← The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: Turning Peter Thiel's $100K into $10M Angel Portfolio | The One Man Accelerator at The Four Seasons | Why VCs Can Be Sharks and What Founders Need to Know | Why Stocks and Cash are BS and You Should Invest in Land with Josh Browder
01:29:01
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- [00:00]
Josh Browder
If you're not motivated by the fear of losing, I think you're asleep at the wheel at the very beginning. There's three reasons why pre seed companies fail. They run out of money, they run out of hope and co founder disputes. There are three types of people. Those who make it happen, those who watch it happen, and those who wonder what happened. Pitching VCs is like a game of poker. You should never reveal too much information about what you're seeking. I put all my Teal Fellowship money and I invested it in Adam Guild and other amazing entrepreneurs. I think when it's all said and done, it'll be in the eighth Vickers. If you back someone who's above average iq, very smart and never give up, of course they'll succeed. The VCs will say anything to get you to sign right there and then. Anything. For every anthropic employee who's making 20 to 100 million, there's 7,000 block employees being laid off. It's not sustainable. You can't have 50,000 people with all the money. I think actually there could be a revolution in our lifetime. Something has to change.
- [01:00]
Harry Stebbings
Do you think you will make more money from your investing than you will do not pay?
- [01:04]
Josh Browder
I think unfortunately I'll make more money from the Investing.
- [01:07]
Podcast Host / Advertiser
This is 20 VC with me, Harry Stebbings. Now, if I could invest in one emerging manager sub $50 million fund, it would be this manager today. Josh Browder, Browder Capital. Honestly, I thought this guy was amazing when I came into this interview, but I didn't know the show would be quite as good as this turned out to be. There's some insane points that are important
- [01:26]
Harry Stebbings
to remember with Josh.
- [01:27]
Podcast Host / Advertiser
He makes founders that he invests in live in his spare room the four seasons until they raise a seed round. Also, he turned his Teal Fellowship 100K grant into a $10 million angel portfolio. He was one of the first investors in companies like Micro1, Yuzu and many more. I've never had such good founder references on any GP that we've ever, ever had on the show as I have with Josh. I spoke to 12. Josh got an average of 9.2 out of 10 across those 12 founder references. This is one of the best shows
- [02:04]
Harry Stebbings
that we've done in a long time.
- [02:05]
Podcast Host / Advertiser
And I honestly just felt really grateful
- [02:07]
Harry Stebbings
to have made a new friend after doing this show with Josh.
- [02:10]
Podcast Host / Advertiser
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- [05:18]
Harry Stebbings
You have now arrived at your destination. Josh. Dude, I am so excited for this. You mentioned very kindly before the show about my levels of prep. I think it's stalking to some extent, but I have loved getting to know you. So thank you so much for joining me.
- [05:32]
Josh Browder
First, thank you for having me. Growing up in the uk, I'm proud to have known of you before you became a world famous podcaster.
- [05:40]
Harry Stebbings
Dude, I think most of the stuff I post these days actually just rage baits most people on LinkedIn. But I want to start with one that I always actually wonder with CEOs that I interview and meet, which is what actually inspires or motivates you more? Is it the fear of losing or is it the immense satisfactory feeling of winning?
- [06:01]
Josh Browder
If you're not motivated by the fear of losing, I think you're asleep at the wheel. Only the paranoid survive. And the world is changing. It feels like the world is changing. A year's worth of progress every few weeks. So definitely the fear of losing.
- [06:14]
Harry Stebbings
You know, when I started, you very kindly said like about getting to know me through the show. I still kind of have this to this day, in all honesty. And this is why the show's become more and more successful. I don't really care what people think, but like I was terrified of being Macaulay Culkin. You ever seen Home Alone and he was very famous when he was young and then nothing became of him. And I was terrified of being the shot in the pan. Did you ever have that? Because you were very successful young. I remember seeing you in the same vein, like on magazine covers raising $22 million. Did you feel that pressure early?
- [06:45]
Josh Browder
There's this saying among the Thiel fellows that they have an expiry date. We all know these people who are very hyped and then maybe didn't stay relevant and they just, some of them lost their minds. And so that was always a huge fear of Min have to constantly be reinventing yourself to kind of stay relevant and adapt because the world changes very quickly. I started do not pay in high school when I was 17. That was a completely different world back then. That was in 2015.
- [07:11]
Harry Stebbings
I am actually just going to start with that actually and kind of mix up the schedule because you bet intensely now often on very young founders and I spoke to so many of them before this show. Why is it that you place such a bat and conviction on very young founders so much earlier than maybe others would?
- [07:28]
Josh Browder
I think young founders have no option but to succeed. If you back a Google engineer, the first thing they'll do is they'll hire 10 of their friends. And it's like this endless scheme of hiring. The first thing a young founder will do is they'll build the product and they don't have anything to fall back on, especially if they have a chip on their shoulder. The only thing they can do is succeed. And so I think the grit level with young founders is 10x. Being an entrepreneur is like eating glass. If you don't like have a true dedication to win, they'll give up at the first opportunity.
- [07:59]
Harry Stebbings
It is the shittest question which I've often been asked, but actually I've found there's more and more nuance to it. And Dakshit Greptal told me I should ask this. He said, you back founders that others maybe wouldn't. When you actually look at them in that instance, what is it that you look for that is non obvious or atypical in the founders that you do invest in?
- [08:21]
Josh Browder
The number one thing I look for is a deep connection to the problem that they won't give up. I go back to my own Journey. I'm Mr. Do Not Pay. I'm the type of person to get 10 parking tickets just to test out the service or wait on hold for hours to save £20 or dollars. And I look for those founders with a really deep connection to the problem. So for example, I was in the very, very first pre pre seed of a company called owner.com with Adam Guild. He built the initial version of his product to help his mother's dog grooming business. So many of these founders come up with these BS stories but that is a real story. And he really did it to help his mother. And similarly with me, I really did it because I hate the government with parking tickets. And so I look for that sort of founder market fit where they're their own first customer. And I joke, if you're building for yourself, at least you have one customer.
- [09:08]
Harry Stebbings
Do you worry about the susceptibility of founders when they're that young? Bluntly I see a lot of very young founders now getting so caught up in the fundraising game that it's like, it's almost a game of, I raised a random from who, and it's like, we're building a business to create a product for customers. Let's not forget why we're here. Do you worry about that?
- [09:28]
Josh Browder
Yes. So I escaped the UK to go to Stanford, and there was a Stanford Review article, which is a student publication, and the publication said it's easier for a Stanford student to get into YC than it is for them to get a job. Now, we've seen a rise of, I would say, fake founders where they don't have that connection to their problem and they're just starting something just because it's cool or because they have nothing to do for the summer. And actually, being an investor, you have to be very careful about backing students over the summer because part of the signal is they've dropped out and they're going all in on this. But of course, during the summer you can't actually tell if they've dropped out. So I'm actually scale back a bit during the summer, not because I'm in Capri like all the other VCs, but because you have to worry about these fake founders.
- [10:10]
Harry Stebbings
How do you determine whether someone is a fake tourist founder versus not? I look at some of mine more recently, actually, and I've made this mistake where I thought they were mission driven and it transpires afterwards that they're not.
- [10:23]
Josh Browder
So I have a huge list of heuristics and I have small signals and big signals. So a small signal would be, let's meet at 11pm and the best founders would say, sure. The mediocre ones would say, oh, no, can we meet Tuesday week? So we meet at 11pm and then I just hit them quick fire with questions and everything. They say I want them to validate, and it's almost like a Visa interview, for example. They'll say, I'm at 5,000 in revenue. I say, let's look up your stripe right now. Fake ones get really nervous. They're like, I don't have my stripe on my phone. What serious entrepreneur doesn't have the stripe app on their phone? And then I go into like these tactical questions, like, what's your goal for the next three months, six months, one year? A D minus answer would be some vague nonsense like, I want to get a partnership with Anthropic. An A plus answer would be, I'm going to, like, fly to Milwaukee to meet with a dentist to get them to sign my $500 a month SaaS plan. So it's like very tact. Then I look for do they have a top 1% skill in something to achieve their business goals? And you see the best entrepreneurs, they've proved something in their childhood. Maybe they were selling Minecraft servers like Adam Guild or John Andrew, the founder of Wonder. Maybe they were doing sneaker bots like the founder of wop. My generation, when we were growing up, it was very big to do jailbreaking. So jailbreaking or competitive drone racing. So many of these things and it doesn't have to be engineering. I backed the youngest engineer at Amazon. That was really cool. But it can also be distribution like making sure their sneaker bots get to the right audience.
- [11:56]
Harry Stebbings
I heard from some of the founders that you will house them in a Four Seasons residence. Can you talk to me about this and how you structure that environment that you put them in?
- [12:07]
Josh Browder
I noticed over the years, so I've tried all sorts of investments over the years and things have done very well. But the best sort of investments are the day one investments for me. And I think everyone is playing different games. Some people are playing the games where they're getting into the hottest companies 100 million valuation and then they become worth 25 billion one day. The game I'm playing is I'm getting into founders who when they're just starting, they're not polished at all and they can really use my advice and my reliving my founder journey to polish them. And I try and get in sub 5 million valuation. And the question I'm sure you have is how do you account for the adverse selection of getting in at those low valuations? And I noticed that over the years the best founders that I invested in, I actually lived with them at some point. I was roommates with the founder of a company called Assured where we both rented the house where Facebook was started over the summer at Stanford. I was roommates with the founder of a company called Yuzu where he worked at Do Not Pay. So he lived at the Do Not Pay house. The founder of Micro One lived in my spare bedroom when I was his first investor.
- [13:10]
Harry Stebbings
And what is it you see in the best in those periods?
