In this episode, Rob and Josef talk about some Twitter controversy over founder extravagances, and the difference between, say, personal chefs at work used for recruiting, vs. buying a used fishing boat with your profits. This is something we looked into in a piece Rob wrote on BuiltIn, “The Weird and Wonderful Things Midwest Founders Do After They’ve Had a Big Exit

Jonathan Treble joins and talks about his path from Wharton grad to startup employee to Founder/CEO of PrintWithMe

He also talks about building his company, and practical milestones he set. He also has valuable advice for founders: 

“Optimize for control over valuation” – when negotiating at early stages.

“Validate with the smallest team that you can” – because, really, more money means more problems. 

He also talks about team building, which is something Jonathan excels at. They use the “Culture Index” to guarantee culture fit, which is incredibly important. He talks mistakes, onboarding, and recommends two books that created his own foundation for recruiting: 

“Who” by Geoff Smart and “Recruit Rockstars” by Jeff Hyman

Who does Jonathan see executing? Orazio Buzza of Fooda, Inc. 

Transcript:

00:00

Welcome to the execution is king podcast. Today we have Jonathan treble founder and CEO of print with me, along with my co host, Rob Weber, managing partner at Great North ventures. Welcome to the podcast, Jonathan.

00:16

Thank you. Happy to be here. Thanks for having me.

00:19

So Jonathan, I know we first met a little over a couple years ago, I believe, and you were kind of busy starting to really scale your business print with me. Maybe for starters, could you maybe introduce us to how you got to that position, you know, whether it be where you went to school, maybe some of the influences you had from a career standpoint, which sort of led you to print with me?

00:42

Definitely. So I started my business journey in undergrad, my undergraduate program was at the Wharton School, I majored in finance. But generally, it was a very well rounded business program. And I went into business school because I knew that I wanted to get involved in business in some way. Even back in high school, I had started a couple companies in high school. And I had the entrepreneurial edge, I think that comes from my parents, and particularly my father got me started with an eBay trading assistant store in high school. And it was so much fun to build the business and see that have some modest success in high school. I went to Wharton, I studied four years of business Warden is very much a finance school and breeding grounds for wall street and specialty services, firms, consulting firms, etc. And so that flavor of education was a little too formal for me. I realized at the time, I was not really going to use a lot of the finance in my career, although it was great background knowledge. And at even at the same time, in college, I had a couple of side businesses going right after college, I joined a startup in New York City that was founded by somebody I had helped in an internship. And that was my first foray into startup land. I immediately loved it and understood why I am meant for startups, right. And that is just the pace, building something out of nothing. The ambiguity that I like working inside of, and I took that job in New York City, and they haven’t quickly moved to Chicago. And the the story there just kind of all worked out well, for me, I guess is that this New York company took a round of investment from light bank, which was the newly named venture organization founded by Eric lefkofsky. And Brad keywell, who are known to be among the best serial entrepreneurs in the whole country, certainly, probably the top and Chicago, because they’ve, they’ve taken public, at least four companies I can think of, and now we’re working on one or two unicorns that are still private. They’re just incredible entrepreneurs. And when I heard that they invested in in my friend startup and that I could join, and then they needed somebody to go to Chicago and liaise with them. I was like, Yeah, that’ll be me, for sure. So I read jumped at that opportunity, moved to Chicago for that, and ended up with that startup for about a year wasn’t really gaining traction, I switched over to another light bank, back startup, and then even another did some consulting. And after about three years, I wanted to try something a bit different. I wanted to get the big startup experience. And what I mean by that is like a larger at scale startup. So I applied for a job at grub hub, I was given the position, I joined as a project manager on the tech team, slash business analysts. So I was essentially in charge of the development work for five engineers. And these engineers were pretty senior, like much, much more accomplished and experienced and knowledgeable than the more junior engineers I was working with at startup land. And I got to really learn how software is delivered at scale grub up at the time was, I mean, calling a startup is definitely an accurate in 2013. It was way along in his journey and actually getting ready for an IPO already. But it still had the startup feel. And so I joined this, this tech organization, the tech org at the time was probably 50 to 100 people. And I was one project manager among many over a certain team. And that was great. His big company experience I guess, to learn how to work on a team within a big company and I was my job as the business analyst there was to liaise with other departments in the company and help build software to meet business needs. And so that actually gave me a lot of insight into other facets of grub up. So other departments, ranging from marketing, to finance to customer support operations, I got to be the person to kind of liaise with a lot of those departments and help them solve problems with software. So I think that that year that I spent doing that full time was among the more important learning opportunities in my then career, because I got to see what a startup would look like, at larger scale. And kind of what, as a founder, a future founder, I should be keeping in mind kind of like setting as a North Star for my own venture down the road. So at this time, I was about 2526, I was dabbling with a couple other business ideas, startup ideas, I even funded myself, I bootstrapped, that a couple people would help write code for me for a couple of these ideas, and we put them out there and we tried to get some traction, and neither of them really took off. It was there were interesting ideas, for sure. But they lacked some, some point of traction. And

06:20

I suppose during all that time at grubhub, you know, building products to meet business needs, you kind of built may have built up a backlog of these ideas to try out. It sounds like you tried out more than a couple of them.

06:33

Yeah, Funny enough, the ideas I was trying out, didn’t really come from grubhub, I did get a lot of exposure to different parts of grubhub. But the types of problems we’re solving at that scale, weren’t all that. Well, I’ll say some of them were innovative. But a lot of them were just scaling systems. Like, for example, I had, I had the good fortune of being the business analyst who is revamping our accounting system and, like re building out the business logic for like, what activities wound up in which ledger accounts which is mind numbing, but good experience for I think, just just to have that a little bit of that background. And don’t get me wrong, we worked on some innovative things as well. And I was actually I think I, I was involved in some patent application with one of the founders because we came up with a way to track delivery times better through through an interesting system. But you know, by and large, most of my job was was just the nuts and bolts of, of scaling systems, which in itself is interesting stuff. I liked it. It’s intellectually challenging, but it was not exposing me to like a very wide range of ideas. So these other ideas, were just things that I was inspired by in day to day life. And one was like a meetup app, like a spontaneous meetup app, because at the time there was not in this is 2013 meetup.com was very, like planned. And so the a few companies have tried this I I would later discover and that the issue with traction is, I mean, it’s, you know, how do you build a network effect, it’s so hard to acquire those initial users you need. You need like person liquidity, you need a lot of people to be wanting to meet up at once. So it’s, it’s really tough, and then monetizing it as a whole nother very challenging endeavor for that type of app. So this is all setting the stage for how I ended up at print with me, right? So around 2014 I think it was early in the year, I needed to print concert tickets for a concert, right downtown in Chicago. And it was kind of a last minute decision to go to this concert. So it was the weekend. I couldn’t print the tickets at work. I realized I needed to print them somewhere else. And I didn’t own a printer. And I remember having to get into at the time, I think was a cab because early days, I mean Uber Lyft. We’re not quite there yet. And I, I drove about a mile away to a FedEx Office, I printed those tickets, I drove back in the cab. And the whole thing probably cost like 25 bucks between the cab fare and then FedEx Office rates for printing. Just thought, Wow, what an expensive thing to do. Certainly I could have bought a printer at that point and realize I save money in the long run. But I was also moving apartments somewhat frequently. I was in my mid 20s I was embracing the sharing economy. I was thinking, you know, why do I want to own more stuff? And I bet I figured a lot of my peers and people in my cohort felt the same way. And so the idea kind of struck for printing kiosks and it was an interesting idea. It was a kind of like a wacky idea. like okay, who would actually put printers in public places right like It sounds like that’s maybe problematic, like, I could foresee many ways that that would break and how it’d be tough to manage. But the idea really kind of sat with me. And for a few months, I kind of pushed it off. And I was like, I don’t know if this is a great business, and I was working on the other ideas at the time. And then one day, in the middle of the summer, I kind of just had this this moment where I was like, You know what, that idea is still bugging me. And it actually I, I could use that myself. And I bet a lot of people could, and why not just try to build it. So I just decided to go for it, stop the other projects work on this as my key focus. And that’s how I ended up starting it.

10:48

Yeah, there’s a lot of good useful lessons and kind of your your origin, how you got print with me off the ground, I think a couple of the things that really resonate with me is just overall, I think, when people see successful founders, they often think that, you know, that they’re, they don’t think of all the background work that went into sort of honing your skills, and they’re just hearing your stories a lot like my own where it was like, I wouldn’t necessarily call them failures. But like, there were a lot of projects that I was gonna tinkering with, you know, before we had kind of our breakout success, which, you know, went on. And I think that’s a really common theme with a lot of entrepreneurs. And I’d say, the other ingredient there was to just working at seeing another company at scale that was, you know, previously a startup, be able to learn from the kind of execution, especially in like a product or product engineering type of team, we’re actually working on the product. And, you know, ideally, probably some exposure proximity to one of the founders, like I think, you know, that is that can be so powerful for people who want to know, they want to be a founder, but they don’t know how to get there. I have a lot of young people who reach out and say, hey, how do I do what you did? How do I become a founder, I think there’s, there’s these like two logical, and you should have both of them. I never had the sort of bigger company experience. But I think that’s like to be able to see the, you know, the startup at scale, alongside your own tinkering projects, that’s got to be super powerful, right?

