Chamath Palihapitiya: right everybody it's sunday so first up molly asks me two you get a bonus here two vc sunday school uh questions the first one is about what's the rational way to deal with an overheated market

SPEAKER_01: whether it was crypto last year or climate the uh category that molly has dedicated herself to

Jason Calacanis: today great question thank you and then uh i gotta spring one on him because i just still don't totally understand warrants but after this conversation i do which is great and then we have former journalist nat bullard on the podcast to talk about moving to voyager ventures as a venture partner uh investing in early state climate startup wow sounds familiar from

SPEAKER_08: journalist to investor huh i see a trend emerging thank you michael moritz and uh oh malik and molly

SPEAKER_11: wood it's gonna be a great show stick with us this week in startups is brought to you by blue ground is revolutionizing the rental game with its global network of designer furnished apartments that can be seamlessly booked for a month a year or longer get up to one thousand dollars off your booking with blue ground visit promos dot the blue ground dot com slash twist for more info feel at home free to roam with blue ground paperclip in a downturn every dollar counts see where your firm's cash is going and stay on top of your runway with paperclip go to get paperclip dot com slash twist to get the app free for life and linkedin marketing to redeem a free 100 linkedin ad credit and launch

SPEAKER_12: your first campaign go to linkedin dot com slash this week in startups hey everybody it's sunday i hope

SPEAKER_01: you had a restful weekend thinking about your career maybe blocking out some of the bad news in the world and thinking about something great molly which is building companies it's virtuous to build a great company that solves a problem in the world creates jobs uh you are now a free market capitalist

Jason Calacanis: monster correct how has the transition been for you definitely capitalist vulture up in here i actually was at an event uh last week this past week and one of the i did a million panels at this event and but one of the things i did it was a verge 22 by this outfit called green biz and they put on it's very very business and finance focused conferences about climate this is specifically a climate tech event so i'm very excited to say i already have four startups in my inbox as a result of this one day on the ground and got to spend the whole day with like my number one favorite sci-fi author kim stanley robinson oh wow it's great it was a great day but i did a lunchtime event called will capitalism this was my title will capitalism kill us or save us or both and ended up with a table full of investors and startup founders in the climate tech space so first of all good job me it was really good bait but it was a very interesting um i think we kind of landed on both because we're all like well we feel

SPEAKER_01: really great about this you're good at naming things you have a you have a talent for uh packaging of

Chamath Palihapitiya: media there it's but we have to we're gonna have to uh see where you can take that pull that string

SPEAKER_07: and see where it leads us because you're good at like uh making a uh yeah a splash i'm pretty good at

SPEAKER_30: branding yeah and branding titles never never trained in it but you just have that ability

Jason Calacanis: you just i think of myself as a translator and in general right like i'm i'm like take your complicated topic and i'll boil it down to a few words for you how we survive okay translation so so anyway that was a long way of saying yes i'm all in great capitalism i love the motivations it's

Chamath Palihapitiya: just clean it works you know where you're going yeah i mean if you look geopolitically i you know i've made this argument a ton of times uh including on all in when you know last year people were like i guess i mean it was friedberg was like oh my god china's gonna you know wall up the us and i said i have to pull this clip so i can do one of my pulling of the clips like chamath does but i have this great clip where i said listen you know i think dictatorships always wind up imploding and they have their own problems and they overreach and capitalism always wins i'm not worried about america basically and um sure enough here we have it china is becoming super insular ain't nobody in china want to start a company after they saw what happened to jack ma and all those companies losing their value like what's the point of being an entrepreneur if it's going to get you in hot water it's hard enough like imagine if entrepreneurship was a quick road to being you know put in jail or

SPEAKER_41: or whatever happens to people in china when they get too powerful absolutely i should probably say that

Jason Calacanis: i'm still enough of a public radio hippie that i do not believe in unregulated capitalism i think and that's where the kind of climate tension comes in because unregulated capitalism is just complete consumption until we all die right and so this this kind of idea of rules rules matter public private partnerships really matter in the climate space but also talk about rampant capitalism we're in this moment and i've made this joke a couple times that like about timing in life for once in my life i have timed this particular career move perfectly yes maybe because climate tech investing specifically right now in this weird moment of downturn this gets to the vc sunday school thing is out of control like the the slowdown in funding does not seem to have hit climate tech investing there are so many new funds there's so much money it's still like totally competitive you know we had a company that was destined for the accelerator all of a sudden get this huge term sheet what do we do what what is is this normal for like one part of a venture ecosystem to be like wildly out of whack with

SPEAKER_08: out of step with the rest sure it it it really does happen from time to time where you have irrational

Chamath Palihapitiya: exuberance from uh the capital allocator side and uh perhaps even overfunding and not enough entrepreneurs so if the balance if there's only a small number of entrepreneurs pursuing a vertical let's say it's like the stable diffusions and the open ais of the world you know ai kind of creating images and words there are a small number of opportunities to place a bet there people are enamored with it because the technology when you see somebody use dolly or stable diffusion or gpt3 you're like oh my god that's incredible right so you want to place a bet you're sitting on a bunch of chips and everybody wants to place a bet in the same space there's more supply of money

SPEAKER_01: um there's a lower supply of companies so therefore demand for those companies is really high would

Chamath Palihapitiya: be the best way to say it and so since demands high the price goes up because entrepreneurs are smart and they want to have a marketplace and they'll go for the highest price so what do you do in that situation is you have to be disciplined because if people overpay for a company early then the company has to do what's called build into the valuation so to give an example if companies pre-product they don't have a product completed they don't have a product in market those are typically valued 10 million and under they could be an accelerator they could be seed invested so 10 million and under then they have a product in market and they have some people using it okay now you could see them getting 10 to 15 or 20 depending on what amount of traction right and you can put a multiple of cash on it like how much revenue they're making but just broad strokes let's say under 10 if you don't have a product over 10 if you do have a product but what happens if there's so much demand that to win a deal a vc says you know what i'll just give you credit for what would happen in the next round in this round so what would that look like well instead of investing a million at a 10 million dollar valuation i'll give you 2 million at a 20 so i'm still buying 10 but i'm paying twice as much for it why would a vc do that because there's competition and they want to get in on the deal what should you do if you're one of the people who doesn't get in the deal well you just wait because they're going to need more money and in order to justify the 20 million dollar valuation