- [13:14]
Josh Browder
So I've made so many mistakes with do not pay. I'm 10 years in now. I can give them a crash course so they don't make the same mistakes as me in a matter of three weeks. And bear in mind these are very young college first time founders so they don't even know the difference between pre money and post money valuation and all of this. So it's almost like a one person accelerator. It's one partner at the accelerator, me, and then one founder or one company. And you mentioned Four Seasons. And I would say it's not that luxurious. It's adjacent to the Four Seasons. It's technically a Four Seasons residence. But sometimes if there's four co founders, it's four beds in one room. So I'll rent beds for $50 a night. And then they all one company, they live in one room and I say to them it's like it's in California. So it's like Hotel California where you can't check out until you've raised your institutional seed. And then the company is off life support and I can relax a bit.
- [14:05]
Harry Stebbings
Okay. I just have to kind of delve into this process. What are the main fuck ups that they make in that period where they're there? What do you need to shape, polish or create in that period?
- [14:16]
Josh Browder
At the very beginning, there's three reasons why pre seed companies fail. They run out of money, they run out of hope and co founder disputes. The running out of money comes down to pitching and I help. I'm lucky to have pitched almost everyone in Silicon Valley over the years successfully and unsuccessfully. And so I teach them how to present their business. Running out of hope is also really important. I want them to make them feel like they're making progress every single day. Encouraging them to ignore all of the kind of vanity signals of being a young founder in SF and actually focus on their customers. And then co founder disputes and building the team. I sometimes recruit my smart friends who are not ready to start a company into their organization and I get them the vesting and all the boring stuff. Everything that YC would say, I say to them.
- [15:03]
Harry Stebbings
It's so interesting that we had money, hope, co founder dispute, co founder dispute is one that really kills companies, I find. How do you, how do you measure, analyze co founder relationships when they're staying with you and any lessons there?
- [15:18]
Josh Browder
So the good news is that with all sort of red flags, young founders are very bad at lying. If they say we're kind of best friends and then they start interrupting each other, you kind of know that that's not true. So I look for kind of a long history. The best co founder dynamic that I've seen among young founders is friends from high school. So I was the first and they live with me as well. I was the first investor in a company called Halideer. Very recently they were friends from high school, went to different colleges, dropped out and rejoined. So that's the kind of perfect dynamic. One thing I'll say is I've noticed a really worrying trend of people reverse engineering what I say on podcasts and in articles to pitch me exactly what I'm looking for. Just now I said, friends from high school. I can guarantee you in three weeks someone is going to say, we were best friends in high school. And so this is a worrying trend where they're using Claude and chatgpt deep research. And so I have to worry about that.
- [16:12]
Harry Stebbings
It's the biggest, biggest challenge that we actually have because I've been very prescriptive in the past that I look for, and this sounds awful, but like, family trauma is a big sign of like future success, gaming and then early entrepreneurial success. I would say nine out of 10 young founders that we meet, pitch those three. Exactly. And you're like, wow, this is very aligned.
- [16:31]
Josh Browder
Yeah, it's disgusting. It's a certain type of fraud. I call it ideological fraud.
- [16:36]
Harry Stebbings
I agree completely. When you bring them into the house, is that when you put the money in?
- [16:41]
Josh Browder
Yes. So I put it in just before.
- [16:44]
Harry Stebbings
And is that same size check at certain price?
- [16:48]
Josh Browder
Yeah. And it varies depending on how many co founders there are. If it's just one, sometimes I don't mind solo founders. If it's like three dropouts from Harvard, then the price reflects that.
- [16:59]
Harry Stebbings
Do you find that 5 million price is still attainable?
- [17:03]
Josh Browder
It sometimes can be lower, sometimes can
- [17:05]
Harry Stebbings
be higher because I just find dropouts from Stanford or Harvard in particular. Just see TechCrunch and see Twitter or X and go, I'm 25. I'm a CS grad from Stanford.
- [17:17]
Josh Browder
Oftentimes it's so early that it's definitely possible. From my latest fund, I've done 33 deals so far. The median across the Entire fund is 5. The minimum is 1.5. Maximum is 21.
- [17:31]
Harry Stebbings
Do you worry about the level of fraud that's going on with the current ecosystem, with the founders that we're seeing? Do you worry about that increasing with the pressure we're putting on?
- [17:41]
Josh Browder
I think that at the earliest stages, the only fraud that can be is ideological, which is not illegal. It's not illegal to say you've had childhood trauma when you've actually grown up middle class. And that's a huge, huge issue. It's interesting because the best founders are hustlers in some ways. So it's a balance. I actually think it's becoming easier and easier. The World is becoming much more transparent. You have Twitter sleuths who will detect anything as several companies recently have been taken down because of someone published an article about stock 2 or something like that, and the entire company is done. So I think actually that the illegal type of fraud is becoming harder.
- [18:18]
Harry Stebbings
You mentioned you've pretty much met every venture investor in the Valley. What was the best venture investor meeting you had? You know, somewhere you just meet them and you're like, wow, this person is really smart.
- [18:30]
Josh Browder
I think it was Marc Andreessen. Like so many founders, after Do Not Pay got all of the hype and we were starting to get a lot of usage, he reached out on X and he said, do you want to have breakfast? I was very mission driven. I was not one of these Stanford founders or anything. I was actually on the verge of making Do Not Pay a nonprofit. In fact, I had a pitch to nonprofit style investors. Not investors, just funders. To make a legal nonprofit to help people with their rights. I was that focused on fighting the system. I went to this breakfast and Mark convinced me that the biggest organizations are for profit entities. And you can have 10 times the impact of a for profit company because the incentives are aligned. And DoNotPay was a very small example of this. But I guess you're seeing this today with OpenAI, with the $150 billion lawsuit where they switched from nonprofit to for profit. So that was the first major lesson I learned. I would say.
- [19:24]
Harry Stebbings
How old were you at that breakfast?
- [19:26]
Josh Browder
I was 18 or 19.
- [19:28]
Harry Stebbings
Were you nervous?
- [19:29]
Josh Browder
I was so nervous. And it was a breakfast meeting.
- [19:33]
Harry Stebbings
Where was it?
- [19:34]
Josh Browder
It was his house in Atherton and he came down in like, breakfast clothes. And what are breakfast clothes? I was fresh off the boat. I'm not trying to get in trouble, but I was like, fresh off the boat from the uk, Came down in breakfast clothes and. Yeah, but I would say all of the luminaries are incredibly nice people. But Marc Andreessen is by far my favorite, and I'm very fortunate. He's my first investor at Do Not Pay and also first institutional investor for my fund.
- [20:01]
Harry Stebbings
That is absolutely amazing. I love that. I also love breakfast clothes. I have no idea what that is. Do you think venture investors add value? Keith Roboyo says the best founders I work with, honestly, they don't need venture investors. Most VCs on LinkedIn or Twitter tell me that I'm an idiot for saying that. Do you find that to be true? What side of the fence do you sit on?
- [20:22]
Josh Browder
I have a friend. He has a great Saying, which I'll copy. There are three types of people. Those who make it happen, those who watch it happen, and those who wonder what happened. And I think at best, venture investors are in the second one sometimes, unfortunately, they can be in the third. So the biggest issue is they don't go crazy on the founders, which happens a lot. But of course, they can add value at strategic points, going back to the
- [20:45]
Harry Stebbings
core ingredient of success and venture that the founders themselves. You're a dropout. How do you think about the value of university today? And if you were sitting with university students today, advising them on whether it's worth staying or worth pursuing a dream?
- [21:01]
Josh Browder
People see their life as paint by numbers. So they say, if I go graduate, I go to business school, I go work at X company, then in five years, I'll be ready to start my company. The problem is the world changes so quickly that the paint by numbers approach doesn't work anymore. I would say to any founder who has an idea of what they want to do, they should just go for it and the world won't wait for them. On the other hand, you see a lot of people drop out just for the sake of it. In fact, when I dropped out in 2018, I actually had like one or two classes left at Stanford. So I was very close. It was very kind of taboo to drop out. Now dropping out is almost the establishment. So you see people drop out just for the sake of it. And I think that's definitely wrong because there are huge advantages to being in college. Even if you're doing a startup, like, you can recruit your friends, you have your college email, and people will take you more seriously if you email them from Stanford, MIT Edu. Also, people give college students more of a free pass. If all of these founders who are getting this controversial stuff are in college, they might be able to kind of pivot more quickly.
- [22:04]
Harry Stebbings
Do you think your father's an incredible figure? Incredibly respected figure, but there was a little bit of a safety net. Do you think your ability to have a safety net slightly enabled you to drop out?
- [22:16]
Josh Browder
No, I think the opposite was true. So I was sitting, and I've never told this story before, but I was sitting, sitting at a poker game at Stanford with my friends. This is no exaggeration. I got a news alert saying, so my father is a human rights activist and he's an enemy of the Russians. It was a news alert about my father, that he'd just been arrested. The Russians managed to get him. It just made me incredibly paranoid. And so I think I was more paranoid. Most people don't have the mafia after your family. And so I was always paranoid and fearless. And so I think actually it kind of made me more paranoid to like take big swings. I called him. It didn't go through. Then I called my mother and then I like cashed out my chips and left the poker game and dealt with this situation. And as a 19 year old college student, there's very little you can do in that situation. But my biggest thing was trying to make sure he didn't get extradited to Russia, because if he got extradited, really bad things would happen. I went to an event, British Students at Stanford, and it was hosted by the Consul General. And I thought the one thing I can do, maybe I email the Consul General. So even as a teenager I was just trying everything. Of course that made no difference.
- [23:33]
Harry Stebbings
Do you know what I find very funny? If you've been like, you know what, I'll deal with this later. I'm playing poker right now. That is quite the story.
- [23:43]
Josh Browder
Yeah, it was a Financial Times news alert.
- [23:45]
Harry Stebbings
Yeah, that's pretty terrifying. Can I ask you, when you think about like a really challenging time like that, seeing that news, can you take me to a really hard day you had with Do Not Pay and how did you learn about yourself from it?