12:13

Yeah, it was definitely powerful is the best education I could have ever wanted or gotten better than a definitely better than like an MBA or an advanced degree. And I actually think you’re right grub hub. That year was very important. It gave me the Northstar for how a scaled business or scaling business needs to look like and how the different departments interact, and how technology can support all that. Very important lessons that I still have with me this day. And a network of people that I still keep in touch with this day, and that have helped out and consulted with me, you know, subject matter experts. But I’d even say going back before grubhub. So there’s three years that I was in startup land, at early stage startups that were still trying to figure out product market fit, and building product. So I was, I started as like a sales rep in the first job for a year. And I switched to Product Manager at the next startup. And I did that for two years, about two years. And those experiences were almost just as valuable. In fact, arguably, maybe more. So I got to see these founders, these early founders, in their process of tinkering and trying to make a product that was in demand and viable. And that was just such an incredible learning experience. And I got to do it on somebody else’s watch or like, on their dime, in a way, right, they were paying my salary, I didn’t have that much risk in it. Certainly I was like earning under market because it was a startup, but I was learning a ton. And so that the combination of all those experiences was super helpful. So that when I went to start print with me, I already had a lay of the land of like, financing fundraising, what, you know, common pitfalls that some of those founders have fallen into with, whether that’s building their product, or dealing with fundraising, and investors, right? So it was four years of incredible learning, you know, from the startup land all the way through grub hub. And I would encourage anybody who wants to eventually become a founder, if you haven’t already to get some sort of experience as an employee at a smaller firm. Right? As as early as you can. I would encourage that. And, yeah, I’ve taken a lot of that with me even to this day.

14:36

Yeah, so it’s interesting, Jonathan, I remember if I think back to when we first met, one of the things that really stood out to me was just kind of your, your sort of more pragmatic view on raising capital. If we go a little bit deeper down that path. It certainly like immediately just like kind of clicked for me as a founder who bootstrapped a company you know, some some level of success and I think there’s just like Eat this echo chamber and venture capital and startup laying that it’s sort of like, you get on the train, and you just raise round after round. And it’s sort of like the tech media just celebrates, you know, these markups and these more dilution and more dilution. And I think it’s almost unhealthy in a way of, of, you know, the way the VC industry kind of like, almost like, perpetuates this sort of like myth about building a company. And I think I’ve really respected Can you talk a little bit more about your sort of mindset with how you funded the business, getting it going, and now scaling it?

15:34

Yeah, happy to I, I’m very passionate about this topic. As an early employee, pre IPO employee at grubhub, I was given some stock options. So I’ll start there. And that was, I think that was great that the founders still allowed early employees, I was like, employee 500, something. I was definitely not early, but they pre IPO, every employee still had a grant of options. And a year later, I was there on IPO day, I was still full time there. We all were in the money essentially. Right. And, and in a big way, I think the IPO popped. And incredibly the first day, certainly a lot of my peers who had been there many years were way, way better off than I was. But this was a modest, you know, a modest gain for me early in my career. And it is true what they say that when a when a tech darling in a community IPOs or exits and, and it’s a good exit, a meaningful one a big one, a lot, it creates a whole class of new founders, right. And they’re, I know, several who’ve gone on and founded new things after that, and, and so the liquidity was great. Again, I don’t want to overstate this, it was very modest. But for me, it was the working capital for bootstrapping print with me for the first six months, before I started raising some funds from friends, I’ll start with that, I think that’s important to reiterate, like being an early employee, getting those options can actually be life, life altering, I won’t say changing. And then I’d say my philosophy in the early days of Chrome with me, so like your, the first two years was to just raise enough funding to reach certain milestones, right, just enough to kind of keep validating that this is indeed a good business. Because when I first started with me, I went in with eyes very wide open, that this may not work out, this has a high likelihood of failing, actually, and I have no idea if consumers will actually pick up on this. So I said, I told myself, I was like, I’m gonna give this three months, if I don’t see any traction, after putting alpha test printers in a few public places, I’m just cutting the cord and moving on to my next idea, right, I was 26, I had nothing to lose, which is another critical part of being a founder, you really need to be be okay to like not earn any money, or it’s better if you have less to lose or lower lifestyle at that point. And I certainly had a pretty humble lifestyle at that point. And so I just figured it I bootstrapped for four or five months, just paying the developers on my pocket, I’m still working part time at grub hub, right? I luckily, they, they were able to reduce my hours to like 20 hours, which gave me enough money to pay my bills, and invest some of that money into into print with me. And there came a time where we had bought a bunch of printers, we wanted to increase our, our velocity for developers. So I wanted to hire a third developer contractor at the time. And I was like, no, what I should raise some money, I could really use some more more funding here. So I started going to friends first, and a good friend of mine from study abroad, wrote the first check in like December that year, so about five months in. And then another acquaintance from the light bank portfolio wrote another check after that, and another college friend wrote one of my former boss So in the first six months of fundraising, I just raised 50 grand from, you know, on a convertible note, and it was like such a shoddy convertible note that probably had tons of mistakes in it. But we ended up you know, converting that into equity with the first price round about a year and a half later, but that was it 50 grand to just fund more development and more printers. And again, bring me to a milestone where I would decide whether it was gaining enough traction to continue even further, you know, that end up being not very diluted at all, but enough capital how we could prove that. And then, at the same time, I was getting great mentorship from one person in particular comes to mind rasio bouza, who’s the founder and CEO of fouda Buta Inc. in Chicago, they do pop up restaurants in, typically office buildings. And they’ve grown an incredible business. And he’s a light bank veteran as helped two or three of the light band companies go public. And he was telling me early on throughout my early days tinkering with print with me, he was saying, you know, I wouldn’t raise that much money. I try to bootstrap as much as you can retain ownership. Right. And, you know, he didn’t think the print with me was a business that was really set up for venture rounds of funding, like ABCD, etc. And I think he was probably right. And I’m happy that I I raised in dribs and drabs slowly, because I still retain majority ownership today, and majority control. Importantly, and I could have easily gone away had I been enamored with the venture cycle of raising so many rounds, and you know, giving up more board seats losing control, right? That stuff is scary. I mean, you know, I’ll jump forward a little bit to when we did raise our first price round, it was August 2016, that we got the first term sheet. And, to his credit, Jeff meters, network ventures, was one of the only VCs in Chicago that would take a deep look at permits me bear with me scared off most other VC is what a printing company right? As it as I totally understand it would, right. And he got in the numbers, our traction saw, saw the growing revenue that each kiosk was making, like, wow, this is actually a good business, great margins. at scale, it can be a meaningful business, a decent size, exit, you know, medium to large. And he said, you know, I’ll do a term sheet. So we did that. And thankfully, right I, and I’m saying this to help maybe other founders that end up in this position. And, Robin, I know you’re a VC now, so I hope you hope you don’t, don’t mind me like giving some advice the other side of the table, but you’ve been on both sides. So I’m sure you don’t mind. Like I got great mentorship from two of these people that I looked up to when I was reviewing that term sheet. And both rasio and Mike Evans, a co founder of grub hub, when we were reviewing it together, they were like, you, you cannot give up a third board seat right now, right? Like the term sheet initially said, One investor board seat, my board seat, and then an independent third. And this was like a pre seed round. And they were like, No, no, no, you can’t do that. That’s crazy pants. So of course, I pushed back on that. And they, their advice was optimized for control over valuation. So I gave up the point on valuation, it was still a decent valuation for where we were at the time. And I but I was firm on retaining two out of three board seats. And to this day, I have so at I mean, I tell you, five years later, if I had if I hadn’t had that advice, or I’d gone the other way on that I would have many more sleepless nights because, you know, there’s there’s another group of people a board that could technically asked you, whenever, you know, they think that’s that’s the right call. And that can happen and does happen a lot of founders. So you know, I’m very happy for that for that advice. Now on raising capital in dribs and drabs, oh, I’ll continue, I raised that round, it was just 500k in new funding, all the previous notes converted in for equity, the post post money was like 3.1 on that. And then that was enough, again, to kind of validate that I could build an early sales team, we’d continue to get traction, some sales efficiency, get ready for maybe an A, well, we didn’t hit quite all those metrics. In the first year I struggled with hiring I made some poor hiring choices. And nevertheless, we were still growing, we actually tripled that year, but it wasn’t like what I wanted it to be, we’re able to go raise a seed two, which is definitely a thing now. And we’re it was an up around, I think,

24:20

an 8 million posts. And, and that, you know, was another I think, in fresh capital that was another like 900 at the time. And I was like, Alright, well, this might all be all we need to really get a sales team in place that can harm and, and prove the model and that ended up being true, I only needed that. It gave me another year and a half of burn, right? hiring and getting getting the team more efficient. And then we we reached profitability a couple years down the road and didn’t really need to raise again and You know, certainly it’s slower. It’s a slower path. It’s not for everybody. It’s not for every business, right? I, you know, the venture path makes sense for a lot of businesses, but not for my business, and certainly not at the time.

25:13

So when you’re talking about like raising, and like setting these milestones, you also talked about, like, kind of like a friends and family round going to people, you know, so were you matching up? Were you like setting the milestone first, figuring out what you needed, and then setting the amount? Or were you kind of gauging how much capital you can expect to raise, and then readjusting what milestones you can hit with that capital expectation?

25:41

Yeah, that’s a great question. I’m not even sure I can remember exactly what my thought process was. Go back now, five, four years, you know, I think, I think it was, well,

25:52

maybe just knowing what you know, now. Like, maybe if you can’t remember, like, instead of the chicken and egg quandary we could get into right now, if you had to devise somebody, what what would you tell them?

26:04

Yeah, I think I would advise to go the former route that you described, which is, pick your milestones like, what do you want to validate with, with your funding and figure out what you need? Yeah, figure out, like, what your use of funds will be? Like, do you really need 10 sales reps? Or can you validate with three? Right? All right, well, three is a lot cheaper than hiring 10 sales reps, right? Do you need five engineers or can you get by with to really try to i, in my opinion, validate with a small team as possible, because then you don’t have to raise as much at such a low valuation and dilute as much. But also, like, more money, more problems, right, you raise a $3 million pre seed, you’re going to have a ton of stress trying to hire up to to meet like, the expected burn on that in like six months, you’re, you’re gonna make hiring mistakes, these are gonna feel time pressure, you know, go slow in those early days. Unless, of course, you there are certainly exceptions where like, if you’re really on to something that can be a massive market opportunity, like 10s of billions and like, you know, someone who’s gonna copy right away, or somebody else is going to, or there already are competitors, you gotta go fast, right? And that’s, that’s where raising a lot of money and trying to blitzscale make sense where it’s a winner takes all are most market. And if you don’t act quickly, a competitor will, will take it right. I think that’s where, where you have to, but for a business like mine, where I didn’t see any competitors coming after us. And still, to this day, there really aren’t any, like, I didn’t have that time pressure.