SPEAKER_49: they're going to need at least a million dollars in revenue 20 times revenue maybe 500 000 if the market's really hot 40 times revenue so you can just wait it out wait till i hit 30 or 40k in revenue build a relationship with the founder and say hey i see that you know you now hit a half

Chamath Palihapitiya: million to a million in revenue probably a good time for us to talk about maybe doing your seed extension or your actual series a um is that something you might be interested in and they're not going to be able to say well give me a hundred because people are going to look and say well

SPEAKER_49: you have half million in revenue that would be 200x that doesn't make any sense so react gravity will eventually bring all of these companies and valuations back down to earth and you just be

SPEAKER_59: patient it is kind of interesting how there is even in a down market always

Jason Calacanis: bubbling because like i brought up climate tech and you brought up ai that's a that's a group like a little bubbling bubble right now it sort of feels like and for sure so one of the things that was discussed at this conference a couple of times about the investing space and how much money there is i was kind of gratified because i've been hearing this you know these whispers about how like climate tech is still really competitive and valuations are still higher and there's like a lot of i don't want to say tourist money but there are a lot of new funds yeah and uh new investors such as myself yeah what happens when kind of like crypto or spax like a bunch of bad things may get funded here

SPEAKER_07: correct and then what does that do to the category you know do i have bad timing after all no no i don't think i do i think this requires patience and it's very hard to have patience

Chamath Palihapitiya: when you're sitting there with a bunch of chips it's uh the equivalent of hey i want to go to this restaurant and it's been open for 30 days and it just got this incredible review and now it's booked out right for 60 days or you have to wait online for three hours and then you go in the afternoon for lunch and you arrive first and there's no line and you're like wait a second this thing has a three hour line it's like yeah not at 3 pm so in between lunch and dinner so you basically have to look at the situation where this place is overbooked and say well what is a place where i could enter how could i enter this well there's a couple of different things you

SPEAKER_01: can do one you can be patient with that company and wait for it to you know start executing because

Chamath Palihapitiya: then they actually have to hit the numbers if they don't hit it well now you're talking about maybe a down round or a flat round if they do hit some level of numbers you'll be looking at only a modest increase so keep the relationship with the founder send them notes give them a retweet and just build

SPEAKER_01: relationship fabric because i've seen over and over again vcs pass on a seed stage deal pass on a bridge pass on the series a and then do the series b you don't have there's probably five or six chances to get on the train yeah and if you could get on the train for google anywhere between the seed

Chamath Palihapitiya: round and the series b you'd be happy right you'd be happy to get on that train so just keep that peace in mind and then maybe go find other startups that are going to compete in the space that are more nascent right so you can just look at who's going to compete with that company and just get a full version of the field so in in the case of stable diffusion right raising 100 million at a billion you know there's going to be 10 more entrepreneurs who are going to see that valuation and have their own spin on it get into one of those companies early and now you're still in the category so you missed uber but you did lift people who invested in lift got an incredible return or you got

SPEAKER_49: doordash where you got postmates all three of those series a's were uh or series b's were unbelievable investments so if you missed uber and people did like andreason horowitz they got into lift or or famously sequoia did doordash right and other people did postmates so you don't have to hit the uber in the category you can hit the other three remote work is here to stay we all know that and i'm

SPEAKER_74: sure a ton of you are listening right now and you've gone fully remote and a lot of remote workers love living that digital nomad lifestyle don't i know it you see me during ski season i'm out there doing the uh executive ceo a little uh 90 minutes of skiing in the afternoon skip lunch eat at your desk well if the nomad life is for you and i know it is you need to check out blue ground blue ground is a network of stunning stunning move-in ready apartments that come with everything you need to work remotely they manage over 10 000 apartments across 15 countries and 27 cities in the u.s but also europe the middle east and asia here are some of the cities they're available in copenhagen barcelona madrid london dubai paris vienna waits for you berlin new york city la austin miami and so many more and they're super flexible you want to stay for a month no problem a year no problem a couple years no problem a quarter you pick you're in control and you can browse all the available apartments in real time book in a few clicks and you move in as quickly as the next day you can manage your entire stay and enjoy a nice console style service through their guest app yes if you need something there to help you they make apartments available where you want when you want and on the terms you want with blue ground feel at home and be free to roam and here's the best part get up to a thousand dollars off your booking at promos dot the blueground dot com slash twist that's promos dot the blueground dot com slash twist for up to one thousand dollars off that's a really interesting point you brought up too about how

Jason Calacanis: you i think that probably i have started to bias heavily toward getting as soon as you can as cheaply as you can and you seem to be saying like sometimes sometimes clearly right that's the what to do and it's the most ownership but that but that there may be times where you're like this is a really promising pre-seed round i'm willing to pay a little more i'm willing to be a little later and own a little bit

SPEAKER_78: less so that i can see this prove itself out and get to seed you nailed it see this is a good this is

SPEAKER_01: a good one this is a good this is a good thing about today good class well i mean if you take the situation you're describing so let's say you you found this company they were going to go to the accelerator they got a c deal great maybe they even used the accelerator offer to get the c deal

SPEAKER_06: great that's within a founder's right to go shop a deal um i mean sometimes they have no shop clauses

Chamath Palihapitiya: on them for this reason but anyway i'm fine with it you know somebody gets a better deal you you're happy for them now you just stay in touch with them and you look at the companies that are in the

SPEAKER_47: category around them because it's usually if it's a good category again there's not going to be one there's going to be 10 and you'll find an opportunity to place a bet in the space and so you just need

Chamath Palihapitiya: to be patient you don't want to place a bad bet and this company that then did the c round they're taking all the risk molly yeah they paid a high price they do all the risk and then you can just jump on after the risk is proven out so bill gurley probably made the most money from uber he didn't do the seed round to take the risk like chris saka and i did now in hindsight sure of course it's a

SPEAKER_01: great bet but he got to let us fund that million and a half take the risk and then he got to do the

Chamath Palihapitiya: series a and then menlo did the series b they let benchmark and the seed investors do the seed in the you know in the series a and take the risk the b was still a great deal at 300 million so there's going to be opportunities be patient don't overpay have some discipline you can overpay on the margins if it's a truly fantastic founder slash idea but i think overall discipline and meeting with

SPEAKER_49: more companies understanding the whole space is how you combat this that was your original question how do you combat right irrationality how do you combat relations exactly patience is one and thoroughness is the other because you're going to what are the chances if you met with 50 companies

