the most incredible experience that. Because you learn very quickly from that, that it's not the money that matters, it's the learning. When I went to kkr, it was a startup, let's make no mistake, right? It was when I joined whatever, 39 people and I had no idea what it means to build a career tracker in investing in funds, it is the important yardstick. My job is to create results for all these pensioners and for what we do. But it's only an output. Okay? It's not the main reason we do that. For me at least it's not. I mean, I enjoy every day speaking with people in completely different ways of life. You may know that I'm a crazy music fan.
- [53:06]
Harry Stabbings
You love the opera, huh?
- [53:07]
Philip Fries
I'm crazy about trying to innovate the Bayreuth Festival, which is the Richard Wagner Festival in Germany. I'm also a trustee of the Royal Opera House. I do love the opera, yes, but I love all kinds of music. But it's, you know, I love it because I learned so much from these artists, right? When you see the shining eyes of the opera singer or the ballet dancer, I mean, it was so incredible to experience during COVID when they couldn't perform, what it meant to them once the curtain could rise again. So in many ways, whether you are a Formula one driver or you are an artist, or you are an investor, if you don't love what you do, then you ain't be good at it. And if you're really good at what you do and you love it, there will be money that follows.
- [53:53]
Harry Stabbings
Listen, I could speak to you all day. Can we do a quick fire round? I say a shallow statement. Okay, so let's roll. With which investor do you most admire and why then?
- [54:02]
Philip Fries
Warren Buffett. Incredible ability to just separate the noise from what really matters.
- [54:09]
Harry Stabbings
What's the most painful investing lesson and what did you learn?
- [54:13]
Philip Fries
Venture Park. I set it up, it failed. And I learned to keep going, to remain humble and to really, really, really think about your investors.
- [54:22]
Harry Stabbings
What do you know now that you wish you'd known when you started at kkl?
- [54:27]
Philip Fries
That is a marathon and not a sprint. I think as an investor you just have to go for the long term and sometimes.
- [54:34]
Harry Stabbings
What does that mean?
- [54:35]
Philip Fries
It means when you're in the eye of the storm, like Covid or like now, do not make the mistake to think that it's structured. You got to stay through it. You got to look for the long term. And when you look back now, it's also obvious. But it's never obvious. You just got to. Endurance is what matters in our industry. You never give up.
- [54:58]
Harry Stabbings
I so agree on endurance. What matters? I always say when you're in the eye of the storm, like now I'm seeing so many people sacrifice trust for short term financial gain.
- [55:07]
Philip Fries
Never do it.
- [55:08]
Harry Stabbings
So dangerous. Totally agree with you there. Biggest lesson from working with Henry Kravis.
- [55:14]
Philip Fries
Arrogant skills is what he taught me. I will never forget when I was the new kid on the block in KKR and I entered for the first time the office and I didn't know what to do, quite frankly, I was just shy. He and his cousin came over and just said hi, we are Henry and George and this is the firm we built. And tell us about you. I was so mortified but so inspired by it.
- [55:38]
Harry Stabbings
Love that. If KKR were a band, what genre would it be? And who's the frontman?
- [55:44]
Philip Fries
Listen, I love the opera, I love classical music, I love many things, but it's an orchestra quite frankly, where the tuba player, the violinist, the bassist, all of them are world class. But my job is to be the conductor and try to motivate everybody and bring them together as a team.
- [56:00]
Harry Stabbings
What's one European startup you wish KKL had invested in?
- [56:03]
Philip Fries
Spotify. I was the first, first institutional investor through the door. I just didn't have the fun to invest. I know, but this is again, every failure you have in life is an opportunity. You know, I learned from it because of that. We did get Your guide, which is a fantastic success.
- [56:21]
Harry Stabbings
Now, is there one that you said no to? Like you did have the chance.
- [56:25]
Philip Fries
Oh my God. I have to hide now under the table. We literally at kkr, I had the chance to invest in Alibaba a long time ago and that came on my desk and I said no, big mistake.
- [56:37]
Harry Stabbings
That wasn't your desk, Philip, that was someone else's desk.
