SPEAKER_00: entrepreneurial background having done something it doesn't almost matter whether it was jet.com or if it was like a lawn mowing business yeah it's like basically you have to have tried and have that fire to actually take risk and failure i think i think it's really important i always tell my

SPEAKER_02: founders getting your ass kicked is a precursor to kicking ass yeah but i do think for the next

SPEAKER_00: generation of founders like for my kids i encourage them and their friends like start businesses talk about business ideas with each other why as a parent why are you encouraging that now the understanding the risk and all the things you just said about hiring planning out the business facing failure and disappointment selling satisfying customers all those things you kind of need reps yeah and then you get better at it over time this week in startups is brought to you by

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SPEAKER_15: welcome back to the program aileen lee is here she's the founder and managing partner of howboy

SPEAKER_17: ventures you can follow her on twitter x aileen lee a-i-l-e-e-n-l-e-e thank you welcome back to the

SPEAKER_19: program i don't know when the last time we talked was but uh yeah we've known each other for a long time

SPEAKER_21: though yeah it's been i don't know 15 or 20 years i mean probably yeah you knew me before i was

SPEAKER_23: investing in companies and i was just an entrepreneur and back in 2013 you coined the term unicorn you've done a lot of research on unicorns and you just updated the famous 20 was it the 2013 report yeah

SPEAKER_15: yeah and so i just wanted to talk to you about all that and then we'll talk a little bit about dei because i know you've been involved in a lot of those efforts here to and you were one of the people

SPEAKER_28: will stay tuned for that part and not be like yeah this is my part to check out

SPEAKER_29: when you started in the industry um correct me if i'm wrong but when did you start as an investor joined kleiner perkins the end of 1999 i was about to say it was during the dot-com era so you've lived

SPEAKER_00: through one two three cycles now that's right i think you actually on x said or some didn't you say

SPEAKER_15: something about being a three cycle investor we did a little series here about being a three cycle investor and it's just so few of them now because in our line of work investing a lot of people

SPEAKER_23: you know if you hit a winner or two you retire right people retire early or they get aged out you know like bill gurley is no longer a benchmark and doug leone michael moritz a lot of folks seem to age out or just yeah some firms i guess have that in their bylaws yeah well i think there's different

SPEAKER_00: vintages at sequoia rolloff and alfred and i are similar vintage mamoon similar vintage at kleiner

SPEAKER_39: so i'm i have a lot of gas in the tank i'm excited to make more investments i find this job really invigorating it's you know it's challenging but it should be it's an elite pursuit it should be

SPEAKER_15: challenging we are in a very important position in society where we get to place bets uh on who gets to

SPEAKER_23: you know try and change the world it's pretty heady stuff when you think about it you know

SPEAKER_42: it's a privilege for sure yes yeah yeah and then you got vinoo costa out here he's in his 70s exactly he's got lots of gas in the tank yeah yeah back dudes they're gonna have to

SPEAKER_44: drag him out of the building he's awesome i interviewed with vinod when i was interviewing at kleiner perkins and i fortunately didn't really know what a big deal he was because i came from

Jason Calacanis: gap so uh i didn't really i had heard of venture capital i was a analyst at morgan stanley in san

SPEAKER_00: francisco office actually um and the people from banking who went to venture were all guys guys and i just figured and all the people who were hiring them were guys so i just figured like i'd both never get a job and i also would have no friends at work so i never tried to get a job adventure even though it sounded like such an interesting job and one that i would love so i

SPEAKER_48: got lucky when i went to kleiner that i interviewed and i wasn't really intimidated by the folks who

SPEAKER_50: interviewed me because i i didn't know they were well and yeah you came into it with the idea that hey maybe i'm not welcome here right um yes and then you were probably you correct me if i'm wrong in

SPEAKER_23: the 90s in finance there was a bit of gender i was the only investor at kleiner in 99 who was a woman

SPEAKER_15: right and when you think about it there were most firms who were all male at that time yeah and it man it's shockingly changed in the last 10 years with so many women starting firms and all raise the non-profit that's really driven representation in the space but let's talk about unicorns what was the state of unicorns when you first wrote that report we then went through this 10-year crazy period yep i would say unprecedented but we did have something similar at the end of the dot-com boom uh but nothing like this so what are the stats uh now that you've done the report show let's get

SPEAKER_00: right into the stats in 2013 i had a relatively new fund my cowboy's one years old so basically we had you know a couple investments and i had a little more time on my hands and so i thought let me just do some research and figure out you know because at seed especially back then but still now at least for us at cowboy it was you know it's your first institutional round so no one's heard of your company before many cases you don't even have a website right you haven't even changed your profile on linkedin so there's not really signal and you don't have any traction so you know how do i i move from being a series a b c investor to being a seed investor so i wanted to learn if i had started 10 years earlier what are the best possible companies i could have invested in and let me make that list and figure out like how could i have found them where did they work before how what was the original idea you know what did the founders do before like what do they have in common that might give me some sense of signal and so i basically just started hand curating this list i was like well let me just use billion reached a billion dollar in valuation in private or public markets within 10 years right that's pretty good progress and so that was one of being 39 companies i posted it as a guest post on tech crunch and uh i came up with a shortener for unicorn so it's basically a company us-based company that's venture-backed in the tech sector less than 10 years old

Jason Calacanis: worth over at least a billion dollars in private or public markets so you're not going to write that

SPEAKER_58: over and over again in any kind of record reports i tried to come up with a shortener and home run

Jason Calacanis: monster hit out of the park you know like you could and like all of them wound up sounding like both annoying and a little douchey yeah for sure and so yeah totally it just sounds horrible and i think it also um it doesn't convey how special it is how much work goes into it it makes it quite crass and i

SPEAKER_00: think pretty empty and so a unicorn was the word that i felt like captured that it's special and kind of rare special and rare for sure yeah it takes a little magic so and then so that report uh back then basically wrote up what they had in common what i found from the analysis and so basically it was just the 10-year anniversary of that analysis so this past summer actually we said well it's going to be 10 years why don't we go back into the data and see what we can find and there

Jason Calacanis: just wound up being so many more yeah and so much more to study it actually took us a couple months because we went from 39 to 532. okay the first list was majority consumer so this is fascinating

SPEAKER_00: the age of facebook and groupon and linkedin and twitter and uh airbnb there were a couple enterprise companies workday service now being among them but um the 80 of the value the aggregate value if you added up the valuations of all the companies in the list was consumer and enterprises minority and so when you look at this new list the pendulum has swung to enterprise massively it's 80 enterprise companies wow so that's a big change and i should say we only look at us-based companies we invest at cowboy in the us only so um and also it's just constrains the list a little bit more but usually i think if you're international listener i hopefully there are a lot of parallels

SPEAKER_67: and the list is probably the us historically in the last decade is about 50 percent of the list usually so it'd be about double i think if you were looking at it internationally so we went from

SPEAKER_71: high 30s to 500. yep so 14x 14x the number of them yeah let's stop there for a moment what do we

SPEAKER_15: attribute that 14x and then i want to get into sustainability i don't know if you've looked gone back and looked at the original 37 was it yes we did the first 39 we looked at what happened to them yeah so i think that's a really important discussion because it's one thing for us here in the industry to dub something you know a unicorn but we all know groupon and some other companies have had a hard time right i don't know if they're still a unicorn or not but i know they're still around so yeah what

