SPEAKER_00: Okay, we're back today with another episode of Angel. This is Episode nine of 10. And the series has been absolutely amazing. Today, Molly interviews Lori Yoler of Playground VC. Lori has been working in startups and venture capital since 1993. And she was actually a founding board member investor in Tesla. It's an awesome interview. And a quick announcement. This will be Molly's final interview. Sadly, here on this week in startup, she's decided to move on from the show, pursue some other ventures, and we wish her well. She was such an amazing teammate. And it was awesome to have her on here for just over a year. Go follow Molly. She's Molly Wood on Twitter, M O L L Y W O O D to see what she does next. We're

Chamath Palihapitiya: really excited for her future. And it's going to be a great episode. Stick with us.

SPEAKER_02: This week in startups is brought to you by LinkedIn jobs. A business is only as strong as its people and every hire matters. Post your first job for free at linkedin.com slash angel. Prenuvo catch health conditions before they become crises with the Prenuvo full body MRI scan. Get $300 off at prenuvo.com slash twist. And the Microsoft for startups founders hub helps all founders build a better startup at a lower cost from day one. Startups get up to $150,000 in Azure credits, access to open AI APIs, free dev tools like GitHub, technical advisory, access to mentors and experts, and so much more. There is no funding requirement, and it only takes minutes to join. Sign up today at aka.ms slash this week in startups.

SPEAKER_04: Lori Oller is a GP at playground global where she's been investing since 2019

Jason Calacanis: and has been investing in early stage ventures since 2001 and has been part of the founding team at six companies, including Tesla. So that makes you officially not only awesome and a person with a fascinating backstory, but a three cycle investor. Welcome to Angel. Thank you so much for having me, Molly. Um, tell me how, I guess I'll just go to the beginning of this amazing career. How did you arrive in venture?

SPEAKER_09: So it was interesting. Um, I guess I'll give some context on, uh, how it all came

SPEAKER_12: about. Um, I, uh, after college, I actually went into AI was, uh, was diving into technology and I always had a fascination for technology. I programmed robots as a kid. And then when I was coming out of school, AI was the frothy thing back then, uh, the first generation of AI, um, the more deterministic rather than machine learning version. Um, and then I ended up at Visa and got really excited about security and

SPEAKER_14: fraud detection and all that good stuff at Visa. And then I ended up at Sun Microsystems in the nineties, which was the place to be. Everybody was talking about trading

SPEAKER_12: stocks in the hallway. My first week at work, somebody showed me mosaic and told me this thing called the internet was going to go crazy. And I'd played with ARPANET and sent messages in university, but it was the place to be. And every startup wanted to be part of Sun. And so, um, I actually was doing a lot of public company investing and trading stock tips in the hallway. But then in, uh, 1996 Sun sent me to Europe to help grow our business in Europe, middle East and Africa. And I started meeting with all of these startups. And the funny thing is the, um, index ventures was starting in my building in Geneva, Switzerland, where I was based. So I started hanging out with Neil Reimer and, and David Reimer and Giuseppe Zocco in the office. And we were talking all about venture investing. And I actually became one of their first LPs and sat in on their partner meetings on Monday and then,

SPEAKER_14: uh, started meeting these really great technology companies all through Europe and started making

SPEAKER_12: angel investments in them actually. And I, and I looked, my first investment was in 1996, uh, in a security company called Brokapp in Germany. Wow.

SPEAKER_19: So it was actually, I had to look back because I knew you were going to ask this question. I had to look back and think, okay, when was my first venture investment?

Jason Calacanis: That is incredible though. You have just been like a, a, a bowling ball through the per through the exact, you know, it's like every book that's written about Silicon Valley and investing history

SPEAKER_14: has L'Oreal or somewhere in there. It was incredible. It was just, I mean, total happenstance that we happened to rent a building and then the Reimer brothers decide to

SPEAKER_28: start index ventures on the first floor. And I was on the second and third floor and give us that,

SPEAKER_26: give us that background for people who don't know the history of index ventures and the Reimer brothers.

SPEAKER_14: You know, they started their dad, Jerry, uh, had been a very successful investor. And so, uh, his,

SPEAKER_12: his, uh, brother, his, his sons had, uh, become very excited about investing and they decided to create a firm because there were so few venture investors in Europe. And when I was over there for son, my job was, Java was very big. The internet was big. And so my job was to go find every startup in Europe and ensure that they were developing on son and to encourage any team that was developing in Java

SPEAKER_19: to do so. And, but I, as I went around meeting all these companies, they had brilliant engineers and great products, but no venture funding. You know, back then there were a few venture firms in the UK, there was one or two in Germany, but that was it. And so, uh, index was started to look across

SPEAKER_12: Europe, both in, uh, life sciences and, uh, and in, uh, technology and to be a strong European investor. So anyway, so got pulled in there and that was, you know, my first gig as an LP and I was an advisor to the fund.

SPEAKER_28: But at the same time, I was seeing all these really cool companies all over Europe and was investing. So amazing. And then when did you come back to the U S so came back to the U S in 99, I almost decided

SPEAKER_19: to stay, but I kept hearing about all these phenomenal companies that were happening in the U S I mean, you gotta think about the U S in 99. So I came back and I remember it was such a shock of re-entry because every taxi driver was asking for stock tips. Everyone was trading stock tips. All anyone was

SPEAKER_12: talking about in restaurants were stocks and private companies. And it was insane.

