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- [00:00]
A
You are better off just focusing on the thing that you are outlier in. And like, I think the biggest thing is just figuring out what that is.
- [00:07]
B
Which of the archetypes you are and.
- [00:08]
A
Then which of the archetypes, like, if you have like hyper networker, philosopher and specialist, like, there's probably more. But like, of those three, like, which one are you? Where do you have an advantage? And then just focus all your energy and effort on being amazing there.
- [00:23]
B
All right, Greg, I am very happy to be here with you. And I'm going to give a little disclaimer that I cajoled you into doing this and you normally wouldn't, but you're one of my best friends and so you're doing this favor for coming on. So thanks for doing this. Is this like your first podcast?
- [00:37]
A
This is my first podcast. I heard this is like a small boutique. No one really knows about it. Right.
- [00:42]
B
It's a small little thing and you agreed to do it once and then you're never again.
- [00:45]
A
Yeah, don't invite me back.
- [00:47]
B
Okay, so I want to start with one of the things that you've taught me a lot about, which is the idea of collaborative venture. What's interesting about it to me is it used to be the case in venture that funds were smaller and collaborative was the nature of how the whole world worked. And funds would sort of team up and do rounds together. And then at some point in the last 10, 15 years, I think it swung to a place where funds got huge, people got sharp elbows, people wanted lots of ownership and whatever. And so a lot of that went away. And so in some sense that declined. But box is bigger than ever, doing more than ever. And so I wanted you to just start by hearing your overall view on this collaborative venture model.
- [01:28]
A
Yeah, collaborative venture is hard and almost by definition it has to be anti scale in certain dimensions. Right. And so for us, like if we started leading seed rounds or series A rounds, and certainly beyond that, we would lose our collaborative Switzerland nature. So instead what we said is, okay, that is an easy way to scale capital is start leading rounds, writing larger and larger checks. And that's what others have done and why it's like, hard to stay collaborative.
- [02:00]
B
That's like usually what happens, right?
- [02:01]
A
That's usually what happens, right? Everyone starts a new fund or new firm and they say, we're gonna be super collaborative, we're gonna work together. And then all of a sudden they start leading 1, 2, 3 deals. And the second that happens, it's this binary moment.
- [02:14]
B
You either make it or you don't.
- [02:16]
A
Because if we're collaborative, right, we're a box group. And then let's say we make 80 investments a year and let's say we only lead two or three seeds of that. Now, when I'm sharing a deal with you or anyone else in the market, you're going to be thinking in the back of your mind, is this fully being shared, all the deals, or is it the one or two deals that they're leading and actually most excited about? I'm not getting shared, I'm not seeing. And so it's this binary moment that, like, the second you start leading those rounds, you just can't be Switzerland. And for us, we have been, you know, since the beginning of box group, you know, 15 plus years ago to now, it is like, we are not doing that. We are Switzerland. And that's, I think, what's enabled us.
- [03:00]
B
To like so just as like a little sidebar on that. Does that mean no matter how excited you are at a seed, you think it's amazing, crazy differentiated access, it's long term, not worth it for you to break the model and just like lead a seed.
- [03:11]
A
Correct. It's why we like our check size from, you know, the beginning to now has gone up, but it's basically scaled directly with like the inflation of rounds. And so, you know, seed rounds a decade ago might be like a fully loaded seed round, might have been $2 million. Now that's $5 million. And so our check size started at way back in the day, 50, 75K. Now I would say it's like 750 to a million. And the reason we do that is that we want to make it as easy as possible for a founder to say yes to us. And so that means if we get to a founder first, we can commit a million dollars or 750k and be like, hey, you don't have a lead. We are aligned with you. You're raising 3, 4, 5 million bucks. We're going to be your first. Yes. And let's go help you find an amazing lead. Or we could meet a founder and they'd be like, hey, we already have Jack Altman as a lead. And we're like, great, we can sort of round out a syndicate very quickly here. And we can also get to a yes. And so the design for us is make it as easy as possible for a founder to say yes in whatever the round structure is, but it is not writing a 3,4 million dollars lead check.
- [04:18]
B
Why do you think that more people haven't scaled it up because there's like a lot of funds out there that are 20 to 75 million, that $250k 750k checks. But most don't scale. It most basically get to this jumping point that you've talked about where you're either like, I gotta go lead rounds and compete to lead seeds or not.
- [04:37]
A
Everyone wants scale. Like anyone who's doing this is ambitious and wants to get to scale. And so there's really only two paths that we've seen to scale the craft of what we are doing. One, scale Aum and then go further up the stack, start leading seeds and A's and B's, write larger checks or. And sort of the approach that we have taken is do more deals, right? Scale velocity in terms of early deals with this collaborative Switzerland structure. And why do more people, you know, choose the, you know, former versus the latter? It's really hard, right? Like it. If you took a look at any one of the people who work at Box Group's calendar, the sheer number of net new deals is ridiculous. Is ridiculous. And I think if you audited the average partner or general partner or managing partner of a lot of other firms and you looked at how many net new deals they are meeting a week, I think you would be shocked.