SPEAKER_00: does the data show about those original 39 so the original have had mixed fates the other thing is 60 i think 66 percent of them had exited so they had either been bought or gone public so a lot of them like airbnb some of the networks effects companies like x like maybe actually became quite a lot more

Jason Calacanis: valuable and feta f f facebook turning into meta yeah um a lot more valuable over the past 10 years

SPEAKER_00: uh and then some of them out of business not worth nearly what they were before um worth less so uh it's definitely a little bit of a mixed bag but for the most part i did the majority are worth more

SPEAKER_23: that is i think one of the key realizations ruloff had at sequoia which was or i think mike moritz and

SPEAKER_15: doug leone had it as well man if if we hold on to our companies when they go public one form of exit that's right they did much better as investments after they went public now i don't know if we could say that today because spax kind of threw a wrench in there some things went out too early and then we

SPEAKER_90: have overpriced companies going public so on a sustainability basis that group had a lot of

SPEAKER_23: sustainability and staying power but this new group that's a big question like did we totally so and

SPEAKER_00: of those original 39 the enterprise companies tend to have had more consistent performance and held up in value than the consumer companies and the other thing that was a big takeaway and might have been to your question about why are there so many more and so many more enterprises the capital efficiency of the enterprise companies in the first batch was much higher than the consumer companies so the consumer companies on average were worth 11 times the amount that they had raised the enterprise companies were worth 26 times the amount they had raised ah so if we pause there and explain

SPEAKER_57: that pretty awesome yeah so if they raised a million yeah if you raise a dollar and you wind up becoming worth 26 that's a pretty good return pretty great when you're in the startup

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SPEAKER_99: sprouts market comes in little bottles and you just take this little shot boom you're off to the races

SPEAKER_00: if you raise that dollar in year one and then you sell the company for 26 in year four i think

SPEAKER_67: that's a 40 percent annual rate of return which especially when interest rates are one percent

SPEAKER_23: you'd much rather get 40 a year than one percent i guess one of the big topics during zerp money became free there were lots of funds lots of investors people started dipping down into what we do

SPEAKER_15: like uh masayoshi-san uh you know and softbank or uh to tiger hedge funds coming down and putting in those last couple of bets some of those were perhaps not as efficient right well not even last i mean they started doing a's and b's yeah and without really being thoughtful about them i think was i think the criticism that seemed viable when you look back on that time what's the lesson now that we've started to look at the data what's the lesson from that peak mania which probably

SPEAKER_23: lasted 2019 and 2020 and 2021 and then ended obviously a lot of founders at the time and i'm

SPEAKER_67: like obviously this is a conversation because i know you have a lot of experience and points of

SPEAKER_00: view on this too so i think at the time because there was so much money swishing around in the system if you had a new and there and there was a real war for talent so people had more money than people in a lot of cases so they were like well let me solve this with technology i'll just buy more software and so a whole bunch of venture-backed software companies found selling their products quite easy and so that and so everything was what as they say up and to the right you know it's like you you start you sell and everyone wants it because they've all got fresh venture rounds and so i think a lot of founders were like this is not hard i should just take money i don't need guidance i just need money i'm going to optimize for valuation and build a war chest to scare off competitors and because i know exactly what i'm doing i've been in business for a year i got this and times have changed so i think a lot of founders out there know that that's not going to be the case for the next five years and so i think the amount of help that you bring on to your cap table early on is going to be you're going to need different help yeah when i was on

SPEAKER_15: a couple of boards and i watched these late stage c's and d's occur during that time period you know people ask me what my advice was and i was like well you've already got a board you've already got product market fit this feels like a financial transaction why don't we look why don't you present

SPEAKER_23: to the board i said to one founder these five offers you have and just give us a google sheet and put them next to each other what price per share they're paying what terms and what the you know

SPEAKER_42: pro forma tap table would look like what would this look like in the case of an exit what would their

SPEAKER_116: ownership be yada yada um and just don't even tell us the names of the firms just look at it

SPEAKER_23: completely as if you were getting a mortgage do you care when you get a mortgage for your home right if it's you know from this you know firm named after one tree versus another one oak tree versus

SPEAKER_15: this tree versus that tree you probably don't care right you know which tree it is for that late stage round or for the mortgage and and so they did i think make some decisions like that and in some

SPEAKER_42: cases they didn't even take board seats which was yeah right that was a weird moment too like you're putting a hundred million into this company or 200 million this company you're not involved in governance maybe you could speak to how governance has changed yeah i mean i think that's a that's a

SPEAKER_120: whole nother topic uh is why you're here aileen you've seen how lax we got in governance you know

SPEAKER_00: and i think people now realize that having a board can be a very constructive thing but who's on your board and what experience they have and you know i think people didn't really want accountability and so there was a feeling like don't have a board just you know what you're doing just go for it but i think we're paying the price now of not having you know having proper feedback or proper dashboards or kpis or being open-minded to different points of view and i think when you take on a fund that has you're one of many bets and it's a very large fund and they've got a portfolio and they are basically there's a bunch of flowers that they've pollinated and they just need a couple of them to grow really really tall and everything else doesn't matter so i think the incentives when you take on money from large funds you just have to really understand that they want you to have a giant outcome that you may at that period of time i think it will change in in the coming years but at the period time it was like you know spend as much as you can get as big as and fast as fast as you can let's see if it works so i can see if i can have the big outcome that i need for my giant fund i think there's risk

SPEAKER_129: associated with that to your point if you were to get in on these companies at a billion two

SPEAKER_23: billion three billion and you had any of the ones you know from airbnb over here and you start seeing the enterprise value of these and this is the original enterprise value anybody getting in at these and these companies became very large right i mean if you took something like airbnb yeah which here was it looks like it's at about three or four billion on this chart yeah that became an 80

SPEAKER_15: billion dollar company uber i don't see it here on the chart alto networks huge huge yeah these are

SPEAKER_00: 50 bigger uber much bigger yeah there's a lot of folks uh on this chart that have gotten a lot bigger over i mean facebook i think is more than 7x in the past 10 years yeah so you know that's a very

SPEAKER_15: important thing to understand about your investor if they are placing you know 30 bets on 30 unicorns

SPEAKER_23: yeah they're looking for one or two of them to go more than 30 acts and then they've doubled their returns and that's what late stage investors are looking for and this is where strategics also become problematic or challenging because they don't care about the returns on a

SPEAKER_143: financial basis primarily yeah what have you seen in your career with strategics i'm curious uh i mean

Jason Calacanis: like a lot of things it's a mixed bag i mean sometimes they can be very helpful uh and with door

SPEAKER_00: opening customer introductions validation but then yeah sometimes they they say they're going to be

SPEAKER_146: helpful and then they're not they also can screw up and exit potentially yada yada so you have to be thoughtful about where you take the money from yes now what's happened to because you did this at

SPEAKER_15: the 10-year anniversary which means you got those seven years of just up into the right but then you got

SPEAKER_71: these last two years of everything constricting so what what have we learned about paper corns yes okay