SPEAKER_19: Yeah. Um, and I came back with, I was actually going to stay in Europe, but I called back to headquarters to say, Hey, I think I'm going to stay in Europe. And they said, why? And I said,

SPEAKER_14: I'm kind of excited about this investing and venture thing. And I'm really having fun working with all these startups. And they said, awesome. You can come back and start some microsystems ventures, write us a business plan. We'll give you money and come back. So I came back in 90 to start some

SPEAKER_24: micro systems ventures. Wow. Okay. And then, all right, so there you are. It's 99 everything. And that, uh, you know, I, that is when I came to the Bay area as well, moved here in 99,

SPEAKER_04: had no clue that any of this was happening. It was obviously much more removed and, and remember that exact same phenomenon. I'm just being like, what jobs are falling out of trees and everybody's talking about equity. And it's just, it was a absolutely bananas time. And then all of a sudden it wasn't. Yes. Tell me about, tell me about what that was like. You had a little bit of a double

SPEAKER_14: re-entry shock. Yes. Well, I, you know, we had a good run for a little while, but everything was so frothy. I mean, I was getting thousands of business plans. It was crazy. I saw every startup. I saw every early dating app. I saw pets.com and went then I saw everything. And we made some good infrastructure

SPEAKER_47: investments, but I kept saying, gosh, compared to your, the valuations here are insane and it's so

SPEAKER_19: frothy. And I like to do decent amounts of due diligence. And this just feels like crazy town. And there were just too many companies being started. So in 2000, suddenly, you know, being the

SPEAKER_14: dot in.com was not necessarily where you want it to be. And we'd made some good investments. But then I said, wait a second, there was really good technology, especially in the infrastructure. So maybe I should change hats and look at acquiring companies. So move, made the move over to corporate

SPEAKER_19: development and started looking at all these companies that I had really appreciated that I either invested in or didn't invest in there and saw and really made the shift and said, okay, now's a good time where valuations have normalized. And so these companies, we can't invest in all of them. And if the venture market really isn't there, maybe it's the time to think about bringing these in and figuring out how to do M&A very successfully. So I just switched my hats and started looking at that market at the time, because we were still a beloved company back then. And there were still

SPEAKER_12: good investments to be made, but less of them. And it was kind of a crazy time of consolidation.

Jason Calacanis: So you have had so many I'm taking you through the bio because your LinkedIn is just, again, a romp through like every cool thing that you would ever want to do. So yeah. So then, so then what, like, where did you go from Sun? When did you because by 2001, you're back to it sounds

SPEAKER_14: like maybe investing in early stage ventures? Yes. And you know, I still had been investing in early stage ventures at Sun. But I thought, okay, if I believe in infrastructure, and I loved security,

SPEAKER_19: I thought, okay, maybe the appy part of the internet is going to have to shake out to a few, you know, and I thought there was an overreaction to companies like Amazon, you know, it's not like eCommerce is going away, but there were just too many eCommerce companies at the time. So I thought, okay, I really, really believe in network fundamentals. I really believe we still are going to need an internet to do all kinds of things. So maybe I'll go down a layer to the plumbing, or maybe down a few layers in the, in the stack. And I had had met Judy Estrin, who had been on the Sun board and had huge respect for her. She'd been CTO of Cisco, who was another company that did very well. And so we decided to create what would now be called a seed stage venture firm, although I don't even think the term existed back then to invest in

SPEAKER_12: internet infrastructure. And we ended up incubating some of the companies as well. And so we brought in all the smartest entrepreneurs that we knew and network scientists and physicists and started working on the biggest problems on the internet, what was going to break, and you know, security was a big piece. So we started out with the first, and this is all about market timing, the first 802

SPEAKER_19: 11, the access control company. Now no one in 2001 knew what 802 11 was, which is now known as Wi-Fi.

SPEAKER_39: I was gonna say, for you kids who still don't know, it's Wi-Fi. That's what we used to call it, for real.

SPEAKER_71: There was A, B, and C. So we, so we ended up creating the first 802 11 access control company, but

SPEAKER_19: no one knew what 802 11 was yet. And so it was really early. We then get this created the first anti DDoS

SPEAKER_28: company. No one knew what a distributed mile of service attack was.

SPEAKER_14: Um, now every wow. Yep. Yeah, there was. And then the third company was the first 10 gig NIC. That's network interface card. And our whole idea was someday people were going to stream video

SPEAKER_19: over the internet. I mean, you're geniuses. And so fortunately, Foundation Capital was an investor with a co-investor in that company. And they said, Lori, we really want you to meet these two guys we think are great. We've invested in them. You should hear, come meet Reed Hastings and Neil Hunt.

SPEAKER_14: They're doing this DVD service called Netflix. And someday they want to stream those videos

SPEAKER_78: into your home over the internet.

SPEAKER_83: Oh my gosh. I'm just going to tell everybody actually that Netflix exists because of you. That is my new narrative. No, no, no. And I will die on this hill.

SPEAKER_14: Not at all. But they gave us all the specifications of what they would do someday,

SPEAKER_19: but not in 2003. Wow. Right. I mean, that was in 2003 where some people were just starting. The blockbuster still existed and they were just starting to trust getting a DVD in the mail. So a lot of learnings about timing and

SPEAKER_12: how you can't be way too early before the customers are there. The other thing that happened during that

SPEAKER_14: time, and you know, we had the dot-com bust in 2000, but some people don't remember right after that in 2002, don't forget, we had the telecom bust where WorldCom went bust. Right. And we were down at the infrastructure layer and you had that next bust, which was, I don't know if you remember, there were oodles of internet service providers in 2000, but they didn't start

SPEAKER_19: disappearing until 2002, 2003, 2004. And so you had another downturn at the infrastructure layer then.

SPEAKER_00: If you're running a startup right now, this is the best possible time to find amazing talent. We all know what's going on. We all read the headlines, thousands, tens of thousands of incredibly talented tech workers. And they became free agents in 2022, and they are out there waiting for you. And you want to be certain you're getting the most qualified candidates. You need to use LinkedIn jobs. Here's why it's really simple. All the best people are on LinkedIn. Obviously they have 875 million users, almost a billion. They're going to get there very soon. And you've seen that purple hiring a frame around people's profile pictures that exists so that people know, Hey, you're looking for talent. So when you're interacting on LinkedIn, people are browsing your profile, you're posting comments, maybe you're posting some updates. Everybody knows, Hey, let me talk to Jake out. He's hiring. And here's the best part. If you go to linkedin.com slash angel, you'll get your first job posting for free. We've hired some of the best people on my team at launch and inside a LinkedIn, you're going to engage with better candidates faster. Let me say that again, better candidates faster. So go post your job for free at linkedin.com slash angel. That's linkedin.com slash angel to post your first job for free. Terms and conditions do apply.