- [23:59]
Josh Browder
This is probably the hardest point of Do Not Pay, which is three years into the company. So I'd raised the pre seed from Andreessen, from Mark. It came time to raise the seed. Two or three years later, Do Not Pay was incredibly popular. Millions of people were using our free product and I thought it was a slam dunk pitch. That was a huge mistake. I was going down Sandhill Road because all the VC firms were in Sandhill Road back then. One after the other, they were rejecting me. I went just down the list. Rejection, rejection, rejection. This was really depressing because I had actually just dropped out a week before. As passionate as I was about Do Not Pay, there's only so far I could go with just me. I needed to hire a real team and then raise some serious money to keep it going. I had like two or three pitches left and I thought, if these don't go well, I'm just going to throw in the towel and do something really depressing, like go work for big tech or something, go work at Google, because I just have to give, I mean, even go back to Stanford. So it was the next day. It was one of my last pitches. I guess this kind of speaks for how bad the situation was. But I turned to my outside counsel lawyer for advice. If you're turning to outside counsel for business advice, then you know things are really bad. He's an amazing lawyer. He's a popular partner at a firm called Wilson Sonsini. His name is Damian Weiss. He's on the cap table of all the amazing companies. I told him the predicament I was in, and he said, well, do the whole pitch in front of me right now. So I gave him the whole pitch, and he interrupted me halfway through, and he said, you're doing it completely wrong. He said, first of all, they're not investing in the PDF deck or some presentation. They're investing in you and the product. And so the fact that you're not doing a demo is criminal. So I kind of quickly scrambled together a demo of a robot appealing someone's bank fees because Do Not Pay was expanding to bank Feees in the US and added that to the presentation. He said, second of all, no one really knows what this can be. You should put the logos of the biggest companies that you one day want to emulate. So I stuck in the logo of Intuit, which is a $200 billion company in the US and I said, we want to be the TurboTax, which is one of their products of consumer rights. And I also put the Honey logo, which was just acquired that year for 6 billion. And then I put credit comma, which was acquired for 8 billion. Put that in the deck. Said, finally, this was around the time of the Cambridge Analytica scandal. You shouldn't say you want to do advertising. Advertising is not very fashionable right now among VCs. I said, okay, what should I do? He said, subscription. So I put in subscription. And I didn't even really believe that it could be like people would subscribe to it. But I put in subscription. And he turned out to be right. Everyone now subscription is our main business model. So I made those three very minor changes to the deck, did my presentation the next day, and Harry, it was like a night and day difference. Everything changed. Not only did they want to invest, I left the room for a few minutes, I came back, and they wanted to invest on the spot. First of all, Silicon Valley is such a kind of herd mentality place. Even the people that previously rejected me, once they found out that this firm wants to invest, everyone started rescinding their rejections. And I thought that was a bit depressing. And second of all, it taught me a really valuable lesson, which is nothing changed about the company, Nothing changed about me, nothing changed about the team, Nothing changed about our usage. But the most minor differences in framing and strategy made all the difference. That's actually some of the lessons I give the founders I invest in. If things aren't working, you just need to change the framing just slightly, and that can make a monumental difference.
- [27:25]
Harry Stebbings
What do you find is the biggest problem with the framing that founders often come in with?
- [27:29]
Josh Browder
I tell every founder I invest in don't have too high of expectations. Pitching VCs is like a game of poker. You should never reveal too much information about what you're seeking. So every founder I invest and I say, don't reveal the price that you want. The price is a function of how hot the deal is, which ironically is less hot if you go in swinging for the fences with something too high. Secondly, I try and relive my story and I say, you have to do a demo. There's a famous story. I gave this founder advice to do a demo. He's a biotech founder and he even did a demo, a very personal demo. Everyone was passing on him. And then he did this demo and then a top tier person came in. So I definitely do the demo, make it all about them. Also, I mean, there's a million things like the CEO should be doing it, not like five founders speaking over each other. There's like a whole list. I send it to any founder I invest in.
- [28:18]
Harry Stebbings
One of the worst things to me, exactly, there is like when three people come to a Zoom call in particular, and it's like, we have 30 minutes. My job is to build a relationship, try and get to know you. Suddenly there's three founders on a call.
- [28:29]
Josh Browder
Yeah, well, Zoom is the first, per se. They should fly to London in person. I say you should reject Zoom and always do in person where possible. If I was pitching you, I'd fly to London.
- [28:39]
Harry Stebbings
That's very sweet. I would invest in you if you fly to London.
- [28:42]
Podcast Host / Advertiser
You said that. I didn't really believe subscription could be it.
- [28:45]
Harry Stebbings
We kind of put some logos of other big companies.
- [28:48]
Podcast Host / Advertiser
How do you think about the Walt
- [28:50]
Harry Stebbings
Disney sell me the dream, sell me the story versus Jerry Maguire, show me the money, sell me what you have. The hard statistical. How do you advise that? And is there a blurring of lines?
- [29:01]
Josh Browder
So I think being British, the substance is always. I try and be more substantive than hypey. I think it's just the UK culture. When I give references, I always say this reference is actually really good because it's coming from a British person. I'm not one of these hypey Americans and I give founders I Invest in this advice. It's okay to be as hyped as possible. With your vision and ambition, you should have boundless ambition. But with how you're describing the current state, it should be very accurate. So I think there's a balance with what your plans are versus where it is today.
- [29:35]
Harry Stebbings
Do you think that we actually expect too much in the ambitions of young people? And what I mean by that is, when I first started the show and you kind of said you'd listened, early on, I just wanted to be an associate at a big fund. That was the dream job. I would have been a terrible associate, I'm sure. But we put a limiter on our ambitions because we don't know what we're capable of. Do you think we need to give founders credit or leeway to have their ambitions expanded?
- [29:59]
Josh Browder
Unfortunately, all of the best founders I've invested in, they've had delusional levels of ambition. The more delusional, the better. And unfortunately, it is a sign of success to be delusional. So I think it's better that they're more on the delusional side. But I agree with you. Do not pay. Initially, we got an acquisition offer for a million from, like, one of these OG legal tech companies when we just started. I was about to take it. So I agree that you never kind of realize how big things can be.
- [30:28]
Harry Stebbings
Why did you not take it? A million pounds? You're very young, probably a teenager. Why did you not?
- [30:33]
Josh Browder
I asked a lot of people I knew for advice and they kind of laughed at me. And I was actually really upset with them for, like, not kind of validating this achievement that we got. This. It was actually a million dollar acquisition offer that was a bit depressing. But I think they actually gave me good advice, which is, you can do better than this.
- [30:50]
Harry Stebbings
You said they can. If you went to mentors, what advice would you have or what thoughts do you have on the value of mentorship and how young people should seek out the right people to surround themselves with?
- [31:01]
Josh Browder
One should create their own luck and meet as many peers as possible because you get different things from different people. One person is an expert at growth. One person is an expert at fundraising. One person is an expert at life. Cliff, who introduced us, I think he's an expert at life.
- [31:16]
Harry Stebbings
I totally agree with you in terms of the people that you surround yourself with and learning from their different skills. Talk to me about deciding to be a teal fellow and how that came about, because that was a significant turning point.
- [31:28]
Josh Browder
Yeah. So I was at Stanford and To graduate Stanford, like many universities, they have diversity requirements. You have to do various things in the curriculum to get your degree. And one thing you have to do is it's called creative expression. And I'm not sure how I seem, but I'm not the most creative person. I'm more of a Claude Code style person. I love the code. This was the last requirement I had and the easiest way to satisfy this requirement was to go to dance class once a week. There's this famous class at Stanford called Social Dance. It was at 9am it was like a schlep and do not pay servers were crashing and I really am very bad at dancing. So. So I had a decision to make. Did I want to go to this dance class or did I want to keep my business up for millions of users? I didn't go to the dance class. I kept Do Not Pay running, failed out the dance class. And that was my, kind of precipitated my dropping out. Not the Thiel Fellowship. And I actually got the Thiel Fellowship a few weeks later. The Thiel Fellowship. The best thing about it is you have 19 other people who also have these dance class style problems who have the same problems as me as an entrepreneur. One example would be how can you convince a 60 year old to work for you? At the time, Do Not Pay was very early in the machine learning days. We were trying to do some machine learning classification for parking tickets and I was trying to get one of these old OG machine learning people to work for the company. I was turning to one of my Stanford dorm mates who was also trying to do apps and projects, but he was more a committed college student. And I said, do you have any idea about how I can convince this person to work for me? And he had no idea, rightly so, because he was dealing with his own college problems versus building a company. So I think the biggest benefit of the Thiel fellowship is having 19 other young people who are dealing with the same challenges as you. And I went to the first Thiel Fellowship retreat and back then they made you share rooms. Now Peter Thiel is so wealthy, if you go on the retreat they actually give you your own room. But back then you had to share rooms with the other fellows.
- [33:28]
Harry Stebbings
Getting too luxurious these days.
- [33:30]
Josh Browder
And my roommate was a fellow Brit. I guess they put the two Brits together. He went on to found a company called Fluidstack which is publicly reported to be a tens of billions kind of company. And so just having those peers is absolutely incredible.
- [33:45]
Harry Stebbings
And so when we look at the Thiel Fellowship. What do you think made it so successful? When you look back, I think not
- [33:52]
Josh Browder
being transactional, it's a price. So it goes to the individual as a price. And you can do anything you want with the prize money. You can use it on research on how to grow organs. You can invest it like I did in my teal fellow classmates.
- [34:05]
Harry Stebbings
Is that what you used it for?
- [34:07]
Josh Browder
Yeah. I put all my Teal Fellowship money and I invested it in Adam Guild and other amazing entrepreneurs. That's how I started investing. Maybe I'm an investor at heart in some ways because that's what I did.
- [34:18]
Harry Stebbings
That's fucking wild. I had no idea. So they give you 200 grand.
- [34:22]
Josh Browder
So back in my day, before the hyperinflation, I'm getting old. It was 100k then last year was 200k, now it's 250k. So it's going up.
- [34:31]
Harry Stebbings
And so then you get 100k and you're like, wow, the people I'm with are really good too. I'm going to invest in 10, 10Ks.
- [34:39]
Josh Browder
So they have this tradition where obviously the ultimate decision on who gets the fellowship is up to the foundation and Peter finally. But fellows help out every year in the selection in various ways. And I was helping out one year and I was actually interviewing fellows for the next class and that's how I met a lot of these people.