SPEAKER_00: so that was one of the the things that we so basically we looked at this new set wow there's 532 i think what's really interesting is obviously the 14x and then also just how many sectors they cover so when you look at the og list as you mentioned like meta right it's it's kind of a horizontal company like anybody can like anybody around the world can use facebook or whatsapp or instagram you've got now all kinds of companies serving many more like in the original list i don't think there were any healthcare companies uh and obviously there were enterprise companies were really the minority in this new list we basically mapped out 19 different sectors there are unicorns in logistics in mobility in healthcare in climate uh in vertical sass in horizontal sass and hr tech and learning tech and ed tech consumer marketplaces b2b marketplaces like there's all they basically fanned out to serve many more sectors and kind of more verticals if you will of society which i think is really exciting when you think about it the iphone is less than 20 years old which is kind of crazy right yeah the i think things like the iphone where people now have incredible ux and storage and processing power in their everyday life then they got to work and they were like god why do i have to wait for this shitty software to load this ugly page that right and then i have to click 20 times to get to or why do i have to use this clipboard and fill it in yeah and deal with these operator errors and people inputting information into mainframe systems you know so i think it's just basically every kind of business whether you're a fintech or a doctor's office people have gotten a lot more comfortable with modern technology and they see how powerful it is and so then when a vendor calls and says hey i've got this software that can fix your doctor's office and make it really magical and on your

SPEAKER_90: phone they're like show me more yeah because if you think about it the expectation of consumers now has

SPEAKER_23: risen so dramatically that they're like hey this is not as elegant as instagram it's not as right efficient as airbnb you know or uber or doordash yes wait i want a doordash experience and if i can get food delivered and yes a burrito is at stake well when my health care is at stake why am i filling

SPEAKER_116: out a piece of paper that you're retyping in this makes no sense or when i'm procuring for my company

SPEAKER_15: why should i wait 60 days to get this order they've had the amazon experiences and that's actually is very interesting that it went consumer to enterprise the consumerization of the enterprise is a theme

SPEAKER_116: make it easy make it simple yeah and then this this speaks also to entrepreneurship and the efficiency of capitalism if you just think about what happened here over the last 15 years or 10 years when you and i were you know active and placing bets entrepreneurs just took those lessons they saw uber facebook instagram everybody do really well doordash and they just said well where can i apply this

SPEAKER_166: didn't yeah listen not every business is venture scale if you're not you won't be able to raise money from vcs we all know that and not everybody has a rich family member to do their friends and family round so if you want to jump start your business with fifty thousand dollars let me tell you about paintbrush loans paintbrush has created a new kind of loan product they connect idea stage startups with bank capital so you don't need to give up any equity and there's no pitch deck or revenue required and the paintbrush loan is available at the idea stage in fact you can apply the moment you incorporate your company monthly repayment is a flat predictable amount which makes cash flow planning really simple so here's your call to action if you're a founder in the us go to get paintbrush.com to see if you qualify for a fifty thousand dollar startup loan in less than two minutes that's get paintbrush.com to see if you qualify in less than two minutes and also i think what was exciting about

SPEAKER_00: that is so it's modernizing a lot of industries that haven't had the benefit of mainstream technology and when we looked at the founder backgrounds and the geographies it also democratized quite a bit so in the original analysis the majority of founders went to highly selective schools and they also worked in tech and they uh tended to know each other from their tech jobs yep the new founder crop first of all we moved from i think about a hundred co-founders that we were studying the backgrounds of to 1300. oh wow so kind of by definition you're going to see a lot of change and so we did uh most of them were not technical and most of them did not work as a software engineer before wow people uh different backgrounds different schools the leading market share school for where these founders went to school was stanford but it was five percent right so it's a big change like

SPEAKER_174: it used to be that vcs would like just camp out like near the dorms or in the kind of cafeterias

SPEAKER_00: at stanford just hoping to meet computer science students like that's important but like it's not

SPEAKER_175: the majority anymore and you witnessed that i mean john doar actually had a famous quote he said oh

SPEAKER_90: yeah just i i mean it's a cringeworthy quote now but at the time he didn't mean it in a bad way he's just like listen if you want to be good at venture capital just hang out at stanford like you're saying

SPEAKER_129: and you know two or three white dudes come along in khaki pants he was kind of giving them a little

SPEAKER_15: bit of a fashion dig but it was true that that maybe was the majority of you know the teams coming out was stanford's computer science or whatever now you've you know i watch um the team at yc that they're obsessed with waterloo you know and yeah other universities that you know really produce great

SPEAKER_39: computer science technique on in israel like it's i mean another topic is immigration we didn't

SPEAKER_00: actually it's hard to understand the immigration statics there's a bunch of dimensions whether you're in the military you know like what's your sexual orientation a bunch of stuff that's just obviously very hard to capture but my guess is if we were able to get the data a high percentage of the founders would still be immigrants i know on the first set that was the case we didn't see as much progress as i hoped on gender mix and for founders uh so that's slow we got a lot of work to do on that but um i think what was consistent was most of the founders were in their mid-30s when they founded their companies and most teams were co-founding teams of three both you know 10

SPEAKER_72: years ago and now these are two very important facts there is a bias from people they think everybody

SPEAKER_15: who's going to be successful dropped out of college and they started their company with 19 and 20.

SPEAKER_90: yeah that's not actually a case that is a bias that people remember those uh stories because

SPEAKER_116: they're such iconic stories whether it's gates or zuckerberg or elizabeth holmes you know it's it's

SPEAKER_15: almost like this pattern recognition oh if you quit the ivy league you're dope right so much so that peter thiel created an intercepting thing called the thiel fellows to try to manifest more of those people and you would expect that from him since he did so well on facebook he literally made a program for that but the truth is people in their 30s who've worked at two or three companies yes are the ones who create the the most value on average yeah and that's actually one of the reasons why

SPEAKER_00: i published the first analysis was because in 2013 mark zuckerberg was the most aspirational entrepreneur in the world and these c's were saying like i pattern match i'm a pattern matcher and basically i'm looking for white guys in hoodies who dropped out of harvard who've been programmed since they're kids that's who i'm going to back over and over again and so i was having meetings with founders who had great ideas and they would come in kind of sheepishly and being like i you know i just i know i'm kind of old for this but i just can't stop thinking about it and i think it could be a really good business and it'd be like someone who was 32 years old it's like no it's like you don't it's great that you have experience and that you can't stop thinking about this and let's have a deep conversation about it you could be a great founder yeah so i think that's i think that's

SPEAKER_196: encouraging yeah i mean uber was travis's third company tesla spacex were elon's third and fourth

SPEAKER_198: or second and third he had he had uh zip2 paypal it was a third and fourth yeah you know pretty obvious

SPEAKER_116: there's something like third time's the charm that exists for a reason like you really start faster because you've all the blocking and tackling i mean really silly stuff but cap tables accounting hr your first five hires all of that goes so much easier when it's your third time that takes

SPEAKER_00: two years of mistakes out of the process i totally agree and in the first analysis and in this one we found entrepreneurial background having done something at least one co-founder has started a company but it doesn't almost matter whether it was jet.com or if it was like a lawn mowing business it's like basically you have to have tried and have that fire to actually take risk and failure i think i wish i could capture or quantify what percentage of the people have had prior failure but i think

