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SPEAKER_03: and use promo code Jason. Hey, everybody. Welcome to another episode of This Week in Startups It's Your Favorite Episode format, Ask Jason. But we've punched it up and we've made it twice as good because we brought back everybody's favorite early stage investor, Zach Kolias, who just tells it like it is. He's incredibly candid. He takes it to a level of candidness that maybe even is more candid than

SPEAKER_07: me. Welcome back to the pod, Zach. Good to be here, buddy. All right. So let's do it. We really want to help these founders. We want to give them really great feedback. And I want to go with this first question. It was number two on the list, but I thought this was a great question. My startup is

SPEAKER_09: a software consultancy that is trying to transition from a service-based organization to a product-based one. What are your thoughts on how to position ourselves to begin generating reoccurring

SPEAKER_07: revenue? What a great question because we see this all the time, right, Zach? Somebody's got a service business. They're making $500,000, a million, sometimes $5 billion a year. And no VC wants to invest in a service-based business. They don't grow. They grow slowly. So what is, what are some ideas you

SPEAKER_09: might have? I have my own, but I want to get your ideas first.

SPEAKER_12: The best thing about Silicon Valley these days is that there's just tremendous information and

SPEAKER_14: knowledge out there about how to solve every problem you possibly can imagine in startups. When we started, you were a few weeks before me, maybe a few years. But when we started, it was a little harder. You kind of had to figure it out on your own. But in this particular question, there's just been tremendous work done by Steve Blank, Eric Reese, and a bunch of other great folks. Lean Startups, Four Steps to the Epiphany, and there's a great book called Monetizing Innovation. And it's all about basically doing customer development, going out, talking to customers, figuring out what their pain is, and then figuring out what they're willing to pay for that pain.

SPEAKER_12: And the trick is, it's not so much building, it's asking the right questions to find the thing that they really want solved, and they're desperate to give you money for, and that you can actually solve for them. So the great thing about a services business is you're in there with those customers, you can ask them, Hey, what do you need me to fix? What software do you need? And find something

SPEAKER_14: that's not being solved right now and start building. This is such a great observation. If

SPEAKER_16: you're in a services business, you are servicing these customers already. So you already have

SPEAKER_07: the ability to do a listening lab to do a customer journey to sit there and just ask probing short questions like, show me how you do that. And then they say, Well, what do you want to see? And you say, Well, just walk me through it. And you give very like, broad, simple, empathetic questions. And you say, Well, what takes the most time? What takes the most time? And they'll tell you, and here's a super hack. There are some Swiss army knives tools in the world. And they were made in the 70s. One of them is called the spreadsheet. The other one is called email. And when people don't know what to do, they default to using email in a spreadsheet, email for communication, a spreadsheet for organizing stuff. So how many times do you talk to a salesperson say, Hey, we're who are our customers? And how much are they paying? And they're like, Okay, let me pull up that Excel or Google sheet. And you're like, Really, that's where you're keeping it. And it's like, Yeah. And then you're saying, Oh, okay. And where's the project out? And they're like, Okay, let me pull up that email. And it's like, Okay, you're doing project management by email. And you're doing CRM and your sales funnel in a Google sheet, whatever's in that Google sheet will beach unless it's a model,

SPEAKER_22: like an actual financial model does not belong in Excel. But people use it for their to do lists. And then

SPEAKER_07: by magic, people made a to do list. And then they made project management software like Asana. So if you're sitting there, just a quick way is to just look in their goddamn email box and look at their list of spreadsheets that they open last 10 spreadsheets, it might tell you the story you're looking for, Santosh. And I think your points act about what is painful. And then what would they pay to relieve that pain? Yes. So so critical. Because it's sometimes people have things that take time. But they actually don't want to avoid that pain. I'll give a silly example. But when we worked in

SPEAKER_20: offices, people would say like a box, it was like a room for walls. And you go there, and you would do work in it. What is to other people? Yeah, it's really weird. No, imagine like, when to another kitchen, imagine you went to like a kitchen design just for us to do work in. That's called an office.

SPEAKER_35: Anyway, whoa, people use horses back then. Yeah, yeah, you know, they had like a horse carriage next

SPEAKER_20: to the kitchen. But people used to say, I want to get a cup of coffee. And they'd say, Okay, well,

SPEAKER_07: there's coffee right there. It's free. And then people say, You know what, that coffee is free. I'd like to go pay $4 for a coffee and take 30 minutes to get it. And you'd be like, Wait a second, we have this beautiful one touch machine. But you want to spend $4 of your own money when you could have it for free. And you want to waste 30 minutes. And it's like, Nope, they what they really want to