- [34:57]
Harry Stebbings
That is absolutely wild. Did you do the same size check in to each? I'm just intrigued.
- [35:01]
Josh Browder
No. So they pay it in installments because I guess they think these crazy young people, we don't want to give them 250k at once. They might buy drugs or something. Probably not, but do some crazy stuff. So at least with me, they gave it to me in installment. So I took all my first installment and just put it into him.
- [35:20]
Harry Stebbings
Into Adam?
- [35:21]
Josh Browder
Yeah.
- [35:21]
Harry Stebbings
Wow. Okay. So of the 100k, what do you think you've turned the 100k into on paper?
- [35:28]
Josh Browder
I think when it's all said and done, it'll be in the eight figures.
- [35:31]
Podcast Host / Advertiser
Wow.
- [35:32]
Josh Browder
That's why I started my fund because I and I did other investments as well that did very well. I also invested in my going back to my Stanford roommate Justin and various other ones at the time.
- [35:44]
Harry Stebbings
What did Justin do?
- [35:45]
Josh Browder
He's building insurance claims processing software. Assured. Yeah, lots of deals like that. And so I thought, okay, I'm out of my Thiel Fellowship money. Maybe I should raise a small fund to keep this going. Because it pays to be early.
- [35:57]
Harry Stebbings
100% pays to be early. That is absolutely amazing. It's the first before we move on to investing in the first ones in that way. You're on the selection committee also for the Thiel Fellowship.
- [36:06]
Josh Browder
So it's ultimately up to the fellowship to decide. But I help out how has what
- [36:11]
Harry Stebbings
you look for and they look for changed over the years.
- [36:15]
Josh Browder
So when the Thiel Fellowship started it was really about backing incredible individuals out of distribution. Individuals. Dylan Field was working on a photo sharing app and then I think some drone ideas. Vitalik was just a crazy individual doing crypto which was not exciting at the time. And it was really about the individual. In the kind of late 2000 and tens, a flood of people were applying to the Thiel Fellowship with huge external validation. But now I think it's going back to really focusing on the individual.
- [36:47]
Harry Stebbings
We said there about the external validation and kind of some group like thinking I am interested because often I don't know how to put it. But the Thiel Fellowship and say like a YC are compared in the same bucket. How do you advise founders on the value of YC today and how they should think about that?
- [37:04]
Josh Browder
Every founder needs some first believer. Whether it's taking my spare bedroom or the amazing programs out there. I really think you need a first believer and YC can be a great first believer for them. Some companies do better in YC than others. The problem with any accelerator not speaking specifically about YC is you're competing for attention with all the other companies in the accelerator. If you're the top of the accelerator, then that's incredible. You're the king made or queen maid company. If you're like a middling company, it might actually be better to not be compared to all those other companies. And going back to my spare bedroom, it's a supply constraint. There's only one spare bedroom. And so it actually is a bar for me as I do, I want to put these people in my spare bedroom and there's only one. So all my focus is on them. So there's no dilution in terms of the brand. I'm not doing 100 companies in my spare bedroom. In fact, One of my LPs asked me, why don't you start buying a hotel or rent out a hotel and just do ten at a time. And I said, well, that removes the artificial constraint of one. And so I think that's why I try and be different. It's like a one person accelerator.
- [38:09]
Harry Stebbings
I have an unwavering man Crush on Matthew McConaughey. He actually says something brilliant, which is limitations reveal style. And I think it's very much aligned here to the constraints of your. I would love to partner with you, Josh, and say, hey, this is the content marketer within me. Hey, could we get a house and do. Found a house and do five or six and turn it also into a content business?
- [38:31]
Josh Browder
So I was thinking of buying the Facebook house. It's actually not that expensive house. The actual house where Facebook started and when I was starting Do Not Pay, I didn't know it was a Facebook house. The first I found out it was a Facebook house is there's a bus of tourists from Asia who would show up at the house. And it would be like Avenue of the Stars. I guess growing up, I'd visit LA and you'd go on a bus with all the stars. And this was on the tour route. And this bus showed up of these tourists. And I said, what are you here for? And they said, we're here to see Mark Zuckerberg's house. I immediately thought, I guess this is the content marketer in me. You can come in, but you have to subscribe to Do Not Pay. We had a Do Not Pay employee outside with a clipboard. And to enter the house, you actually had to become a Do Not Pay user.
- [39:14]
Harry Stebbings
That is amazing. I'm just wondering what are the limitations on expansion fees? The one bedroom was. Could it be three, could it be six?
- [39:23]
Josh Browder
Such a LP question, I think.
- [39:27]
Harry Stebbings
Thanks, Josh.
- [39:29]
Josh Browder
I think you should start funder funds. You have amazing judgment. I think there's something special about one.
- [39:35]
Harry Stebbings
How long are they in there for?
- [39:37]
Josh Browder
As long as it takes. Hotel California, they can't check out until they're in a stable spot. Usually that's a few weeks. Usually a few weeks, yeah.
- [39:44]
Harry Stebbings
Wow. Okay. And so you'll tee them up then for around.
- [39:47]
Josh Browder
And so you'll introduce them maybe a traditional pre. Seed or seed.
- [39:51]
Harry Stebbings
Yeah, introduce them to 10 to 15 VCs.
- [39:53]
Josh Browder
Yeah. And I will go very personally to do everything to help them. So oftentimes this arbitrage is I'm moving them internationally. I'll put that O1 genius visa on my credit card. I'll use all my social capital to introduce them to whoever it takes. I had one person, he was building in data centers. I phoned up my old friend Jamie and introduced him to Jamie from Fluidstack. Do anything possible to kind of build up credibility, build their team and get them in a stable spot.
- [40:20]
Harry Stebbings
I absolutely love that. It's so rare to meet someone like that, and it's so rare to be able to do that. Because most people run portfolios and you just don't have that. Can I ask you a tough one, which is like, have you ever lost belief when you've seen them in the first few weeks?
- [40:34]
Josh Browder
No, I've never lost belief in someone who stayed with me. I think there's enough filters before that the opposite is true. I've accosted them at 2am while they're sitting on my couch. I'm like, I want to put in another 300k. It's difficult to say, no, you're staying in my house.
- [40:52]
Harry Stebbings
Do you want to stay tonight? That is amazing. I love that. And so you go to the 10 to 15. Is it always the 10 to 15 that are the same? Do you tailor it to, oh, well, you're doing X and you're doing Y. So this should be different for you.
- [41:05]
Josh Browder
Yeah, some are off to the races. So some I introduce them to a top three firm and they get it and then they're like. And it's actually going back to. It's actually sickening. Once they get the top three firms firm, it's like a stampede. It's like safari stampede. Everyone is trying to invest and I was thinking, where were all these people just three weeks ago? Sometimes they require a bit more time and then maybe I bring in a sector expert. Like if they're doing government, I bring in a top government vc or if they're doing consumer, I bring in consumer. Sometimes it takes longer, but I always get them in a stapled spot. And it depends on the company.
- [41:36]
Harry Stebbings
Are you able to predict the ones that will be hot versus not?
- [41:41]
Josh Browder
No, the opposite is true actually. The crazier it is, the better they do. Ali Ansari is Micro One is objectively my best performing investment in terms of multiple. The founders get upset when I reveal exact valuation numbers. But let's say over 1000x, well over 1000x. And based on the scale of the business, when I met him I said I'll invest only on three conditions. So as a California llc, uninvestable. It has to be Delaware C Corp. He was based in kind of Los Angeles as a solo founder and he was running kind of a staffing business which there's a million staffing companies even in the uk. So I said, you have to move to the Bay Area. You can live in my spare bedroom. You have to reincorporate in Delaware or shift to Delaware and you have to do a software style product. I don't mind what you do, but it can be anything. We grinded and he's the hardest. One of the hardest working people I've ever seen. And actually he still lives in my building to this day. And I like come at 12am and he's like, like working middle of the night. And he did all those three things and it changed everything.
- [42:43]
Harry Stebbings
Dude, what did you see in him? I don't mean that rudely to Ali. I've seen actually interviews with his. He's clearly brilliant now, but you learn and develop staffing business. I'm sorry to be rude. How uninteresting. As you said, there's millions of them. What did you see in him that made you so convinced that he would pivot? Change the company location, Change his location, Never give up.
- [43:03]
Josh Browder
If you back someone who's above average iq, very smart and never give up, of course they'll succeed. And I think this is actually a mistake a lot of VCs are making. They are focusing too much on these credentials. So there's a race right now to back the math Olympiads. VCs are going to spelling bees and math competitions in high school. And I think IQ is very important. You need someone smart. But much more important is they'll never give up. And I could tell from my own journey and interviewing people for the Thiel Fellowship and seeing so many founders that Ali was someone who has never given up and he's overcome huge challenges along the way to kind of build his business.
- [43:41]
Harry Stebbings
Do you agree with Ken Griffin, who said on the weekend that he likes athletes with above average iq?
- [43:47]
Josh Browder
Yes, I would agree with that. I think athletes is one form of never giving up. And you can kind of tell a huge chip on your shoulder is another way. There are so many.
- [43:56]
Harry Stebbings
We said there about Micron Ali. Take me to that, then. So he's in the house and then he's going out to raise. You're introducing him to VCs. How was that first round?
- [44:04]
Josh Browder
I think that once the minor things get sorted, it's actually quite. There's so much money. People ask me, are you worried about competition from XYZ B5 Seed Firm? I'm like, no, they're helpful. They can kind of join these companies and babysit them. And so once these minor things are sorted, it becomes legible fairly quickly. Not for a unicorn, but certainly for an institutional seed.
- [44:28]
Harry Stebbings
How much weight do you put on the idea to your point on Ali, where his never give up and a staffing business, awful.