SPEAKER_01: it's really important getting your ass kicked i always tell my founders getting your ass kicked

SPEAKER_00: is a precursor to kicking ass yeah but i do think for the next generation of founders like for my kids for example and we have two three kids and two of them are girls and i encourage them and they're friends like start businesses talk about business ideas with each other why why are you encouraging that now the understanding the risk and all the things you just said about hiring planning out the business appointment selling satisfying customers all those things you kind of need reps yeah and then you

SPEAKER_71: get better at it over time literally having sold or done customer support yeah at a pizzeria or at

SPEAKER_116: my dad's bar being able to sell people the specials my dad like hey veal chop let's get some of those

SPEAKER_22: moving because where was this this is in bayridge brooklyn i would you know my dad would be like hey

SPEAKER_116: listen we got we got these veal chops at 36 like let's get the double stuffed veal chop going here you know and dessert is all margin your mom made my mom would make the chocolate mousse chocolate mousse was and then he had a cappuccino machine which by the way in the late 70s early 80s to have a cappuccino machine was a very rare thing and i remember this was like one of my first entrepreneurial lessons alien i was in the kitchen and i was watching the dishwasher and the dishwasher would take the espresso cups and he would go like this and he'd say buck 50. then he would do the cappuccino cup and he would say 250. and he would be counting up how much money my dad was making and he'd be like 275 dollars like tonight on espresso and cappuccinos before starbucks my dad had figured it out and i was just like wow

SPEAKER_23: holy cow that's how money works these are unit sales and the espresso this i have three daughters i am

SPEAKER_42: obsessed with teaching them about entrepreneurship i let them listen to the podcast i talked about it and explain it to them and then i started taking my 14 year old to uh parties here in silicon valley and

SPEAKER_146: like i just hey what do you do and the person like i work in human resources and culture can you

SPEAKER_129: explain to my daughter 14 what you do here because if they get access to that in this next wave what's going to be left because if you look at chat gpt and you look at like what skill is going to be needed

David Friedberg: i'm unsure which skill will still be around is being a developer going to be that important in

SPEAKER_00: the future it might not be i think being able to learn being curious being able to connect with people and being a critical thinker i think those are like the things that that can enable you to morph because yeah the puck's gonna keep moving and we might have called those soft skills right we

SPEAKER_146: might have called those like you know oh those are you know the the softer skills you need hard

SPEAKER_129: tech skills and it's like do you need hard tech skills because this didn't take your study here didn't take into account you know uh the the international ones but the the thing i'm seeing

SPEAKER_15: over and over now is the companies on your list many of them are having more employees outside the

SPEAKER_00: us than inside the us we did a little bit like in the new list we know i think at least 22 of the companies of the 532 actually have a completely distributed company and no physical office headquarters right that did not that did not exist 10 years ago and a lot of them are multi-hub so uh i i think that is completely like i mean kind of to your early question about like why did this happen right it was a combination of like interest rates were super low we had cloud and mobile and security and ai and all these exciting things that were basically giving lots of entrepreneurs ideas and opportunities and like you said it was easier to develop software it's easier to adopt software than ever so it kind of made the adoption curve a lot easier and then we had covet right where people could work in lots of different places we were surrounded by technology all day and all night our like we were basically running our work and our personal lives through these new delivery services through zoom and things like that so it kind of created this perfect storm but i think it also

SPEAKER_227: planted lots of seeds for people to start companies in different places which is exciting what do you

SPEAKER_15: think about public markets and the stagnation we have there what happens to all these companies

SPEAKER_71: if they can't get public what's happening to them now with the paper corns okay so let's get back to

SPEAKER_63: paper corn so not indigestion going on in the system totally so another big change from in the past 10

SPEAKER_00: years is going from 66 uh kind of liquid or exited to 93 of this list being private still so only seven percent of the companies have had exits and i think it's only three percent that have gone public and four were bought so four percent were bought so it's a really tiny percentage and so 93 of these companies and sixty percent of them are what we call zerbacorns i was talking to someone this morning uh smirakaji

SPEAKER_72: he called them some of them are covetacorns in other words that would mean they got very big

SPEAKER_30: artificially and then they raised money when interest rates were really low and public tech companies

SPEAKER_00: were flying high and trading at incredible multiples and there was so much money in the private markets that so much more money had gone into venture capital funds and they were looking to deploy because i looked at public companies they're like wow like tech is a great place to invest you make so much money these companies can trade at 50 times revenues and so we and founders were like well this company's trading at 50 times revenues i should be valued at 50 times revenues so a company well even more if a company doing 1 million dollars in revenue was worth was raising money at at least a 50 pre during those times but it was really that time when interest rates were quite low so uh 2021 in particular and so 60 percent of the companies on our list basically were got their unicorn crowning or valuation during that that period of time listen i got a lot on my plate i got a couple of podcasts i

SPEAKER_15: do you know all in this week in startups i run founder university man with over 2 000 people apply

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SPEAKER_15: percentage of 500 and change would or you know raw number will maintain their unicorn status here

SPEAKER_189: so our prediction we basically triangulated it a couple different ways we looked at uh how are

SPEAKER_00: people trading in the secondary markets so for the companies that we have data on 40 of them are trading below a billion dollars in the secondary markets oh wow so they're already took the haircuts yeah so that would well people who are like let's say someone who worked at the company who's trying to sell their shares or they're willing to take at least at least uh half the valuation and then the other thing that kind of happened is that the distribution evaluation skewed downwards so i think 20 of our list just was valued at just a billion dollars right and 40 i think is trading at two or below so if you kind of take those companies and say well they probably raised at least double the valuation that they would have today in today's market maybe even four or five times so you kind of pull those people out of the list so we basically triangulated a bunch of different ways and said okay this list of 532 is probably going to shrink let's say to 350. but there's a lot of i mean 350 is still almost 10x growth yeah from 39 so it's still a huge change and i think all the things like the moving to enterprise the number of enterprise companies the numbers of sectors the democratization of the founder backgrounds and 10xing in 10 years is still quite impressive and the capital efficiency is something i don't think we've talked that much about but that was the other thing that

SPEAKER_67: really fell quite a bit in 10 years that i think is something we have to be pretty careful about

SPEAKER_248: yeah and just to look at sectors when we get to capital efficiency i was just ripping through the

SPEAKER_15: deck and i said wow oh my god two dozen crypto companies and like coinbase was able to go public but my lord i mean talk about a sector that you know i mean essentially the whole sector has gotten wiped out except for bitcoin solana and maybe coinbase one or a couple of players so you know we silicon

SPEAKER_129: valley doesn't always get it right we are capital inefficient in venture and that's part of the magic isn't it uh and i think well the risk taking may be the way to say it you know we're so risk

SPEAKER_15: taking that i think people who don't understand the job like why would you bet on these companies well because they don't understand the power law yeah there are plenty of companies i think amazon's

SPEAKER_67: probably the best example of companies that like know that they're losing money and are willing to