SPEAKER_03: do is get the frack out of this office for 30 minutes, and get some fresh air, and maybe socialize and see other humans. So what that $4 represented was a break, they wanted to take a break. And they wanted to go for a walk. So adult, sometimes people would not, they were paying for that service, they were paying to not drink the coffee in the office and to get out of the office. So you just got to remember, sometimes the incentives might not be what they seem, they might be saying they're going to get coffee. But what they might be doing is something else. So be just be careful that you'll know if they'll pay for it when you actually get their credit card, right. And that is the moment of truth. Alright, let's take another question. This one is from Leah. And she says, I'm a co founder in South Africa, we have a lot of fans in South Africa. And we're a pre seed company gaining traction with our MVP. So to translate that pre seed is very early funding, let's call it under 250k MVP minimum viable product, the least amount of product you can build to accomplish the task. How do we calculate our valuation? Who do I speak to? Or is there a place I could go online in order to do this, right? So you just go to Zach's valuation calculator.com. And you just type in your age, your your birth date, your zodiac sign and then it tells you. I mean, let's be candid. How does one do an MVP level companies valuation in South Africa? As best as you can tell, how should Leah figure out what her

SPEAKER_14: valuation is? I think the most important thing to do is to realize that the startup valuation is a

SPEAKER_48: totally disconnected number from anything that you would think of as a normal business valuation. So like if you value a business on Wall Street, well, actually used to be when we value business on Wall Street, we would look at their revenue, cash flows, profitability, growth rates, and we would basically analyze the metrics of the business to figure out what it was worth sort of valuations have

SPEAKER_12: nothing to do with that whatsoever. The key to understanding the sort of valuation is that it is a question of the probability that you will get to be really, really, really big. So for instance, like when I invested in Cruise, like we thought that it could be a multi billion dollar business. And we thought at the time that there was maybe a 10% chance it would end up being a multi billion dollar business, give or take great founder, huge market, but it was really hard problem. And the valuation that came out for the Series A, that's after it had already gotten pretty far was a bit less than $100 million. And it's functionally based on that probability of achieving the size of the upside. So the real question you're going to have to figure out when you talk to investors is how big is the opportunity that you're looking at? And how much traction do you have? For instance, if your MVP is growing 100% a week, well, that's a lot of traction. And if you've done this before and sold the company for a billion dollars, well, there's a high probability, you'll probably be able to do it again. So you'd end up with a much higher valuation. Whereas if your MVP is growing 1% a month, and you've never done this before, much lower probability, and you'd end up with a lower valuation. What's the right number? The only way to figure this out, unlike Zach's magic valuation calculator, is to go talk to professional investors like Jason, and be like, Hey, I got this startup, what do you think it's worth, and they'll give you a number, and then talk to enough of them,

SPEAKER_52: and you'll end up with the proper valuation. Yeah. And so there, I agree with all of that. And just to build on it. It's an excellent answer. There is a historic range in your market.

SPEAKER_09: So in South Africa, I'm going to guess the valuation of somebody with an MVP who doesn't have any revenue, and maybe has a couple people using their product might be 234 million,

SPEAKER_07: that might be historically what's happened. So VCs know what's historically happened. And if you're in that zone of what's happened before in the last year or two, they will probably feel comfortable

SPEAKER_09: investing. And if it's outside of that, they might feel comfortable investing if they see other things. So what are those other things that could make them go for a higher valuation? So I'll build on this question and just say, Okay, how do people get outlier valuations or high valuations? Because I

SPEAKER_07: think it's kind of implied founders want to get a good valuation. Valuation is largely a function of the competition for the shares in your company. It's a marketplace, it's capitalism, it's a free market, you go meet with 150, you email 150 investors, you get 30 meetings. And of those 30 meetings,

SPEAKER_03: let's just say, one out of four, eight, decide to do a second meeting with you. And they start talking about valuation. If you can get two or three of them put a term sheet in now you've got a market for your shares in your company. And you can say, Listen, we got three or four term sheets, here's the terms we're looking for. And those terms could be 10% more than the highest valuation, and you might actually be able to work a marketplace. The problem is, founders get an indication that one investor likes them has taken a second meeting and says they're going to do a term sheet and they stop working on the fundraising process. Because 99% of founders would rather build than raise money. Then there are some unique set of founders who are obsessed with their valuations, obsessed with raising money. And that can be a negative signal, or it can be a really superpower, depending on how much you put it to use, and they optimize for a higher valuation, and they get it. And so if valuation is a function of competition, you need to have people competing, not one one is not a competition. One is you're going to be dominated. But when you get to three term sheets, I'd say you've got competition for your shares. And then what determines that competition? Well, having three people who want the same thing. It's not magic here. There's one of this item left. And there's a competition for it on

SPEAKER_07: the margin, your track record can increase your valuation significantly. If you've taken a company public if you sold a company, if you failed, but did a notable company or one that was loved otherwise, you could get a much higher valuation 2345 times higher than what would be market. And if you have customers who love you and your growth rate is going well, that could also goose your valuation, anything else you can think of that I didn't mention, that could increase your valuation and create an outlier fundraising because I'm building on this question here of how to get like a great

SPEAKER_57: valuation. So let's I'm adding a question, how do you get a great valuation, a high end valuation,

SPEAKER_12: a top 20% valuation? I mean, the biggest crazy outliers tend to be companies that get press

SPEAKER_14: before they get capital. So like if you look at, for instance, clubhouse, recent crazy valuation that everyone got excited about, you know, before they had even raised that round that $100 million round, they were getting tons of press and tons of hype and the internet was

SPEAKER_48: going crazy about them. So whenever you can generate that validation as a result of either PR or people tweeting and writing about your product, that can lead to real outlier valuation.