- [05:41]
B
Yeah, truly shocked. I want to come back to the calendar audit because that's like one of my favorite topics with you. And I think everyone gets this super wrong. But on the scaling, what is it like? I guess, first of all, I think implied in what you said is that one of the big deals here is not getting adverse selection. Right. And I guess when you're thinking about scaling and what makes this work, to what extent do you think it's about you not getting adverse selection and to what extent is it just about you seeing tons and tons of deals?
- [06:08]
A
Look, it's both, but it's primarily not getting adverse selection.
- [06:11]
B
That's the big thing to solve.
- [06:13]
A
That is the big thing, right. Every strength has a corresponding weakness and vice versa. So the knock that I hear from other people knocking on our model is you need to own a ton of the companies that work in order to make venture work for us. What we would say is that is true, but also you gotta be in the right companies and it's much harder to be in the right companies. And so what we do is we trade ultimate ownership percentage points for a more collaborative, flexible model that lets us just see better companies and hopefully get into more companies.
- [06:49]
B
And then the math basically is you got to get into the $30 billion companies, not just the three, but by doing a bunch of companies, your odds of that go way up.
- [06:56]
A
Exactly like we are. You know, the. The other thing that I hear sort of as a knock against our model is like, well, this is an index, right? And you know, again, we are such a high bar. We are like always asking ourselves, is this going to be the most important company started over the next decade? But it's really hard. And so we take more shots on goal to try and get those outcomes. And then when we capture them, it's our job to continue supporting them and piling money in.
- [07:24]
B
Gary Tan talked a lot about this. He said this on Twitter. I think we talked about it here, that he was like, basically, if you look at all these funds that just do very big baskets of yc, they outperform ridiculously. And it's hard to believe that it could work like that, but it's something somehow seems to work like that.
- [07:39]
A
Yeah, I mean, I don't know the exact statistics and someone from YC should correct me, but it was like the class sizes were about 100, and I think it was like you would get two to $3 billion companies per batch, at least historically. And so let's call it whatever it is, 1, 2, 3%. Where else can you get a 1 in 102 and 103 and 100 chance of hitting a unicorn or a multibillion dollar company? And that's what makes it so great, because that pool is sort of a really elite pool. And that's sort of what we think about internally at Box Group. Now we have to sift through a lot more than 100 deals to get there. But that's sort of the Box Group machine that we talk about in terms of trying to just see as many deals as possible.
- [08:27]
B
I think implied in your worldview about adverse selection is that at Seed, it is somewhat knowable what's good. In other words, like you're saying, like, you'd rather get to go alongside Sequoia than have to compete with Sequoia or whatever. There's like other views that like Seed is like super unknown and nobody can tell. But I think your view is that, like, tell me if there's a fair characterization, something like picking is actually, you know, most people can see a good thing when they see it and you actually just have to like, see the stuff and just like get in some way somehow.
- [08:59]
A
Yes, I would say, especially as venture shifted from a cottage industry to like, you know, a machine industry with tons and tons of capital and Tons of firms. I think there's no such thing really as a proprietary deal. And if it is, it lasts for, like, literally a blink of an eye, like not even a day anymore. And so what that means is, is just like, it's. The whole, you know, inner workings of Venture is just way, way harder. Yeah. Like, competition has gone through the roof. And I think what's interesting to me is that most, most people, if not everyone, limited partners, general partners, employees, founders, I think everyone would agree that venture has gotten more competitive. It's gotten way harder. Right. And what's interesting then is that if you look at the math formula of venture, the, like, seeing picking and winning a deal and then equals enterprise value output, everyone says, like, okay, those are the three things, and venture's gotten harder. But if you don't change any of those variables, what are you accepting? You're accepting that returns are going to go down. Like, you're just going to perform worse as a, as an investor. And so then what the counter is for most investors, we'll be better at picking. We're going to be better at picking. It's gotten harder. And we're just like, think harder. Yeah, we're going to. Exactly. We're going to be thought boys. And in reality, like, maybe I'm just not good enough at this job. I don't know how to be 50% better at picking, let alone 2x, let alone 10x. I just think it's like a fool's errand to think that you're magically going to become better pickers. And so for us, we've said, okay, venture has gotten harder. We don't know how to be better pickers. Let's take winning aside. We are going to be really focused on seeing how do we. How do we, like, see more in order to counteract how much more difficult it is. And then let's have a model back to making it easy for founders to get to a yes, to allow us to win more. And what I would call this is like, Josh Koppelman came on your podcast and talked about the Venture Arrogance Score. I would say this is our Venture Humility score, which is we don't know how to have a basket of 20 companies in a fund or in a year and pick the most important ones, given how competitive and hard it is. So for us, we're saying we need to do more, we need to see more. We see on average about 5 to 6,000 qualified or referred opportunities a year. And then we at box group end up making about 70 to 80 investments a year. And like that's our humility is like, if I could at the extreme make one investment and I would know that that investment would be OpenAI of course I would do that. I'd have the best performing venture fund of all time. We don't know. And so we take more shots on goal because it's much harder so that we can counteract how much more difficult and competitive venture has become.