SPEAKER_00: lose money for a long time because the pot of gold at the end of the rainbow is very big and they have a strategy to basically be willing to lose money on categories for up to 10 years because once they get dominant market share they can start to creep up prices and figure out and work on profitability and margins and they've kind of fled they fled they've washed out the competition so i think amazon has been masterful at that if you look at their history of how much they raised and i mean they went public very quickly uh and they raised a lot of because that was the only way they could actually access capital and then they raised a lot of money as a very a wildly unprofitable company for many years um so i'm not this is not saying that every company has to be like viva where they got profitable on four million dollars and then went on to be worth billions of dollars but that is a really great way to build a company that has sustainable value is that you you know you're not spending too much on marketing you know that you're being really efficient with your people you know you're building and shipping a product that customers like because you have very low churn

SPEAKER_257: you have high margins uh and a very healthy p l so that is a i mean a really nice sustainable way to

SPEAKER_113: build value and here's the chart for average capital efficiency valuation divided by the equity

SPEAKER_15: raise 2013 versus 2023 maybe walk us through what we're seeing here with the two bar charts yeah yeah so

SPEAKER_189: you can see on like the right hand two bar charts is 2023 and you can see that enterprise companies

SPEAKER_00: basically went from 26x to 7x so basically being worth let's say if you raised 100 million dollars and you're worth 700 million dollars that is a big decrease and enterprise and consumer being the same

SPEAKER_187: is kind of very surprising because when you look at what's going on in the public markets i think didn't microsoft just pass 3 billion dollars or something crazy they they just dipped above it yeah you're

SPEAKER_44: correct and the dow hit a high i mean to make 7x in 10 years in many cases you would have been better off

SPEAKER_00: picking a basket of public stocks which are liquid and freely tradable and you can decide every day whether you want to hold or sell versus locking your money up in a private company where you cannot sell

SPEAKER_15: freely so with three decades of experience doing this having watched three cycles you come to the conclusion that the industry got too big there was just too much money chasing too few high quality deals and so then efficiency goes down is that the reasonable conclusion i wouldn't say i think quality

SPEAKER_00: is so i mean there are a lot of quality companies that i think are going to get screwed up or quality ideas that when you raise too much money then you can't grow into your valuation you put yourself in a big zone of risk and they might have been quality opportunities that kind of got screwed up by the fact that they raised too much at a high valuation we lost discipline around valuation because we had

SPEAKER_266: like a i guess there yeah it was too much demand there was too much money in the venture ecosystem in a way it's a boutique business isn't it and well it's not anymore yeah well so then should it be

SPEAKER_23: you know or can it be a scale business like you know because it seems like we try to scale this business um or at least the the private equity folks dipping down thinking oh well this is easy i just

SPEAKER_116: look at what sequoia and andreason and whoever kleiner have invested in and we just double it and

SPEAKER_15: we give the founder more money and we're the next round so we don't have to do diligence we don't

SPEAKER_55: have to have a board seat we'll just double or triple their valuation and give them you know 100

SPEAKER_00: million bucks and that's it we punched our ticket that doesn't work it's it's funny aaron griff griffith in the new york times just published something today about how like everyone always says there's like many times in the history of the tech and venture industry where people like there's too much money it's a bubble it's gonna pop and like it just never does and i have to agree with her like i don't the genie is not gonna go back in the bottle like we have delivered fantastic returns in the past you and i are both very excited and bullish about the power of software and i think believers of how many more great software companies are yet to be built and that will deliver great returns for people and there's still so much money out there that doesn't have venture exposure you know there's sovereign wealth funds there's pensions i think this is going to be a great time because the next couple i think people are going to have learned a lot of hard painful lessons they're going to be more disciplined in the next five years valuations are going to be lower people are going to raise less and be more disciplined with how they use their money so the next vintage is a venture i think should be much better than the past three years like the past vintages it's going to be a great

SPEAKER_59: perspective for people to actually get into venture uh because we're going to be better yeah this

SPEAKER_15: would be the best time to do it the valuations i'm seeing are the same valuations i saw back when i did uber and vam tac and com and you know companies with products in markets that are valued in the seed round between 5 and 15 million uh as opposed to 15 and 100 million before they even have products launched so where do you think the opportunity is if you were to look at it in venture you're you're in seed i'm in seed and precede uh then their series a seems super competitive series b and c seems to be a commodity where is the opportunity in venture today i think there's

SPEAKER_00: opportunity across the board okay i mean i think at every round there's opportunity i am a little worried i've heard from some multi-stage firms that they're just like one one guy at a multi-stage

SPEAKER_67: firm recently told me he's just doing seed and b and the fund is it's a one and a half billion dollar

SPEAKER_00: fund like that doesn't make any uh that doesn't make any sense to me i do think founders we do a lot of seed right and we're telling our founders to just be a lot of the people who could do a's could also do b's and c's and so they've gotten pretty conservative to look at the a and be like this is kind of promising but it's not perfectly de-risked i'll wait for the b and be willing to pay a higher price and invest in a bigger round because i have a really big fund and i'd rather wait and see more cards turned over and so i think it's creating a little bit of a gap in a so i think um and a's are you know when you're a board member for series a you're carrying the water for a long time you have to be willing to sign up to really be committed to this company for 10 years we've added a lot of people to the venture business in the past five years but not that many people who have training to be great board members so i'm a little worried about that but i think there's opportunity across the board i think cowboy we're very excited to make some new investments this year i think the founders know that it could be potentially a marathon and it's not a get rich quick scheme and they the people who are down for it and they're like i don't care i just really want to help build something substantial that stands the test of time the next three to five

SPEAKER_15: years we're going to see tons of great founders like that see this i think is so important we talk about venture tourists there were a lot of people who were trying on being a venture capitalist

SPEAKER_129: you really have to have a certain personality for it my friend uh david freeberg got incredibly frustrated running the production board and he's been very public about this i wouldn't speak about it publicly if he hadn't but he's been on a bunch of pockets talking about how frustrated he was

SPEAKER_116: trying to get founders to do what he wanted he wasn't and then now he's ceo of his own company again and so and he's much happier because he can come in and make that change the people who you did also have founder tourists people who might have been a great i don't know cto cmo vp of sales whatever it is they would have been a great number three four five on a team and then they were put in the ceo slot and i mean it's not for everybody right and and i think now we're starting to see people who are built for it when i hear your description of the grit tenacity and what people are signing up for that to me is like yeah people who are built for war and let's just face it you know these these companies we've seen it up close and personal they're always on the verge of flipping over going off a cliff even the public ones are you know always uh have somebody looking to disrupt them so

SPEAKER_23: you need to have a certain amount of grit that maybe we didn't see in the peak era did we another

SPEAKER_293: combo is i mean there was just a lot more budget five years ago you know and then there was so much