- [44:35]
Josh Browder
So this is the biggest mistake I think I've made as an investor over the years, which is as an investor and entrepreneur, my imagination can run wild as to what they can build. I think if only they did this, it would be huge. The problem with that is unless it comes from them, them, it's not their life's work. And so I'm very cautious. I have a rule. I never tell the entrepreneurs what to build, which might seem surprising as an investor. I say to them, it's your job to build the product and get customers. I can help with everything else. So I never index too much about the idea. It's about the person. With that said, there's a few things I'll never touch. I'll never touch crypto. I'm not getting into whether I believe in crypto or not. I think it has huge use cases, but I think it's best left to the crypto funds. Consumer hardware is tough because of various different consumer hardware issues. So I try and stay away from that, at least from my fund, but beyond that, anything. And wet science as well. Stay away from that.
- [45:28]
Harry Stebbings
For me, it's specifically about biotech and life sciences where it's like. It's far too intellectual for me and it's like Atlas exists for a reason. You should go and see them.
- [45:36]
Josh Browder
Yeah, I'm not a scientist.
- [45:38]
Harry Stebbings
Has what you need changed? I would say again, the show is successful because I'm very open. I would say we as a firm are struggling to make the transition between what was good 1 to 5 million good enterprise clients to what is expected now, which is Lagora 1 to 100 million in 18 months. Lovable 1 to 115 months. Has what you need to see changed?
- [46:04]
Josh Browder
No, I'm more excited than ever. Everyone is pitching this AI infrastructure nonsense. We're building agent observability like the jargon levels. I'm British, I think that's all bs. They just add on the jargon. I love people building real businesses, so the more real it is, the better.
- [46:21]
Harry Stebbings
What's real?
- [46:22]
Josh Browder
So I think enterprise AI is really exciting, like assured or Owner or micro one, things like that.
- [46:30]
Harry Stebbings
And what you mean by that, just so I understand, is like I sell a product that people pay for and it's a simple transaction in that way. Not the market will move towards our way of seeing data access for agents.
- [46:42]
Josh Browder
If you can't explain the business to someone at the pub in the uk, if you go to a pub and say I'm building observability for AI agents, they'll laugh at you. But if you say I'm building software to automate health insurance claims, that makes sense.
- [46:57]
Harry Stebbings
When we go back to The ALIS and the micro ones for the fundraise. What do you advise founders when they get multiple term sheets and the heat is on?
- [47:05]
Josh Browder
There's kind of two groups of firms. There's the kingmaker firms that you should accept at any price. One example would be Founders Fund or Sequoia or people like that. And so if you get an offer from them at X and the offer from someone else is at 2x, you should take their offer. Because even if you're maximizing amount raised and minimizing dilution, in the long run, you're king maid and it will save you in the next round. But another mistake these entrepreneurs make is they have the list of the kingmaker firms as too big. There's probably some tier 2 firm that think very highly of themselves that aren't in that same level as Founders Fund or sequoia.
- [47:43]
Harry Stebbings
No Tier 2 firm thinks they're Tier 2, to be very clear. Can I ask, if I were to put the pressure on and say you can have three firms in tier one and three only, what would they be?
- [47:58]
Josh Browder
No, it depends on the sector. It really depends on the sector. If you're a consumer company, getting forerunner could be the kingmaking thing generally. It could be Founders Fund or Sequoia or something. So that's a very diplomatic answer.
- [48:11]
Harry Stebbings
That's a very diplomatic answer. I often think that kingmaking exists very candidly. Do you agree that kingmaking exists? You said it a couple of times.
- [48:18]
Josh Browder
100%. We live in such a noisy world that people outsource their judgment to established brands.
- [48:24]
Harry Stebbings
The thing I think you've also seen that people really don't anticipate is how kingmaking really correlates to customer adoption. And what I mean by that is if you look at and you ask Winston at Harvey or Max at Lagora, a big part of their customer acquisition is relying on their venture investors to bring mega law firms. It is a revenue generator.
- [48:43]
Josh Browder
Yeah. And it's not just law firms. Even consumers who use DoNotPay, I think. I'm sure lots of people have signed up because of the investors that backed us.
- [48:51]
Harry Stebbings
You mentioned the word dilution there. I'm seeing more and more founders who are like, oh, I'm being very dilution sensitive with this round. And it's often very early rounds. They'll do 5%, maybe 10% dilution on a seed round or a pre seed round where it used to be 15, 20. That's hard for me as a fund. What do you advise founders on dilution sensitivity from your lessons and observations.
- [49:13]
Josh Browder
I think it's nonsense. I think they shouldn't do something stupid like sell 50% of their company to a Midwest angel for like 100k like you see with some of these shark tank deals. But at the same time, the number one thing I say to especially these young founders I back is either it succeeds or it doesn't. If it succeeds, at a minimum you're worth hundreds of millions or billions. You're on the COVID of magazines. It's life changing. If it fails, you're nothing. So if taking that extra money can reduce the chance of failure by even 5%, the expected value is infinity in terms of life improvement, 5% of infinity, you should still do it.
- [49:52]
Harry Stebbings
For you as an investor, dilution is real. I mean we're seeing on Anthropic. I think the Series A round is a 92% dilution. Astonishing. Never seen such levels of dilution for you as an investor with subsequent rounds. Do you do reserves? Do you do them from the fund? How do you think about that?
- [50:07]
Josh Browder
I'm on my fourth fund. My first three funds I did do reserves and I did some great reserve investments. For example, I did a very hummingbird style investment. I put 15% of my 33rd fund in owner at the Series A. That fund has micro one lots of other good things. So that will be a very good fund because of that reserve investment and also because of these pre seeds.
- [50:26]
Harry Stebbings
Let's pause on that. You put 15% into owner. 15% for people is an extraordinary large
- [50:32]
Josh Browder
of my third fund. Yeah.
- [50:33]
Harry Stebbings
Normally I would never go above 7%. So you're doing 15. What did you see that gave you the unwavering conviction to put 15% in it?
- [50:40]
Josh Browder
So in the private markets there's no insider information. Speaking generally, all of these founders are like my good friends. I speak to them sometimes at 2am if you can build that depth of relationship and conviction, it's adverse positive selection. Through that kind of relationship that you can build with the founders, you can tell if it's real. Because I'm not a professional investor and I'm sure you'll ask me about being a founder versus investor. I think people consider me as a founder and that's a unique edge. Anyway, going back to your question, so that was a good investment. But I realized the opportunity cost of that investment, given where I come in, it could be 20 to 30 pre seeds. And the value creation at the pre seed is so high that I decided for my fourth fund, no reserves, just everything up front. Browder Hotel.
- [51:27]
Harry Stebbings
Let's go Browder Hotel, let's go. Along the way, you said, hey, you'll be worth hundreds of millions, blah blah, blah. How do you advise founders on the ability to take sales secondaries off the table early? We're seeing it more and more earlier and earlier. How do you advise them?
- [51:42]
Josh Browder
The people buying these secondaries are sharks. If someone is emailing you asking to buy anthropic shares, the value of anthropic is probably going to go up. And the same is true with these founders. And so I would say to them, if you're being bombarded with secondary offers, perhaps they have more experience with the market than even you do as a founder of your own business. I think a lot of founders, they've regretted, a lot of my friends, they've regretted taking secondaries. They've got one of these kingmaker firms in and then the valuation has gone up 3x in a few weeks. So why not do the secondary at the higher price? So I would say if it's too much inbound, there could be something that they have within their investing experience that as a founder, maybe it's their first time business, they maybe shouldn't jump to sell too quickly.
- [52:30]
Harry Stebbings
Did you sell?
- [52:30]
Josh Browder
Secondaries do not pay. We haven't really had to because of dividends, which is a whole nother thing.
- [52:37]
Harry Stebbings
It is a whole nother thing. I just wonder, do you think richer investors make better investors? My theory around this is like a Sequoia, for example, is not worried about an LP questioning their investment strategy. They're not worried about losing a company even they're not going to get fined for losing a $20 million check. A firm that is more worried or needs the money more is going to worry about their next fund, is going to worry about losing. And they don't have that upside maximization.
- [53:07]
Josh Browder
Yeah, I'll give you a classic example of how this impacts decision making, which is safe versus priced rounds. As a pre seed and seed investor, the B minus VC investors will want to get that next round on a priced basis to get that gap markup. But if you actually care about the economics and making money in the long term, you want the next round on a safe because safes don't dilute other safes. And so I was actually talking to a seed investor about this and I said to them, why don't everyone just encourage more safes? Safes are beneficial for founders because they can raise more quickly and all of this stuff. And they said no, but they want to get the price round to raise the next fund. So I Think this raising the next fund nonsense really does impact decision making and actually directly hurts found us with some of these things.
- [53:50]
Harry Stebbings
Does the safe on safe on safe not actually ultimately hurt the founder when it ultimately converts and it's kind of like a delayed debt that you ultimately have to cash in your chips for?
- [53:59]
Josh Browder
Well, the VCs always win if they do a price round. Some of them are shocks. They say we want a 15% option pool at the seed. So safe you can just pursue the existing option pool and wait till the company becomes more valuable. But I'm biased.
- [54:13]
Harry Stebbings
VCs are shocked. I love that it's a good title. What other ways do you advise founders to just be mindful of a shark like mentality from VCs?
- [54:22]
Josh Browder
So I say to the young founders, the VCs will say anything to get you to sign right there and then anything. They'll reverse engineer what the founder is looking for and say, oh, I'm friends, I'm buddies with that guy. I know someone at that company. We're golf buddies. I can get him to be a customer right now. I can introduce you to so many customers. And they just say exactly what the founders want to hear. And these poor young founders, they're so impressionable. Sometimes they sign the safe on the spot afterwards. Of course it never materializes. They never get that customer that they were wanting because it turns out they weren't as close golf buddies as the person made it out. So I say to founders, do not sign on the spot. And going back to my office, I don't make them sign on the spot. It's just too much, especially for these young founders. I say, you have the night to think about it. I think decisiveness is a key quality. So I do want to know by the next morning. If not, it's done, but they can't sign on the spot.
- [55:13]
Harry Stebbings
I freaking hate this. I'm running a process. I'm collecting term sheets and I'll let you know by Friday evening. The same with everyone else. That is an awful feeling way to do business.
- [55:24]
Josh Browder
Either a hell yes or a hell no.