SPEAKER_24: You know, that is such an important note too, because that is just as we were starting, we weren't

Jason Calacanis: anywhere near super widespread adoption of mobile phones, but we were getting closer and mobile technologies like the idea that the internet could be somewhat portable. Like you said, eight or two 11, it was called the telecom scratch, the biggest and fastest rise and fall in business

SPEAKER_28: history. Yes. Yeah. It was a tough time. It was a tough time in the valley. Super, super tough time

SPEAKER_19: because infrastructure used to be a safe place to go when apps, right. We used to have, you know, consumer and enterprise going like this and we'd have apps and infrastructure going like this, but to have both of them, uh, go through such a significant downturn within such a short time was

SPEAKER_28: pretty unprecedented. Yeah. Wow. Okay. So then what did you do? We just keep rolling and now I know

SPEAKER_83: there's another hat. I know another hat is involved. It just kept going. So I always joke the fourth packet

SPEAKER_14: design spin out company was a consumer company. So, uh, Martin ever heard was head of hardware at packet designs and Mark tarpening was head of software and I kind of did everything on the business and op side.

SPEAKER_19: So we used to have lunch together most days at packet design. And they came to me one day during lunch and said, okay, Lori, the service provider thing sucks. We have like customer concentration, like crazy, right? We have, you know, we have Juniper and Cisco are the only networking companies who are going to absorb what we're doing. And then the number of service providers we can sell to has gone from many to very, very, very, very, very few. You know, we were talking to AT&T back then and Verizon, and there were very few companies that we could sell to. And they said, we don't ever want to do this customer concentration thing again. And we also don't want to be too early. So we should do something

SPEAKER_14: in consumer again. And they had worked on the rocket ebook, which was by the way, the first

SPEAKER_19: ebook out there before the Kindle. And they said, we like consumer. And I said, okay, you know,

SPEAKER_12: we'll see what you guys, you know, come up with. And one day at lunch, Martin said, Hey,

SPEAKER_14: I just went out to try to buy a new car. And, you know, I want a really cool looking, sexy, high performance car. But did you look at the gas mileage lately on Lamborghinis and Ferraris and

SPEAKER_19: Porsches? And I'm like, I have two kids at home, Martin, I am not out looking for a Lamborghini, a Ferrari or a Porsche, but that's awesome that you're doing that. But I'm not really doing that.

SPEAKER_14: And he said, Don't you think there are people out there who want a really cool, sexy car, but also don't want to kill the planet and actually care about, you know, oil and gas usage?

SPEAKER_12: Yeah. And I said, um, you know, there probably are, let me go do some research. So I go spend a couple of weeks and learned all about the zero emissions mandate that had been

SPEAKER_19: crushed. Right. And it had gone in and out of fashion and started talking to all the consumers

SPEAKER_12: who I knew. And one of the guys at packet design had, uh, um, one of the GM, uh, one of the GM, uh, oh my goodness. I can't believe I'm blanking on the name. What was that one called? Uh,

SPEAKER_24: all I can think is the name of the video or the documentary who killed the electric car.

SPEAKER_19: Yeah. Here we'll look it up. He was leasing. Yeah. Thank you. I can't believe I'm forgetting. He was leasing one and we used to drive it around at lunch and I just thought it was so cool to drive. It had great torque. It was kind of cute. It was easy to get around. The EV one. EV one. Yes. I thought

SPEAKER_12: it was the EV one, but I'm thinking, I'm thinking EVs. I have EV on the brain. Yes. So he had a GM EV one and we'd all tried it out. And so anyway, Martin came one day and said, don't you think

SPEAKER_14: we could like take commodity batteries, you know, lithium ion batteries and replace the fuel tank in a

SPEAKER_119: car and make it electric, you know, just kind of like the EV one. And I said, yeah. Okay. And so

SPEAKER_19: he paid to get a prototype developed and he brought it to my home one weekend and I drove this thing for the weekend and I was in love. And I was like, okay, I didn't care about driving a Ferrari Lamborghini. Although by that point I had test driven a lot of cars, but I said, I love driving this car. I love this. I would not have gone for one of those muscle dude cars, but I would drive this. This is so much fun. I can't believe it. I'm not a car guy, but wow. Did this make me love cars? So anyway, I said, okay, now you have something, let's go. So we, the three of us went from packet design to getting a little tiny office and starting Tesla and late 2002, early 2003 timeframe. I was still trying to figure out how to have a great exit for our portfolio companies and packet design. So I said, you know, I can't, they actually asked me to join as CEO of Tesla. And I said, I can't give you all of my time, but I will be your first investor and be on the board. And they said, awesome. But of course I quickly had an office there and set up there and was spending most of my time there. And as things started winding down and packet design,

SPEAKER_12: I started spending all my time at Tesla and going through the fundraising shuffle during a fascinating

SPEAKER_102: time. I mean, I am just having a multiverse moment right now and imagining a parallel universe where

SPEAKER_126: you were the CEO of Tesla. I know. It was so funny. You don't have to go all the way down that road,

SPEAKER_128: but man, but man. Yeah. And so you were a board member for almost a decade, right? After that?