SPEAKER_00: money that these new venture-backed high-growth companies had in their bank accounts and they could buy one of everything and so as we've seen as the recycle investors also that economies tend to move and go in cycles and enterprise budgets also kind of do so i think i've seen you've probably seen this too it's like you people used to there used to be the saying you never get fired for buying ibm right there were like certain vendors that everyone was like yeah it's not the best but like it's safe and so people had bought software and they had a rep who had they had a relationship but they would buy software from the same vendors over and over again it's a very tight and then something changes there's some new technical technical innovation or something that the incumbents are a little slow to grasp and some new software companies like i've got best of breed for this problem that you're trying to solve and i've got the new thing that you don't that ibm doesn't have like buy this new package and then you kind of move into this best of breed cycle where you wind up having a bunch of kind of point solutions or smaller uh software vendors who solve very acute problems but then you wind of having a lot of vendors and then you might have a security breach or your company misses a couple quarters and you need to get back on financial plan and like where we are right now is because of the refocus on margins and profitability and because public market multiples are compressed everyone's cutting people are cutting budgets cutting vendors also their security risks so the cio the cto the chief security officer yeah the cfo they're all like hey we we spent way too much this whole like byoa like bring your own app just like you know sure you can start using dropbox or slack or whatever just expense it like no more right we need too many vendors we need to cut back so that's a there's a lot of headwinds right now selling to the enterprise big time and so i think to your point about like everyone thought they could be a founder like you have to be a founder who has an idea that actually can

SPEAKER_15: break through the headwinds of today's enterprise market yeah it the the benchmark is much higher for what people would say you know what we have this built into our office suite over here or we're

SPEAKER_129: getting this from google docs or you know notion encoder have this built in you know and i had this

SPEAKER_305: happen somebody wanted to introduce a certain project management software that they had and i was

SPEAKER_15: like so we got to train 21 people in our venture firm how to use this and we've got to pay per seat and in notion encoder which we're already paying for there's a template for project management and we only have four projects that really need project management right so what are we doing here yeah like we just even the idea of stopping everybody's day to have them log into a new piece of software learn it you know forget about the ten thousand dollars just that part to me is what i'm worried about and then you know so let's keep everybody in notion encoder and whatever and that's what we wound up doing and i i see it in my portfolio of enterprise software companies where they're saying yeah we lost this customer why did we lose it oh they loved it the people who are using it loved it but you know the cfo and the cto cio all conspired to say we're going to get rid of we have to get from 20 vendors down to 15 and we were one of five that got cut so the benchmark's higher one of the great things i want you to talk about talent here in the valley um the bay area is just unbelievably magical in terms of the density here i mean people ask me if i could change anything in my life what would i do i might have had a great run in new york city but i might have just come here in the 90s uh that might have been like a better thing for my career to get here a decade earlier or something i think you're doing okay i think i did okay and the kid from brooklyn did

SPEAKER_87: okay but um shout out to dara and uber hitting another 52 week hi that's like the crazy thing

SPEAKER_42: about investing is like i talk to investors like they hit some home run you hit some great company and then they sell their shares and i'm like my thesis about uber has not changed since i made the

SPEAKER_129: first bet and i keep getting rewarded for not selling shares just by hanging around and i was talking to

SPEAKER_23: somebody who had google shares and another person of facebook shares at a dinner and they both sold

SPEAKER_17: their positions and they were just sitting there lamenting like why did i ever sell my positions

SPEAKER_67: i know but there's so many counter examples to that yeah people who held on to peloton people who you know just i i love that product so i don't mean to trash talk them i think it's no product is

SPEAKER_15: incredible but yeah the valuation did get wonky i do think selling half is like where i've come to i very i feel very good about selling half and then putting it somewhere else for safety but

SPEAKER_00: and putting or putting it on a regular program like every quarter you sell a certain percentage

SPEAKER_146: regardless where the price is yeah and then you can just you have some downside uh protection seems

SPEAKER_15: to make sense but the thing i want to talk about was talent here in the valley uh things are much more diverse we have founders coming from anywhere but i do see a correlation between people who come here kind of wanting it more or maybe they're more serious or maybe they're able to deal with more pain or maybe it's a self-fulfilling prophecy you're here and then people projecting to you that you're

SPEAKER_23: more seriously and then they invest in you and then you know the flywheel just gets going your top of mind i don't know what it is about this place that's so magical i think it's a super magical place

SPEAKER_00: too i will note in our analysis so in our first analysis savage the bay area silicon valley and san francisco were the hands-down winner for being unicorn central right like 70 of the companies were here and all the other geos i think new york had three unicorns and that was like the number two so it was a huge gap between san francisco and new york and then everyone else like had none or maybe one uh so that changed a lot san francisco lost a lot of ground we went from 70 percent to 45 percent now the list is a lot bigger so there's a lot more unicorn servers and we lost a lot of ground and new york jumped to 19 percent wow it's almost half fintech and you showed the crypto it's like crypto on web three so we'll see have to see how it plays out but and then denver austin southern california boston all now more than 10 unicorns and so i think the bay area i mean i love it so i hope we get it we it's expensive place to live public schools are not consistently excellent living in san francisco to get my sister lives in san francisco her car has been stolen and broken into like three times yeah and we got to clean up our act if we want to be as compelling a place in the

SPEAKER_260: future as we were in the past yeah it's definitely the safety security in the city is an issue and

SPEAKER_305: yeah the doom loop is very real and yeah the areas around it still doing great but there's not a lot of space here and we're so nimby and anti yeah building housing it's just unbelievable if somebody was

SPEAKER_00: like expensive place for if you want to be a teacher or it's like we have a lot of things to fix enough so i'm hopeful that maybe people who are paying attention will look at the number and be

SPEAKER_305: like we had 70 and now we have 45 we better get on our game yeah i you know watching the people who

SPEAKER_15: are very passionate about san francisco the city and because we we live in the wider bay area we say here like there's a bay area and then san francisco is part of it seven by seven mile part of it you know michael moritz and gary tan and his brother and just any number of people in the city who are really committed to changing the political landscape there to maybe have more will to keep up with this change and if not you just you lose the companies to new york which is a dope place to live and austin

SPEAKER_342: which is also a dope place to live and you got a lot more room to move around and utah is amazing

SPEAKER_00: totally some of our most valuable companies were not based in the bay area and also founders that didn't work in traditional tech uh so we love when you're asking about where the opportunity is i mean we at cowboy we invest a lot pre-product so if founders need the money to actually build the product we are a great place to call and also founders who don't come out of central casting i mean we we invest in both obviously and we've got lots of people who are experienced ctos or came out of coinbase or google or other but a lot we've had a lot of success investing in people who just have a great idea and have a ridiculous amount of hustle and intelligence and learning mentality but

SPEAKER_15: maybe never worked in tech before i was about to ask you what you look for pre-product because you don't have the product to play with and obviously if the product doesn't exist you don't have metrics so you know people who are doing series a series b they're going to be looking at some early metrics talking to some customers seed you might have product you might not you can kind of talk about the product but pre-product pre-seed kind of uh what do you look for at that stage it's a conversation

SPEAKER_39: and i think that's one of the good things about things slowing down a little bit right in the boom

SPEAKER_00: boom time when there was so much money everyone was like nice to meet you can you tell me this

SPEAKER_345: afternoon if you will give me five million dollars like that's not i think a good way to build a