Chamath Palihapitiya: and this one one out of 50 you got this like overpriced deal what are the chances they're the one it's possible but statistically not probable so let's look at the other 49 and make sure we understand all of them and that we're checking in with them every three to six months and that is the way

SPEAKER_49: you're going to find out of the space again you missed uber but you understood on demand you understood the power of mobile you understood the power of delivery you really had a prepared mind and understood those dynamics great lyft postmates doordash all did wonderful so you just place a

SPEAKER_35: bed in one of those or maybe you waited out you skipped web van and waited for uber yeah i mean actually

Chamath Palihapitiya: it's funny you mention that bill gurley did web van and then did uber so the prepared mind and the

SPEAKER_07: losses of web van led to doing uber and and maybe doing a little more cautiously too fascinating well

SPEAKER_70: bill gurley did good eggs as well so he made two bets on a space where he got walloped previously so it

Jason Calacanis: is interesting too because it's also i mean it is the way of venture i think to be riding early we're you know riding early waves in general so like climate tech is a really early space where where you start like it's oh okay there are 10 businesses in this category right there are lots of different measurement things there are lots of different this type of thing there's this and this and this and they're all kind of like growing and you're looking for the signals that suggest that one of them might be a winner that's also happening in ai right now that was also happening in cryptocurrency like it sort of sounds like really with any brand new category that everybody's running to the so-called vc lemming effect the the advice is always the same like play tight at the beginning of the poker game

SPEAKER_08: until you know what the table looks like um that would be a great way of saying it and then just to

Chamath Palihapitiya: put a pin in this i just sent you a link why the clean tech boom went bust there's a story from wire right yeah and you're like okay well this looks like an interesting story let's read it oh yeah let

SPEAKER_01: me just check when it was written oh 2012 right so you know there was uh john door kosala solyndra all of these things that happened in that first wave that you can learn lessons from and of

Chamath Palihapitiya: course they overpaid of course the you know it was too early and if cryptocurrency uh is going to be a thing probably now is the best time ever to invest in it after having bought bitcoin or ethereum when those projects were first launched so that was probably one entry window buying those you know in the first couple of years bitcoin and ethereum and now the second window is emerging now i don't know if you saw the story about uh chris dixon and the portfolio over this there's a big story that just came out in the time near times right was it yeah and so chris dixon uh really nice guy by the way i'm a fan of chris dixon and he went all in and it looks like massive losses for injuries and horowitz who apparently talking about timing went in at the wrong time it's a wall street journal story oh yeah it is yeah interesting horowitz went all in at crypto at the worst possible time ouch so now what you could do is here's how to strategize this you look at everything chris dixon who is a smart individual uh and it was a great founder and a good product person um you just look at every bet he made you look

SPEAKER_49: at all the collapse evaluations of those and then you would look at that portfolio and say well he's smart he probably picked some good projects in there let's go through those projects and see if there's a winner and see if they're doing or down around or they're doing around where they're giving 10

Chamath Palihapitiya: warrants for every share you buy which means it's 10 of the price right and that's what will happen is out of this you know poorly timed portfolio in all likelihood case if that's what's happening here this could be a poorly timed portfolio just like the other um climate ones were like

Jason Calacanis: that's saying yeah yeah you can almost like you could almost cut and paste chunks of the john door climate once i know into this one and then listen to john door on our show saying that one billion dollars worth of investments then is worth three billion now right and so which one is worth it

Chamath Palihapitiya: now if you were to look at that same time period you know who's in that cohort that's one of the most

SPEAKER_01: successful companies of all time tesla so and if you were studying that at in 2012 when that story was written about the collapse tesla in 2012 was i think public by that time and was probably trading at

Chamath Palihapitiya: one or two percent of what it is now all right and so molly if you did invest at the time of that wired story in 2012 in tesla yeah you would have had a 245x so they had about a 2.9 billion dollar market cap in october of 2012 and they got a 710 billion dollar market cap today so oh my lord you know in sometimes the collapse of an industry if somebody does survive we saw this with amazon uh you see

SPEAKER_110: with other companies that to the victor goes to spoils and so i love it because it's not the what

Jason Calacanis: i love about that is that at the time all the fomo all the froth all the bubble was about solar and tesla came out of that right so it's like it's just such a great lesson that it is so easy to follow the school of fish to green hydrogen and fusion and the whatever it is and it's like no no no no

SPEAKER_08: look where they're not yeah and it goes back to what i always say nobody knows so if you can find

Chamath Palihapitiya: a reasonable bet on a great founder you make as many reasonable thoughtful bets on as many amazing founders as you can find and that's the name of the game it's exactly analogous to this injuries and

SPEAKER_01: harwood story um i bet you inside of crypto there are three or four in this huge pile of heaping fire

SPEAKER_117: and rubble two or three uh mother of dragons are going to come out of there right three dragons

SPEAKER_119: are going to come out of that dragons are going to come out oh that's so fun and famously door

SPEAKER_120: did fisker instead like passed on tesla so you know it's you you could lead you would literally lead

Jason Calacanis: the category so christics and either and we will only know in 10 or 15 years probably christics and either picked tesla or fisker right somewhere in this portfolio maybe both maybe both you know this is

Chamath Palihapitiya: the thing that's so crazy about our industry um you know as an investor in a capital allocator you need

SPEAKER_01: to place uh as many reasonable bets as you can understanding that you don't know and that's the you know what i'm teaching to our you know uh 22 person team twice a week for two hours during those investment meetings is let's find every reasonable opportunity we can and place a bet and if it goes well triple down on that bet that's that's the name of the game and just have the humility to know okay i i this is a reasonable bet at a reasonable price with a reasonable founder with reasonable product market fit all those things we look for okay this is a reasonable bet now let's um you know move on uh and study the results of those early bets to increase our position in them and and you just have to have that humility the humility i've come to you know in my second decade of this is make bets on any

Chamath Palihapitiya: reasonable you know opportunity you can and triple down on the winners and just study your process and try to make your process you know 10 better a month that's literally what i'm committed to i'm just going to try to be a 10 better investor every month by being more thoughtful doing more training and then you place as many reasonable bets as you can because overall the category wins the category of venture capital historically has won so just get in the game and be thoughtful and that's what you're doing you don't have to sweat any one you don't need to hit everyone you need to hit one so i mean