SPEAKER_61: Wow, such a great observation. Also, if you have a waiting list for your product,

SPEAKER_07: that does create a similar impact, which is buzz, we can put this all under buzz. And the buzz here would be either you're on the waitlist, or somebody notable is using the product. And remember, clubhouse is still in private beta, I think you still have to be invited to it superhuman, you still have to be invited to it. Both of those got really great valuations. And they had

SPEAKER_09: influencers on the platform before it. We were lucky enough to be investors in superhuman, but not clubhouse. So I think we I think we we nailed that question. We really

SPEAKER_65: crushed it, bro. I'm giving us a lot of credit on that. Do you ever wish you invested early in some

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SPEAKER_09: slash twist. Here we go. Some live questions are coming in. Jordan BMX on Twitter asked what month

SPEAKER_07: over month growth usage are angels looking for when investing in a startup that does not have the ideal looking founders? Okay, I'm not sure what ideal looking founders is, but I'm going to guess you mean underrepresented founders, or maybe older founders or maybe founders from middle America,

SPEAKER_03: but not Stanford bros, or people who come out of Google or Facebook as alumni. So what month over

SPEAKER_07: month growth or usage are people looking for an early stage? We can open it up from angels to also seed. What kind of growth would you be looking for week over week month over month? And duration

SPEAKER_12: will make it really specific. First of all, I would say I love founders that don't look like the

SPEAKER_14: Stanford sort of like classic sort of founders, because they tend to want it more. They work harder

SPEAKER_12: and they're a little less presumptuous about how they approach the process. So like maybe yeah,

SPEAKER_14: yeah, I'm happy to pay a higher valuation. You know, for what I think of as great founders, my the founders that I'm, you know, it's all about how hard you work and how much you want it. And often when you don't come from having success, like success handed to you on a plate by your parents, you want it more. So those those folks are the ones I love. But generally, you know, we're looking

SPEAKER_12: minimum at, you know, 10 to 15% a month would be sort of like a low growth rate. And, you know, 20 plus,

SPEAKER_14: we start to get excited. And, you know, I like for instance, one of the companies I invested in mud water is a mushroom tea company, invested in, in them when it was, you know, $20,000 a month in

SPEAKER_12: revenue, but it was going 100% a month. And so when you look at 100% a month, I went into I don't know anything about mushroom tea. I knew the founders, but 100% a month. I'm like, I'm in. Done.

SPEAKER_03: Absolutely. How could you not be in when you see 100% growth a month, we actually will look at weekly, monthly, quarterly growth at launch accelerator when we're accepting companies. And we like to look at all of those. And we know it's going to be spiky, we know there's going to be up and downs for founders. So just to put that out there, we would look at a blended week over week for a consumer company at 5% a week. 5% a week is more than 20% a month. So maybe it's 25% a month for low growth for a very nascent product. So if you had 1000 people this month, or 2000 people this month, or this week, can you get it to? Can you add 50 people next week? Can you add it to or 300 people a month? That means there's something going on here because you also are losing customers who are disinterested or we're not an ideal customer. So net net, it might even be a higher percentage growth of new customers because you do have people churning and for a marketplace or a DTC product or SAS. Yeah, you definitely want to see 10% minimum month over month and founders work on everything I find but growth. They find everything they can do but grow. They'll add the 17th feature that nobody asked for. They'll go speak at seven conferences, they will start their own rolling fund on their side, they'll do a podcast, they'll do anything but grow the core business. And I even fall prey to this in my career, and I've gotten laser focused at launch, at just telling people, I want to see things grow 10% a month. If we're not growing 10% a month on something, I want to know why we're still doing it. Right? So a founder university or the accelerator is not growing every year, every month, every quarter, why are we doing it? And it's like, you know what, that kind of created a north star for us inside of our own organization. And the syndicate as an example, has been growing 100 users a week, weekend and week out, to the point at which I told people, we don't need to grow the syndicate anymore. Let it grow organically. What else can we grow? Because all of our deals are now we're two or three x oversubscribed. We'll take another question from the live audience since they're here. George F clay on YouTube asked

SPEAKER_07: if you can afford to bootstrap? Is it always better to use your own money? Yes or no.

SPEAKER_12: So I love how you let me take the easy low hanging first shot at it so that you like, you give yourself a higher bar, you have to like answer them. I mean, I could if you want,

SPEAKER_82: I'll take anytime you want me to say take it first, just say take it first, you take that.