SPEAKER_122: Yeah. So I was on, I was officially on the board of directors, uh, until I want to say late 2008,

SPEAKER_19: but then I switched to the advisory board because at that point we had taken in an investment from Daimler and Toyota who wanted board seats. And Larry Sincini was helping us on the legal front. And he asked for a board seat and the board was getting huge. And so I, uh, at that point I said, Hey, I'll be on the board of advisors and still do everything that I'm doing for the company. But I don't really care if I'm on the board anymore because I'm still going to have all the conversations and access about strategy and be involved. So, uh, yeah, so I, but was still very, very involved

SPEAKER_00: through 2013. Listen, everybody. You've heard me talk about pre nouveau a ton of times on this week in startups and all in what is pre nouveau. It is a full body advanced MRI scan. Okay. They're able to detect cancerous tumors at stage one and about 500 other conditions takes less than 60 minutes. And unlike other screening mechanisms, pre nouveau does not use radiation or contrast, making it a safe preventative screening tool. It's proactive healthcare rather than reactive. Now you're saying, Jake, how, uh, why should I trust you on this? Cause I did it. And it was amazing. It's very easy. If you're a little claustrophobic, nothing to worry about. You can get a little pill. If you want to, you know, take a, uh, something to relax, or you just put on Netflix like I did and you watch glass onion. And all of a sudden the hour is over before you know it. And yeah, just in a couple of days, you're going to get back your results. They have given life-saving diagnoses to one in 20 people, 5%. Many of these diagnoses occur in asymptomatic patients. That means people who aren't showing anything. Okay. 95% of the cancers found are at stage one, where treatment is much easier and much more likely to be successful. Don't I know that two parents who are cancer survivors. I wish this technology had existed 20 years ago. You can get $300 off at P R E N U V O.com slash twist. If your city isn't on the list yet, the $300 credit will still apply for when pre nouveau opens in your areas. Get yourself taken care of today. That's

SPEAKER_137: $300 off your pre nouveau scan at pre nouveau.com slash twist. Wow. I mean, I have a million questions that I probably don't want to put you on the spot about, but, but man, it's like your origin story

Jason Calacanis: is every origin story when it comes to tech in the valley. And I, I wonder, like, before we talk about playground, which of course I want to do, what do you see commonalities? Like, as you look back at this string of origin stories, do you see commonalities in how bubbles are formed or how

SPEAKER_04: people act or how hard it is to fundraise for a truly revolutionary idea, like a whole new

SPEAKER_14: American car company? You know, having gone through all of those downturns and, you know, the trying to raise money for a car company when one had not gone public since Ford in, I think, 1954, it was impossible. I mean, having the door slammed in your face every day, metaphorically and having every VC

SPEAKER_144: say, that's Lori, that's so cute that you think you can do this. But you know, if you get out now,

SPEAKER_145: no one will ever know you were involved. So just get out quickly because this company is such a dog.

SPEAKER_14: I must have talked to 100 of my VC friends because I had met them all through both at Sun Microsystems and then at Packet Design we worked with a lot of VCs as well. And so I had all these guys who I

SPEAKER_95: really respected and respected their opinion and all of them turned me down and just said,

SPEAKER_149: this is the worst dog ever. And so persistence in all of this and being able to rationally say,

SPEAKER_14: for example, wait, our market timing, we're a little early here and the market timing's not great. Or, hey, we're in a frothy period doesn't mean we're all horrible humans or that this wasn't a good idea. It's either at the wrong time or at the wrong time in the cycle. And let's make sure and take the learnings. But if we truly believe in something, which we did with Tesla, I mean, I just thought this is going to, I mean, I really every day thought this is going to be the greatest product

SPEAKER_12: of all time, not just car of all time, but greatest product. And the innovations like being the first to do over the air updates. I mean, most car companies still don't do that. In fact, I'm trying to think of any that are still that are doing over the air updates. I mean,

SPEAKER_19: we invented that way back when the breakthroughs of coming up with a new architecture and a great product and a stellar team, you know, was amazing. And so certainly persistence and patience and not listening to all the naysayers, you want to listen to helpful input. Oh, that's data I didn't have before that. Gosh, I'm going to take into account. But if you're doing something radical and new, everybody's going to tell you it's crazy. However, if you run out of money, you don't get to see that that become come to fruition. And so raising money is something you have to get really, really good at get really creative about and be willing to think hard about when you need to bring in strategic investors versus financial investors, or other kinds of partnerships that are going to get

Jason Calacanis: you where you need to go. It seems like that experience, I mean, you have always done

SPEAKER_72: more difficult things, right? Like it seems like every time that you have taken the easy road. Yeah,

Jason Calacanis: you're like, No, thank you. And clearly, that has informed what you decided to do with Playground

SPEAKER_19: Global. Yes. So tell me about that. So at Playground, I had not known the partners before, it was pretty surprising. And I was just finishing up at Zoox talking about doing hard things autonomous

SPEAKER_165: vehicles. Let's go back. I skipped like, I skipped like four chapters. Okay, yes. So all of that is happening. And you're like, so Tesla company, by the way, on the side, while I was at Tesla,

SPEAKER_14: I also started an investment bank with four partners called growth point in 2006, because I know, it's a little crazy. Because I saw all these great companies that hadn't been able to

SPEAKER_19: raise as much funding as they wanted to, but still had incredible technology and incredible team,

SPEAKER_12: and they didn't know what they were going to do. So I thought, you know, there should be an investment bank out there that helps all these great founders that maybe they're not going to IPO, but if they can cut the burn a bit, and if they can find some strategic partners and grow their customer base, maybe they can continue to build a company and either get more strategic funding or

SPEAKER_19: perhaps merge with another firm or get acquired. But there were so many companies thinking about all the companies that were created then both at the infrastructure layer and at the app layer that were just going to go poof. And so given that only one out of 10 deals typically goes IPO and the IPO window opens and closes, what do all those other companies do, right? And the more technical they are, and I've always loved deep tech, the more technical they are, they're probably the less,

SPEAKER_14: they're probably not all that great at fundraising or building partnerships and relationships. But that

SPEAKER_12: core technology is critical. So anyway, we dealt with technology, technology companies where there was

SPEAKER_19: extraordinary technology, often IP and team, but they had either didn't know how they were going to do their next big fundraise, and they probably weren't going to IPO. So I got to work with lots of VCs looking at those kinds of companies, and they tended to be very deep tech.