Jason Calacanis: it's so funny because like your advice on this segment and elsewhere has been effectively exactly the same since the first day and it has been be patient like put the fomo in the box yeah almost

SPEAKER_03: how you get yourself in trouble fomos and now there's massive fomo in the specific vertical

Jason Calacanis: that i'm in and it's gonna make it's gonna be in a way it's amazing right because it's like an extra crucible like here we are in a bit of a downturn but then there's a bunch of fomo here and so it's like the discipline that i feel that i will learn in the next two to five years yeah will be incredible because there's going to be so much push to go the other way can i like ask a bonus vcss question

Chamath Palihapitiya: absolutely and i think by the way i would even take your two to five year window yeah and i'd look at this as a decade-long journey for yourself two to five years of learning and then the next five years five years of learning and then five years of being at top on top of your game and if you take a 10 year review of it what's the rush here you know there's no rush just get to know as many people as you can get to you know take as many meetings as you can learn as fast as you can in those first couple years and then yeah place as many bets as you can on any reasonable opportunity your follow-up

Jason Calacanis: question is bonus question here we go um about yes i want to be clear i actually just told somebody yesterday i was like i can't wait to just go insanely hard for 10 years just like run as hard as i possibly can on this for 10 years because i'm so energized by it and into it and thrilled by everything that i'm like it is the coolest job ever yeah um i feel like the two to five years are the

Chamath Palihapitiya: years i will be just actually on fire yeah for sure just take as many as many first round meetings as you can get is what it's about just like shooting as you know as much playing time as you can get those meetings are the playing time be very liberal with meetings take as many first round meetings as you can if it's not a fit just get comfortable saying hey not a fit for us at this time we make very few investments but it was great to meet you and love to stay in touch and the more of those 30 minute meetings you can get under your belt you know it's a couple a week then to 10 a week whatever the the pace is just want to get to know you you know hey maybe it's just like a quilt you're just

SPEAKER_87: weaving it in together yeah exactly for the show like the whole thing okay so my follow-up

Jason Calacanis: question well i don't understand i'm still working on warrants i keep reading about warrants sure

Chamath Palihapitiya: warrants i just don't get it okay it's very simple a warrant is the right to buy a share at some time in the future at a predetermined price so if i give you a warrant right now to buy facebook shares and it's a public company but let's say facebook was private and was trading at the hundred dollars it's trading at today i see you have a warrant for the next 10 years to buy a share for a hundred dollars you'd say or let's just say for 110 and it's trading at 100 right now you'd be like okay so if i buy the share i lose 10 bucks so yeah that's right but what value does that warrant have the right to buy 110 share of facebook when it's trading at 100 well it's a free option because if the company grows 10 a year uh it will go to 110 and then 121 and then 134 whatever it is right 10 compounding all of a sudden you know that warrant has some value to it and you can execute it at any time and you do not need to put any money down for it so this is a magical thing um now why would

Jason Calacanis: a company stock options right it's like stock options in a private company why would a company issue it's not a fundraising mechanism it is just like a sweetener it's a pot sweetener yeah and it could

SPEAKER_01: be or it could be for a partnership so let's say um you know you've got a company let's say like a

Chamath Palihapitiya: sale plan right we've got a company like sale plan that you invested in you're on the board of and they do this thing in shipping right where they're monitoring emissions from ships and let's say i don't know the number one maker of ships in the world says hey we'll build this into our ships we'll build your sensors into the ships in some you know incredible way you know we'd like the right to invest a million dollars in your company at this valuation let's say it was a hundred million dollar valuation but we're not going to give you the million dollars we just want the right to do that in the next 10 years at the 100 million dollar price let's say there were 100 million shares so each share cost a dollar they would have the right to buy a million shares for a dollar each anytime in the next 10 years so it costs them nothing and the company might say well this costs us nothing right now it would be one percent dilution and we get to be in every ship so all we have to do is have the ship the person who bought the ship turn it on and sell them the software it's already built into the ship all these sensors are all over the ship already okay great you have this option to buy those shares and in fact i i wouldn't be surprised if a company like sirius xm or sirius which then merged with xm either one of them said to ford you know at some point hey if you put our um satellite receiver and satellite into every single car we'll give you the ability to buy a million shares for a dollar each you have the warrants doesn't cost you anything now and if you have the option if this works and a bunch of people buy sirius xm subscriptions you're going to make tens of millions of dollars so it's a

SPEAKER_07: free option it's a way for the company to give other people skin in the game who maybe don't want to put cash in how often does that come up in venture deals not too often not too often it's

Chamath Palihapitiya: usually used in business deals but in a down market it is a way for people to change the valuation the effective valuation of the company without changing the valuation the company so you invest at 100 million you put a million dollars in and then we give you nine extra warrants for doing it at 100 million so essentially you paid you know you got the million in warrants you have the nine million in warrants you paid a million dollars for one percent but you actually have ten percent of the company so you know it's the equivalent of paying a much lower valuation

SPEAKER_78: i see so that is why i'm starting to hear the word warrants come up more because we're in and

SPEAKER_110: down market and those scenarios are kind of like a liquid it's another way to do a liquidation preference without putting a liquidation preference on the books and so when you invest in a company you

Chamath Palihapitiya: say hey are there any outstanding warrants let us know about them uh and that's a good thing to know like maybe the company is giving 10 of their company away in the future so you just have to factor that in okay if i'm paying the 100 million dollar valuation there's 10 of these out here maybe i should be paying a 90 million dollar valuation or what impact would that have when the company goes to get public and this person executes those warrants um so it's it's just a financial device to let people buy equity in the future if they want to but they're not obligated to do so and they

SPEAKER_110: typically time out uh so usually you have the warrant for 10 years you have 10 years to execute the

SPEAKER_64: warrant gotcha thank you amazing i get it you get it some blog posts are not as easy as talking to

SPEAKER_08: humans turns out that's nice to you know when you're on the treadmill if people right now are on their peloton treadmill um you know you can be listening to this pod and then you learn a little bit and you know so not i'm not by the way i'm not perfect in all this regard i'm in my second decade of

Chamath Palihapitiya: investing if i get something wrong here you can email me anytime jason at calacanis.com if you have a question that you want us to address producers at thisweekinstartups.com that's right