- [55:26]
Harry Stebbings
So what would you genuinely I'm asking you advice. What would you say to me I should do when a founder says we're collecting term sheets? We so appreciate your belief in us, but we'll let you know on Friday.
- [55:36]
Josh Browder
I say it's probably not a fit, especially given my investing model and I want to so many ways to win. I'm sure that they might win or not, but that's not a fit for me. I say Good luck.
- [55:46]
Harry Stebbings
So when you advise founders on that selection process and they say I've got a term sheet, blah blah blah, you guys then sit over dinner and talk about it. You won't run a process?
- [55:56]
Josh Browder
Yeah, no, definitely not. If they're running a process, it's too, I want to help them with their process and I'm very collaborative. I typically take 5 to 7%. I say to them, and I really think this is proven true, I will save them that over the life of the company. Even if they have the most top tier people, I will save them that through various founder tactics. Helping founders at 2am Even raise their series C. It never ends. I will make it worth it for them. It's not like I'm trying to get like 25% of these founders.
- [56:25]
Harry Stebbings
How do you advise them on price optimization?
- [56:27]
Josh Browder
I tell them the market sets the price and price optimization is a function of how many offers you have. So you should never say what price you want. And of course they ignore my advice and then they get hit with oh, I'm passed because the price is too high when the VC would probably would have given them an offer and that would have actually helped improve the price.
- [56:45]
Harry Stebbings
You mentioned the dividend element there of do not pay. Do not pay is such a fascinating business, especially in the way that you've run it. Can you explain to me how many people are at do not pay why it's not the traditional venture business that bluntly loses money is reliant on the next round. Desperately. Just tell me about that before I dive into it.
- [57:02]
Josh Browder
DoNotPay in some ways is a media business. We get 90% plus of our customers organically through SEO, earned media like viral stories and referrals. And so we're not playing the meta spend $100k a month or meta game that some other founders are playing. And that is a double edged sword. It has positives and negatives. The positives are it's extremely efficient and profitable. We have hundreds of thousands of customers and it's only a team of 11 people. It's automated, fully automated, so it's very efficient. The downside is we can't just decide to dump a million into meta ads and grow by X percent. And so the organic is kind of a ceiling. Another ceiling. Is that coming from the uk? I've always wanted to build a real business. We had a competitor in the 2021 peak, they were spending $300 to acquire a customer worth $150 and they actually managed to sell at the peak of the Market. Good for them. I can't play these games. I think that the best thing is to actually build a real business.
- [58:03]
Harry Stebbings
Good for them indeed. Do you worry with the reliance on SEO with that golden goose potentially being threatened? I had the CEO of Monday.com, aran on the show and he said, I think that their SEO performance have gone down by 15%, which doesn't sound huge, but at the scale of Monday.com, it's $100 million plus. Do you worry about SEO being potentially damaged?
- [58:21]
Josh Browder
So Geo, the AI version of SEO, is rising in parallel. So we're not too worried that people always rely on some acquisition channel. Fortunately for us, we haven't yet seen it. Because one of my life philosophies is the world doesn't move at the pace of San Francisco. A lot of our customers are from middle America and actually the uk. I mean Google is still huge, so it'll take a while, but we are definitely insuring ourselves with lots of Geo related strategy.
- [58:50]
Harry Stebbings
Was there a moment where you were like, we're not a traditional VC company and I'm not going to go down this route of raise, raise, raise, headcount, rah rah.
- [58:59]
Josh Browder
I think from the very beginning we were always, I mean the clue is in the name. Do not pay. I joke. It's not just a company, it's a lifestyle. I'm like, Mr. Do not pay. And so we never wanted to do anything stupid. And when I was hiring my friends, I was always hiring the people who were like browsing Reddit at 2am trying to save money. I think this is controversial. I think founders who burn all the money, I think that's not cool. I think it's kind of lame because why did they run out of money? Why didn't they just cut the burn? And obviously some founders fail because of some black swan event. And I can understand that they take a massive swing and there's some huge litigation or something passing patent thing that Apple crushes them or something. That makes sense. But if they just run out of the money, that's not cool. That's kind of lame. They should have just managed their burn better.
- [59:43]
Harry Stebbings
The dividends, how does that work? Basically we're so profitable we just dividend now.
- [59:48]
Josh Browder
So we have more money than we've raised and we're actually doing another dividend next month. So it's like quarterly? Yeah, we're planning on doing it now quarterly. And the investors, I think it works for us because the investors got in at such low prices. We didn't raise 100 million, we could have at end the peak of 2021.
- [60:04]
Harry Stebbings
You raised 22.
- [60:05]
Josh Browder
Yeah. Which when I was fresh off the boat from the UK dropping out of college, that seemed like the world of money. But in the grand scheme of things, given the scale of our business, it's not actually that much money.
- [60:16]
Harry Stebbings
Do you worry that to your VCs, you're not a success? And I didn't mean that badly. But just like you know as well as I do we look for fund returners. You're not going to dividend your way to a fund return.
- [60:24]
Josh Browder
We are going to take some big swings this year. We are looking to kind of roll up some different consumer things within Do not pay. I'm still 10 years in, still extremely excited, ambitious, who knows?
- [60:37]
Harry Stebbings
You said about hiring friends.
- [60:39]
Josh Browder
Yeah.
- [60:39]
Harry Stebbings
How do you advise founders on how to build the best first five to ten people?
- [60:45]
Josh Browder
Well, I think business school is actually a counter signal. I'm not going to be very popular among the business school people.
- [60:51]
Harry Stebbings
But I agree 100%. My favorite is when it's in the LinkedIn title though.
- [60:55]
Josh Browder
Yeah. So stay away from the strategy. Highest strategy is a meaningless hire because what does that even mean? Everything is strategic. I think connection to the problem is really important. Similar to investing Do Not Pay employees. They're autumn scaling themselves. Like we had one do not Pay employee, he would go to Target, the US retailer and he'd buy prepaid Visa gift cards so that whenever he would sign up for a free trial, they wouldn't be linked to his direct debit real payment details.
- [61:23]
Harry Stebbings
So this is one of your products?
- [61:24]
Josh Browder
Yeah, that would make a great product. So we're trying to hire people to scale themselves. My very first hire at Do Not Pay. Obviously I built the thing myself. The design looked terrible. It gave me a headache. It was like a moving road background. You would look at it and it would give our early users headaches. We'd get complaints. People would get headaches from the design. So the first hire for me was a designer. So you need to immediately solve these bottlenecks quickly.
- [61:49]
Harry Stebbings
What role does not exist today that you think will be very commonplace within five years?
- [61:54]
Josh Browder
I think custom evals. Everyone is very excited about foundation models like Claude Code and all of this stuff. The future of AI will actually be organization specific, specifically around the data that Do Not Pay has where we're doing evals on our own data. So I think custom eval has will be really big.
- [62:13]
Harry Stebbings
Do you worry about the concentration of value to very few numbers of companies if you look at where markets think valuations will go and where companies will go. It looks more and more like 8 companies will take $5 trillion plus of market cap and actually could eat up large parts of the software market in
- [62:32]
Josh Browder
some respects I think there'll be a rise of medium sized businesses like almost do not pay that fill the niche and then these massive companies. But the middle where there's just like a large company, I think they have to be very worried. I was saying to a friend, for every anthropic employee who's making 20 to 100 million, there's 7,000 block employees being laid off. I think there is a huge transfer going on between the extremely large companies and the quite large companies but I think the smaller ones will still have a role.
- [63:05]
Harry Stebbings
Do you worry about what happens to San Francisco when you have, I think it was announced this morning, 600 OpenAI employees that took out an average of 11, 11 million dollars.
- [63:13]
Josh Browder
I think there's a lot of pain happening in San Francisco. At the same time I think a lot of matter employees are being laid off. A lot of big tech employees are being laid off. I think there's like two types of goods. There's like absolute goods like a standard apartment or some food and things like that. And I think the price of that will stay the same. But then there's like positional goods. There's only like eight seats in Delta first class. There's only eight houses where they want to buy it like, like on the best road in San Francisco. And the positional goods will just go off the charts. So if you're someone who values your success in life by attaining positional goods like one of the eight houses that everyone wants to be in. Good luck.
- [63:53]
Harry Stebbings
I spoke to so many of the founders that you work with. Most of them said about buying land as something that we should talk about, which I was not expecting by anyone. I think Dan actually at Graptail said it. We were talking, I was like, like he buys land. Why do you buy land, Josh?
- [64:09]
Josh Browder
In terms of my diversification retirement, I take all the money I make and I buy land. I don't put in the stock market. I don't keep it in cash because I think that the dollar doesn't have a good future. Don't buy bonds or anything like that. And I buy land. It could be being British. There's a famous quote from Winston Churchill. Land is the only scarce resource. And I think I'm diversified, diversifying on two outcomes. The first outcome is that AI creates a post economic world where it replaces all big companies and the only thing that's scarce, that's left is land. And so AI doing extremely well. Land can still be valuable. And then the second is maybe it's all a bubble and all of tech goes to zero, but land will still be valuable. And the land I buy is in Nevada, far away from the tech bubble. It has nail salons and all sorts of things. It has passive investment and it's just diversification for the AI. The various outcomes that will happen with AI.
- [65:09]
Harry Stebbings
Why Nevada?
- [65:10]
Josh Browder
I think there's secular trends regarding it being very pro business population growth. Three things are true in Nevada. There's no state income tax, there's very low property tax and it has a rising population. That is not true, in my opinion, anywhere else in the us. So if you compare it to Florida, for example, there is no state income tax, but very high property tax.
- [65:31]
Harry Stebbings
Do you worry about the rising hatred towards the super rich in the US?
- [65:36]
Josh Browder
It's not sustainable. You can't have 50,000 people with all the money. I think actually there could be a revolution in our lifetime. Something has to change.
- [65:44]
Harry Stebbings
It's my biggest worry actually today. You see it in the UK too. We all sit here in the bubble of London. 33% of children stay in the UK, grow up in poverty. It's an astonishing fact. What do you think happens in that respect? Is that just social revolution and unrest?