SPEAKER_12: No, I like it's easier to go first, because you know, I can just give the obvious answers,

SPEAKER_14: you have to like, come up with the complicated ones. I mean, look, I think the secret to bootstrapping is it's really a question of two things. One, if you have the resources to bootstrap, and you're in the discovery stage, you're still figuring things out, you haven't yet hit the accelerator, and you have the ability to like explore with your own money, it's always better. Because whenever you have to deal with idiot investors like me, it's a waste of your time and your energy and your focus, you should spend that on exploring the space and figuring out where the opportunity is. The more you can focus on being close to the metal, which is your customers and product,

SPEAKER_12: the better you're going to get to the right answer. Once you get to the acceleration part of the business, you found the gold mine, there's gold pouring out of the ground, and you just got to dig faster, you got to build a railroad, you got to hire people. Well, now the resources required that bar becomes much higher. If you're rich, like Jason, you can afford to do it yourself, go for it. The longer you can not deal with idiots like me, the better. But at some point, it's time to hit the accelerator, it's time to ram that that throttle forward.

SPEAKER_14: And that's when really, that's when raising money starts to make a lot of sense.

SPEAKER_09: And you need only look at the people who have the resources to do this, Elon started SpaceX, and then funded Tesla himself before going and getting money. Evan Williams, after doing blogger funded Twitter, ODO, his podcasting platform that was way too early,

SPEAKER_86: but he was right, he just gave up to do Twitter. So if he had just done both simultaneously, he would

SPEAKER_07: have had two multi billion dollar 10s of billions of dollar companies. And he did media himself first, and then he brought in other investors. And I think Zach now that the amount of meetings and emails, as I've said over and over again, to do a proper fundraise, you know, you're talking about 10s of meetings and hundreds of emails or introductions. So hundreds of introductions, dozens of meetings, a handful of two or extra second and third meetings, I mean, all of that could be done in product discovery to dovetail with another question we got earlier, you could actually spend that 300 hours of a fundraising process and a fundraising process is probably 300 hours as best as I can tell those 300 hours. I mean, what if you spent them, you know, 100 of those hours on customer discovery,

SPEAKER_03: 100 of them on product and 100 of them on sales, I mean, your growth rate would be 20 30% and then people are going to throw money at you. So going to investors early, it almost universally

SPEAKER_07: results in Okay, come back to us when you have growth or come back to us when you have five customers. So you're kind of going to an actor and saying I want you to be in my movie. It's a science fiction movie. And they're like, Great, can I read the script? And you're like, Yeah, I'm going to have that next year. And they're like, Okay, you want to come back next year? Because why are we having lunch? And they're like, Well, I'm just really excited. It's like, do your work first, and then bring the script. In this case, the scripts the MVP. All right, another one from YouTube Enrique asks, What's your process like from first meeting to an investment decision? What a great

SPEAKER_88: question. Good, Zach. It's different every time. Sometimes I have invested five minutes into the

SPEAKER_12: first meeting. Sometimes I have the first meeting. And I'm like, this person's smart. I like what they're doing. But it's not quite at the proof point that I'm looking for. Let me try to be helpful. Let

SPEAKER_14: me introduce you to a customer. Let me introduce you to a partner. Let me try to be helpful. And then I try to hang around the rim, and watch as they progress and see them solve problems and learn from their their their path to basically create a line for me to invest in. And so it can be anywhere from, you know, five minutes to five years between the first meeting and getting to a yes.

SPEAKER_92: Fantastic answer. For me, I have a team now that does first meetings. And so

SPEAKER_07: I have removed myself from what we call the introductory call. And we call it an introductory call, because it's to introduce what you're doing to somebody in our firm and for to introduce our firm to you. So in the early stage, we have so many people coming at us that we do 50 introductory calls every week right now, we're trying to get that to 150 introductory calls means 20 minutes on a zoom, you tell us about your product, and one of our associates or researchers tells you about the firm asks basic questions, if they can't answer the questions, they will bring on a managing director like Jackie or Ashley to join the second call, and then I'll be the third call. If something is absolutely fantastic, and we have to move quick, we will short circuit that process and I will just jump

SPEAKER_03: on the call. So there have been times where, for example, rule off from Sequoia just sent me a company he's investing in. And he thought I would be creative to the success of the company if I was involved, I'm not sending them to an associate, and then making them meet a managing director and do it three calls, they were referred to me by a bestie. Or if you referred somebody, I would just get right on the call, especially if you were investing, so referred high quality deal flow, that's referred by people who we trust, I'll get right on the call. And then we make a very quick decision for the accelerator, which is, do we go to due diligence, and make an offer or not. And if we make that due diligence, decision, where we're going to spend an hour or two or three, really going in deeper and maybe talking to some customers, we're going to do the deal. Unless we discover something bad in due diligence. So that's our process. I would say, on average, three meetings with our team two or three meetings, and then we make a decision, what did somebody direct with me, I'll make a decision like you do,

SPEAKER_93: Zach, very quickly. Because that's the nature of the time we're living in. Again, the market determines

SPEAKER_78: a lot of what we do, right, Zach, like if the train is leaving the station, and like, somebody just told us like, that's a really great train, like we're chasing the caboose and trying to jump on and throw

SPEAKER_96: 50k in the back of the in the caboose. We're like running with a bag. We got a duffel. And we're just trying to throw that duffel on the back of the money train. Okay, next question is,

SPEAKER_97: I can see that in my brain. It's exactly what it's just about me and Zach running with our duffels.