27:53

It’s so interesting. And I just love I couldn’t agree more. It’s interesting. So on episode four, we had my new con from Twin Cities bass field nation, which is huge breakout success that the story isn’t very well known because we did this sort of friends and family round with my new Alcon he was sort of my brother’s computer science lab partner at St. Cloud state and central Minnesota. You know, he skipped all the subsequent funding rounds, no seed round, no way around, no, no, maybe not even a B round. And then he raised like 30 million after bootstrapping for seven years. And the weird thing about my news story, in his category, there were several direct competitors that raised far more money and ended up just flaming out. And actually one case, he acquired the company, it was just like, this is why we have the execution is king podcast, not be blitzscale and raise the most money you can podcast, because it very much it speaks exactly to the core of our beliefs, which is, you know, it really execution matters the most. And I think it even matters and even in cases where there are competitors, multiple competitors, even some with a lot more capital, you know, stronger execution with the right strategy will kind of Trump the capital all day long, right? I believe that it definitely is a little more nerve wracking as a founder, when you start, you know, having a more direct competitive pressure and in there, you know, maybe categories where there, there’s just a lot more capital flowing into it. But even then, like, I think my new is a great example. So I think that’s probably why like, this sort of mindset you had is very much aligned with my own, you know, in terms of just capital efficiency. And I think there’s also this being cognizant of the overall competitive landscape like you described, like that. It’s just so important. So I know, obviously, you know, if we fast forward to today, you know, growing the company is gone from like, will the idea work? You know, scaling and scaling, of course, means expanding the team. Can you talk a little bit about, you know, some of your lessons learned in terms of recruiting and building up your team and maybe we can dive into that for the last part of the podcast here?

29:56

Oh, absolutely. Yep. And I mentioned it earlier, but I made a bunch of hiring Mistakes after my first like large round of raising and which was 500k. And so it was it was actually the investor, the lead investor Jeff gave me a book on recruiting after that he was like, you should probably read this book. I was like, Okay, great. So I read it. And it was cool by Jeff smart. And that’s like one of the classic recruiting books out there. And about a year later, I picked up another book by Jeff Hyman called recruit Rockstar. So those two books have formed the backbone of our recruiting process, I’ve just taken their processes and kind of melded them together in a way that I think makes sense. And I hate

30:41

to interrupt yet, but I don’t want to get too far away from this. You dangle that out there. And I just got to ask without naming any names. What was your worst recruiting mistake?

30:52

Worst recruiting mistake? I think so hiring a couple of people at the same time who had fantastic like results on paper in sales roles, but were toxic for culture. So really, like just looking out for themselves to money motivated? Yeah, like all about themselves and not not willing to care about the team or the company. So that was so so I shortcutted the the interview process with those, those two people and it was disastrous for the culture, right, a couple other good people left because they were there and, you know, so that set me back a few months in the middle in the middle of this whole journey. But that was a lesson I you know, definitely learned and avoided that mistake after that. But yeah, that’s a it’s a great question. I made plenty of mistakes, I think I’ve made every recruiting mistake you could possibly make. But that one stands out as the worst in terms of impact on the company. And so I started getting building a process with these books. And and also like, you just build muscle for this right over time, you you get more confident in recruiting and interviewing and, you know, the imposter syndrome goes away a year into it maybe of recruiting and, and so I’ve learned a lot and even even from Jeff hymens podcast recruit rockstars, where he takes he brings on entrepreneurs, and they talk about recruiting, and lessons learned. I mean, I’ve learned so much from there, too. So now I feel like we have a really good process. But it’s so important. Nope, it was a lesson for me. Pretty pretty early on in the entrepreneur journey that I can’t do everything right, I, I find myself to be pretty bright, and like, adept at many different things. I like back in a year into starting print with me. I was like, I had my hands on everything, right? I was leading the tech development, I was leading the operational side I was selling I was like, marketing, I was doing everything. And I loved it, because I like doing a lot of different things. But at a certain point can’t can’t just scale like that. Right? And, and that, and I thought it would be kind of easy to hire people and just have them do the roles. But no, you know, you got to find great people for each role. And that was like, a learning opportunity for me, right? I think it was 28 when we started trying to hire people and at scale, and you know, and so that like learning how to identify strong talent for a role. Also make sure that the talent matches your culture that you’re trying to build for the company. Understanding like the difference between an entrepreneurial employee and somebody who works at a large company that needs so much structure and process around them and just gonna just flounder in your crazy mess of a startup, like, these are hard lessons learned. And I hope founders can avoid those mistakes by being very thoughtful about it and deliberate and listening to other founders who have gone through those same exact problems.

34:02

How do you how do you really like, ensure that they have the right personality? How do you how do you go through and like, I mean, it’s not like you give them like the Myers Briggs personality test are, you know, is it just a matter of the interview process and getting a lot of the right people on your team involved with talking to them?

34:22

Well, we do actually give a culture survey I’d call it which is a 10 minute questionnaire, and it’s called the culture index. And that is similar to Myers Briggs. It tells us at a high level, where an applicant falls on five or six different spectra of personality. So how driven they are right the competitive atop like seeking risk and autonomy, how socially our extroverted, introverted and in a way, how urgent they are versus more like methodical and Slow, and then how like detail oriented and conscientious they are, it’s been around for a while, it’s a derivative of like the five factor test, and like many people have written about it. And I use it religiously to this day. And so it is one data point among many in the interview process, and helps us get more comfortable with the idea of a person in a role and you figure out what archetypes and patterns you want for each role, and you try to make sure that your applicants match at least match majority of those spectra. So love that test that was introduced to me in 2018 by an investor who literally wrote a check for us to go get trained on it, like a five figure, check. He just wrote it. For me, it was like a gift. I was like, wow. But you know, that has been so game changing for the company that I’m sure he’s he’s, you know, it’s kind of like, he’s was protecting his investment, because he he probably also saw the hiring mistakes I was making. I was like, you gotta you got to go through this training, and use this test.

36:05

What What was the name of the test? I wrote down? culture index test. Is that the name of it?

36:11

Yeah, the culture index? Yep. Yeah, they’re, they’ve been around for, like 20 years. And there’s a great team at UT Dallas, I’m happy to put any founders that are interested in touch with with their leadership in Dallas. I’ll give my contact info after the show. But you know, it was transformative. I’m a junkie on that now. And it is, it’s really, it gives you a reference point that you you can’t even imagine for assessing candidates versus like the, the traits that you really need in a role. Now, that’s just one thing. You also have to test? Do they vibe with your culture? Like, if you’re trying to build a very Hustle, Hustle, Hustle culture? That’s like 70 hours, 80 hours a week? Well, are they willing to do that? Are they excited by that? Is that is that are they at a point in their career where they can do that, I was never trying to do that with all my employees. Since day one, I’ve expected just 40 hours a week, because we can get a lot done in 40 hours. And we we do I mean, I work I work a little bit more than that. But we’re, we’re still growing exponentially. You know it with a reasonable culture, they’re not not a crazy 7080 hour week culture. But you know, I realize some startups it’s, that’s, that’s what they want. And there’s good reason for it. In some cases.

37:31

I think that’s really interesting and kind of macro perspective, you know, our company’s scaled to 170 employees. And my brother Ryan, kind of, we were twin brothers, he ran kind of product engineering team and I, everything else kind of, for periods of time kind of rolled up to me. And so I think back to the way you evolved, your, your entrepreneur, your leadership style, sort of going out, studying the the areas, the best information available on certain processes, you knew you needed to scale your organization, and then bringing that into your business, on your own doing it on your own as an entrepreneur. And it goes something I remember, like in our sales organization, we got to several dozen people in our sales organization in my last company. And I think I read every, there’s all these different methods of selling, there’s like SPIN Selling solution, selling challenger sales, all these different methodologies. And I would just read up on all of them, I go, I think this would work best in our business. So we’re going to implement this. And then the next step was running a sales training workshop. And we’re creating case studies based on the book, you know, for this methodology that is completely built for our business. And it was like, and I thought it worked really well. There’s this sort of attention to detail on scaling, the organization, the onboarding that went into it. And, you know, even down to like an onboarding checklist for like, the first 30 days in an employee. There’s just I know, I was listening to your podcast interview on recruit rockstars. And you talked about, you know, the importance of strong onboarding, I think that’s something many startups, you know, really fail at, quite frankly, though, especially in the positions where, you know, you’re going to add a lot of staff. You know, it’s so critical. The early experience and employee has made me talk a little bit about like, you know, beyond recruiting like the onboarding experience, and some of the things you’ve learned as you guys have been building up the business.

39:21

Yeah, sure. So you, you hit the nail on the head. onboarding is very important. We’ve, I learned the hard way I had a couple people that I just kind of threw to the wolves and just said, Hey, can you go figure this stuff out, and that they didn’t last long, and that was my fault, right? But I learned some wisdom from Jeff in his book to take onboarding very seriously. So I started there a couple years back, I built an onboarding checklist of things that I think every employee approved with me should know. And you know, it’s it’s the nuts and bolts of like, systems, getting getting all your tech stuff on boarded obviously that’s going to be There, but also like, how we communicate what are our communication guidelines and standards? And what are our okrs? What does our OKR system look like we do objectives, key results, like the measure what matters, but we have every employee read the measure what matters book. So that’s part of the onboarding checklist. So we we try to be just as good about onboarding people into our culture as we do the nuts and bolts of the systems in the company and also like the knowledge for their specific domain or the role. Both of those things are very important. I we now have the good fortune of having two people in HR lead recruiter and then kind of an HR recruiter hybrid. And now that HR hybrid is onboarding people, and has a checklist and you know, he’s there, buddy, for for onboarding. But early on, it was all me, right? When you’re a 10 person company, you’re the founder, you’re doing everything. But like you said, Rob, I, I would read tons of books, I still, there’s there’s a bookshelf at our office in Chicago, where I dumped all my books before I moved to Denver last year, and it’s like, filled, it was probably 100 books on startups selling marketing, tech development. I mean, you name it, I think that’s another key point for aspiring founders is you have to be a voracious learner. You have to be humble enough to realize you, you don’t know everything yet. Which I, I’m not sure I was quite there at 26, I kind of learned the hard way. I need to level up a lot of skills in my late 20s. But you know, you really can if you’re open to learning and curious and you’re seeking it, you can find so much wisdom in any topic by just reading a book, and then bringing it to your business and saying, alright, this sounds great for my business. The next day, you incorporate it into your process, and you’re able to do that as a founder, right? Like there isn’t red tape, which is great. Your your employees might have whiplash if you’re doing that too much. So you can’t be a book of the week person but you got to, I think there’s a balance you can you could do it reasonably in a way that is beneficial for the org.