- [11:59]
B
So then the game is like, see a ridiculous amount.
- [12:02]
A
Exactly.
- [12:02]
B
So how do you see a ridiculous amount? What is the body of work that goes into saying we can't get better picking but we can see a bunch more stuff?
- [12:09]
A
I would break it up into inbound and outbound. Inbound is like the icing on the cake that tastes really great, it's awesome. But you can't just eat icing. Right. You need the actual body of the cake and that is outbound. So we really focus on a bunch of great outbounding activities that looks like running a ton of different events across the country. So intern events, events on campuses and you know, engineering leaders. And again, these things aren't unique in terms of like, oh, we figured out unique alpha here. No one else is running events. But like quality matters here, right? Again, back to like empty calories. It is very easy to do a bunch of events that return nothing because you didn't curate great people and do all the hard legwork. And I think, you know, our team does an exceptional job at running and doing these events. I think probably 25%, maybe slightly more of deals is from the sharing and sort of Switzerland work that we do with other investors and people. And why do they share openly with us? It's because we're not going to snipe a deal, we're not going to compete with them for a lead position and more so they want to be preferred partners. For when a company that we are fortunate to back in the precede or seed inflects, we can say, hey, we've loved working with Jack Altman and so you should go take. Don't we all Exactly. His money for the Series A.
- [13:40]
B
You don't just have somebody for the most part who's just reaching out to people. It is to some extent this inbound, outbound mix where you're kind of warming up groups of people that you think are interesting and you're talking to your network or are you also really reaching out in just machine gun type ways?
- [13:56]
A
We built some Software to do LinkedIn scraping. When someone changes their job title or whatever, it would Be great if someone, like, posted on Twitter, hey, I'm amazing and awesome and I'm starting a new company. Like, that doesn't happen. And usually when that does, it's like, way too late. There's already probably been two rounds into the business. And so for us, like, we really think about, like, we have the saying internally, like, if there's a deck, it's too late. Right. It means that not only has there been, like, a team coalesced, but enough work has gone in to think to build an actual deck. And that means we're late to the party. And so so much of our outbounding and gets to, like, before there's a company, there's a human being. How do we get that human being oftentimes before they've even left the company. And that's what earns us the right to be that first. Check that first. Yes.
- [14:44]
B
How do you do that part? Because this is one of the things I've always. And you invest mostly a lot earlier than I do. But, you know, I've always wondered, like, how do you get to people in some reasonable way that will make sense at a top of funnel? Because in my mind, you need to be talking to, like, thousands and thousands of people that hopefully someone's going to leave at some point at some way. Like, yeah, how do you do it?
- [15:04]
A
The almost, like, tactics aside, getting to the mentality, because I think that's like, most important here. Back to the calendar audit. There is no substitute for your time. Right. And most people, especially check writers, do not spend time with someone who, like, hasn't left their job yet, who may never start a company. That's, like, primarily how every single one of us at Box Group spends our time is like, trying to meet and curate those people before they've even left their job. Right. And so step one is there's no substitute for putting in the time. And you have to be okay with taking a lot of really, I don't want to say bad meetings, but, like, bad meetings. And they can exist in different ways.
- [15:50]
B
It's not that it's bad people, it's that it's meetings with a director of engineering at a cool company and you spend an hour with them and it turns out they just love being a director of engineering.
- [15:59]
A
Exactly. Like, you know, we have different sort of verbiage internally when we meet, unlike how we describe and talk about, you know, founders or companies. And like, sometimes you get, you know, someone who is an amazing big company person who's not a founder, sometimes you get an extremely technical founder who's not commercial. You get all these things. And by the way, you then have to line up those different archetypes with what are they working on. So like you can't make these blanket statements. But more so my point is when you go super early and nothing is formed, you cannot look for perfection, you cannot look for cohesion, even in ideas. Right. Like oftentimes we've missed and passed on companies because we were like, we met this human. They were really interesting and amazing, but like they were all over the place. They're talking about 10 different ideas and it's like that's a feature, not a bug. That means we're getting to them before they've actually figured out exactly what they want to work on. And ideas are not precious. You can work on anything. And so now we've sort of iterated away from that and said like, okay, that's actually a sign that we're doing our job and getting to there early.
- [17:03]
B
I guess. It's also not just people leaving companies. You're probably getting people out of school and stuff like that too, which is another big body of work, I guess.
- [17:08]
A
Absolutely, absolutely. Like the number and look, I think that has increased dramatically with the rise.
- [17:15]
B
Of AI because it favors younger founders.
- [17:17]
A
It favors younger founders. Like whenever you get new technology, right. It's always the younger generation that figures out the most native ways to use that technology.
- [17:27]
B
And even the old ways of building a company become less relevant. So the advantages of experience decline.