SPEAKER_66: Back in 2019, our team at launch was was pretty small, I'll be totally honest. And when we were having trouble finding founders to attend the launch festival Sydney fivers networks of freelancers was there to help us so quickly, we literally hire researchers on Fiverr, I kid you not. And they filled the top of our funnel so quickly with 1000s of founders who were based in Australia, we emailed them we offer them a free ticket to our event and our biggest problem in running that million dollar event was finding all the great founders and Fiverr did it for us. And it made the event a huge success. So thank you to Fiverr for helping me Fiverr business brings you the team you need with freelance talent, you can count on a dedicated business success manager and collaboration tools and so much more all from one intuitive dashboard. Speaking of teams, did you catch Fiverr's new commercial during the big game? I bet you did Fiverr ran a Super Bowl ad we love Fiverr at launch from hiring researchers for our events to designers for our portfolio companies pitch decks. Fiverr has been there to supply experience talent quickly stop wasting time researching and searching for talent just leave it to Fiverr business their team of dedicated business success managers are going to help match you with the talent you need for your team. There's no more guessing there's no more wasting time you're gonna get one year free and save 10% on your purchase of Fiverr business with the promo code Jason. That's pretty easy to remember. So I want you to go to Fiverr.com slash business F I V E R R.com slash business Fiverr with two R's.com slash business and don't forget to use the promo code Jason. So it's free for the first year and you get 10% off your purchase.

SPEAKER_03: Am I allowed this is a curve than did it on YouTube? Am I allowed to call successful Kickstarter

SPEAKER_106: campaign as a product validation test? Obviously, yes, of course. I mean, it's one of the best tests. Come on. Yeah, people are giving you money. You must be giving you money for the promise of a product

SPEAKER_20: that you're gonna make in the future. Oh my Lord, that is some Huck Finn. Right there, man is like, hey, you want to paint this fence? It's really a lot of fun to paint this fence. If you give me your apple, I'll let you paint my foot. Is that Huck Finn or Tom Sawyer?

SPEAKER_110: I'm going to get canceled. You've been using that reference. I think it was Tom Sawyer.

SPEAKER_07: Anyway, there was a kid story about a guy who had to paint a fence. Kid had to paint a fence.

SPEAKER_87: Oh, no, come on. No, no, no. It's Mark Twain. It's Mark Twain. It's a great,

David Friedberg: great seminal piece of literature.

SPEAKER_116: Yeah, it's like, I really get frustrated about that. The canceling of literature that's written a long time ago.

David Friedberg: Samuel Clemens, right? This is a, yeah, this is a real name. Yeah, real name. Samuel Clemens. Mark Twain.

SPEAKER_57: Mark Twain. Mark Twain.

SPEAKER_88: Amazing, amazing writer.

SPEAKER_57: Past in 1910. But the adventures of Tom Sawyer are pretty notable work. But I do think you'll get canceled.

SPEAKER_120: So be careful, folks out there. People can cancel me all they want.

SPEAKER_48: Yes. I embrace my likelihood of being canceled by people who disagree with me because,

SPEAKER_14: I mean, you can't be a great investor unless you basically are an iconoclast. And you can't be an iconoclast if you're afraid of being canceled by all of these people who literally want to impress

SPEAKER_38: their ideas on the world. 100%. 100%. Own it on YouTube. As a young and growing startup, we have a lot of product improvements that we believe are inevitable. Should we continue to

SPEAKER_03: put off these inevitable tweaks until it's an immediate priority? Bit of a convoluted question.

SPEAKER_55: It's a young and growing startup. We have a list of product improvements that we believe are

SPEAKER_38: inevitable. Okay? Should we continue to put off these inevitable tweaks until it is an immediate

SPEAKER_03: priority? Okay, so let's just interpret this as how do you prioritize your roadmap? What's a what's a

SPEAKER_127: good way to think about your roadmap and to prioritize what's going to be done next?

SPEAKER_14: So I think there's two questions they're asking here. One is, should you delay query building features that you know you need to build in order to deal with scale? And the answer to that goes back to what you said earlier, which is get the growth, focus on the

SPEAKER_12: growth. And then once you have the growth and things start breaking, then you can fix the problems that are preventing you from breaking, you can fix the roadblocks that are constraining your growth. But the only thing as far as I'm concerned, you should spend time and energy on is

SPEAKER_48: what features and functionality will improve growth? If it improves growth, build it.