Jason Calacanis: Yeah. And, and what did that look like? Did it look like investment? Did it look like venture debt? It sounds like there were help, like you said, with M&A, and it was fundraising, it was fundraising

SPEAKER_19: and M&A and really just finding the best strategic partner, you know, it was really saying, Okay, your technology is really, really, really valuable. The broad market doesn't see it. But there are a few companies who probably would love it, I ended up doing a lot of digital media deals. One of my favorite clients was crunchy roll. Do you remember crunchy roll that was doing anime? Yeah. And fortunately, brilliant technologists, they'd come out of PayPal. Absolutely phenomenal team, great service that everyone loved. But it was the digital media industry was, you know, to grow bigger, they needed to either create content or do all kinds of really interesting licensing deals around the world. And the guy said, Hey, we're great technologists. And we love to start doing deals with studios to create content and license more content. But we're not as good at that as we are technology. And I said, Okay, so who? Tell me who your dream date is to learn licensing from? And they said, Peter Churnin. And

SPEAKER_12: I said, Okay, so I went and stalked Peter Churnin. He was speaking at a conference at Hong Kong,

SPEAKER_19: that I was attending. And so I go and stalk him. And I'm like, Peter, I am going to make your world, you know, he'd done Hulu. And I said, You gotta you got to take this company, which he brilliantly then immediately got a whole bunch of money from AT&T to do a venture. But anyway, it was so fun to see those marriages where I could take this entrepreneurial team who said, If only we had,

SPEAKER_12: you know, this, right, and to go find them. Yeah, which made the company not just survive, but thrive and continue to grow and build. Incredible. Everybody listening,

Jason Calacanis: please don't worry. I also feel like a huge loser. Okay. And then there's more. Then we go

SPEAKER_187: founder, managing director, and then you go to Qualcomm. Yeah, I go to Qualcomm. So the mobile

SPEAKER_165: thing seemed like it was catching on. Right. I mean, you must have such a good eye. Like,

Jason Calacanis: is there something? Do you read everything? Do you get it like a tingle? Like, what is it that makes you see that? Because even if you're too early, too early is still like smarter than too late. In some ways, you know, it still means you had like the right kind of instinct.

SPEAKER_191: I am just I'm a total geek. And so yes, I, I, my, my dad was a physicist, and my uncle was a biochemist,

SPEAKER_14: and my aunt was a geneticist. So I mean, the, the conversations around the family gatherings were all about science and the future, and what could actually happen? And what could technology bring?

SPEAKER_19: And what was science doing? And so it was just normal for me to be in those, uh, scientific

SPEAKER_12: circles and technology circles talking about what was possible in the future. Interesting. You grew

Jason Calacanis: up in like the world's fair and it just became like a mindset. Yeah. Okay. Incredible. All right. So you're thinking mobile going places, you know, okay, if we're going to look at something that's

SPEAKER_19: really important and continuing to grow globally, it's, it's a mobile and actually Qualcomm had acquired three of the companies that I was working with, um, at GrowthPoint. And I had a lot of respect

SPEAKER_12: for the management team and how much diligence and how thoughtful their diligence was on deals. And I thought, wow, these guys are really thoughtful. They look at the technology, they look at the IP, they look at the team, and then they go make something huge with it. And, you know, mobile is

SPEAKER_19: going to be one of those very lasting trends because of course we have to have our mobile phone. And, you know, this was in 2013 and I also thought, you know, cars. And because of course,

SPEAKER_14: at this point I've spent a lot of time in the automotive world with Tesla, I thought, you know, cars are really kind of, if you look at a Tesla, it's kind of like a next gen mobile phone on wheels.

SPEAKER_19: And so we're going to have to get more and more, all the other car companies are going to have to get more and more technology into the car and they're going to have to have chips, right? It's going to have to be semiconductors and they're going to have to be more and more of those going into the car. And so Qualcomm had, you know, extraordinary cash balance sheet and understanding of technology. And I thought, you know, the next generation of mobility is probably going to be some merging

SPEAKER_14: between the car and the car and the phone. So when there, you know, Qualcomm was an early investor in Waze, in Mobileye. They were an investor in Cruise and they were really, it was a great place to say,

SPEAKER_19: okay, what is actually possible with the future of mobility? And back to my AI days, it's like, and what can AI and machine learning do this next generation of AI do in the car? And so it was a perfect place to have that cat bird seat and to just sit, look at mobile

SPEAKER_12: really broadly and look at, you know, again, a different layer of the infrastructure and figuring out how that was going to help the technology world. So I was there for three years. And as I

SPEAKER_19: was out searching for the coolest autonomous vehicle company, I ran into Zoox at its very

SPEAKER_28: earliest days when it was literally five guys in a garage. Wow. And Zoox, of course,

SPEAKER_102: we should say for people who don't know, went on to be acquired by Amazon in August, 2020.

SPEAKER_12: You were with them kind of that whole time? The whole time. And I don't know if you saw, they just had their first fully autonomous ride or drive on the streets of Foster City, California.

SPEAKER_19: So very exciting and are continuing to grow. But that was kind of pulling together all these things I was interested in mobility, new vehicle architectures, AI, sensor fusion, which I'd spent a lot of time looking at Qualcomm as well. And so I love those really big, hairy problems. So in 2019, so I started hanging out a little bit at Playground in early 2019. And we were talking to many companies at that point, because of course, autonomous vehicles are quite capital intensive. And so once again, we were back to the fundraising all the time mode that I had learned before. But it was once I would

Jason Calacanis: imagine a heavy dose of this also is never going to work or we thought it was gonna work, but it's

SPEAKER_24: taking too long. I feel like that was a big part of the autonomous car development narrative is it's

SPEAKER_122: here. Wait, it's not quite here. Well, and look at EVs, right? I mean, we the concept for Tesla was 2002.