42:14

One of the other managing partners are great and adventures is Rob’s twin brother Ryan, co hosts other episodes. He is fantastic at producing book recommendations for me, I don’t know how many of his I have behind me on the shelf, but several and the last time I we were in person, I saw Rob and Rob recommended a book to me that I’m actually already currently reading a Clayton Christensen book. It was just fantastic. We are running out of time here though. I want to make sure we get in our last question. I like to ask every one of the guests on our podcast, this question focused, we’re focused on execution. And we like recognizing people who can do that it might not always be the flashiest people who are getting that recognition. So is there somebody, maybe it’s a team or a startup or a single person that’s really executing that maybe they’re flying under the radar, maybe they’re not maybe they’re deservedly, very popular, but someone that you’ve seen or startup that we should be paying attention to.

43:16

I’ll say I’m again, I always and I will always say this orazio bouza is probably the best operator I’ve ever met. And I’ve met a lot. And you know, just to give you a sense, so he he’s skilled three or four light band companies and food is is now an awesome success in Chicago. But I think he told me once and he wasn’t trying to brag, but he was just kind of explaining, like how he does budgeting. And he, he had set lot, you know, pretty ambitious projections for fouda in the early days when their fundraising and you know, some investors were passing on on a couple of his rounds, they just didn’t think it was for them. It wasn’t software enough. But then he would go back to them a year later. And he would show them the new projections. And they would see that he actually hit the ambitious projections. And they were like, no one ever does that. No one ever hits their startup rejections, but he actually does and I’ve learned a ton from him. He he, he’s probably the best. I mean, I can’t think of another so he is the best executer that I’ve ever met. So I’m happy to make an intro to try to help you guys get him on the podcast at some point.

44:30

Yeah, that’d be cool. Sounds great. Well, thanks a lot, Jonathan for joining us today. It’s been a pleasure.

44:35

pleasures all mine. I’ve really enjoyed the conversation. And yeah, good luck. Continuing with the podcast is a great idea.

44:41

Thanks.

In this episode, Rob and Josef talk about of-coast investing, and the strategy behind Revolution’s Rise of the Rest Seed Fund and its founder, Steve Case. 

Anna Mason, Partner at Revolution, joins, and Rob talks about how they met, and about doing deals for the past 5 years. Anna shares how she went from Wall Street, with a front-row seat to the housing crisis and the Great Recession. 

She also speaks to the importance of investing in under-capitalized regions, and in being intentional about inclusivity, especially in the wake of COVID where some metrics reveal a backslide in DEI progress.

“We see opportunity first, through the lens of geography. The drive-it-home statistic that we have long focused on is that while the industry has grown as an asset class from $10B up to north of $150B a year, 75% of the capital invested every year still goes to three places: California, New York, and Massachusetts. “

Anna talks about the bus tours with Steve Case, which is an iconic exercise for the fund, and how people react to their arrival. 

Spoiler alert: Steve does not drive the bus. 

Who does Anna Mason see executing? Founder Rathna Sharad and Flavor Cloud, and recycling startup Recyclops.

Full Transcript Below:

00:09

Welcome to the execution is king Podcast, where we talk to successful startup founders, investors and ecosystem builders to uncover insights and best practices for the next generation of great global startups. I’m your host, Joseph Siebert. Joining me today is co host, Rob Weber partner Great North ventures. Our guest is Ana Mason, managing partner at revolutions Rise of the rest Seed Fund, Rise of the rest invest in promising companies at the seed stage. Were outside of Silicon Valley, New York City and Boston.

00:42

On a it’s great to have you on today. The first question I wanted to start with was this Have you briefly described your path into venture capital. And also, if you could go a little bit deeper on your thesis with Rise of the rest? Maybe any more specifics as to the focus of your role within Rise of the rest?

01:01

Sure. Thanks, Rob. It’s it’s great to connect in this more public forum. I know we spend a lot of time chatting with each other about deals and I’m excited, really excited for you guys in launch this podcast. My name is automation. I’m a proud washington dc transplant. I’ve lived in the district for about six years, I like to say I have my two favorite startups are my little girls who are two and a half and five and a half. They’re fifth generation Washingtonians. And the responsible family life choice that led us to raise our kids in DC is very much so the reason why I’m there. But along the way pretty early and I got connected with Steve and revolution team. And it’s been a real privilege and an honor to just work alongside him and my other partner, a managing partner, David hall to really grow rise the rest. It’s my path into venture I think like many is an interesting one. And part of what I love about our industry, but I also think can be a little bit challenging is that there is no one clear check the box path into the industry. So I like to say that I have a bit of an eclectic portfolio of professional experiences that brought me into venture. I grew up professionally on Wall Street, I was a distressed and high yield bond and bank debt trader and also dabbled in a bit of post retired private equity. Over the years. Long story short, I had a very, very front row seat to the financial crisis in the Great Recession. coming right out of school, I landed in a job that I thought was like the greatest thing since sliced bread working at Lehman Brothers on their distress desk, which has a strong reputation. Little did I know that shortly after, you know, a couple years after I joined, I would be trading our own bonds and bank debt on that desk through one of the largest corporate bankruptcies in history. What I would say briefly just about that experience, and how I think it tracks to my path into venture is that I find myself very frequently thinking and somewhat frequently saying that venture is very much so like the other side of the coin, from distressed from the distressed investing world, you’re making big bets that typically have very binary outcomes. But the fundamental difference, and what I really love about our industry, and about our work, it rides the rest specifically is that in venture, you’re really fundamentally betting on the bright side of the coin. And you’re just, you’re working with partnering with funding and backing entrepreneurs who are really functionally optimists, I think reimagining the future, which is a wildly different universe from working in a subset of the financial markets that are focused on trading in the securities of companies who have missed the mark, they’ve missed the innovation or have some measure of corporate malpractice that is that has taken their securities into a more distressed stage. So I learned a tremendous amount in the earliest days of my career, both from the standpoint of the nature of the work we did and I did on the distressed side, but also in having gone through a major corporate bankruptcy upheaval, and merger thereafter. And that merger experience going from Lehman to Barclays taught me a tremendous amount about corporate culture. And it’s a lot of what I try to apply from an investor lens standpoint, into how we think about team construction and team values. Because at the end of the day, whether you’re a seed stage startup with five employees, or you’re a major conglomerate with 25,000, employees or anything in between, at the end of the day, your organization is the sum of its people. And so really kind of having a feel for the good, the bad and the ugly there from some personal experiences early in my career certainly guided that experience. Wall Street was beloved and have to leave it experience. So just kind of fast tracking here a little bit. My Wall Street recovery program took me to Southern California, and I lived In LA and got involved in the awesome guests years ago, still somewhat nascent startup community, they’re co founded health tech startup called burness. We originally started in the boutique fitness booking space. Like so many we pivoted early in the lifecycle of our company, when we realized we productize the wrong value proposition, happy to talk more about that later. And that pivot led us into an opportunity where we really doubled down on community and the social psychology of fitness. And so it’s been fascinating for me to see sort of the emergence and the 2.0 of a lot of social, like vertically focused social, social commerce company is kind of coming up in the market, because we were very much so playing in that space. Back in 2012 2013, my co founder and I both got pregnant. And we were in a great place with our business, traction wise, but hadn’t fully landed on our business model. So we had an awesome opportunity to soft land, our company into a major, major private company in the space called Beachbody, which was a great home for some of our engineers and the technology and the platform itself. And I moved to DC for my responsible family life choice, which takes me close to present day. So I’ve been a revolution for five years. And it’s been a real privilege to work on scaling rise the rest.

06:24

So can you tell us a little bit about the thesis behind Rise of the rest?

06:28

Yeah, at its core, I would sum up the thesis of rise the rest by saying we see opportunity, first through the lens of geography. What that means in practice, is that the guiding light and the sort of drive at home statistic that we have long focused on is that while the venture industry as a whole has grown tremendously as an asset class, from, you know, $10 billion invested a year up to now, I think north of $150 billion a year 75% of the capital invested every year still goes to three places, California, New York and Massachusetts. And so we believe very deeply and are delighted to put our money where our mouth is that brilliant entrepreneurs can have and continue to build transformative companies anywhere in the country. But the tip of the spear in activating those opportunities is early stage seed capital. And so our model is what we call a catalytic co investment model where we are high volume early stage investors. And while we do invest across industry, over the years, we’ve sharpened our pencils to increasingly focus on opportunities that sit at the intersection of, of a handful of themes and those four themes for us, our infrastructure, resilience, digital transformation, and sustainability. And so that can take us into FinTech it can take us into healthcare, may can take us into hard infrastructure. I’m pretty sure I have a small child, my little startup who somehow broke the lock and snuck in here. But that’s the thesis for rise the rest in a nutshell.

08:14

So I’m a big fan of Rise of the rest. And I know one of the things that it’s known for our it’s bus tours all around America. I know that’s been challenging to pull off during COVID. But I wonder if you could share with us a story or two, in terms of the most unique or interesting startup ecosystems you’ve come across in your travels with Rise of the rest.