- [17:32]
A
Yeah, like the rules get rewritten. And I've like, you know, certainly felt that with like Cogen and other areas now it just feels like every day something new comes out, some new piece of technology is what makes the job so great. But like that like favors young folks. And I think like if you charted the number of like 18, 19 year olds that like we are funding now versus 10 years from now is, I mean, I don't know off the top of my head, but it's like at least one order, if not two orders of magnitude higher.
- [18:00]
B
Wow. Yeah. When you're bringing people in or, I don't know to the extent you bring them in for a partner meeting. But like we don't do partner meetings. You don't do partners. Yeah.
- [18:09]
A
I think partner meetings make no sense.
- [18:10]
B
Why?
- [18:11]
A
One, a partner meeting is designed so that you get multiple partners or decision makers to give you an opinion on the person. And what we found is one very few founders like doing that because you're just regurgitating the same thing. You're Getting everyone's like, it's super performative too. Exactly. But like that aside, which is like a huge waste of time on the, on the founder's part for us at Box Group, it's like we've found that like there's three classes of deals that come in that we discuss, right. As a group. Obviously great, obviously bad. Everything in the middle. The obviously greats are easy. It's like, all right, let's go, you know, find a way to invest those. Actually interestingly, as a basket perform worse. They're higher priced. Usually they're more like likely to get acquisition offers. Obviously bad. We don't spend any time on and then all the alphas in the middle bucket.
- [19:09]
B
But you do the obviously greats anyway.
- [19:10]
A
We do the obviously greats anyways.
- [19:12]
B
Looking back at your biggest hits, have any of them started in that basket and then in fact been obviously great or have most of your. Or have all of your really good stuff?
- [19:20]
A
I don't want to say all but like most.
- [19:21]
B
Wow.
- [19:22]
A
And it's all for different reasons. Right? But, but, but this sort of gets to my point which is the sort of middle is where all the alpha is. And because it's so early, like oftentimes the deals, deals that are there are pre product, oftentimes pre team, like there's nothing. And more often than not, we are discussing those deals as just like we're talking about the human being for 15 minutes. Right. And like a little bit maybe two minutes on what exactly they're working on.
- [19:55]
B
So what are you talking about with the per. When you're, when you're having a debate like that, what are the things you're debating? Like what are you talking about?
- [20:01]
A
We're basically looking at. I hate the term spikiness because it's so annoying. But like maybe said a different way is like we're, we see again five, six thousand opportunities a year. What is outlier, what is standing out, what is just different? What is making us likely to want to go quit our jobs where we get a portfolio and go work for them. Right. When we see all these really interesting companies and that's different. Sometimes that can look like they're talent magnets. Sometimes it's like we're Talking to an 18 year old and it feels like you're Talking to a 30 year old and they're like mature beyond their years. Sometimes it's amazing technical prowess or expertise. Sometimes it's like jump off the page commerciality. Right. But I guess my point is almost always in that bucket. It is not obvious. It is like we're talking about it in an obvious way, but like, these are decisions that are so on the margin. And it's like if you wake up the wrong way and you're kind of in a grumpy mood and that causes you to pass on the one, you know, great. Like it's so hundred billion dollar, one trillion dollar company that gets created either that year or that decade that is extremely costly. And so instead, what we've found is that we should design a model that we are trying as a team instead of sort of poking holes and trying to figure out all the ways that it can't work, which I could do, by the way. I could have every single company that comes in, even the good ones, I could find a million reasons why it's going to fail and not work and be very negative and try and talk all my partners and team out of it. We take the opposite view, which is we have to help the sort of person that's dreaming with the founder. Or squinting is sort of the term we use internally to sort of get to their own version of yes. And so what you hear is that the sort of individual stakeholder that's meeting the company will sort of talk about it as the group. And then all of us, instead of poking holes, and it's not that we're not critical, we try and pull on the thread on, hey, like you mentioned this language that seems pretty outlier to me, like, can you expand on that on like what you saw in this founder? And so we're all trying to help them basically get to a yes in our model, which is very, very unique. And then we are, you know, single trigger.
- [22:17]
B
I feel like that's your whole orientation. Like, even when I call you, which I do all the time about like a deal, you're often trying to help me get to a yes when like almost the whole industry is trying to get you to a no in some weird way.
- [22:29]
A
Yeah. And this is the, you know, cost of omission versus, you know, commission.
- [22:33]
B
And it goes to you doing a lot of companies per fund.
- [22:36]
A
Exactly. It's like you just. The number one thing that matters is just being in the right companies. And, you know, and I remember, you know, I won't mention the name of the company, but like, you called me on a, on a deal that you were looking at. And the first conversation I was like, here's the critical pieces of the market and product and like the competitive landscape. And sort of, I was like, you should think about that. And then I Remember, you called me again later that week and intuitively I didn't realize I was doing it. We were just debriefing earlier than this. But then I swapped in that second meeting to like, oh, you now are seeing something. You're squinting and seeing something that's not obvious in the market. Let me like help pull on those threads to help you get to a yes. And you ended up investing in the company. And I think that's what we aim to do as an entire team across the board, not just partners, but like a associate or analyst who just joins. It's like everyone. That's the mission and ethos of like someone at Bosh Group.