SPEAKER_00: relationship no uh you want to meet over the course of meetings for both sides you know you it's harder to get someone off your cap table than to get divorced as they say yeah and so for founders you want if you're going to have choices which hopefully you will meet your investor a couple different times ask them questions do references on them and see how they handle things but also for us we want we want to see how you process information we want to understand how you learn when you are hit with a both what do you figure out when you have very little resources like how ingenious can you be or when you get thrown a curveball how do you take in the information how do you respond because i think one of the things that we found is we use this term learning animal the people who we backed who have actually survived and thrived and scaled also because i think what was really impressive was of the companies that have had exits or you know gone public or been bought in the most recent set similar to the old set the prior set it takes about seven years to get to an exit and whether you get bought or go public but 70 to 75 of those founders scaled from being the person with no money and just an idea to being a public company ceo or a multi-billion dollar company leader that's like it's just you have to live through so many different phases from basically being like a infant to being kind of an adult and all the stages of development over those seven years it's really impressive so you're trying to look for both is the idea innovative enough is it going to deliver really significant measurable user or customer value and time and a quick time to value is you know how big is the market uh and then you know the founding dna and kind of the hustle and ingenuity of of the founders are the things that we're looking to use that term learning machines and

SPEAKER_15: learning animal yeah learning machine yeah i love it uh because we have one internally because we do also do precede pre-product or while they're in this mvp stage and and we say we just we like this product velocity and then people say what's product velocity i'm like yeah well you know when you meet with them last week and then you meet with them this week and they shipped a new product and you saw the app was updated in the app store or you looked at their corporate blog and they had a new blog post up and then this other company was outsourcing you know their tech to some place you know halfway around the world and you know they ship every six months like people who i have some people in the portfolio

SPEAKER_23: i've watched them ship you know every couple of days and man the the learning that's right that you

SPEAKER_116: become learning animals when you ship because you then hit the customer you yeah you make contact with the ball there's nothing like getting punched in the face or making contact with the ball to to sort

SPEAKER_15: of drive learning yeah yeah totally i'm just fascinated by you know people in the early stage and how they try to figure these things out and i too have seen now the funding cycle feels like we're we're back to you know for seed stage you know six 12 weeks of running a process and man is that so

SPEAKER_23: much better than six hours or six days it was so weird to for people to say like get off a zoom call

SPEAKER_359: and be like are you in and i'm like in what interested i'm interested yeah yeah let's have

SPEAKER_42: another call and then i just took the same approach because i i am old school i think like you and they

SPEAKER_15: would say like well i have to know today i'd say okay well then obviously the answer is no um but would still love to meet next week and keep hearing about the product and i would just keep the meeting on the books a lot of times i've been watching people are not clearing market so i i i've taken to this um

SPEAKER_146: rule off kind of taught me about this not yet kind of thing which is like i like everything you're doing it's a not yet for us yeah and i've been training my team like let's explain to them

SPEAKER_00: what we would need to see that's right for the next meeting uh kirsten green told me uh at forerunner they they basically have got covet taught them to become more transparent with uh i think she wouldn't mind me telling you this sure um with founders about the reasons for not yet and so we've been doing the same thing of kind of being like here's where i'm stuck and um these are the questions i have almost like let us show you what's in our memo yeah and uh and let's work through it together and through that process you start to get a feeling of what it would be like to work together

SPEAKER_129: and how they think ah so this is because you want to have a great relationship and if the person can handle hey we're not convinced yet yeah it's a sign of maturity of it and if how they respond to it like you know what you're right we we do need to have a customer that's not a friend of ours we do need to earn a customer through a cold call right that's what i always tell them like i like the two

SPEAKER_15: customers you have right now how did you get them and they're like i worked at that company and

SPEAKER_340: that's my brother's company yeah i'm like i've seen this trick before you know like with yc companies

SPEAKER_116: replicable yeah yc companies have this great trick and one of them explained it to me i said where do you get these 12 customers like oh it's great you go on to bookface you say that what your company is and then you trade customers so i buy your product you probably might i'm like and they literally explained to me yes that this was like a process that people were and i'm not i don't want to get into it with the yc founders right i don't i'm not saying everybody did this but it was like build your roster of customers through the yc you know ecosystem and it's if you even double click just on

SPEAKER_42: but two customers before an investment you'll find this out where did you source this customer and

SPEAKER_00: you know look at their linking page how many employees so i think some of it is the transparency it's like if the founder tells you right away like look i have these 12 and i did kind of like bootstrap in this way but i learned a lot through the process and i had to start somewhere so here's how i'm thinking about when i cold call someone that i don't have a warm intro to here so i'm going to do it like that is a great conversation to have but if you pretend like no these you know that then you are starting to be like well if this person isn't honest with me about this what else they're not

SPEAKER_116: going to be honest with me about exactly and this is where sometimes founders make a mistake the opportunity for us to invest at the early stage is that it's not perfect is that you are figuring it out if you had figured it out you would be raising a series b that's right and we'd be having a totally

SPEAKER_385: different comp you know we'd be doing comps versus public market whatever uh let's end on this you know

SPEAKER_386: you've been at it for a little bit um well listen i i'm saying it out of respect because every time

SPEAKER_129: i talk to you i learn something i'm like writing stuff down as you talk it's one of the great things

SPEAKER_15: about having a podcast as i get to learn um and i was i was talking to brian singerman about this like

SPEAKER_129: um from founders fund what do you think now that you've watched a couple of different archetypes over three cycles succeed at venture and you're part of the bill gurley analyst mindset i would say

SPEAKER_392: right you were an analyst interesting okay well you part you were an analyst right um not like bill

Jason Calacanis: gurley kind um but i was a financial analyst yes i was an m a analyst okay so yes that requires like

SPEAKER_129: creating mental models and architectures and really you know thinking strategically and then of course we

SPEAKER_15: have people who are operators and growth hackers and there's relationship people but what archetypes

SPEAKER_42: really work in venture uh in your experience that just create massive value for founders and for lps

SPEAKER_00: yeah i mean i guess the beautiful thing is i don't think there's one archetype i did actually when i was at kleiner uh we were really small there were eight gps and three associates that was the whole firm and what was really cool about that is we had one partner meeting for everything whether it was chips or medical diagnostics or routers or consumer internet so i got exposed to a ton but all the gps had a lot of operating experience and so that was we had a belief that you kind of had to have walked in the shoes of the operator the founder so actually when i was at kleiner i was a partner i think i was a gp but maybe not yet a senior partner and i had always felt like i was i had operating experience from working at gap uh after business school and before moving to planner but not like in tech and so i actually went and ran one of our portfolio companies for two years it was um in between series a and i actually uh raised series b and it was actually really interesting time to do it because it was between 07 and 09 things were really good uh we i learned a lot because

Jason Calacanis: we it was enterprise software i became a sales animal with two twin one-year-olds i basically like lived on a plane and uh then we did well enough to raise a 20 million dollar series b in 2007 which was really big back then and then oh it hit and i had to lay off half the company um but we kind of because we had done a kind of advancing strategy we had basically conserved all the cash we had a lot of cash in the bank and we lowered our burn significantly and then we wound up acquiring our two closest competitors and then ironically that company went after i left and replaced myself that company went public in spec um but uh but i would say like that's just it's not the same as being uh like a true i had a job at kleiner still so it was a little different than the average uh founder but

SPEAKER_00: i mean you see people like martin cassado right who was a very successful enterprise infrastructure structure uh technical founder ran a company now a partner andresen so i think you've got lots of uh former operators and former ceos and you've got people who basically have been brought up in in venture their whole lives and michael moretz who you mentioned earlier was a journalist