SPEAKER_12: We started the company in 2003. And now the major OEMs are doing EVs. And how many years, you know, 20 years later, so things take time, and I'm okay with technology taking time if I think it's truly

SPEAKER_19: impactful and breakthrough. So I, in 2019, a bunch of folks introduced me into Playground, there were a lot of folks here, somebody I'd worked with at Zoox, who I had tremendous respect for. And there were a number of folks who were in the building who I had intersected with at some point in my career. And I thought, wow, these guys are doing cool things. And I looked at their portfolio,

SPEAKER_14: and I was completely blown away, you know, really cool stuff in AI in robotics.

SPEAKER_19: They were looking at all kinds of automation, they were looking, they had invested in sci quantum and quantum computing, which we hope is the biggest and best company in quantum computing. They were starting to look at engineered biology, they had a really cool cybersecurity investment. And I just I started calling all their portfolio company CEOs and looking at what they were doing. And I thought, Okay, these are all the really cool hard problems. And I really, really like this team. So joined in 2019, and got to, you know, started looking at the stuff that I loved in cybersecurity and AI and automation and, and even, you know, looking, looking, trying to understand all the stuff in engineered biology and mRNA and RNA structures that my, my colleagues in life sciences are diving into, but

SPEAKER_12: thought, these guys are really tackling the really tough stuff, the really interesting, tough stuff that could be very transformational and long lasting.

SPEAKER_224: All right, everybody, I wanted to take a moment to thank our friends at Microsoft. Today, we have

SPEAKER_226: Lahini Aranachalam with us. She's a Senior Director of Platform and Growth at Microsoft, and she actually created the Microsoft for Startups Founders Hub. Welcome to the show.

SPEAKER_227: Thanks, Jason. Thanks for having me.

SPEAKER_228: So tell us a little bit about the Founders Hub. Why did you create it?

SPEAKER_229: Yeah, so we built Founders Hub based on the feedback from hundreds of founders. We spoke to founders at all stages of their journey. So ones that were just starting out with an idea, to those that had actually built successful companies, just to better understand what their challenges and pain points were as they were building their businesses. And we found three challenges that kind of rang true regardless of where they were in their journey. The first one was that founders need access to coaching and advice to get to that next milestone. The next is that they need to accelerate the time it takes to actually build an MVP or their second product or their next set of features. And of course, founders need capital to actually keep them afloat as they continue to build their companies. And so Microsoft for Startups Founders Hub is a digital platform built to help founders with these challenges.

SPEAKER_226: Thanks so much, Lahini. If you would like to check it out, go to the Microsoft for Startups Founders Hub, and they have no fundraising requirements open to anybody. If you're a founder, they want to support you. It takes five minutes to apply and startups can get up to six figures of benefits instantly. Sign up for the Microsoft for Startups Founders Hub today at aka.ms slash this week in startups.

Jason Calacanis: So play right so playground already existed. I wonder you definitely seem to be a person who follows the smart people and the big idea and not necessarily the like the money or the easy choice. But I do wonder a little bit, why not start your own

SPEAKER_165: fund? Was playground just that compelling? You were like, Alright, I've started a lot of things.

SPEAKER_19: I you know, I, all the way through I've been angel investing on my own, and I've made probably close to 50 angel investments. You know, Tesla was my certainly my biggest check and investing in every round meant more checks. And so I really loved angel investing. And I became part of Broadway Angels, which is a whole bunch of female angels in the Bay Area and loved hanging out with them and also invest with health tech capital. So do I do a bunch of health tech investing with my husband.

SPEAKER_14: And so that kind of autonomy was fabulous. But if you can find a team that complements you perfectly, that you have so much respect and trust in, you know, wherever they happen to be, and I looked at these guys and thought, Okay, I would not have seen psi quantum and been able to figure out

SPEAKER_19: which quantum computing company was going to be so much better than others. And I, you know, although I read stuff on AI meets biology, I am not a brilliant life sciences investor, but I believe it's the future. And so if I can find the absolute best team to be looking at engineered biology, which I think we have a phenomenal team here, and then we were even doing stuff in space, you know, we've got a number of space investments that my colleague, Jory Bell has led relativity space, which is doing fully here, mostly 3d printed rockets. And, and, you know, really exciting velo 3d, which is also doing very, very advanced 3d printing, you know, there were, they were investing in areas that I cared about, but I'm not the most brilliant technologist in, you know, I can hold my own in cybersecurity and AI and automation, but they were areas that I really cared about investing in, but wanted to be working with the absolute best partners who could do the very thorough due diligence, stayed up all night reading the white papers in those areas and could really pick the winners. Amazing. Yeah. Um, so there you're focused

Jason Calacanis: on automation, AI and logistics supply chain. Tell us about some of the investments. And cybersecurity, cybersecurity, cybersecurity. Yeah. Um, tell us about, I mean, so let's see, Lacuna Technologies, Leaf Logistics, Saltbox, like who do you have a favorite? Do you have one you really

SPEAKER_14: want to pick out on a leaf is a, we'll start with leaf. So leaf logistics, uh, was my first investment

SPEAKER_19: at playground. And I, um, I had spent a lot of time at Qualcomm looking at, um, well, certainly mobility broadly, but our, our actually the very first product that Qualcomm sold was called Omni tracks, which was putting in, um, basically sought communication software into trucks to enable truckers to basically communicate where they were and, and do some of their basic communications technology. And, um, as I had looked at the freight market and the trucking market, I thought, wow, this is a really inefficient market. And, uh, a guy that I had worked with at Qualcomm was saying, oh my God, you would not believe that, you know, there's no software, there's no automation, everything's still done over the phone and the fax. And so this is a market that needs to be optimized. And so fortunately met this, uh, bright entrepreneur who, who had come from AT Kearney where he'd been, you know, they're all about optimization and efficiency and had, he was very, uh, he was very, um, strong in their supply chain team. And he said, you know, there are all these huge shippers on one side and there are all these trucking companies on the other side. And you kind of need a marketplace for tradable contracts so that everything's not a one-off. So today I have a whole bunch of dog food that I need to send from California to New York. And so I, you know, might fax my favorite person at a trucking company to come pick up the load and take it to New York. But after that, that's done, it's a one-off.