Jason Calacanis: all right and then next up this week in climate startups this is actually very well timed um because again while i was at this day-long death march of awesomeness i was interviewed by another podcast about the transition from journalists to uh bc and as it happens today's guest on this week in climate startups is a journalist who became a climate tech vc journalist nat bullard came on the podcast to talk about his recent move to voyager ventures as a venture partner uh voyager invests in early stage climate tech and nat does this really good newsletter at bloomberg green focusing on energy transport technology climate and finance so it's like a cool transition to vc but also just in terms of that translation layer he's writing this really it's what i have been discovering a lot is that the

SPEAKER_78: storytelling aspect of this is still a really big deal and this is a great mashup of that so all

SPEAKER_169: right everybody enjoy the interview not as good as i'm at it but guys pretty good enjoy the interview

SPEAKER_40: founders when you know your numbers like the back of your hand you're gonna come across as super

SPEAKER_74: credible and when you're super credible you're gonna close investors and you're gonna close customers right and credibility i say this all the time equals closing and paperclip is going to make you more credible right now it's a free instant financial dashboard that puts all of your most important numbers at your fingertips you plug in your bank you put your credit card in your financial accounts and paperclip gives you instant access to the most important metrics like your net cash your burn weight and your runway these are the numbers that you need it's like being a pilot you got your altitude you got your speed you know your gps coordinates well when you know those coordinates you can be a better pilot i want you to stop wasting time crunching numbers and spreadsheets or waiting around for your accountant to close the books all this information is at your fingertips if you use paperclip so here's your call to action see why thousands of startups trust paperclip to help manage their finances check out paperclip and get real-time visibility into your financials today it takes less than five minutes to set up and twist listeners get the app for free for life by going to get paperclip.com twist that's right it's typically 30 bucks a month but at my link it is free for life there is no downside literally so go to get paperclip.com twist today nat bullard is a bloomberg nefs chief content officer and

SPEAKER_78: somewhat recently i hear became a venture partner at voyager ventures investing in early stage climate

SPEAKER_173: tech companies me too let's have the whole journalism to investor talk about first of all what's bloomberg

SPEAKER_178: nef sure so let me begin with a little qualification of that which is that i was the chief content officer

SPEAKER_180: um now i just stepped back into a role that is purely looking at um the climate mostly from an externally facing perspective so bloomberg nef for reference or did spend 15 years was sorry is a research shop

SPEAKER_179: started as a startup itself in 2004 covering the very early stages of what then was emerging as clean tech uh it was acquired by bloomberg in 2009 made its way sort of through the stack of global emissions

SPEAKER_180: and markets related to climate and i spent 15 years with them i joined in 2007 one of the first hires here in the united states uh took it a bit on the road once we got acquired the minute that we got acquired by the shop in london where our team was i realized i want to move to the west coast so i moved from dc to the west coast moved from there to hong kong now back here on the east coast but we and we're gonna have to cover the whole thing so we as i said we started really quite contained on the

SPEAKER_179: things that say a german investment bank would be asking you about in 2004 2005 how does solar work uh and instead it's expanded to really cover all the kind of key questions that you might have for

SPEAKER_180: the deepest decarbonization that's out there but after all that time after 15 years you know i had seen my title i'd kind of reached the apogee of where i was going to go within that group and in an important way from a product perspective where i'd spent a lot of time and from a strategy perspective on what we're going to cover kind of tapped out like we'd read we'd done it we were covering everything we were at the point where the biggest companies in the world were asking us the most formative questions uh and i kind of missed the game a little bit so took a bit of a step back so i joined um the company in a new role contributor role so basically doing public writing assisting

SPEAKER_179: with some of our high-level stuff taking it on the road with some key conferences here and there and that gave me the freedom to be able to do what i was very much interested in as you are which is to work with these early stage companies after so long it's fantastic because i've got what i would hope to

SPEAKER_180: think are kind of a symbiotic set of of processes and priorities here the first one is i still write every week about climate and i started off writing a little newsletter of my own devising in 2014 i remember it was 179 people exactly that i signed up for the first one uh it finished last year at 179

SPEAKER_179: 175 000 and now it's going to about 220 000 people in concert with some other friends at moonbrook of course it's not just me at this point yeah but then the work with voyager is a sort of fantastic

SPEAKER_180: add-on to go with that you know it's my sort of chance to get way back towards talking to the earliest stages of companies i was listening to your your interview with greg dalton uh last month actually and you said a couple of things that sort of made me realize that we move from this world of high production and intense focus across sometimes months and years to put things together and now we

SPEAKER_179: kind of have to unwind that and take our insights and our ability to recognize genius and brilliance back down to the level of like a person with a powerpoint deck and it's really really fascinating

SPEAKER_180: it's quite a bit of a learning curve for me in many ways it's kind of like an unlearning to an extent of the sort of skills that you put in place for working with big organization dealing with other big organizations for such a long time yeah and now you're back to how do i judge two students coming out of a lab how do i also talk to somebody who might have spent 30 years doing this as a practitioner but within you know the belly of a very big industrial beast for a long time so it's really refreshing um i'm doing these things both you know in in parallel i do writing with voyager i do sit in on conversations where you know i might help troubleshoot something with a portfolio company or uh help a prospective investment to kind of see where the market opportunity might be and then i'm writing every week you know um i don't know if you miss writing but i know i would miss writing i find it incredibly uh satisfying as a way to sort of shape my thoughts over time and also to you know keep me honest it's you know you're doing your work in public yeah i would love

SPEAKER_78: to miss writing but we do a daily podcast and i'm trying to run this climate syndicate so like right i'm not missing anything except sleep right now but no i do actually and it's funny because i've got a like i'm like i have a piece inside me that wants to come out and there's just not the five minutes or the place to put it so the newsletter is just a is a great outlet it's called bloomberg green by the way i don't think we said how did you get hooked up with voyager ventures like how

SPEAKER_59: did that we've all got our sort of origin story in terms of the arrival in bc how did that mine's

SPEAKER_180: good um i've known sierra peterson the the founder one of the founding partners since new year's eve of

SPEAKER_179: 2005. um we met we met just as she was on her way to beginning at the international energy agency and