08:38

Your thanks, Rob, I’m excited to get you back out on the bus with us again, whenever it is safe for us all to convene in that way again. So I’ve actually personally been to 47 cities and counting in the five years since I’ve been at rise the rest. And so these are always the hardest questions, because picking just one or even two is tough. I thought I chat briefly about to startup communities that might surprise people, even as I’m so heartened and pleased to see how much momentum the broader thesis and interest level investing outside the coasts, has become over the last couple of years. And so one, one community that I’m wildly bullish on is Tampa, the Tampa Bay Community in Florida. I think it’s most interesting to me, and I think is worth noting, because Miami, you know, sort of just across the state has been getting so much fanfare and attention and opportunity. And frankly, I think rightfully so I’m long Miami in so far as that debate rages. But I think Tampa long before COVID and in particular through COVID has had the opportunity to really kind of double down on the ecosystem that’s developing there. So some fun facts about the Tampa Bay region, average age. I don’t know if you want to wager a guess, Rob average age in Tampa Bay? What do you think?

10:09

I would I would think it’s all I think of Florida as being retirement oriented. So I’m gonna say like you say, 42.

10:16

Yeah, it’s like 34. It’s crazy. It’s 34. We learned that when we went there a couple years ago, you actually came in lower that I that I might have thought otherwise. But there’s, you know, when we visited there a couple years ago, pre COVID. We got to see firsthand what Jeff fenech and Lakshmi Shenoy and the team at embark collective or building in the Tampa community. And what’s super interesting about this, I think of it as what what we call the work live play model in our 2019 rise, the rest ecosystem playbook. There’s a major real estate development underway there, called the Water Street project, the Tampa Bay Water Street projects, it’s like multi billion dollar, really like city renovation, if you think about it. And what I love so much about what was developed there with so much thought and intentionality is that as you redevelop different areas of a city, you have to have entrepreneurship, top of mine in front and center. And that’s where you had this really this like gem in this toolbox of embark collective, which was not only startup hub and community space, but it was really a collective to bring together leaders, mentors, investors to support this emerging generation of startups in the Tampa Bay Community. And through that, they really become this like magnet or beacon. That gives people a landing place, not only for startups who are maybe relocating, or maybe are homegrown in the region, but also for so much of the talent that’s moving to Tampa, from the Bay Area and otherwise, and either wants to pay it forward, wants to find that next opportunity wants to mentor wants to invest wants to join a startup. And now there’s a space for it. And I think creating that type of network density and concentration with intention can make all the difference in a startup community. So that’s incredibly exciting to see. And I will also say, I don’t think they’ve all been announced yet. But we have four investments in Tampa, up from zero, like two years ago. So it’s really cool to see what’s happening in that market.

12:24

That’s really interesting to hear. I’ve actually been thinking about buying a place in Florida as I as I get older, the Minnesota winters are starting to, you know, catch up to me, but I was thinking more of more like southern Florida, not necessarily Tampa. So before I buy a place in the next couple of years, I will have to spend time in Tampa and see what it’s all about. Yeah, you gotta check it out. As a entrepreneur and investor, you know, so much of success, you see really comes from having a strong team and developing a team and talent. And I know with the rise of the rest, you recently completed a nationwide career fair on clubhouse, targeting all kinds of different local talent markets, such as the Twin Cities which I participated in and others, I saw you this quote that you tweeted from Brian chesky, the Airbnb co founder, who also participated, he said, You’ll never be in one place quite like you used to be, the place to be will be the internet. So see a lot more small and medium cities rising up. I could really relate to that being I’m kind of I’m not super nomadic, but I, you know, I spent a lot of time in the Twin Cities or rural like Lake town in Minnesota, and then also Chicago, you know, but I, I don’t like to be bogged down or tied down. And I think that really resonated with me Brian’s quote, but when you think about advice, you know, as you’re counseling founders through investments that the rise of the west or otherwise, what advice would you give to founders with respect to recruiting top talent? And, you know, what do you think is working best right now? And I guess, what do you think is not working?

14:02

So I love this question about place, obviously, in a, you know, in our intro discussion, I highlighted that place really sits at the foundation of our investment thesis or programmatic work, just everything we do, centers around this idea and this philosophy, its mantra, really the only place matters. And so as we moved into this space, where the realities of COVID created, I think, what some people call zoom land, like, you know, you’re sort of in nowhere USA everywhere USA. The question about, like, What does place mean, almost, at the risk of sounding hyperbolic, you know, sort of felt like it was taking on his like existential thread, about how we should all be thinking about place and one of the conclusions I’ve personally reached, in part informed by this intentional work we did through our tech talent Tour, which as you noted, Brian chesky and co headline but it was really intended to be a virtual Career Fair that could bring together active job seekers from all across the country with these startups who are in our portfolio, we had actually over 1000 open jobs across the entire portfolio. So I think a couple things on on this front. One is that I’ve, I’ve personally come to the conclusion that we’re in this moment that I’m calling like, the great unbundling of place, where when you think about it, even from a venture investor standpoint, we’re constantly chomping at the bit and looking for opportunities, like, Oh, is this industry being unbundled? And what does that mean for opportunity? And where does value get unlocked and who can really, you know, go after and chase this opportunity? I think we’re seeing the same thing happened with place where fundamentally the value proposition of place, right, which is usually where you work, and where you live, are inextricably linked, is now unlocking and unbundling. And so just like when we think about industries that are being unbundled and value creation is happening for startups, who are sort of jumping into that moment, with a very specific product offering that really just focuses on sort of like one element of the previous bundle, I think you’re kind of seeing the same thing happen, where cities can really focus on the value prop of why you should live there. And companies can really focus on the value prop of like, why you should work for us. For this to fully work, I think for cities, and for companies, and startups headquartered in Rise of the rest cities, they’re probably actually needs to be some sort of partnership that happens between the city or the economic development authorities, or the Chamber of Commerce, and startups, who often don’t get as much attention as some of the later stage companies. So that’s something I’m actually personally spending a bunch of time thinking about what could come next there that helps not only companies in our portfolios, but helps any startup in any emerging city across the country. And so all that’s to say, while there’s tremendous opportunity, because you’re seeing so many people move for individual startups, and I know all of our companies are feeling this on the front line. It’s actually also challenging, because now you’re not just competing for talent in your own backyard. We heard this from one of our startups headquartered in Nebraska, where he’s like, I used to be the best game in town, for everyone, for all these engineers, but now suddenly, they have remote opportunities in other places, too. And so I think, for companies to really put their best foot forward as they’re trying to attract top talent, and what is becoming very quickly, like an increasingly competitive market. Is that you, I think, you really have to kind of let your personality shine. I think we’re, we’ve certainly entered this age from a consumer standpoint, and I think we’re seeing this from an employee standpoint, to where values really matter a lot. And frankly, I think that culture and values people operations is something that early stage startups may didn’t always have the luxury of thinking about. But I’ve noticed, at least across our portfolio and a new companies we talked to, it’s becoming increasingly important and prominent. So two last quick things that that I think came out of actually this talent toward the first is

18:15

we discovered, and it was an exciting discovery, that so many of our portfolio companies, even early stage ones, have heads of people, Chief people, officers, VP of talent, like not just an HR person, but someone who is looking at the whole picture of what’s our culture, what’s our recruiting process, what’s our training methodology? How do we really bring people into the fold. And I love the fact that that is front and center. And so I think that I’m thinking about how you build that function. And frankly, how that becomes not just the CEOs issue to think about, is an incredibly important tactical steps that startups can take at this early stage. And the second is, frankly, just to really transparently reassess your policies for your team. We surveyed our portfolio as part of this talent or effort. And we found that while fewer than 30% of our companies had remote work policies before COVID, more than 75% plan to have a policy, either already do now or plan to just have one for the foreseeable future. And on the flip side of the nearly 2000 active job seekers who RSVP to join us during this virtual career fair 99% of them were interested in or open to remote work. There was like one person that wasn’t interested, and 67% were interested in or open to relocation. And so I just think like flexibility is the name of the game these days. And it’s a tricky terrain, I think, for startups to navigate, because it can be distracting from a focus standpoint. So again, empowering someone on your team early Who’s sort of thinking about the people function most fully, I think is really beneficial.

20:05

So along with this unbundling of work from from place, you know, as kind of education from place as well. When you think of the uvp of these different cities, a lot of it has to do at least nowadays, you know, with with education that you can attain there. But you’ve been traveling around to these cities, you’ve been investing in these early stage startups. And obviously, there is this unbundling of education happening. Right now, I don’t know how, how progressed, it’s been put, there’s all these things, I mean, Udemy, Coursera, the ones that immediately popped to mind, but then there’s things like lambda school as well, and all kinds of other opportunities to get the education you need to work specifically in, in like startup type careers that are really proliferating. But as far as like traction, that you’ve seen, you know, like at companies, have you seen people in leadership positions? Are these founders coming out of those kind of educational backgrounds? Have you seen any traction to that unbundling of place and education,

21:13

we’ve made some investments in that space in a couple different different directions and are excited to track the progress of those companies. I can’t think of specific examples of founders in our portfolio who have been graduates of those programs. But I know that there’s active hiring that happens out of those programs. And I can say, you know, I think one example of a company in that space is to you, it’s actually DC based, you know, in our backyard in DC, they’re a publicly traded company, which I think in and of itself speaks volumes to the potential of the industry and the potential for success and real traction and efficacy of that business model. Um, but we actually partnered with them as one of our core talent partners on this recent talent tour that we did. And they brought a tremendous number of candidates through the platform. And I think what’s interesting, and what you see in some of the nuances of these models, is you have many people who are actually also leaving their current career, like they’re leaving their jobs, sort of mid cycle, mid career professionals, I guess they there’s the terminology. And they’re inspired to be a part of positive change, which I think is fundamentally what our industry is all about. And while I don’t have the specific stats for you on founders, you know, something that a colleague of mine said a while back, that’s always stuck with me, is that you don’t need to be a founder to be an entrepreneur. And I think this, having this spirit of innovation and opportunity and possibility is something that bleeds through startup cultures, whether you’re the founder, your employee, number five, or number 50. And I think you see a lot of those folks coming out of these programs into job opportunities in the startup space.