SPEAKER_12: So somewhere between 40 to 70% of trucks come back across the U S empty to pick up another load

SPEAKER_19: because nobody has coordinated that maybe they should pick up something in New York and bring it to California. And maybe there shouldn't be all these empty miles as they're called in the industry.

SPEAKER_14: So 40 to 70% of trucks are carrying empty miles and wasting fuel and wasting driver's time and

SPEAKER_184: wasting, wasting, wasting. So unnecessary emissions galore. Yes. Yeah. So these guys, uh, put almost,

SPEAKER_14: I think it's 450 different shippers, routing information into, and data into their system.

SPEAKER_19: So they can look at, okay, what does the whole map look like for trucking that's going across the U S at any time and then be able to reroute around weather, but, you know, being able to have, bring data analytics and AI into, uh, the trucking market, and then to have tradable contracts to have reliability, to be able to schedule stuff far in advance to say, Hey, you know, they just, and they just, uh, added a new product that is called a flex fleet to be able to say, Hey,

SPEAKER_14: we can ensure that since you know that you've got to get all this stuff to Walmart every week, we'll combine you with some other shippers and give you basically a dedicated, kind of like a

SPEAKER_19: dedicated fleet for what you need to do and make sure that you've got the predictability to know that those trucks will always be there without you having to put out the capital yourself to have this trucking fleet. But it's just, it's really bringing software and data and advanced analytics

Jason Calacanis: to, uh, to long haul trucking. Yeah. Which is so, which is, it's so interesting because logistics is infrastructure. You're creating infrastructure for logistics. And I just, you know, it, your whole career kind of makes me wonder about like, this is what I think the outside world thinks that venture is doing is like tackling really hard problems and taking on big risks and being like, yeah, new car company, let's go. We're risky capital. We're going to do this. When in fact, a lot of, you know, I say this with love for my newfound profession. A lot of VCs do all the same stuff instead of, instead of finding these other ways or digging down four more layers to the thing that's actually the shovels of the gold rush. And as we enter kind of another downturn, I wonder how you're thinking about like the ability to cut through that, the ability to go those couple

SPEAKER_14: levels deeper. You know, I have a huge belief that fundamental technology, and if you invest at the

SPEAKER_19: early stage, you're not really, you're not really, uh, pushed into those waves. You're, you know, you may not have as many customers and your revenue projections may be a little bit lower than what you expected, but if you have solid fundamental technology and can raise the capital to last. And, and fortunately, most of our, most of our companies raised quite a bit of funding over the last few years, you know, COVID was a really tough time, but we were, most of our companies were COVID beneficiaries. You know, we'd invested in a lot of robotics companies. And initially when we made the investment, the, we were getting a lot of articles saying evil robots, taking away jobs, you know, taking away logistics jobs. Well, gosh, now, you know, and during COVID automation and robotics saved the day in those factories that were making vitamins or trying to get their e-commerce packages out or

SPEAKER_14: groceries out to consumers. And suddenly robotics and logistics optimism, optimization became hugely important. At the same time we invested in an MRNA company called strand therapeutics before COVID and trying to tell people what MRNA was before COVID was, was funny, but during COVID suddenly people

SPEAKER_19: learned. And, um, so it was, we were, you know, uh, the, uh, new education of the public during that timeframe, um, was helpful to many of our companies, but at the time we made them, they seemed like extremely contrarian bets and extremely early bets, uh, and high risk. But, uh, fortunately the, the market did catch up to some of the bets that we were making or hopefully most of them. Yeah. Timing, of course,

SPEAKER_24: a huge part of this, I think a little bit of contrary nature seems to be a big, quite a few

SPEAKER_14: contrarian bets. Yes. Yeah. I don't know how to follow. I mean, how do you follow the crowd

SPEAKER_19: and go in all these competitive deals and then what, you know, I guess it's based on your personality of your firm or your brand of your firm, but, um, it, it gets really competitive there and they're, you know, amazing investors who I've had the privilege to work with over my career. But when things get that frothy, it was like when I moved out of venture at sun and thought this is just too frothy, you know, everything is getting funded and they can't all win. You know, they, it's just not going to happen. You can't have that many players in a market, but there's some fundamental technology that will last and there will be some winners out of that. But I think I'd rather go in really early and find an extraordinary team and help them build a company by providing all the operational resources around them that they're going to need and hopefully be, um, uh, you know, be able to help them through all of those different waves.

Jason Calacanis: How are you thinking about speaking of waves, this current kind of new AI bubble that seems to

SPEAKER_102: be inflating? I mean, you've, you're OG AI. Yes. It's so funny. Wow. I saw a tweet today. I think something to the effect of like, I've never seen this level of uniformity in terms of what everybody is rushing to right now. Are you going to go a totally different

SPEAKER_33: direction? You're going to go like, ag, you're gonna be like, Nope. Well, we are fortunate.

SPEAKER_14: Fortunately, we have already made a couple of really great AI infrastructure investments that play right into this. Um, so, um, we invested in mosaic ML in, uh, 2021, which was significant working to

SPEAKER_19: significantly reduce the cost of training neural network models. So knowing, you know, at the time when they were talking to customers, there weren't a lot of companies other than the huge tech companies

SPEAKER_12: that were actually building models, right? You called your typical fortune 500 enterprise company and

SPEAKER_19: said, how are your neural network models coming along? And most of them did not have a group working on AI. They may have had a data analytics group, but there wasn't a lot of knowledge of ML and AI. Uh, now they are getting their phone is ringing off the hook because it's very costly to train those models. Right. And very costly both in terms of compute and people time and data time. And so mosaic was a second, uh, founder who we had back before, uh, his previous company was Nirvana systems. And so we were very excited. So we thought training large language models is going to be really important and really helping do it incredibly efficiently is important. We also made an investment in very early 2021 in D matrix who, uh, also just raised, uh, a significant up around and we invested alongside M 12. So Microsoft's venture group. And this one is focused on, uh, the compute side. So this is focused on inferencing and significantly improving the performance of inferencing. So after your models trained, then you're actually doing inferencing. Um, and so it's, it's inferring results from the

SPEAKER_24: data it has ingested. It's like, okay, I've taken all of this data and I have determined that the correct answer or the output necessary is X. Yes. But you know, the cost and power required for AI

SPEAKER_19: compute is completely unsustainable. And so both of those are saying, okay, we believe AI is going to be there. Don't know which model and which company is going to benefit. They'll probably be a bunch

SPEAKER_14: of winners, but everybody's going to need better plumbing and more efficiency. So back down to the infrastructure level, mosaic is going to help tremendously on training large language models.