SPEAKER_180: when i was still in school uh studying international economics and energy policy and i wouldn't say we've exactly been on parallel tracks i would say honestly sierra's is much more distinguished than mine because she worked in the obama white house after the iea she worked for some early stage companies she's been an active investor for a long time but we were at a moment when they really to be honest were very few people that were doing this worldwide um you know when her work at the iea was looking at energy efficiency at a time when this was sort of you know barely kind of on the radar i was coming out of school and getting ready to go to work for a research firm when we received really the most

SPEAKER_179: elementally basic of kind of questions that you had to answer like how do things work not just how

SPEAKER_180: big might the market be but how might they work and so sierra and i have kept in touch over over all of that time corresponding keeping up with each other's work and we just entered a series of

SPEAKER_179: conversations as voyager fund one was was approaching the close and it was a it was it was a

SPEAKER_180: it's all the always with these things sort of a feature of timing you know it's it's about when you might have the time to uh have that meeting of minds and to to get together and be able to talk um but also i i unique to find people who are not in my case necessarily but in the case of the other founding partners still relatively young but have spent the entirety of their careers doing this and so there's not a lot of people that can put together a founding team of two people with 30 years of experience devoted purely to climate tech uh at this point so that was a special opportunity we i knew i could i would walk in with sort of a high degree of symbiosis between the three of us uh and also to be able to kind of hit the ground running and that's definitely what's going on yeah full full

SPEAKER_200: sprint yes that's what you're saying yeah that's right hey everybody i'm here with my pal tom eschbacher he is the senior sales manager at linkedin marketing solutions and today we're going to talk about marketing for startups and linkedin did a great new internal report called today in startup

SPEAKER_203: marketing welcome to the program tom thanks jason we've been talking about icp ideal customer profile

SPEAKER_200: this is a critical concept for all founders to understand how can linkedin help with the startup

SPEAKER_204: figuring out who is their ideal customer it's hard to know especially for for companies who are really getting started and one of the great ways that linkedin is able to help is by providing you additional insight on who's visiting your website from all channels organic paid search what have you our website demographics feature looks at the professional attributes and i'm talking about the job function job seniority company industry company size even company name to help you hone in on the audiences that are most engaged with your site we can look at this down to the particular page so you can get product level insights and what you're going to do is take that share it back with your sales and product team and add that to the anecdotes that they are bringing to provide a really

David Friedberg: holistic view of what an icp can and should look like fantastic you can go to linkedin.com slash this week in startups and get the report for free as well as a hundy a hundred dollars from tom talk to me

SPEAKER_179: about the thesis of voyager fund so the voyager thesis is that there's there's money to be made in in in doing things that are going to drive the deepest decarbonizations that's possible um it's primarily i would

SPEAKER_78: say an economic and then talk about actually i'm going to even back you up one more step can you define deep decarbonization for people who don't know let's start with deep decarbonization and i'll tell

SPEAKER_180: i'll do that into kind of like a sort of a three layers here the first is you know when i started working in 2000 2007 was in this era of kind of renewable energy was this thing this is where you're going to do wind and solar you're going to do bioenergy and if you're in europe you do some carbon markets flash forward about seven eight years you can layer another thing onto that which is sort of what i would call energy transition that's you know you've got a group within the company that's like hey looks like turns out that we can get to zero emissions in one part of our business we should go do that and we'll call it our energy transition strategy so these layer up and the next layer up is and the final one really is kind of a net zero like we're going to get ourselves to net zero emissions in the global economy by 2050 and that's different that's not just like create a special situations group in your bank to finance something and it's not just like well we have a strategy team that's working on something that might happen at the corporate level by 2040. this is like everything has to happen all at once and it also has to happen at every level of the business and in every part of the business so it kind of leaves things it gives you no out there's no area that's sort of untouched and thinking about that that's my thesis okay that's that i think is probably not terribly controversial yeah you know and i don't want to speak too too much is there a part that is controversial no i wouldn't say that's controversial but i would say that like i think uh you know you should get the the voyager founding partners on to tell exactly their their take on it but yeah tell them they're welcome anytime for sure and there they will be fantastic guests when you guess um but yeah so as a starting place though good but the thesis there is that there are there are new levers to be pulled in things like food and agriculture industrial industrial infrastructure of course still things within energy but also within mobility within materials where we need to go

SPEAKER_179: first of all we need to be invested in in order to achieve a decarbonization down to like almost zero net emissions in most processes but also that there are business opportunities to be had there that's kind of why i start with that like there's sort of three layers is that each successive layer that

SPEAKER_180: has been an addressable market and now the addressable market is essentially every big process that creates emissions within every company that does it everywhere uh the trick of course is to hone that down into something that you can actually do i think that that sounds like a lot of meetings yeah yes it like that's not an investment thesis that's a principle essentially on which the thing is founded i think you know the thesis is that there are there are now new things that are addressable by virtue of technology and markets that weren't previously there's a really rich landscape in which uh to be active there are entrepreneurs that are and this is me talking here but but i think this also wouldn't be controversial or essentially climate natives like they have come up through this entirely let's be honest different from you and i in that sense that like this is not something that they that they ever sort of had to view as either controversial or outside of the main

SPEAKER_179: it's something that they they went to school to study as undergraduates as graduates they've worked in it and finally that there's there's opportunity to make money in all of this and i think that it

SPEAKER_180: it exists obviously within a realm of climate as a thesis and it exists in tandem with capital market and policy rotation towards that but it is not dependent necessarily on an esg lens or a particularly

SPEAKER_179: socially responsible frame in which to make that happen so lots to unpack there but i guess the

SPEAKER_78: shortest version shortest response is it sounds like what you're saying is that the investment opportunity is far beyond energy the investment opportunity is definitely far beyond that i mean there's

SPEAKER_180: one which is there's an investment opportunity in energy as in decarbonizing power in order to then

SPEAKER_179: use that newly decarbonized power to do other things so like we're going to have just an insane amount more electricity generated from renewable energy but we're also going to have like four times more electricity generated full stop globally by the middle of the century a lot of that is sort of just inherent demand growth but a lot of it is also that like you now need electricity to go and do the decarbonization of steel and cement manufacture you're going to need that for processes that where

SPEAKER_180: it didn't previously work you're going to need it to make green hydrogen all of that sort of stuff so there's that i think is probably the first the first principle why i would say um how early stage

SPEAKER_78: are you what's the what's the check size cna okay and then what what does that translate to generally