SPEAKER_92: And in fact, if a startup is collapsing under its own popularity,

SPEAKER_07: fundraising, I mean, instead of just me and Zach chasing the train and trying to throw duffel bags on you're gonna have 50 people behind you. So when Twitter had the fail, well, people were like, what, it's crashing from that much usage? Oh, YouTube's crashing, we need to invest in that

SPEAKER_20: company. If company is getting shut down, because too many people are in line, and want to buy their

SPEAKER_07: hamburgers, like we want to invest in that hamburger joint. Duh. In terms of prioritizing the rest of your features, I just love what Des trainer says, you know, you can make an XY axis. And here are features that people use every day. And here's how many people use that feature. So here's the frequency of using the feature. And here's what percentage of your users use it. So if we were talking about

SPEAKER_03: slack, on slack, every day, somebody chats, right, so they compose messages, and they read messages. So making it really readable, the design, and making it really easy to compose. Well, if there's improvements to be made in the compose window, make those. Now, there might be a feature like, I don't know, cross functionality between two organizations. Okay, what percentage of people use that? Well, that could be your high growth feature in the future. So if you think everybody's going to eventually be using that every day, then you would want to put a lot of time into it. And something like reminders, or a to do list or piping in the weather, it might be 10% of your users use it 10% of the time, it's not a priority. This is why Zuckerberg is such a genius, he puts so much time into the feed, and making sure your feed was so addicting, whether it was on Instagram, or on Facebook, that you couldn't help but open up those apps. And he probably did that so well, that, you know, he made people addicted to social media, right, social media actually took that to heart, everybody

SPEAKER_07: uses their default feed so often, we should just keep making it 1% better. And something that gets 1% better every day gets better every 72 days. So that's just 1% better. This is the magic of

SPEAKER_09: compounding interests. Jake asks, I recently graduated from college and moved to a mini tech hub,

SPEAKER_20: I think Miami, Austin, Atlanta, Jake, does anybody care where you actually are? Okay. He's trying to

SPEAKER_07: obscure if I were is, I didn't graduate with a tech specific degree. But I want to break into the startup industry any tips on growing my personal tech network locally? How did you guys break in?

SPEAKER_12: Huh, great question, Jake, go ahead, you take it first snack. So I first moved to San Francisco in 2005.

SPEAKER_14: I didn't know anyone. And the first thing I did is I started crashing every conference I could find. So I went to web to Oh, I took the badge lanyard they had without a badge in it, I just put it in my suit pocket. So I had a neck thing around my neck, but I actually had no badge. And then I just walked around meeting people. And I did it every single conference anywhere I could, and just trying to make friends. And the thing the secrets of Silicon Valley, and I think generally in tech, is that you never know who the next Mark Zuckerberg is going to be. So like when I first moved here, I was playing

SPEAKER_12: poker with the founders of Uber and Dropbox, Airbnb, and they were nobody who's just like me. And if you do favors for those people, and you're like, Hey, you guys should hire this guy, he's great. Or here's a customer for you. If you do favors, and you don't ask for things, you just give freely give pretty soon, you'll find you've done a lot of favors for a lot of people who end up being pretty amazing. And those favors come back. And so just it's a it's a beautiful ecosystem of do favors help people and then lots of value will circle back to you relatively quickly. Well, I don't

SPEAKER_07: know about quickly, but it will come back. It'll it'll happen quicker than you think. I too would play cards with, you know, my friend who had just left AOL where he was managing ICQ's demise. His name was Chamath. And my other friend was starting a company called Genie. He had worked at PayPal, and that was David Sachs. And, you know, that is what happens. You just be a friend to people, you be of service, you help people out, and you build and build and build. And, you know, speaking of Travis from Uber, somebody said to Travis, and I was overhearing this, like you got lucky, you know, just putting the, you know, 25k into Uber, whatever it was, and Travis stopped him and said, No, Jason, making all that money off of Uber was the culmination of how helpful Jason's been to be for a decade. And he deserves more than every penny he's made in that investment. Because you don't

SPEAKER_03: know that Jason helped me on my comp my first company, my second company, and has been friends with me for over a decade. And that's the long game you're playing as a young person, play the long game. And, you know, for every anytime you can help somebody help them. And don't get bitter. When you watch everybody around you get successful study why they got successful, and then help them even more and, and then figure out how to get on cap tables. The way you get rich in this world is by I think, as much as I can tell, either you get lucky, which means you were born into money or won the lottery. Putting that aside, since those are not in your control. The other three ways is by being the creator of a company, a capital allocator, or a virtuoso, which I would say is just somebody who's so good at something that they get overpaid for it. And if you look, Zach and I are not virtuosos.

SPEAKER_146: Well, we're capital allocators.

SPEAKER_148: Speak to yourself.

SPEAKER_96: What are you a virtuoso? Are you asking questions, answering questions on this? You are actually.