23:03

Yeah, I think that’s right on, I think one of the values that I always tried to push really hard when I as an entrepreneur was just shared around accountability. And I think that’s one of the real benefits. So you know, most startups provide employee stock appreciation plans or stock options. And I think that really kind of aligns it, you really want your team to act as if they’re owners and to take accountability when you’re building a startup. And I think that really can support that kind of a culture where every, every employee is a founder, and I think it’s really important. I was gonna maybe to change gears a little bit I wanted to ask, so your partner is Steve Kay’s. He’s one of the true pioneers of the internet. I know when I was starting out in the late 90s, as a teenager hacking away at my first websites and ecommerce projects, AOL was just a force of really kind of bringing the internet to the masses across the country. What is it been like working with someone like Steve that, you know, is really one of the true pioneers of the internet? Really? How does that impact your day to day,

24:10

it’s incredibly inspiring to work with Steve and it always has been from from day one, you know, it’s, it’s funny part of my role over the years it rise, the rest and in addition to the, you know, investment per view, and has been overseeing sort of strategy and execution, for our Rise of the rest, road trips, these bus tours that we do and that I think we’ve become pretty well known for. And it’s funny, I usually get three questions, and they’ve sort of followed me and us all through the years and through all the tours coming up on our ninth one. And, you know, the first two questions are is Steve really on the bus? And the second question is, like, is Steve running for president? You know, sort of learned, you know, my quick one two punch is like Steve is really on the bus. And and he’s no, he’s to the best of my knowledge. He’s not running for president. But I think there’s, you know, that first point It’s really like literal, like when I say like Steve’s on the bus and sort of both literal and figurative. He is, you know, front and center and present in all the work that we do. And I think his dedication has been a constant source of inspiration to our partnership to our team, to the cities that we visit, it’s always been fun in a delight to see the way that people react to and interact with him and to have the opportunity and the privilege to sort of be on the inside track of that has always been a lot of fun. And there’s also a tremendous amount of learning. You know, I think most people are not strangers to sort of the brilliant marketing behind the rise of AOL. And, you know, the CDs, everyone always talks about, but I think I’ve seen and I’ve learned a lot of that kind of shine through in the way that he’s, you know, conceived of and, and, you know, we’ve expanded Rise of the rest over the years, there’s a very specific, very deliberate, high level message that I’ve always found so impressive and inspiring in terms of how Steve always delivers it. Most people who know of our work in the space know that 75% of venture capital goes to three places. And all of the work that we do all of the investment, all the partnership, all of the focus on economic development, is inspired by that one single fact. And it’s been just tremendous learning, I think around that. The final quick thing I’ll say is, the Steve is also a great storyteller. And I think one of the first times I heard him, you know, when we were out on the road on a tour, tell the story about you know, one person, you know, when he started AOL in the early days, I don’t know if I’ll get this exactly right. But I think the story goes, like only 1% of the US was online, and it was only for like three hours a day or a week I forget exactly what that last part is. But I remember the first time I heard him talk about that, and link in his mind, the connection between sort of leaning into and creating the future with AOL, and, and drawing parallels for himself and the work that he and we are trying to do with rise. The rest was just, you know, kind of one of those that gave me chills moments, and it continues to be a source of inspiration, I think, in all the work that we do.

27:13

Here’s what I want to know, though, does Steve ever drive the bus? Like maybe it goes and sits up there he hangs a couple AOL CDs from the rearview mirror. So they’re spinning,

27:23

we do have a professional bus drivers. It’s a pretty big tour bus. We’re, he is on it. I have never seen him actually drive.

27:35

So I was gonna skip to my last question. I think the tech industry at large, but especially the venture capital market, has really struggled with diversity, equity and inclusion over the years, and I no Rise Of The rest is really at the forefront of kind of embracing diversity, equity and inclusion, from a VC point of view. So I just wanted to ask, how is the progress been? The last? I guess you’ve been with revolution for five years? How do you think the VC industry is doing in terms of embracing? You know, Dei,

28:10

my sense, in my experience, is that we’re making progress. I see it in the now much more regular announcements of you know, many of our colleagues who are women or, you know, GPS of color, or launching funds for the first time raising second or third funds with, you know, much larger numbers and a un behind them. It looks like we’re as an industry starting to do a better job. I think you see some of that too. On the, you know, the funder side in terms of what the composition of founders who are getting funded. But those anecdotes like those anecdotal insights aside, I think when we still see the headline data come through year after year, the numbers are just still so incredibly sobering. You know, from a female founder standpoint, we went backwards during COVID pretty dramatically. And the numbers were not all that impressive to begin with. And so I think we are living in an age more broadly, of increased intentionality and focus, frankly, because we all sort of live and operate in the public eye in some capacity. And I think there’s a more there’s the potential for a more virtuous circle between what your customers and what your investors and what your team sort of demands that can hopefully create more momentum and more positive change on this front. You know, one of the things I’ve been reflecting on, both with respect to geography and with an end diversity more broadly, is that I think we’re in maybe in a moment where it’s helpful to dig deeper Behind the headline numbers, because we do also have a tremendous amount of momentum in the asset class. And there are, you know, an increasing number of later stage funds. And I say this with all the warmth in my heart who are like weaponizing capital, and, you know, doing these very quick, later stage rounds that sort of inflates the overall numbers, I think of invested capital in the space, both in the fund world and in the startup world. So, you know, coming back to geography just for a minute, as we close, the headline numbers haven’t changed from the standpoint of 75% of venture capital still go into three places, but svv put out a report a couple weeks ago, where there were some really exciting data, I think, from our standpoint, it rise the rest, which is that the percentage of early stage funding, early stage specifically funding going to Bay Area startups, has actually declined 15% in the last 10 years. And what’s even more interesting to me, and I think to us, is that half of that decline has come in the last 15 months. So when you think about everything that COVID is accelerating, I think in certain ways, I think some of these shifts, you’re starting to see more acceleration and more momentum. And so that even that, just that one fact, that made me really want to double click on that, and understand, like, Where is that capital going? And what does that look like? And so there’s a lot more work to do. That’s like really the short answer behind my longer winded answer. But I’m encouraged to see more people around the table. And I’m also encouraged by the seriousness and the size of check increasingly being committed in the public forum by institutional LPs, and by the corporate community. I think, in particular, like the corporate LP community can start to make a pretty big difference when it comes to funding both startups and fund managers from a founder of color or female founder perspective.

31:56

So one last question, before you go on, we try to ask this of all our guests, sticking with the theme of the podcast, nice book into it, who is someone, or maybe it’s a team or a startup that is really executing. Or maybe it’s flying under the radar that nobody hasn’t heard of, that we should be paying attention to.

32:18

I have two companies in our portfolio. just picking up on that last thread one is led by an extraordinary female founder, the company is based in Seattle. It’s called flavor cloud. And the business is a cross border. Ecommerce enablement tool that really helps to empower every retailer to go global rathna recently closed a $6 million dollar series a round, and she’s just flying. And she’s one of the most capital efficient, sort of nose to the grindstone execution oriented founders I’ve ever met in our portfolio, and the numbers don’t lie. And so she’s already I think, come close to doubling monthly revenue, since she closed that a. So I’m really excited for the prospects of that business and think she’s writing a real wave of momentum in the e commerce enablement, and sort of supply chain resilience sectors. And the second is a newer company in our portfolio out of Salt Lake City, it’s called recite clops. And the company started as a consumer oriented like recycling as a service business that focused on rural and smaller MSA communities that didn’t have recycling services provided by their municipalities, in large part due to some changes from the International sort of regulatory landscape. And what I what I love so much about what’s happened. And they’re also just heads down executing so so efficiently is that their business has, I think, very quickly evolved not only into that consumer facing recycling as a service play, but actually now they’re sort of leaning into this reverse logistics company that singularly focuses on sustainability and the opportunities that come from that. And that’s created some really explosive b2b opportunities for them that I think are already and will continue to prove to be a short cut from a market based expansion standpoint, that helped to take them from a regional to a national player pretty quickly. So super excited about them. And they also the founder, there’s actually the younger brother of another founder in our portfolio who’s who was one of our first investments back when we launched rise the rest a couple years ago. So I love love seeing that connection come through for so many reasons.

34:37

Second generation of investees That’s great. Yeah, so listeners check out flavor cloud and recite clops. And if you google recyclates, and see a picture of Dwight schrute in a samurai outfit, that is the wrong recite claps.

34:53

It is not thank you guys so much for having me on congrats on the new podcast and I can’t wait to see Tune in to all your future episodes. Thanks, Ana.

35:02

Thanks so much on it’s been great to have you on today and looking forward to keeping the conversations going in the years to come. We’re really proud of all the good work. You’re doing it rise of the rest. Thanks, Rob.

Ryan and Josef talk about the Weber brothers’ long history, with Ryan tracking Mynul since they took classes together in college.

He talks about his journey as a first-generation immigrant who came from Bangladesh to St. Cloud, MN.

His biggest lesson for founders? “Never run out of cash.”

He shares how his “hobby” turned from Plan B into the only plan, and the importance of going all-in. Mynul is heads-down, and shares some great advice about maintaining and creating capability while discussing people, systems, and processes with Ryan.