SPEAKER_180: in terms of check size do you lead like good question another one another one for uh for the two founding partners i think rather than may um not huge and a lot of them are still stealth so to be honest there's probably not a lot of uh a lot of cover out there on that i think they have led some

SPEAKER_179: um definitely have co-led with with others great what are you like as you look at this sort of

SPEAKER_78: suddenly much bigger universe what's exciting to you within it and then what do you think we're maybe

SPEAKER_180: wasting time on what's exciting to me is people who are sort of building their new business thesis

SPEAKER_179: around a a notion that we will have much more abundant energy in the future as an input to other things it's not quite a kind of like abundance narrative as such but it's it's it's something

SPEAKER_180: like that i'll give you a great example in california where where i i sort of did some of my formative

SPEAKER_179: years where you still are the grid is just not able to use a really significant amount of solar power at key months of the year it's just the feature of the way solar has been built and the way that the grid

SPEAKER_180: operates so this is technical term it's called curtailed basically it's being generated by the panels it's not going anywhere and that's done on an economic basis it just it's like magic you just turn it off and never happens that's going to go up so much in the future no matter how many batteries you put in place or how much transmission you do but a better way to think about it is like what businesses are going to emerge around that around the notion that you can get either free or even negatively priced energy input that has no emissions like there's this universe of things you could do and it's not just mining bitcoin which is of course what every guy with laser eyes on twitter tells me that you're supposed to do with it like there's going to be something something else that can come up with that and the really cool thing is that that unlock hasn't really been explored like that hasn't

SPEAKER_179: really been looked at yet because that hasn't really been a thing like you didn't have in the 1990s a thesis that said well people are going to pay me money to get to get energy so what would i do with it it didn't exist and so therefore a lot of sort of incumbent architectures are not really ready to think about that so that's one and then the the other thing that's exciting is that people are now thinking way ahead in terms of solving really really tough problems like the coolest

SPEAKER_180: thing for me is that my bnef colleagues when we catch up and i talk to them are doing deep analysis at a market level on stuff that was like guy with ratty ponytail science experiment stuff

SPEAKER_179: even 10 years ago but is now like part of a corporate consortium that's designed to make this sort of thing happen and you start to see capital commitments go with it and of course you can you can say that you flubbed it and we spent two billion dollars of you know of capital investment on something and it didn't work that definitely happens but that's not really the principle in which most of these

SPEAKER_180: companies are operating they're saying we're putting together a complex governance structure multi-party multinational but corporate to go do something that's complex and was outside of frame uh you know even 10 years ago so that's really cool what am i less excited about i said i'm not completely convinced of the the full utility of a lot of web3 solutions that are meant to address in particular the early side of carbon markets i'm quite fine with nfts in a different way and that's because i was an art history major and um art markets are have an incredible way of collating and processing manufactured scarcity so actually i think the long run for that completely independent of anything related to climate is probably fine the challenge that i find with a lot of the web3 things is that they don't necessarily they don't necessarily make it easier to solve a problem for normal people and they don't necessarily create much greater scale and i say this coming from like you know the experience of working for a giant financial services company that has clients that are giant financial institutions you were asking an awful lot of them to go create a new market by going on chain to learn a new protocol and having to stand up an entire division that does that for something that may or may not actually end up having a lot of effect and you have to layer into that all kinds of other things measurement and verification and then if you want to get into sort of thinking about it from a real banking perspective custodianship possibly building instruments like futures and forwards on top of it all kinds of things that will need to be built

SPEAKER_179: are probably going to be built in ways that are interoperable highly with other systems that we have that aren't necessarily that exciting but they don't necessarily go through a kind of a web three

SPEAKER_180: lens i mean my last thought on that is like art and i've listened to many many of these things and i always listen with an open mind but are they using web3 to solve a climate problem or climate to solve a web3 problem and they to my mind most of them are tending towards the latter the explanation from a climate perspective is just very baroque and i think therefore kind of like rate limited in terms of how far i

SPEAKER_59: could go yes the idea of um using an alternative financialization mechanism yeah don't even get me

SPEAKER_78: started right right we can already we can already have a very spirited debate about the financialization of climate solutions right whether it will drive adoption whether it has to exist to drive adoption or whether it's distracting us from you know really hard tech and frontier tech that's one conversation already and then when you layer in the web3 part of that and say but it's going to be an alternate structure of extreme financialization of products that who are of dubious value to start with and not

SPEAKER_180: just that is it interoperable that's too many beers exactly is it can you warehouse like you you come at this from the sort of financial lenses that i do where is that who's the who's the financial custodian for that right where does it get warehoused in in in this in in the time before it becomes a full-on security who's the market maker behind it like like all of these sorts of things happen and you know like over time all markets probably grow to the point that they become

SPEAKER_190: ideally boring in a in a constructive way in a highly interoperable way which is great um speaking

SPEAKER_78: of markets i actually the reason that i ended up pitching the the the thing that caused me to send the message to the group saying like hey can we book this guy was the piece you wrote about sales forces marketplace for carbon emission offsets yes um i want to ask you specifically about the sales force project just because i thought you had such a great digestible write-up on it but also from the investment perspective how you're looking at carbon offset markets because we're starting to see like that's such an interesting area where i'm seeing pitches and it feels like there's a lot of potential there and the it's the combo of like bloomberg and venture here that i think this may that makes you the