- [56:40]
Philip Fries
It was literally at that time, kind of early angel, kind of family, KKR stuff. And I was the maverick in terms of having done venture investing.
- [56:52]
Harry Stabbings
What do you make of all venture firms coming into your field now you have Andreessens, your lightspeeds, your general catalysts. Just eating the financial stack. Stack. Do you worry they're coming into your field?
- [57:03]
Philip Fries
I think the industry is big. Everybody has its place. I have done venture myself to know that it's an entirely different skill set. So I'm not worried about it.
- [57:14]
Harry Stabbings
Final one, KKR 10 years from now are new in it. Where do you want to be? We said about Aum. Where do you want it to be in 10 years?
- [57:21]
Philip Fries
Very important question. We have 670 billion under management. Now, this number will go up massively. But what I want to see, I think historically the kind of individual retail type, broad based investor base is roughly 20%, maybe 30%. I want to see that, to go to 50% just to have that spread of what we discussed before.
- [57:47]
Harry Stabbings
Listen, Philip, thank you so much for joining me. As I said, I've been looking forward to this one. So many good things from you, Hannes, so thank you so much.
- [57:54]
Philip Fries
You're very welcome. It's great to be here.
- [57:56]
Unknown
That was such a fun show to do. I want to say huge thank you to Philip for giving up the time and joining me in the studio. If you want to watch the full episode, you can find it on YouTube by searching for 20VC. That's 20VC. But before we leave you today, I love seeing the team come together to make this show happen. What I don't love is trying to keep track of all the information, the data and the projects that we're working on across dozens of platforms, products and tools. That's why we use Coda, the all in one collaborative workspace that's helped 50,000 teams all over the world get on the same page. Offering the flexibility of docs with the structure of spreadsheets, Coda facilitates deeper teamwork and quicker creativity. And their turnkey AI solution, the intelligence of Coda Brain is a game changer. Powered by Grammarly, Coda is entering a new phase of innovation and expansion, aiming to redefine productivity for the AI era. Whether you're a startup looking to organize the chaos while staying nimble, or an enterprise organization looking for better alignment, Coda matches your working style. Its seamless workspace connects to hundreds of your favorite tools, including Salesforce, Jira, Asana and Figma, helping your teams transform their rituals and do more faster. Head over to Coda iO20VC right now and get six months off the the team plan for startups for free. That's Coda. Coda IO 20 VC and get six months off the team plan for free. Coda IO 20 VC and while Coda keeps the engine running smoothly, Shopify puts the pedal to the metal when it's time to sell. When I was 18, I dreamed about being an investor with zero contacts in the industry and through persistent existence, I'm now living that dream. Maybe you're dreaming of your own business and that's where Shopify steps in. I spend my time exploring successful businesses online. Often there's a business behind the business driving success for millions. That's Shopify. Powering 10% of US commerce, Shopify offers beautiful templates, AI tools for product images and descriptions, easy marketing campaigns and 247 support. Their number one checkout boosts conversions by 50% fewer abandoned carts, more sales Winner Turn dreams into success with Shopify go to shopify.com 20vc for your $1 per month trial today. That's shopify.com 20vc and while Shopify helps you drive sales, don't forget what really keeps those customers coming back. Trust is the ultimate currency in business and today customers expect it for faster than ever. And that's why over 10,000 global companies trust Vanta. Vanta automates up to 90% of the work for in demand compliance standards like SoC2, ISO 27001 and more. Using smart AI to centralize workflows, manage risk and get you audit ready in weeks, not months so you can stop chasing paperwork and start closing deals. And a new IDC report found that Vantika customers achieve $535,000 per year in benefits. That's insane. And the platform pays for itself in three months. I had no idea about these Whether you're growing fast or just getting started, Vanta connects you with trusted auditors and experts support to help you build trust with customers. Get a thousand dollars off your first year at vanta.com20vc that's vanta.com as always, I so appreciate all your support and stay tuned for an incredible episode with Rory o' Driscoll and Jason Lamkin on Thursday.