- [23:35]
B
So you've described now like a few attributes of doing like super early stage investing, which include like a big basket, an orientation of trying to get to a yes, not trying to get to a no. Looking for people, not ideas.
- [23:48]
A
Yep.
- [23:48]
B
All of those things are like extremely different than everything about how like a big firm operates. Like, those are like opposites on all dimensions. I'm curious how you think about a big firm trying to do this. I don't know if you want to call it pre seed or first round or whatever, but they're just such different sets of work. Everything about it's opposite.
- [24:09]
A
Yeah. And look, it's why I always ask myself, why are there not ventures so competitive? Why are there not more box groups? And it's so counter to how so many people run their business and do their, you know, work. And I think, you know, for us it's just the only thing we know. And I come back to like, if. If your ultimate goal and orientation is not how do we maximize ownership and then hopefully we are in some really good companies there and instead say, how do we. If we look at all the good companies that get started in a year, we think about how many of those did we see and then how many of those did we actually get Right versus wrong. And the way that we look at it, and I think my partner David Tisch, who started the firm, owns a lot of, deserves a lot of credit here, which is the failure mode is we didn't see it if we made the wrong decision. Okay, let's figure out and debug that. But what is unacceptable is we didn't see this deal and if we didn't see it, we got to figure out why. And what I would say is like most people I think would look at venture and say the most important thing out of the C pick win is pick.
- [25:26]
B
Yeah.
- [25:26]
A
And for us, the ethos of box group is like, we don't earn the right to pick or win unless we see it.
- [25:31]
B
Yep.
- [25:31]
A
And by the way, seeing it late versus early can be the difference of winning or losing. And so we are obsessed as an organization on seeing everything as early as possible.
- [25:42]
B
You mentioned the single trigger thing, which I think is. I don't know if it's completely rare, but it's less common than trying to get to some amount of group consensus.
- [25:49]
A
Yep.
- [25:49]
B
How structurally important is that?
- [25:51]
A
Incredibly consensus driven decision making at seed doesn't work, in my opinion. Back to the point on. It will just shift the level of risk that you're taking. Right. If we had to vote as a team on every single deal, one, we would need to ask founders to come in and pitch everyone. By the way, our model then wouldn't work. It would be too much time sync. What are we going to have, like a full day of the year, you know, 12 or 15 companies that are interesting that week coming in and pitching the partnership. It would break down. But more so like it's again, back to that point. It's usually just one person who is like. Or two people or like in a pod. We usually operate in pods. You know, our team size is like 11 investors, 10 investors. And you know, we operate in pods of like, you know, two or three usually. And it's like that's. It's usually even one person within the podcast that's like getting really.
- [26:41]
B
It's actually double. Because you've got both single trigger. But you also have a culture where people are trying to get you to a yes versus, you know, you have got consensus and it's like anybody's trying to block. You got both things. Which makes getting a yes, obviously, you know, more frequent.
- [26:55]
A
Yeah. And I think because we are all obsessed with seeing deals, There isn't this concept of senior partners. Time is too precious. Only loop them into a good deal. Yeah, right. Like something that we try and untrained sometimes. Like, you know, we'll hire someone new. They're like starting as an analyst or an associate. They'll be like, oh, like, I thought this was an interesting deal. I'd love to loop, you know, someone in to get another, you know, set of eyes and the second meeting, for whatever reason is not good. Right. And then they'll apologize. They're like, I'm sorry. Like, you know, it didn't like. Your line of questioning, you know, made me realize that it's not a good fit. And it's like, never apologize. None of us are too busy to take the meetings and it's your job to go and try and surface those interesting ones. Now you can't always surface bad ones and that deal taste gets honed. But there is this culture of no one's time is more valuable than anyone else's time. And we are trying to see deals as early as possible, which means we're going to take a lot of bad meetings and that's okay.
- [27:57]
B
You've talked about how picking is like not the thing.
- [28:01]
A
Well, you are. It is.
- [28:02]
B
Well, I was gonna say empirically you're a good picker. Like you just, you just have been. And I guess my question is, is there anything describable about picking people or spotting? You know, we won't use spiky, we won't use taste, but is there anything about what goes into seeing something special about a person early that is describable or is it only learnable through lots of time or is it just not a learnable thing?
- [28:27]
A
I hate giving like half answer, but the truth is it's like half and half. Half of it is just you can't teach taste. Like certain people just like have inherent deal taste. And what is that? It's like the human taste. It's like who do I like spending time with? Who like do I think can just like do the impossible.
- [28:43]
B
And I've actually always thought about that, that like people just like have their preferences about who they like. For some people that set of preferences is just going to overlap with super talented people. And for some it's just not talent.