Full Transcript Below:

00:00

Well, welcome, everyone. For those of you who don’t know me, I’m Bonnie spear McGrath. So thanks for joining me today. As an entrepreneur, there are few things I enjoy in life as much as hearing the story of other entrepreneurs. And today, I’m super excited because we’ve got two entrepreneurs in the house lined up for this session. Both are graduates of St. Cloud University. So I want to put in a big plug for St. Cloud University, because there’s a lot of social pressure on all those Ivy League colleges. And that’s not necessary. So and they’re both highly successful entrepreneurs, I first I’m going to introduce Ryan Weber, I met Ryan and his twin brother, Rob A few years ago, and I love their story. They’re both from St. Cloud, went to a cloud University, started their own kind of bootstrapped ad tech company, that they later grew to $70 million in sales and made a lot of money for their investors, which is always a good thing to do. And after doing that, they decided they wanted to start helping other entrepreneurs. And they they did a little bit of on their own. And then strat started Great North labs, which is where I met them and became an advisor and investor. And I’m super impressed with them, and their integrity and authenticity. So big plug for Great North labs. And one of the people that they helped early on was my new old con. So I’m super excited to invite my new look here. As I said, he did study at St. Cloud University, but he’s not from St. Cloud. He’s originally from Bangladesh, and came all the way here to study computer science, and later decided to stay and start field nation, his company that he founded any CEO of in 2008. And field nation matches company projects with freelance technicians. And that might sound very simple. And it’s a simple idea, but it’s a super successful private company in Minnesota in which we can be so proud of, they now have over 200 employees and offices in Minneapolis and Bangladesh. So that’s pretty cool. And I always say it’s good to hear the behind the scenes story about how something happened in terms of idea, and especially in terms of financing. So the conversation today between Ryan and Mike Newell will be very interesting, including any secret insights that they want to share that maybe Rob Weber, who’s also on the call doesn’t know yet. So welcome, gentlemen, thank you so much for being here today. Thanks for having us, Bonnie.

03:09

Yes, thanks, Bonnie. So my name is Ryan Weber here. We’ve known each other for over 20 years now. It’s it’s over half our adult over half of our life, not just our adult life, pretty much our entire adult life. But I’m really excited, longtime friend, and then a great classmate and advisor to current projects that were involved in, but maybe manual for the audience, you could start off by telling us a little bit about field nation and what you do.

03:36

So So fuel nation is the simplest way to explain it’s, it’s like Uber for Field Services, right? What we do is we connect businesses that need field service work done with with the technicians and engineers in the field, who have that skill set to get that work done. So think about, you know, all these retail stores, they need point of sales, to cabling to networking, all sorts of technology is getting deployed in retail, banking, QSR, quick serve restaurants, offices, and, you know, how do you how do you find this technicians? How do you deploy them? How do you know that they’re qualified? How do you manage the project, all of this is built into the Philadelphian platform, you know, we help businesses connect with the right technician in the right place, and help them manage the whole project from the start of the planning all the way to payment, back office management, all that kind of stuff. And when did you start field nation? I started field nation in 2008. That was March of 2008.

04:44

You know, I I think that people would love to hear a little bit about your background, being a you know, from Bangladesh originally and coming to St. Cloud State University to study. Could you talk a little bit about, you know, your background prior to field nation?

04:57

Yeah, so I’m originally from Bangladesh. I came here for college for my bachelor’s degree, I went to St. Cloud state. Usually when people hear that Bangladesh to St. Cloud, they immediately the follow up question is how you ended up in St. Cloud? And the answer is, when I was looking for colleges in the US, I learned that there is only one state that was at that time was at least offering in state tuition to foreign students from day one. So the taxpayers were, you know, graciously paying for part of the tuition for the foreign students. So as you can imagine, when you are Bangladesh’s, literally the other side of the of the of us, it’s literally 12 hours time difference. Growing up, I knew, you know, Hollywood and New York and LA, and never heard about St. Cloud, probably not even Minnesota, growing up, right. But then, as I was doing my research into what college, you know, and everything is expensive, you know, especially when you come from the other side of the world, a developing country. It’s like, okay, I can’t afford to go other places. And St. Cloud gives a great deal. And that was really the primary reason to come to St. Cloud sent out state. But very quickly, I just, I just loved everything. I just loved the school, the teachers, the community, the friendship, that right that I built, you know, my plan, or a general plan was, I’ll just do, you know, two semesters of, you know, general education courses and then go somewhere else. But then, you know, that never happened, I just really love this place and love the community love the school and decided to stay here. So right after college, what actually do you know, in the last semester of my college, I had the opportunity to do an internship with a startup called Ebro in St. Cloud. And, you know, I think I was probably the I don’t know, you know, fourth or fifth employee, you know, at a bureau. And that’s kind of where I really saw got the sense of, you know, what it takes to build and the fun of, you know, building and taking something to the market, the uncertainty. And I remember, the first day I went to Ebro, they were in this big, you know, quest building, there was no desks, chairs and stuff like that, you know, a couple of people are building product and stuff like that, I just love that. And so I never grew up thinking that I would have, you know, I would start my own business, but I just loved the whole process there. And, and then I started the first company, back in 2004, called technician marketplace. It’s really first version of field nation. I started that in 2004. And that company also grew fairly quickly. But I ran into cashflow problem, and had to shut it down. It took a year off, got married and promised my wife not to start another company, and that lasted a year. But of course, with our blessing started field nation in 2008. So that’s that’s the whole story, Ryan, all the way from Bangladesh to Phil nation.

08:31

In during this these early years, what were some of the biggest challenges you faced with starting a business?

08:37

You know, that for me, you know, the biggest challenge was that I didn’t have a network, right? Do you need a you need, you need to know people to start a business like, you know, people who can advise you people that you can actually hot, you know, not even higher, but say, Hey, would you work with me on this project. So my network coming from monitors, my network is really, really small. So that was, you know, that that was one of the biggest challenge, me being an immigrant had its own unique challenge, because I couldn’t just leave my full time job and do do this thing, because that’s that non meal wouldn’t be legal. So I always have to have a full time job, I would, you know, you know, do my eight to five, job. And then in my business, my entrepreneurship would be up part time after hour and weekend thing. So those are those are, you know, a few few challenges that I had to face. But, you know, I was I was very fortunate that the small network that I had, was very, very, very, very effective. You know, people like you, Ryan, I reached out to you when I first started my business, Phil nation, Rob and a small network of people that that I I grew up, you know, and the university was part of the company from the beginning.

10:06

Well, thanks for sharing a bit about the background. You know, I remember that those early years very well, a few years there later, I think we obviously we connected, interacted a little bit in computer science, I think a lot of computer science students do. I think at the time, we were very analytical, and kind of not a lot of social, social, not a lot of partying even though thing club seats sometimes gets that reputation. We were kind of the Nerds working in the labs. And so I think we got to know each other a lot more as we started to do business together. So flash forward to, you know, the beginning of field nation and the early years, what was different? What, what did you learn from your first experience? And how did you go about supporting and scaling the early years of field nation?

10:54

So so the, the biggest learning from the first one is that never run out of cash? Cash is really important. And that’s one area that I know, finance. And accounting is one area that I, I, I enjoy all parts of the business, finance and accounting was always a drag for me. And I always kind of wanted to avoid debt. And, and the biggest lesson is that, you know, cash is the lifeblood, and you run into that you’re dead. It was literally dead. And so that was the biggest lesson there. Scaling up, you know, starting field nation. I’ll tell you another another good lesson for me. When I had my first job, I never had the confidence to go all in with my business. It was, you know, partially, you know, I never saw people are on me to do do successful. I mean, of course, I saw you guys, but not in my family. Growing up, business wasn’t a thing that you do. It’s the the people who cannot have a job. Go start their own business. And so I grew up thinking, you know, you go for good, good employment. Something something safe. So, so starting the business was always like, it’s it’s sort of my hobby. My friends and family would tease as it’s my hobby, I mean, old doesn’t have anything else to do. So after hours and weekends, I just, you know, like you said, No, no partying, no, no life, no social life. And so what do you do you just go do your second job. But what happened in 2008, I was laid off from Ebro. And I remember that long path, long drive back from St. Cloud to Plymouth. I was living in Plymouth at that time. And I just felt rather than being scared, I was scared. But I felt more free. I felt like, great, there is no plan B anymore. It’s just plan A The only plan that just make filmnation happen. And it was just absolutely freeing experience. Because I was always trying to juggle the ball. And, you know, if, you know business, if it doesn’t work, it’s fine. I got another job. But the job that I have, that’s really important. Don’t screw it up. I’m going to need that. And when I when I got laid off, it was like, No, there’s, there’s a plan B, there’s just one plan. Let’s go go all in and make it happen. That was That was really good. That worked for me.

13:37

It’s really interesting. You talk about the kind of the culture a little bit of starting a business and going all in you know, we both were classmates in the Department of Computer Science at St. Cloud state and not I remember being called into the office by the department chair one day Sarnoff, that who you know, Dr. ramnath. And, you know, he asked, he asked me about my business, I thought he was calling in to reprimand me about something and then all of a sudden, I just decided, you know, I’m, I’m opening up, you know, I was going to talk about my my work, you know, in class and with faculty and everything changed, you know, at that point in it. And I remember when we met you were talking about we had been just a few years ahead of you and in building what was freeze calm and became native x. And, you know, it was those relationships. You know, in St. Cloud, we connected with a lecturer at Rob’s entrepreneurship class, Brian schoenborn who connected us with with somebody that had a lake home on his Lake, maybe you can share a little bit about the background. I guess, you know, I joined field nation a year before this gentleman as an advisor, you know, when you reached out to me, we hadn’t talked in a while. I didn’t really know what you were working on, but it was similar, like, maybe similar experience when I had with Sarnoff. You know, when you reached out to me, I was very interested and I was very much wanting to get involved in but until you opened up and kind of reached out I never knew you know really what you were up to and And even though I wasn’t invested in eat Bureau, you know that you talked about that. Maybe you could talk a little bit about that getting, you know, our angel investment and advising round together along with this gentleman and how that impacted your early years.