SPEAKER_180: guy to ask this question that's very kind of you um yeah i had fun with that because it was a sort of an aha moment that i was looking for and like who's going to make this easier not more complicated and and when i say that it's not just easier in terms of like it's easy to engage with but like that there's a sort of long chain of things behind it that have already been made easy and by that i mean that like when i wrote it up i said okay like if you are a swiss based trading firm you are definitely going to be able to get into the carbon markets because it's another esoteric opaque over the counter kind of thing you're like great this is how i make money it could be cocoa beans or it could be oil whatever it is it's going to be something that that has asymmetries to it opacity and where my own calculations and capabilities are going to like give me some kind of an edge also it's not very big that's fine you can get in that market in play but if you are if you are a small to medium enterprise and you've been given this new mandate that you want to do some kind of carbon offsetting do you really want your purchasing manager to have to go learn again like how to be on chain to go sit through all kinds of different ratings and verification standards and learn all of these different things to serve what at first is a very thin layer of a purpose and so i was thinking like this is actually great because i can picture this meeting already the boss's boss says we need to buy some carbon offsets and you in purchasing is like okay what am i supposed to do with this am i going to take a month and figure this out i don't have mckenzie and bain money to have them tell me what to do and i'm not a trading firm and then the answer i'm going to use salesforce is sort of elegant because salesforce is already a payable for all of these companies it's already an approved vendor like there there are little elements in there that especially for smaller companies who will appreciate that like you don't have to go through all these new processes to do things it's already there yeah i think that's actually great because it expands this addressable market beyond the specialists it does have some sort of it does create some natural cohorts of like if salesforce says that these are the standards that we support then those kind of attract some things around them with their own specific gravity uh what you can debate about whether or not that's good um i've sat through many methodological and verification discussions and everybody says theirs is the best or they say that it's or it's the best for x over time we'll see if those don't sort of you know goes kind of parito optimal and collapse into like the thing that works not perfectly for everything but it works well enough for most things that it goes forward and so i think that things like this are are are great do they do they sort of close or potentially close a venture window for the new carbon marketplace that everybody's going to operate in potentially but they also create a much bigger addressable market for all of the other things that flow into it like if i'm a developer my goal right now might be i want to get my asset positioned so that it's visible in the salesforce marketplace that's a simple like one sentence pitch that you can make to yourself and that will have probably a handbook style set of steps that you need to do get to that point and i think that that's actually really good it you you kick the innovation layer somewhere else and i think that that's actually very very healthy one of the big challenges for these markets right now is that everything is in play the assets that you are going to develop are in play the way that you measure them is in play the way that you transact them warehouse them the way that you securitize them all of these things are in play at once and that's that's tough like that's actually very difficult to do because if you're you know if you're at any level of those things you're dependent upon other people's own innovations that may not be running aligned with yours so if you can marketplace these things i think that that's actually great you want it to become as normal as possible from a climate perspective so that it become as big become as big as possible right now these markets themselves i mean there's just so many potential things that can be done i do think that we will have a lot of shaking out in the long term about what counts as good you know um sort of a rank ordering of like one company that says i bought you know i bought offsets from a an old clean development mechanism hydro dam in southeast asia that's been running for 20 years is different from i'm funding geologic storage of atmospherically removed carbon dioxide so i think like i think that we're starting to see this this qualitative aspect men and not just quantitative and you can also see this in the in the prices that companies use the range of prices that people pay for offsets is anywhere between like a few dollars to many hundreds of dollars a ton and that's not because the market is inefficient it's because there are many many markets within it right now and i think they'll they'll shake out in the same way that related to that is that company internal

SPEAKER_179: prices for carbon range from like a dollar which is essentially not really a price at all to if i recall correctly 677 dollars per ton of carbon which is incredibly high price that's way beyond what most economic modeling would say but definitely is a price that would help you know force some behavioral

SPEAKER_256: change and then finally i want to ask you back to the fund and voyagers fund one announcement

SPEAKER_78: this is sort of speaking of this idea of of tracking and quantifying um the announcement said across its portfolio voyager as a target of sequestering or averting the emissions of 500 million tons of carbon dioxide equivalent uh during the lifetime of fund one how trackable is that and how much is it a thing in the back of your mind i mean you're relatively new but you know in every meeting

SPEAKER_180: so it's a question you ask every time the nice thing is is that you can you can just straight up ask in any given in any given pitch okay for you know for each unit of your own economic activity whatever that is like how much you know what how much emissions are you abating versus what would otherwise be happening if you're in the business of removing it how much are you going to be able to remove like it's a it's an it's a nice sort of step ladder to be able to work through uh on the portfolio basis while also of course kind of preserving some diversity of companies that you look at and different industries you look at but it's it's nicely clarifying like it's a it's another clear form of measuring what the fund needs to do while also of course returning money to limited partners right so i i find i find that actually very helpful um because it it helps you target for scale and for relevance so if something can't if something has this has a like fantastic economics but a tiny addressable market it's maybe less of a proposition from that perspective or if it's small at the moment um but you can see the path to it being three or five orders of magnitude bigger

SPEAKER_179: in the future then you can get a sense for sort of the emissions capable the emissions reduction or

SPEAKER_92: removal capability that comes with it would you say it skews you toward hard tech like are you

SPEAKER_78: do you consider yourselves a hard tech firm so there's a lot of stuff in there that i think

SPEAKER_180: would still qualify kind of the edge so it's it's it's software based or it's transport based a lot

SPEAKER_179: of it of course is is driven by ict in its way i don't think you would call it hard tech in the like

SPEAKER_180: breakthrough energy ventures sense because the timelines are you know within a venture horizon but it's it's definitely um not exclusively huge things that are going to take 15 years to come to fruition i mean it has to have some things that happen kind of within within fun lifetime to go it's and so not that not that hard tech funds are necessarily requiring a 20-year window but i think that there are there are activities within the fund that are happening with some fair immediacy so and

SPEAKER_266: not just requiring you know another seven or eight years to to get to to get to lab bench phase right

SPEAKER_78: i'm calling this medium tech medium for media to my strategy yeah you'll have to i'll have to check with uh i mean honestly blended tech could a hundred percent become heaven help us alike oh no all right

SPEAKER_210: i can see that i can see the offering documents already you're the guy with the newsletter let's make

SPEAKER_78: this happen nat bullard is writing weekly for bloomberg green on energy transport technology climate and finance and uh recently a venture partner at voyager ventures thanks so much for the

SPEAKER_273: time thank you molly all right everybody thank you for listening yes thank you we have a great

Jason Calacanis: week coming up a great halloween week we got adina heffetz from dibby coming on the show to talk about

SPEAKER_278: that fast company hit piece yes that'll be great and i'm interviewing my pal for the second time the founder of aol steve case on his new book the rise of the rest i smell a book club coming

SPEAKER_157: and we have an awesome drone startup for next unicorns all right listen tons of news as well

Chamath Palihapitiya: are going to be is going to be breaking next week earnings geopolitical who knows what's going on

SPEAKER_07: in the world twitter might be bought by that you know well and uh if yeah if the twitter transaction

Chamath Palihapitiya: is closed then i will uh be able to talk and you know what i love to do molly talk so

SPEAKER_282: maybe next week monday could be the start of an exciting new this week in startups where i can talk about certain companies that previously i was boop not able to mark your calendars mark

SPEAKER_285: calendars everybody everything's gonna be on the table see you monday