SPEAKER_400: yeah before he became a venture same path as me right yeah exactly yeah yeah so i think all kinds

SPEAKER_67: of people can be successful in venture i don't think there's one answer the ability to be a

SPEAKER_231: learning machine uh seems to be part of it when you look at journalists and what we do or what i used

SPEAKER_234: to do like rebecca caden at union square as an example she was a journalist we have to ask questions

SPEAKER_15: and what i what i was trained was you're going to ask these questions you got to look them in the eye

SPEAKER_146: and figure out if they're bsing you or not or what the spin is and what the actual truth is and then you got to find other people who you can ask the same questions to and get the same recounting of

SPEAKER_116: events yeah and then triangulate the truth and then now you do that i talk to competitors i talk to

SPEAKER_385: customers you you know you kind of triangulate the truth that's right yeah totally so i'm i feel like

SPEAKER_00: we're very lucky to be in this job and i guess we can end with uh i think with uh privilege comes responsibility so i think we have a lot of opportunity as people with privilege in the tech

SPEAKER_67: ecosystem to watch out for its future uh and to make sure that we do more good than harm how do

SPEAKER_385: you think we need to do better or what should we focus on in that well i think we still have a lot

SPEAKER_00: of bias uh there's still not a lot of diversity so i think we can do a lot better there the people who control the big funds and manage most the money in the industry is still pretty much like the same and tend to look for themselves and their successors um but i also think when it comes to obviously ai i mean when we look at the impact that social media has had on society i think we probably could have done a lot better than we did absolutely yeah and uh and so for the stuff that's coming down the pike neck next i hope we will learn those lessons yeah it's been pretty pretty great to

SPEAKER_198: see some change in regards to diversity uh i often joke like when i go to my poker game now i'm part of like the last white guys at the poker table uh we we're seeing a lot more diversity is it all guys still and that is uh part of the challenge but um yeah i mean at the poker table you guys have

SPEAKER_00: access to great deal flow lots of insights when you're trading information or you've got a company that's doing really well and you want to invite people to take a look like just think about who you're

SPEAKER_305: inviting and broaden your networks yeah it's we're we're on this pendulum now i don't know we saw the fearless founders that they got sued and i was just like huh alice has been sued by the same group

SPEAKER_00: there's this group that basically has a war chest that is going to try and sue the people who are

SPEAKER_67: actually trying to make things a little bit better right some past wrongs yeah it's very up very

SPEAKER_421: straight up i'm sorry if uh no it's okay i'll just bleep it out put a beep no it's it's i i thought

SPEAKER_129: it was kind of strange to pick like the one tiny you know seed fund that was like you know what there's not enough black women who are funded and they're like you know what we should do we should sue that

SPEAKER_144: fund yeah that's why they that is why they did it yes yeah and they want to scare the out of

SPEAKER_55: people and they should know it is not going to scare us yeah oh and if people want to learn more about that all raise this is this incredible organization always.org just check it out i mean

SPEAKER_15: if you're a woman who and you want to learn about venture capital you can come to one of these all race events and hang out with 50 women who have the job already and are supporting the heck out of each

SPEAKER_17: other and just telling you how to you know basically um hack the system or get into it without you know

SPEAKER_157: yep and if you're a man in venture or in tech and you want to be a great ally or you want to hire new

SPEAKER_00: people meet new people we are also here for you because i think you know it's something when we started all raise 75 of venture firms had not a single woman partner that's wild now i think hopefully to some of our efforts we're doing better so now only 65 of venture firms have not a single woman

SPEAKER_189: but so if you are a founder and you're going to have choices you can make choices with who you invite to invest in your company make money for people whose values you are aligned with yeah i think

SPEAKER_198: that is uh well said and just go check out allrays.org it's a great organization to support

SPEAKER_17: and we'll see you all next time on this week thank you jason hey everybody i talk to a lot of founders

SPEAKER_90: here on this week in startups and as an investor and they tell me the same thing over and over again they want two things from me more face time and money they want me to invest in their companies and they want to spend time together so we've been working here on a new meetup program we call it founder fridays and founder fridays are an event by founders for founders this is an event that is hosted in cities by people like you if you're listening to this week in startups you're a founder so what are you going to do at founder fridays you're going to get together with other founders in your community it could be four or five of you it could be maybe up to 30 of you in

SPEAKER_129: a location pick a cafe pick a co-working space i like to go to a great mexican joint or maybe a dim sum restaurant you know where you can do shared food have a couple of cocktails maybe you do it on a friday you get together and you host it now why is it important for founders to get together shouldn't you be at home just focusing shouldn't you be in the office just focusing on your startup well if you get together with other founders true founders who are in the arena building like you are you're going to get a lot of value from that because you can trade notes with that other founder about what's working at your startup and what's not working the truth is if you're facing a problem there are hundreds of founders out there who have probably solved it already and instead of you banging your head against the wall when you sit there and you talk to three or four founders you're having some dim sum you're you're splitting the quesadilla some fajitas somebody's like oh you know what i had that same human resources problem oh i had that same technical problem oh i had that same marketing problem and they might tell you about a tool or a service that'll solve that problem for you this happens over and over and over again when i do founder fridays with our portfolio companies now we're going to give you that same experience but here's what i need you to do i need you to host

SPEAKER_90: this in your city so you're going to go to this week in startups.com meetups that's it and you'll see a landing page where you can sign up and you can say i want to host in my city now your city may already be hosting so you can just join that person and what if you go to this event and you learn some go-to market strategy that 10x is your growth that might unlock funding or you might be talking to somebody and they say hey i'm a marketplace too i'm not a competitive marketplace your marketplace is for used cars my marketplace is for hair stylists whatever your jam is whatever you're working on

SPEAKER_129: but they give you some technique that you didn't know about to increase your supply side or get more demand in your marketplace and you 10x your business i see this happen all the time and founders are like mutants right and i'm like professor x here i'm trying to put on cerebro and find all the founder mutants in the world and then have you get together and do your own little meetup and here's what you're not going to have to deal with you're not going to have to deal with a bunch of service providers trying to sell you software or services and you're not going to have to sit through a bunch of passive speakers you can listen to this week in startups and get the greatest speakers in the world on your own time and you're not going to have to pay for a ticket to a conference or get on a plane or fly somewhere no this is about having an intimate experience with five ten maybe two dozen other founders in your city please go to this week in startups.com meetups if you are a founder this is for founders by founders only if you are not a founder this event is not for you you can start your own meetup for lawyers accountants recruiters this is for founders by founders we vet everybody to make sure you're a founder and if you host it it's a non-commercial event our first founder friday will start on february 2nd so please mark your calendars and we're going to do these on a rolling basis you can join an existing meetup if it's already occurring in your city or you and uh one or two other founders

SPEAKER_90: can start your own we're using a wonderful piece of software that we've invested in called river you can sign up for a river account just by going to thisweekinstartups.com meetups we've already got hosts and attendees lined up in san francisco new york city toronto los angeles las vegas london and even in india so this is your chance to connect and if you didn't hear your city name you can start your city go to thisweekinstartups.com meetups