SPEAKER_12: So maybe you're a virtuoso advice, but I think you're virtuoso. I was gonna like, I don't know, you're the hardest for command and show business. I don't know anyone who basically has made as much money and it's as much success as you are, that's still cranking away, like building, building,

SPEAKER_94: building. I like to build I like to work hard. And you know what, it just happens to be that my skills,

SPEAKER_152: my superpower talking is great talker. That's it. I'm my superpower is talking. When I was a kid,

SPEAKER_94: they told me to shut up. They said, sit down, shut up. And now people are like, stand up and do a keynote at my event. Can you bring the besties with you? And by the way, folks, just as a side note, I've been busting my ass on this podcast for 1200 episodes. And when you come to me and say you love my podcast, I assume you're talking about this week at startups, not all in. All right. The top 10 tech podcast, just because I have number one and number 10 doesn't mean that number 10 is not my life's work. I know how people ask me, can I come on your pod? I'm like, yeah, great. And they're like, Oh, I want it to be on all in not this week and startups. I'm like, God damn it. There's no guests

SPEAKER_77: on all in. So get that out of your mind. It's never gonna go on this week and serves any day of

SPEAKER_155: the week. I love it there. I feel at home. Thank you. Happy place. You don't want to talk about

SPEAKER_38: politics or Trump or the insurrection or vaccines. Terry asks, what is the single most detrimental thing to a startup, lack of focus, lack of skill, inability to recruit talent, or something else? Wow. What a well structured question, Terry, you're forcing us to pick one of these three or come up with our own focus skills or inability to recruit talent. So lack of focus, lack of skills, inability to recruit talent or something else. Wow. What kills startups most often? What's the most detrimental thing?

SPEAKER_12: Hmm. Hmm. What do you think? It's not listening. The trick is to be a good listener. If you go to your customers, you ask what they want, they will tell you. And all you got to do is keep asking them until they tell you something that you actually can build. And then when it starts working, you listen to them, they tell you what's broken about it, you fix it. And when your employees get mad at you because you're not doing something right, you fix it. And when your investors say, hey, we need to do this, you listen, you fix it. If you can just listen, you will succeed. Such a great answer. I'm going to say for me,

SPEAKER_07: focus is the killer of existing startups. So I'm taking this from the vantage point of the startup is started, I'm assuming the startup is started and has some level of basic product market fit. So I think Zach's question is pre product market fit. So I think that's the right answer. But I think the right answer for a startup that has product market fit after doing that listening sets very, very hard for founders to do sometimes is focus. I gotta tell you so many times I see a startup hit 100,000 in revenue. And they're like, What other bullshit can I do other than get it, then add a zero. And then

SPEAKER_20: they get to a million in revenue. And they do the same thing. They take that out. I don't want to curse. They do the same fracking thing, they get to a million. And they're like, What can I do that isn't adding a zero to my revenue. And then they get to 10 million, like we got to 10 million, we're thinking about building a hardware product. I'm like, Oh, my God, you built software to 10 million. It's printing money, you have $5 million in profits. Now you want to do hardware? Is there anybody else who wants this goddamn software? Can we get to 100 million? Because then if we do, you're billionaires, and I just made 100 million, and we're good. But you want to divert all this

SPEAKER_94: into another product, please, for the love of God, if you drill and you hit oil, keep drilling, do not dismantle the rig. This is a message to founders. It's so hard to find that oil. It's so hard to strike oil that when you do strike it, you have an obligation to all the other founders who came up with no oil to keep drilling. Because when you lift up your drill and go try to find more oil, there's seven other founders who saw you hit oil, and they're going to drill your well, and they're going to drink your milkshake. They drink it up.

SPEAKER_174: David, it's so true. It's so painfully true. It's what is it about this ADD ADHD that we all have,

SPEAKER_03: that we hit some success and we stop. I hit success in early stage stardom. You know what I did?

SPEAKER_78: I went from 10 a year to 20 a year to 30 a year to 50 a year and now 100 investments a year. I'll did I did more investments in the last year than I did in my first six years of investing, put more

SPEAKER_94: capital work and did more deals. Next year, I want to do more deals than I did this year. It's pretty simple, folks, you figure out something you're great at, you figure out something the world needs, and you just do more of it. Tesla has made the model s that are they made the roadster the s the x,

SPEAKER_03: the three and then I think the culmination of all their work is this masterpiece the why that if you buy the model why you cannot cannot drive any other car I don't think ever again. Matt road on YouTube asks with 15 plus angel investments through syndicates, what is the best way to start getting

SPEAKER_180: your own deal flow? Hmm? Someone with a non operator background? Are you not taking investments you have done? But face reader, you must training you must complete. All right, Zach, what do you think?

SPEAKER_179: Got the 15 investments through syndicates and he wants to get on deal flow. It's a good

SPEAKER_07: I like it. I like what you're doing. You built a foundation of 15 investments. You got your logo page. Now what?