SPEAKER_19: And then D matrix is going to help for optimizing inferencing and significantly huge step change in performance and reduction in power required for inferencing. So we had made those, you know,

SPEAKER_14: I'm watching and smiling. I, it was very funny because I, I, when I first came to playground, I wrote a hundred page of presentation called AI for enterprises and boards. And I kept being asked about AI and trying to explain to my non technologist friends. And I've served on boards of, um,

SPEAKER_19: large companies that are not technology companies. And I kept trying to explain why they should care about AI and what actually it is. And so I put together this hundred page presentation covering different industries and why should you care? What is it? And why should you get involved? And, you know, I tried to explain perception on autonomy on one hand, and then what was, what could be done in chat and with natural language processing and text to speech and, you know, put all this together. But I still found that most companies were like, yeah, but I don't even know how to start. I have a, I, you know, I have a couple of my data analytics guys and they're kind of playing with this demo and they're using a little bit of computer vision, maybe to do some kind of barcode scan in one of our apps. And, you know, it was very basic what we were seeing. Um, you know, the legal, some legal firms were ingesting lots of cases to be able to automate, but you know, what we really saw was more robotic process automation types of tools that were automating manual typing tasks, but it wasn't

SPEAKER_12: really, uh, significant AI using machine learning, except in the largest companies. And so that kind of bummed me out because I thought, okay, only the large companies that also have a huge compute farm

SPEAKER_19: cloud infrastructure are the ones who get to play in AI. And so the big tech companies just keep getting bigger and everyone else is scratching their head saying, what is that AI thing again? So the interesting thing is with GPT three and, and, um, and with the chat GPT, of course, now I call all these companies and my friends who are non technologists saying, Hey, have you played with

SPEAKER_14: chat GPT? And now they can actually try it and say, wow, this seems like a way better way to search for things. Because when I use existing search engines, I get all this stuff and I have to spend an hour going through it. But here, this seems like a much better way to search for things and

SPEAKER_19: get information. And then of course I got all my Christmas cards that were written by chat GPT. And, and, and so, um, now I think what has really happened is you've seen a proliferation across enterprises saying, Hey, maybe we could actually do something. And you're seeing, you know, starting with the marketing industry, the legal industry, finance, um, you know, so, so yes, it's exciting.

SPEAKER_14: But for me, I don't see it as this explosion. Aha. I see it as the next evolution of the tools that were already there and large language models were being built, but suddenly there's an interface

SPEAKER_19: that's available to the public. Now, one could say when the Google search bar first came out, it was, you know, there had been a lot of search engines before then, but this made it very simple for anyone to go in there and run a search and get results that look kind of fun and sexy. So it feels to me like the next generation of that, where more people have access to those large language

SPEAKER_12: models that are being built, but you know, the data accuracy is still pretty scary.

Jason Calacanis: Right. Yeah. Not great. Yeah. It is interesting. If you look back at kind of the,

SPEAKER_102: it's always that presentation layer that makes the next leap possible, right? From the internet to the world wide web, the world wide web to Google, Google to AI and then chat GPT to access AI or,

SPEAKER_04: or even Google maps or ways to access AI, right? Like it's that intermediary, right? But it seems like you have an uncanny ability to ignore the intermediary and look at what powers it, which will always still be there like the, you know, or that that's what builds to the next big innovation. The intermediary is an iterative step. That's really important. Right. But like, it's seeing all the stuff that gets built as a result of that step. That's, it's like layer cake on layer cake on layer cake,

SPEAKER_177: went straight to baking. Don't know why. You know, where's the foundational technology change? Right.

SPEAKER_14: And all the, I mean, the last 10 pages of my hundred page AI presentation is, um, is bias in the data, right? I mean, okay, this is great. We have all this AI stuff, but okay, what data is being used to train the models? Because, you know, you've seen all the stories and even, you know, we saw this in medical research where, Hey, if every, if every piece of medical research is done on 50 year old white males in the U S. Exactly. Those drugs are not necessarily going to work for everyone else. And we're seeing the same thing. I think in these large language models

SPEAKER_19: is if it's trained on the internet, the internet is unwashed mess, right? It's like, it's bad. Okay. This is not a, this is not the best data source for this. So, um, I look forward to, you know, someone creating a large language model that is everything that's ever been written in science and nature, right? You know, that, that one I'm going to be really excited about, or, you know, all of the

SPEAKER_12: best, uh, medical diagnostics information that's up to date. Um, that's exciting, but what we're seeing

SPEAKER_95: right now is a little, uh, unfiltered. Yes. But exciting that the general public is now talking,

Jason Calacanis: everybody's talking about chat GPT. Oh, for sure. When my friend who, when my friend who does staging and interior design asked me, have you seen this chat GPT thing? I was like, okay, fine. We'll keep

SPEAKER_83: talking about it, but I will tell you anybody who's out there listening, do what Lori says, ignore the rest

Jason Calacanis: to the crowd and do what Lori says Lori. Thank you so much. This is an absolutely amazing hour. It's

SPEAKER_306: incredible. This was so fun. I love it. Thanks. Thank you.