- [28:52]
A
Clusters by the way like always. And so if you are a high performing human, you are going to spend time with other high performing humans. So I think there's a natural clustering there that you just can't teach. The other is you can get reps, you can practice. We both love playing golf. There are certain natural athletes in a big way, but there's no substitute for just lots and lots and lots of reps. Box group is, I don't know how else you can get as many reps of seeing companies and across all different stages and sectors. We're generalists, we're not specialists. That's I think the other half of the equation.
- [29:34]
B
You mentioned something to me that really stuck with me which is you said basically if you looked back anytime you took a third meeting with a founder, you should have done it. And I thought that was a really interesting tidbit that basically one of the ways to get better is to simply be more observant of your own intuitions. And the act of you continuing to spend time with somebody even if you're not sure, is your intuition trying to tell you something?
- [29:58]
A
We're always updating our. We don't have, like, any rules, but, like, we have these, like, de facto sort of learnings. And we're always updating them right back to the, like, you know, okay, we did a good job. We saw, you know, a bunch of interesting companies we passed. Why? And a big basket of, you know, one of them was, more often than not, I would say the average deal is two meetings, right? In this market. First meeting, intro, we're kind of figuring it out. Second meeting, both, like, go deeper, maybe have someone else come in and also sell the founder, spend a bunch of time and like, then invest. Right. So that's like the average flow. There was a subset of deals where we were taking three, four, five, six meetings. And why are we doing it? It's because someone, again, was seeing something and was almost taking more and more meetings with trying to make it obvious one way or the other. And it's like, it's not obvious. It's just, you got to believe or not and just do the deal. And so now it's like, if we're going to take a third meeting, just do the deal. Yeah, so that's like one. Another one that sounds, like, obvious is that, you know, sometimes in really competitive processes, we, you know, we'll meet the, you know, CTO or co founder, you know, in the first meeting instead of like the CEO or we bump into someone and it's obviously always meet the CEO or sometimes the CEO. It's like two sort of equal co founders. Just like, always meet the one CEO and then I would say the last one that we've really thought about and I think like, you know, the mistake that we made and then how we corrected it was sort of not giving enough surface area to, like, ideas aren't precious and like, we don't want to invest, hoping for a pivot, but if the human's good enough, just like, don't overthink the market. Like, either we're going to be wrong on the market because it's so early, or the founders are going to change and evolve and just don't overthink that.
- [31:46]
B
I want to talk about the calendar audit stuff. You and I have talked a ton about how people spend time in very dumb ways. In very dumb ways.
- [31:53]
A
A lot of empty calories.
- [31:54]
B
It's funny, I think I also, when I was running a company, I also spent time in dumb ways but less. And I think in venture it's really possible to spend time in dumb ways because everything is amorphous. You don't know what's actually going to lead to what. And so it leads to. I think if you compared calendars across venture capitalists, you would see a ridiculously different pie chart of how people are spending time.
- [32:17]
A
Absolutely. And look, everyone's running a different strategy. Right. And so I also understand that for you and the sort of craft that you're doing in leading series A's and being an amazing board member, like that is going to shift the amount of time that you're going to spend and take on like completely net new meetings. However, you are only as good. And this was like drilled into me when I was at Benchmark. You're only as good as your last deal. Like you have it really hard where you have to both create incredible founder mps as like a great board member which is also anti scale. But then you have to be always spending time on finding the next great company. And what I find is that most people are not honest with themselves and they hide behind that. They're like, well, I'm on 10 boards so I got to spend all my time doing board work. And I'm like, okay, but why are you spending all this time networking with other investors?
- [33:13]
B
Totally.
- [33:13]
A
Why don't you go meet founders? Or why are you at this event that's all VCs and no founders?
- [33:19]
B
I think that stuff's a massive waste of time.
- [33:21]
A
Massive waste of time. And people think they're so busy, but there's always more hours than that.
- [33:25]
B
It feels good. You feel like you're out and about, you feel like you're doing stuff, you're meeting people. And what did you do?
- [33:29]
A
Nothing. Yep.
- [33:31]
B
And so what are the other big time wastes? Like what? Like if you had to like name the top time wasters, like I think.
- [33:37]
A
Networking events, VC networking is like gotta be number one.
- [33:40]
B
Yeah.
- [33:41]
A
Basically anything that isn't, if again you're, you're in the boardroom doing board work, like if you're not helping your portfolio, you should be spending all your time trying to meet and find new companies. But again, really individuals and great, interesting pockets of people. If you want to find alpha, you have to be people focused, not company focused. There are many ways to do that. We do sort of a hyper networked approach at doing it. There's sort of a philosopher tweeting media, very loud out there approach. I also think there's being a specialist. Right. And you know, this is the one area that basically I'm gonna know more than anyone else.
- [34:25]
B
Yeah.
- [34:26]
A
I mean, three different archetypes.
- [34:27]
B
So it's like, so if there's like, there's like network, see everything. There's like, you know, media thought, boy, like, is that you pour one out for me.
- [34:34]
A
That sucks.
- [34:35]
B
Yeah. And then there's like a specialist. Those are like the three ways you can go about it. What can be a big problem in venture and just in general is when you start trying to get caught up in other people's games. You like, don't just make like no progress. You like go backwards.