SPEAKER_12: I think it goes back to my advice generally for successes in tech. You got to do favors. You got to be useful. If you're like a day, cash is commodity. So like just being one more idiot with a checkbook showing up asking to get on the cap table does not get you on a cap table. You got to be the guy who they want on the cap table because they think you're going to make their company more valuable above and beyond your money. And so the only way to get that is to have proven that you're useful. The only way to prove that you're useful is to be useful. If you're constantly going out and being helpful, people are gonna be like, Ooh, that that person's awesome. I want her on my cap table.

SPEAKER_186: She's she's crushing these other poor 100%. So said another way, look at those 15 angel investments and

SPEAKER_07: say what have you done for them lately? And email every single founder of those companies. After you've

SPEAKER_03: read their latest update after you use their product, and say, and looked at their competitors products and spend an hour on each that research and say, Hey, would love to catch up on a quick zoom or just wanted to let you know, I noticed that you're hiring for these three positions. And I saw these other job descriptions of your competitors, or I saw this other job description. And I saw this other person on Twitter, I wonder if they might be a good candidate, right? You're just trying to look at what problems they have, and how you can help. And that is how you can be most helpful. And there's a million ways to be helpful. I mean, even just taking a founder to dinner, going

SPEAKER_78: for a hike with them and talking and being there to be a warm ear for them to share with, and feel heard. It's a very lonely job sometimes running these companies, correct?

SPEAKER_14: Yeah, so I'll give you another example. I'm a I'm an investor in a new Gen Z dating app called snack. It's like tick tock for dating. And one had one of those. Yeah.

SPEAKER_12: One of the investors through my syndicate is literally spanning it out to all of her friends. And like, it's like turning to be a huge generator of new users for sec. And Zach is growing like crazy. But this woman is like adding a lot of value. And I'm going to make sure the next time that basically

SPEAKER_189: she's I get a snack founder, can I get an intro snack founder, I'd like to get in on that.

SPEAKER_190: And it's Kim Kaplan. She was one of the founders of plenty of fish, which they sold for like,

SPEAKER_09: Oh, yeah, of course. I remember the plenty of fish guy. He just made this incredible simple $30 a month or 20 bucks a month thing. So go ahead and Nick set up a meeting for me with Kimberly and let's see if I can chase that train and throw $100 $100,000 into the booth. Thank you. All right,

SPEAKER_92: we're gonna end on this one clubhouse or Twitter spaces. Will Twitter kill substack with super follows? Wow, such a great question. Twitter spaces has the social network already built out. And it's a

SPEAKER_07: single app. And there are some really unique things you can do when you create a space like share tweets and refer to those tweets and make them the discussion points. So

SPEAKER_09: we I've done two or three of these, and I'm getting just as many people on my Twitter spaces in week one of using it as I am in month, I don't know, 6789 of clubhouse. So that is not a good indicator for clubhouse. I think Twitter spaces, if they stay focused, will have the majority of minutes listened to. That being said, I think clubhouse has a chance at being a 10 billion or $50 billion company, because they will be the dedicated space to it. So it could be similar to

SPEAKER_07: what happened with Snapchat and Instagram and Facebook, where Facebook, where Twitter runs Facebook and Instagram ran away with the number of stories. But Snapchat has been worth a lot of money. So a lot of times these things don't kill each other, they build a category lift didn't kill Uber, it only made Uber better. Door dash, and Uber Eats and Postmates didn't kill each other, they just trained everybody to order from home. And then the super follow is going to be the game changer of game changer.

SPEAKER_03: The ability to follow somebody you love on Twitter and give them five bucks a month to get exclusive exclusive content and spaces is going to be I think it's going to make Twitter grow 5x. I'll be totally honest. I don't know if you saw the super follow template. But it's gorgeous and something happened at Twitter and I did dm jack about it today and gave him a couple compliments. They got product velocity back. Whoever's doing over there is got the product velocity back. And I am

SPEAKER_114: here for it. Any closing thoughts on that? No, it's great. Great to see the clown car back on the race

SPEAKER_203: course. Famously, Zuckerberg called them the clown car. Yes. The cloud car fell into a gold mine. Oh, my God, he called everyone. He was a jack and biz clowns. Oh, my God. Zuckerberg is savage.

SPEAKER_114: He's savage. But no, no, look, it's it's great to see innovation. We've got a long way to go. It's great to see people trying new things. It's great to see new ideas. I'm excited for the super follow for charity. Like, because that would be that would be something that I would do be a great way to filter basically all these bots on there that are sorry, these effing bots on there. They just drive

SPEAKER_12: me nuts. Put in unnecessary censorship, Nick. Beep. I really just want like a button or any non real name user. Just I never see them again. Like they can be on there. I don't care. You can have

SPEAKER_214: all the bots. I'm going to charge a dollar and I'm going to give it all to charity. That's what

SPEAKER_11: I'm going to do. Yeah. Yeah. It all goes to charity. Can't wait. Yeah. All right, brother. This has been amazing. Thank you so much. And we'll see you all next time on this week's service. Bye. Bye.