- [65:58]
Josh Browder
I'm an optimist. I think that the jobs that will exist in 20 years, we couldn't even imagine what jobs would exist like AI, data cleaning, these companies like Mercour or Micro One. Those jobs didn't even exist five years ago. And I think similarly AI will create a huge number of jobs, maybe working in air conditioning and data centers and all of that stuff. The problem is there'll be a shift in the economy and people will have to transition. And I think the government will have to get a lot better at helping people transition.
- [66:26]
Harry Stebbings
Has Trump been better for business for you?
- [66:29]
Josh Browder
Absolutely. I think that whether you agree or disagree with what's going on right now, it's objective that for tech, the current administration is a lot better. Lina Khan, in my view, is evil. Several companies I invested in had their acquisitions blocked by the kind of Lina Khan style approach. The worst kind of Lina Khan story I heard is there's a biotech company that was being acquired by a much larger pharmaceutical company and Lina Khan's FTC blocked the acquisition and the drug didn't get developed. And to this day, 50 people die a year because of the Acquisition being blocked. So I actually think that the tech policies of the last administration were not very good.
- [67:09]
Harry Stebbings
You said the dollar maybe doesn't have the good future. I put a lot of my money in dollars. Why not? Why should I think differently?
- [67:16]
Josh Browder
I think that inflation every year is just going crazy and it's just going to get worse. House prices and SF seem to be doubling. Things are not what they used to be. And the only way to stay ahead in this AI world is to have real assets.
- [67:30]
Harry Stebbings
When you look at real assets, what is your IRR or return profile?
- [67:35]
Josh Browder
On a land in Nevada, it's only 10 to 20%. It's very safe.
- [67:40]
Harry Stebbings
That's better than I thought. For real estate. That's not bad. Yeah, like on a stock portfolio in a good case, you're like 15% good case.
- [67:47]
Josh Browder
There's all sorts of advantages. Like you don't have to. There's depreciation and things like that.
- [67:52]
Harry Stebbings
Is there anything else you do weird with your money?
- [67:54]
Josh Browder
No, that's it. And I just set it and forget it with the land.
- [67:57]
Harry Stebbings
We mentioned the pain of big tech and sad to see the layoffs. Was that in your mind just mass overhiring from COVID interest rate times or is that actually AI causing efficiencies?
- [68:09]
Josh Browder
I think it depends on the company. With Meta, I think it's AI driven. It's clear that they're spending so much money on their data centers and AI has made their engineering more productive. They need fewer engineers. But maybe with a company like Block, maybe it's controversial, but I think it's more about the COVID over hiring.
- [68:26]
Harry Stebbings
Do you buy that we will have dramatically smaller companies in the future?
- [68:29]
Josh Browder
Absolutely. It's objective. You don't need. Even with do not pay customer support, we're seeing optimizations. Previously you had to hire three people to do the job of one person. Now we do have 10 extra contractors for customer support. We found that maybe even that that's too many. Now they press a button and an agent identifies the issue and pre processes the refund.
- [68:52]
Harry Stebbings
For example, what do you think of competitive markets? You mentioned customer support. There there's been 15 companies that raised over $100 million. Sierra have just raised at 15.9 billion. We mentioned Micro One and Macaw earlier. How do you feel about super competitive markets?
- [69:07]
Josh Browder
All of my best investments have actually been in very competitive markets. Ona as well has dominated a category that's traditionally very competitive. Small business, restaurant technology. There's a reason it's competitive. The competitive markets tend to be absolutely massive. They tend to have a huge number of customers and that's why everyone is going for them. Going to the data labeling example, it's not unusual for large labs to throw these companies 100 million even close to a billion dollar contracts. And so I think there's a reason everyone is excited about it.
- [69:37]
Harry Stebbings
Two areas that worry me is that one, I do do series A and we lead series A investments. I think series A is the worst place to be in the market. Little PMF is like 1 to 3 million of revenue but the price is 200x ARR. If you're a million in revenue it can be 100 to 300, 400x. My question to you is, do you agree that series A is the hardest place to be?
- [69:58]
Josh Browder
I think so. And I think there's this illusion that the valuations are lower than series A. So it's less risk. But sometimes the best place to be could actually be investing a billion where it's de risked. You can model the cash flows.
- [70:10]
Harry Stebbings
I worry about the constraining elements of exits. And what I mean by that is if you look at IPOs today, you can't IPO with less than 500 million in revenue constrains what can go out. Big tech is very specific in what they want to acquire and then tech buyout. The 3rd Avenue honestly is very constrained too. Thoma Bravo just lost Medallia. It is a tough market for them to be in. Do you worry about a changing exit landscape, constraining?
- [70:36]
Josh Browder
I think secondaries are an increasing driver of kind of exits. That's why it's helpful to be on the smaller fund size because it kind of opens up a whole new channel.
- [70:46]
Harry Stebbings
Have you done many secondaries from the fund?
- [70:49]
Josh Browder
We're doing some now. Actually. It's a lot easier to do a secondary when you're a friendly pre seed seed investor than if you're a big firm. If Menlo Ventures sell secondary in a company, the company is dead because the signaling risk is huge. Or any firm. But with a seed or pre seed firm that's not necessarily true. And the fund sizes are smaller so it's easier to achieve good outcomes with secondary. So I'm not too worried about it because of the secondaries market which seems to be more active than ever.
- [71:15]
Harry Stebbings
How long ago was your first fund?
- [71:17]
Josh Browder
2020.
- [71:18]
Harry Stebbings
Should you have done them sooner? Do you think? Knowing what you know now, going back
- [71:22]
Josh Browder
to the sharks thing, when people say that the things that are most attractive to the secondary buyers you never want to sell. But we're finally selling some now.
- [71:30]
Harry Stebbings
Do you worry about the messaging to founders. It's so interesting. I do lots of references on investors when we do calls. As you know, I've never had references like the ones I got on you. It was amazing.
- [71:40]
Josh Browder
Well, that's really nice. Thank you.
- [71:41]
Harry Stebbings
Do you worry about going to an Adam or an Ali or Max and Russell at Yuzu and saying you want to sell some?
- [71:48]
Josh Browder
No, I think it depends. If it's like a small part of one stake, and the good thing is these things can be sizable and you only sell a small portion, then there's not much signaling risk in that. Additionally, it sometimes helps the founders. Oftentimes they're so performing so well, their rounds are so oversubscribed, they want to let someone in. And they still have me because I have the rest of my stake. But they can bring in an amazing new name that helps them. Maybe someone strategic.
- [72:13]
Harry Stebbings
Do you think you will make more money from your investing than you will do not pay.
- [72:18]
Josh Browder
That's a great. I think, unfortunately I'll make more money from the investing.
- [72:23]
Harry Stebbings
Someone said it to me the other day about you. He said you're a generational investor in your approach and mindset and said you will make more from investing. I was like, wow, that's really interesting. My question to you, Naith, is I don't like it when founders that I invest in are investing heavily. We've seen start funds raise funds from other people. How do you feel about that?
- [72:45]
Josh Browder
I think you always have to remember who believes in you and do right by them whatever it takes. Some of these Companies are up 100x,000x. I brought them in alongside me sometimes Direct. Not even the spv, just like Direct can invest directly. There's a huge amount of overlap between Do Not Pay and my fund in terms of LPs, like Marc Andreessen is the first believer in both in some ways. So I think you just have to do right by people. I think there's advantages for both LPs and also investing and being a founder at the same time. On the founder side, I've learned things that I wouldn't learn had I not invested. That's Help Do Not Pay, for example, this whole SEO strategy. And on the investing side, founders learn love to work with other founders. They hate professional money managers. So I think it actually makes you a better investor. And you see some of the best investors now they're also founders like Locky Groom or Delian. One thing I love about tech is you can refer to people by their first names and everyone knows who you're talking about like Locky or Dalian.
- [73:44]
Harry Stebbings
Yeah, I completely on Locky. It's amazing, especially when it comes to hardware and robotics. You also become an aspirational check by being a founder, which is like, I have so many robotics founders who are like, I'd love to meet Locky. You don't get that for any other venture firm.
- [74:00]
Josh Browder
Yeah, and I see that a lot.
- [74:02]
Harry Stebbings
What do you think consumers still get most ripped off on? That isn't solved.
- [74:06]
Josh Browder
Definitely bill negotiation. If you phone up the utility company and say you're going to switch to a different Internet, they will by default give you a discount. The Internet barely works. Sometimes they don't credit you properly. So that's number one. I would also say in flight WI fi. We have 100% success rate with inflight WI Fi refunds because it works, but it's slow and it's not what they advertise.
- [74:28]
Harry Stebbings
Have you tried Eurostar?
- [74:30]
Josh Browder
Well, now with Starlink, that will finally be solved, I think. Do Not Pay as an ETF on the world's problems. And some problems go up, some problems go down. Fortunately for us, the general trend of problems is up.
- [74:41]
Harry Stebbings
Do you think chat interface is the right UI for the future of consumer AI?
- [74:46]
Josh Browder
It's good in some areas, terrible in others. I think for the travel use case, it's terrible. There's a big debate on X going on about this right now. The reason it works for us is you're taking kind of unstructured responses and making them structured. When I started Do Not Pay, I did a Freedom of Information act request in the UK for the top 12 reasons why parking tickets are cancelled. Poor signage, the parking bay being legally too small. All of the reasons. The reason I did a chatbot is the consumers had no idea which reason to pick and they'd pick the wrong reason. Or they just wouldn't select what was the best thing to pick. So when I did chat, they could write whatever gibberish they wanted and it would match them to the correct defense. And that was really the unlock of do not pay.
- [75:29]
Harry Stebbings
I would love to see you on days like, what do you do? I'm a specialist in parking ticket refunds. World experts.
- [75:35]
Josh Browder
I was in my high school. That was my reputation.
- [75:40]
Harry Stebbings
The final one before we do a quick fire is you mentioned the UK and growing up in the uk, do young founders have to move to Silicon Valley if they want to succeed in building IT tech companies today?