- [34:49]
A
Yeah. You, like, you spiral and waste a bunch of calories. And what's most dangerous is can. Look, the tactics can be the same, but the quality can be very different. Right. And so like again, I don't, I don't tweet, I don't do podcasts.
- [35:05]
B
You do this podcast.
- [35:05]
A
I do this podcast.
- [35:06]
B
That's right.
- [35:07]
A
Many other people have tried to create.
- [35:08]
B
We just do this once a quarter and that's all you need to do.
- [35:11]
A
Exactly. But like many people have tried to create a bunch of other podcasts and like, you know, you came out and did an exceptional job and of quality. And now this is probably going to hopefully lead to a bunch of really great, interesting companies coming your way. If I tried to do the exact same thing, it wouldn't work and the time spent and all of that. But it's alluring to.
- [35:33]
B
Oh, totally.
- [35:34]
A
I could go and have the. And then everyone's going to come inbound to me and it's going to be so great.
- [35:38]
B
Or he's like, I mean, this is going to come off as a joke. So. Sorry, Sam, but our friend SAHM is an incredible. He's good at all things, but he's really good security investor.
- [35:46]
A
Really good at cyber.
- [35:47]
B
Really good at cyber. Good at other stuff too, but particularly good at cyber.
- [35:49]
A
Particularly cyber.
- [35:50]
B
And if we try, I tried to go be a specialist in something, I'm going to fall over. It's just not going to work.
- [35:56]
A
Yeah, exactly. He should be better at that one thing. But the trap that I think investors and especially early investors in their career fall into is, you know, the thing that you're good at and then you're like, well, this other thing over here.
- [36:10]
B
I see people doing a lot, I.
- [36:11]
A
See people doing really well. But the trap is like you actually don't know how hard it is. Right. And it's like you are better off just focusing on the thing that you are outlier in and like I think the biggest thing is just figuring out.
- [36:22]
B
What that is, which of the archetypes you are and then which of the.
- [36:25]
A
Archetypes, like if you have like hyper networker, philosopher and specialist, like, there's probably more, but like, of those three, like which one are you? Where do you have an advantage? And then just focus all your energy and effort on being amazing there.
- [36:38]
B
And there's probably some people who are like a major in one and a minor and others. But like even that, you need to like, know what that is.
- [36:44]
A
Yes. Yeah. And back to like the calendar. Like then audit your time and go back and look and be like, how many empty calories did I waste doing this thing? And like, even if the inputs are good, if the outputs aren't there, right. Then like audit them.
- [36:57]
B
It kind of goes back to your like inbound, outbound thing where like inbounds, icing. It's so easy to just get lost in, you know, just inbound requests. Will you do this thing or that thing or come meet this person? And you know, one of the things that always shocks me is you could just like save 90 minutes by just, you know, saying a polite no and then it's over. And people all the time just do stuff because they're like, eh, I don't have something else planned, so I can just do it.
- [37:21]
A
Say no all the time. Yeah, like to coming back on this podcast.
- [37:24]
B
Yeah, that's right. This is the last one. First and last one more question and then I want to wrap with a couple of your thoughts on just specific areas of tech as you reflect over your last sort of 10 years of venture. I'm curious how you've thought about like deep relationships, broad relationships, the sort of tight knit versus professionalized nature of venture. What do you see over your time doing this?
- [37:47]
A
What was really interesting is I feel like a decade ago, venture had clicks, venture both had clicks, and founders had less power than they have now. And so what that meant is VC would invest at the Series A and then go tell their founder, like, hey, here's who's leading your beat. Not always, like, and I'm exaggerating a little bit, but it was like that dynamic. And then what ended up happening is obviously founders got a lot more power, which is awesome. But then almost the playing field of leads and new firms and everything, it kind of like spread out. Right. It became more democratic. But that also meant that you were getting more sort of random people and sort of more junior people doing deals and sort of investing in companies.
- [38:31]
B
It was a bit of A mess. You're talking like early zirp.
- [38:34]
A
Yeah, exactly. And now what's interesting is I feel like we are going back to not clicks, but almost like who are the preferred partners. And what's cool is that founder sort of powers continued to go up. So what that means is that. And we see this all the time and, you know, people that we like working with is we invest early, we sort of build founder trust and relationship. And then we say like, look, we're not, you know, leading your series A. Who's like, here are series A investors who we really respect who have done exceptionally well by like other portfolio companies and founders in our portfolio. They are our high wreck. And what I would say is, like, when I started Inventure, I always thought it was like bad to play favorites. And now it's like, I'm absolutely playing favorites on the recommendation. And then ultimately it's on the founder to go and take that recommendation. And if we have high trust, like, hopefully it means a lot. And then ultimately they're going to pick and choose what's best for their.
- [39:37]
B
It's a very interesting observation because it's like a similar net effect, but for opposite reasons and with an opposite power balance where like 10, 15, 20 years ago, it was like VCs had so much control that they could just say, this is the round you're doing. And then it became founder power grew, venture capital dollars grew, and it became a bit of a mess. And what you're describing now is more a world where part of the job of the existing investors is to help the founder who does have all these cards, circumvent a lot of the messiness there and say these processes are really quick. We know people that are great and here's options presented to you.