- [75:50]
Josh Browder
Okay, so I don't want to denigrate my country too much. I'll say two advantages and then one huge disadvantage, one advantage. It's good to be a big fish in a small pond. Starting out in the uk, it's kind of less competitive for talent, less competitive for media even. Like anyone can get on the front page of the Daily Mail with the right story. The media in the US is much more jaded. So it's a lot more noisy, a lot more. More competition. And actually, when I was growing up, the very first thing I did was I created iPhone apps. I built the iPhone app for Pret a Manger, the sandwich chain.
- [76:23]
Harry Stebbings
What?
- [76:24]
Josh Browder
Yeah, I built the official iPhone app for Pratomage. I actually did it unofficially. I just made it for fun and then ripped off all the graphics and stuff. And then it eventually became the official app.
- [76:35]
Harry Stebbings
So what happened? They called you and were like, hey, can we use it?
- [76:37]
Josh Browder
So they didn't realize it was 14 at the time. They didn't realize it was was a 14 year old behind it and they were considering taking legal action, but they realized that once it was a 14 year old behind it, it would be a terrible PR thing for Pratomage to sue a 14 year old. And so they actually invited me to the headquarters and we made it the official app. And that taught me a very valuable lesson growing up, which is it's best to ask for forgiveness versus permission.
- [77:01]
Harry Stebbings
How much did they pay you for?
- [77:03]
Josh Browder
I can't disclose. No, it was, you know, it was a huge win for me at the time, but in the grand scheme of things, it wasn't material.
- [77:12]
Harry Stebbings
That's amazing. What did your parents say?
- [77:15]
Josh Browder
My mother, actually, you're the only tech podcast my mother listens to because she really appreciates your wholesome mother content on LinkedIn. So she really is a big fan of you. And I'm not just saying that she's not in the tech world. She doesn't really know how to use iPhone or anything like that. She was just worried, as any parent would be. And actually when I went to meet the CEO of Prat Emerge at the headquarters, she was actually worried because I was 14, that maybe it was inappropriate or something. She said, I want to come with you. I said, no, mom, it's a business meeting. She said, no, I have to come with you. I don't want you meeting strangers on your own. So she was more worried about the personal thing anyway, going back to the UK, building an iPhone app at that time in the UK was seen as cutting edge whiz kid genius style thing. In the US people were building iPhone apps every day. And that gives you an Idea of why. Why it's better to be a big fish in a small pond. Second advantage of the UK is that for the idea I was working on, the UK is repressed. They're perfect target market for Do Not Pay. I tell people in the US about some of the things that go on in the UK and they're shocked. So one example is the concept of average speed cameras. So I tell my friends in the us, if you drive from here to Birmingham, which is a city north of here, for those who don't know too quickly, it's not about if you go past a speed camera too quickly, if you get there too quickly, the average speed, they'll give you a ticket. My US friends are shocked by that. They think that's like some sort of surveillance state. And it's true. The UK is handing out tickets. All these fines, all these environmental regulations, it's just fine Topia. So I think for the specific idea, some ideas work better in the uk and so that's why I started here. So those are the two positives. One huge negative is the scale of ambition in the US is 100 times bigger. The most successful companies in the UK are in the tens of billions range like Revolut and great outcomes like that. In the us it's in the trillions and it's just an order of magnitude more.
- [79:15]
Harry Stebbings
Can I ask you one? Which is. I think San Francisco is the worst place to start a company today. It is so expensive and difficult to acquire talent. The pool of companies competing for that talent is immense and brilliant. Anthropic product team is brilliant. You're competing for that same talent. It's so expensive to acquire that talent. The duration with which that talent sustains is so much less. You can't build that institutional memory. Am I wrong and have I been infected by UK Advantage virus?
- [79:44]
Josh Browder
I think you're right in some ways. And there could be an arbitrage where the leadership lives in San Francisco, but you get talented globally. Deal is a great example of that in some ways, I guess. It's also New York, but San Francisco has such serendipity. You bump into Sam Altman on the street. I've seen personally seen Sam Altman on the street.
- [80:02]
Harry Stebbings
You should start a podcast so you get to interview him personally.
- [80:06]
Josh Browder
And another thing about San Francisco is it's so boring. All of these people, no one's specific, which is all of these people, they're so bored. If you're just moderately interesting, you can become friends with anyone in San Francisco. Francisco is less stratified in London, the rich keep to themselves in their fancy clubs. In San Francisco, you can play pickleball with anyone.
- [80:26]
Harry Stebbings
That is amazing. And that's very true. Final one. If you were to make a change to Europe, to make Europe more competitive on a global scale, what would it be?
- [80:35]
Josh Browder
You have to get rid of these ridiculous regulations. I made a mistake of trying personally to invest in a company in Germany. Oh, my God. There was like a notary. I couldn't. I do not pay. I'm an expert in bureaucracy. I didn't want to do it.
- [80:48]
Harry Stebbings
Did you end up doing it?
- [80:50]
Josh Browder
No, I didn't. And also, why are they charging VAT on investments in the uk and some investments. How can you charge a sales tax on investments? Who thinks that's a good idea?
- [81:00]
Harry Stebbings
Do you know what? I tried to bring a billionaire once into a deal in Germany and I had to send out a notary by speedboat. And it cost more than their investment to get their investment done.
- [81:13]
Josh Browder
That's shocking.
- [81:13]
Harry Stebbings
Isn't that bad? Yeah, yeah, yeah. So I feel your pain. Listen, I want to do a quick fire with you. I've so enjoyed this. So I say a short statement. You give me your immediate thoughts. Sound okay?
- [81:22]
Josh Browder
Okay.
- [81:23]
Harry Stebbings
What have you changed your mind on in the last 12 months?
- [81:26]
Josh Browder
I think that the AI shift is extremely real. I thought 12 months ago it was a bubble. Now I don't think it's big enough. I think Anthropic will get to a trillion in revenue. I think the value shifting is very real. We're not in a bubble. That's what I think.
- [81:43]
Harry Stebbings
If that's the case, why wouldn't you buy the shit out of Nvidia AMD Nebius coreweave. My job as an investor is to see ancillary value as well to appreciate what you just said. And I agree wholeheartedly. And then make more money from it. Why don't you do the same?
- [82:00]
Josh Browder
I'm very lucky. I do have an investment in Fluidstack. That's my favorite of the AI infrastructure.
- [82:06]
Harry Stebbings
Who's the most underrated CEO operating today?
- [82:09]
Josh Browder
I would actually say Ali Ansari. I think he's in a very crowded space. But he is a force of nature in terms of execution. Watch this space. I think in the next 12 to 18 months he's going to be very hyped.
- [82:23]
Harry Stebbings
What's your favorite story of serendipity from San Francisco?
- [82:27]
Josh Browder
There was a class at Stanford. It was only 20 people. I was focused on building my business, not necessarily focused on classes. And it was taught By a billionaire. Pat Hanrahan, who's the founder of Tableau. Just the fact that you can have billionaire professors teaching classes of 20 people is something that wouldn't exist anywhere outside of the Bay Area. And I remember working through a problem set, and he was spending, like, 30 minutes with me working through this very elementary problem. And I was thinking, why is he spending his time? And then I realized it's all about human connection, and he just wants to kind of meet interesting people. And I think the same is true across the Bay Area, where everyone is just a human. And you can kind of short circuit the kind of business guards that people put on just by having a human connection with them kind of aligned.
- [83:14]
Harry Stebbings
But what's the kindest thing anyone's ever done for you?
- [83:17]
Josh Browder
I have a founder. I don't want to say too many details because I'm under ultra NDA, but I was a personal investment. One of my earliest investments, they lost my money. They went on to start an absolutely blockbuster company, and they gifted me the shares in the blockbuster company as if I had been an investor at the same price in the blockbuster one. And I think that's a very upstanding thing to do. I think it's almost a very British thing to do. To do.
- [83:45]
Podcast Host / Advertiser
Extraordinary.
- [83:46]
Harry Stebbings
But it goes back to the references that I got. What is it that you do, do you think, that makes founders have such a kinship towards you?
- [83:55]
Josh Browder
I'm not sure. I think I really believe in them. It's so lame, the reasons people invest. Oftentimes they invest because someone else has invested. Oftentimes that's like 75% of the time. But I really believe in them to do great things, and I'm their first believer often.
- [84:09]
Harry Stebbings
What's the biggest lesson from your father?
- [84:12]
Josh Browder
Definitely it puts everything into perspective to just be fearless. I've physically seen the Russians. They've come to our house, knocked on the door, that news alert where he was arrested. Growing up through all of that, it puts everything in perspective. And so when maybe there's a bureaucrat who's upset that I'm getting too many people out of parking tickets or things, it's all noise. It doesn't really matter.
- [84:36]
Harry Stebbings
Yeah, seriously. I've had the Russians. You are nothing. Wandsworth city council. You start a new company, and you can only have one investor. Who do you have?
- [84:45]
Josh Browder
I think definitely Marc Andreessen.
- [84:48]
Harry Stebbings
What does no one know about Marc that they should know?
- [84:51]
Josh Browder
I think he is the most curious of the luminaries. I think he spends an immense amount of time reading on X and people see this when he's liking all of the X posts, but I think that speaks to his curiosity. When I met him, he was referencing obscure tweets and things that are part of my do not pay journey. So he really, really reads a lot about everything.
- [85:13]
Harry Stebbings
Tell me, final one, what are you most excited for in the next 10 years? For me, you mentioned very kindly my mum, my mum's got Ms. I'm very excited for drug discovery for chronic conditions. What are you most excited about?
- [85:25]
Josh Browder
I think that they're going to find a cure to a lot of diseases. My grandmother passed away from Alzheimer's and Alzheimer's is one of the most difficult diseases to crack and I think AI will hopefully make a big dent in that.
- [85:37]
Harry Stebbings
Josh, this has been so much fun. I love doing what I do but some are more special than others. Some stories are just more cool than others as well. This has been so good to do. So thank you so much for agreeing to do it.
- [85:51]
Josh Browder
Thank you.
- [85:53]
Podcast Host / Advertiser
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Harry Stebbings
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Podcast Host / Advertiser
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