- [40:11]
A
Yeah. And there's so many ways that you can get sucked into a process that's either annoying, a waste of time, or like worse, like a partner that has a great brand, but then in reality is like, annoying to you.
- [40:24]
B
Yep.
- [40:24]
A
Right. And I think that's part of venture funds are sort of becoming hyperscalers in their own way and amassing huge billions and billions of dollars building platform teams, all this different stuff. And it's not saying that that's good or bad, but it just means that there's more noise.
- [40:38]
B
Yeah.
- [40:38]
A
And so for, like, us, one of the things, you know, I always say, like, VCs love pitching magical value add. Like, we pitch zero. Like, founders are the reason why companies work, not investors. But the one thing that I think we can Do a really great job at is say, hey, across our, you know, 500 company active portfolio, here are the partners who have done exceptionally well, you know, by the founders, you know, that we've worked with.
- [41:03]
B
Yeah. All right, I'm going to hit you with two quick future guesses and I'm going to let you go. And then you can never go on a podcast again. Great one is Future of Code. I just posted this podcast with Dwarkesh. He dropped a really interesting stat, which I think has also been shared by one of the calls, ins. Guillermo has talked about this, but basically it was about these tools are not yet that productive. Obviously people are finding ways to be very productive, but they're not yet. You have made amazing early investments in Cursor and Warp, which are awesome sort of leading products here. Do you know more than average about the space? Where are we right now and where do you think this AI code gen stuff is going?
- [41:44]
A
I don't think anyone knows. And it's changing so quickly, so I'll caveat by, like, no one knows. The thing that I feel strongly at is that whenever there's a new platform shift, and I started my career with the rise of mobile, right? And I remember when mobile first came out, people were like taking HTML web views and taking their mobile website and saying, there we go, there's our mobile app, right? And that was the. You know, I always like talking to, showing how old I am, talking to young, you know, AI founders and being like, do you know when the App Store came out what the number one app in the App Store was for like the first two years?
- [42:19]
B
Do you know, I remember, like the beer drinking game. Was it that?
- [42:22]
A
No, that was, that.
- [42:23]
B
That was quick for like a day.
- [42:25]
A
It was Pandora, right? And the reason is like, that's what us humans do. We're like, ugh, like an iPhone comes out, it's a supercomputer in your pocket. What's the most important thing? It's like taking the radio that's in our car, putting it on our mobile device, right? And what happens is it takes like two, three, four years for people to actually understand the primitives that end up coming out of mobile, right? And then we get Uber, the remote control for, you know, the real world, and Instagram and Snapchat and Discord and all these like amazing, great native expressions of mobile. That exact thing is happening, bringing it back to AI and Cogent. But it's really hard, right? It's the reason why I think cursor's done so well is that they took the IDE form factor that everyone knew and then built on it and made it a lot better. What Warp is doing with the ADE and the agentic development environment is like, hey, this terminal and CLAUDE code and all these other components, we can just tell a computer what to do. And maybe the right native expression is not opening up a code file and then hitting tab 100 times, because you shouldn't even be looking at an individual code file. You should just be telling the computer or machine what you want it to do and then sort of auditing all the thought and steps throughout it, throughout the process. And then eventually, maybe you don't even need to do that. I'm always asking myself, whenever a company is pitching us, what is the most native AI version of this? I don't know the answer, otherwise I would start the company myself. But that's our orientation and that's been some of the. It's been cool to see the cogen companies that we've invested in take different stabs at doing that.
- [44:01]
B
All right, one more just for fun. Neuralink brain computers. What do you think about that?
- [44:06]
A
We were talking about this earlier where I was like, you know what? I don't know if it's harder or easier, but there's so much stuff that's happening in robotics and humanoids and all this amazing things. Maybe what's actually more fun and interesting is just if we find a way to have input output to our human brain, like, then you just hook us up and, you know, it's like Matrix 2.0. And that actually may be easier than having, like a Westworld environment. So I don't. I don't know, it's like a little futuristic. But I'm. I'm surprised that there's not more people that are like, focused on, instead of sort of changing and almost terraforming the Earth and world as it exists right now.
- [44:51]
B
Just make our. Yeah, just like, just put in the.
- [44:52]
A
Brain, literally just simulate a much better one for ourselves. And really, what is the difference there? It's a little futuristic, but it's just a fun thought because it may be. Ultimately, it's like, what is the path of least resistance? I'm talking way out of my scope of knowledge. But the path of least resistance rather than that utopia on Earth might just be we're all, like, hooked up to the Matrix and, you know, we have perfect input output to our brain. And that may actually be easier than sort of the utopia with robots running around and humanoids and all that stuff.
- [45:22]
B
I don't know. Sounds good. God willing. Greg, you're the best. Thanks for doing this.
- [45:25]
A
Thanks.