15:14

Yeah, Ron, I don’t know if I, if I told you this story. So I started the business in 2008. And a few months into into the business, I realized that I need not only I need some investment, I need some people who knows, who can tell me what I’m what, what I don’t know. And there was, there was a lot of things that I didn’t know. And, and literally, I started searching my LinkedIn at that time, I’m like, you know, I gotta find people that I know. It is a very, very small network, right? I just all of a sudden, I remember like, I do have a rich friend it, Ryan and Rob, let’s, let’s see, that’s out. Let’s ping them and see if they’ll, if they want to meet with me, and you were very gracious to meet with me, I remember us having lunch. And I was telling you, you know what I’m doing and stuff like that, and you’re giving me advice. And then we decided to stay in touch, because I think you liked something that I was doing. And we decided to stay in touch. And we I think we and since our kind of the first meeting outside the school, we probably talked probably for few months, maybe six months. And then I said, Look, I’m now ready to take some angel investment. Although my company didn’t have a lot of overhead I was I was always very resourceful in terms of doing stuff. So, you know, company was was was generating income and stuff like that. But a company was growing. Without a balance sheet. There’s no no no money in the balance sheet. But the company know the revenue and all that stuff started to flow. And it just made me really uncomfortable. I keep the nightmare of cash flow. from my previous company kept coming back. I said, I need to, I need to get some cash in the in the bank. And so I reached out to you and and you’re interested and quickly, you introduced me with young son, and young, I think you’re talking to young les comment in St. John’s, and he got interested in Phil nation, and you both decided to invest. That was my first investment into the company that was probably back in 2009. And at and you guys invested. And also you decided to stay involved with the company and time to time I’ll just call you up and say, here’s what I’m thinking. And I need people in this key roles and you are very, you know, gracious to, you know, help me connect with a lot of people and a lot of people are still with Phil nation, the people that you introduced me holidays.

18:05

Yeah, for everyone listening that, you know, young stone was a early connection that we made. Through his wall tap home near St. John’s young, young was a CEO of a tech company called Old technologies and lived in the same neighborhood was Steve Jobs. But we just were very fortunate that somebody in the community Brian shone bar and introduced us early on and, and young served as a mentor to Robin my business freeze calm. And when we began our family office, angel investing, we tried to model our behavior of, of young and young brought his friend in Pradeep madonn, who’s the third partner in our current venture fund, Great North lab. So we tried to when we Angel invested, we tried to lean in and provided any support and guidance, we could just like we were receiving from our Silicon Valley friends, thanks to Brian. But you know, those years, I remember, everything is just flashing back in front of me as you talk about, you know, this time period, because at the time, you know, we didn’t have a lot of active angel investors in many funds in Minnesota, if any that were doing this seed stage or or pre seed stage investing. And, you know, I think we were so you know, we’ve always looked for people that can execute, you know, and we love to find entrepreneurs like Mike Newell, you were working on your business and clearly had some traction yet, you know, you had to learn, you know, you had some hard, hard times in the early years and had to recover. But maybe, can you talk about how and I also remember, when we gave you the money, I thought you were going to spend it but it seemed like it never left your bank account. So that was maybe that gave you more confidence with scaling. But I’m really interested to hear more about when did you feel like things were really starting to hum and what were some of the major milestones, as you began growing after the after that period.

19:51

I don’t know if I can tell you one major milestone two kind of breakthrough moment for us but Well, I do have one aha that I always like to share. Yeah, which is, I was so naive, when I started, I thought, you know, you build a product and you do some Google AdWords and stuff like that, and all of a sudden things gonna just everybody start to sign up. And I was so naive, and and I waited and waited, you know, for for few months, and there was literally nothing. And I don’t know if this was a problem with a business model or, or what. And then I think towards the end of 2008, we had one bot customer sign up, just all by there is no sales for somebody signed up, one company signed up and did 20 work orders on our platform, our our platform is mostly work order driven, like somebody create a work order, and then they find a technician and deploy the technician in the field. That’s kind of how the system works. And, you know, by end of 2008, I waited six months and then end up to those and eight, somebody signed up, created 20, work orders found 20, technician nation, you know, distributed all over the nation. And I got so excited. I thought this is it, this is the moment that tells me that I’m on the right path. Now, looking back now, you know, last year, we did a million workorder, you can see that the scale of the company is very different. But there is nothing more meaningful to me than that first 20 workers that just just that was the lifeline for me, that just gave me this desperate validation that I needed. in those early days that it is the right, I’m working on the right problem. And people find value through my, through my product. And that then it was a question of, you know, the How do I figure out the sales and, and distribution and all that kind of stuff, which is an ongoing process that never ends, that we still have the same same discussion that that we had 12 years ago. But that that 20 work order was so sweet memory in my mind, I still if anybody asked me, what’s a breakthrough, that was the breakthrough? I don’t know if that didn’t happen. And I didn’t see any worker coming for a few more months, I would just, you know, shut down and say this, it’s not worth doing. I don’t know, I don’t know, what would have happened. But that is really big.

22:33

Yeah, it seemed like, you know, I just remember observing in it seemed like, you know, you had some very large enterprise customer interests. And in part of the, I think getting, building that confidence, you’d see it, you know, with every order almost in every meeting we had, and, you know, during the scale up, and it just seemed like the conversations, you know, the types of companies and the traction, you were seeing continued to increase as your confidence built, and kind of, I think more and more people believed in field nation, and it was a competitive space it you know, what, while you were starting, wasn’t it my No,

23:06

it was a competitive space, we had a, you know, very well funded competitors. And we did things very differently and not having money, I sometimes I say, you know, one of the one of the best thing is that don’t start with too much money. I mean, you need some money, so you’re not running out of cash, that’s a, that’s a different problem. But too much money could be the same problem. It could be, you know, a bigger problem, because you’re wasting someone else’s money without knowing whether you have the right product, or you have the right distribution, what not, and I’ve seen some of my competitors made that mistake of raising too much, I mean, the promise of a, you know, Uber, like model, and right now, you see everything is becoming Uber eyes, right. It’s the Uber of this and Uber of that delivery, and, you know, hotels, and everything is overpriced. And when we started in 2008, this idea of you know, getting on demand workers to go do something was new people would, investors are very bullish back then, as they are now. And so a lot of a lot of my competitors got raised a lot of money and they try to scale quickly without figuring out the you know, the market maturity and, and all that kind of stuff. And, and wasn’t wasn’t very successful. But you know, one thing I would say, the timing matters, right? So when we started people would compare us, Phil nation as the Craig’s Craigslist, they would say, oh, you’re like Craigslist. We are not we, you know, ABC Company. We’re enterprise. We don’t deal with Craigslist, right? And now it changed so much. It seems like everybody is more comfortable staying at Airbnb and riding an Uber. It’s the new normal, like, of course, you know, you get something on demand, that’s the way it was. It’s whether it’s a cloud on demand, or whether it’s a technician on demand on a driver on demand, it’s everything on demand.

25:21

That’s maybe a great kind of topic to follow a little bit, you know, we I know, you went a long time before raising, you know, any larger financing. And I remember working with young, young, young, young, everybody is now the Chief Strategy Officer at Samsung, he’s been there for six years. So quite, quite an amazing journey, you know, for the people involved in associated with that time, you know, going into that big financing. Do you want to talk about, you know, after you scaled for some time, you were in a position of strength, but how, what were you thinking about, you know, in terms of the next chapter, as you prepare for, you know, that your later financing, if you could share a little bit about that?

26:03

Yeah, you know, what, one thing we didn’t want it to do is raise a lot of money, too quickly. And because we were still, we were figuring it out at that time, like, what is the right market? What is the right customer? How do we scale them up? How do we scale our business and stuff like that, and there was, you know, we just didn’t want it to raise a lot of capital that comes with the, with the constraint of build it 100 people sales team and sell, sell, sell, you got to fight, you know, you know, you get to do that, you know, product market fit, you got to figure out the distribution channel and stuff like that. And so we waited, you know, we waited, and then we were adamant to find somebody who was genuinely passionate about the market we’re in and the problem that we’re trying to solve, and be patient, like we are, we know that it’s a slow maturing market. For us, it’s a slow maturing market, it is still taking a long time for us to, you know, see the market maturity, because we are working, we are working with enterprises and not consumers, it doesn’t turn, like the way you see GameStop it’s done. Yeah. enterprises move in a different pace. So we wanted to make sure that our investors are patient, they will stay with us and not not have that undue burden that, you know, do something because we got an exit, we got to figure out an exit in next, you know, next year or something like that. So when we raised our capital, that is, you know, end of 2015. By that time, we were on in 500, multiple times, fast 50. And so there was a lot of calls, we’re getting a lot of VC and private equities are coming from east and west coast. Unfortunately, there wasn’t any anybody from the, from the Midwest at that time. But I remember our CFO and I, we met 70, some VCs at that time, as part of the interview process. And then we finally found someone, a company private equity, called SAS corner growth equity. We immediately like those guys, because of their flexibility in the, in the capital and the life, the the time horizon, they have, they literally don’t have time horizon, if they’re like a business, they hold it, and they can have subsequent rounds, and stuff like that. And, and so we decided to raise capital at that time, you know, and up to those.

28:41

I remember always hearing you say that, you know, this is the startup you see yourself working on forever, you know, and it’s been, you know, I never thought you would, I never thought it would be come forever, but you still have the same excitement and patients it seems and continue to grow. And it’s been exciting, you know, following your journey, maybe we could kind of shift gears and talk a little bit more about the broader kind of gig economy, you know, and, you know, when when we started the fund, with experience investing in these gig like services quite a bit as angel investors, you know, we, you know, we’ve done SAS and marketplace, businesses, consumer and enterprise, as a fund. But, you know, we were excited to win starting the fund to get a group of operators as advisors of scaled tech companies, including yourself, so you know, having, you know, having then seeing in the portfolio, we start seeing a wide variety of, of people working on Uber like services for other markets and including one that you helped with diligence on early I remember, it was just so, so amazing to see this, this founder, Patrick O’Reilly at factory fix, you know, request a meeting with our fund and in his deck as he’s going through it. He says the comps he was highlighting was field nation as a major success. I was like Yeah, that’s my buddy, my Neil from college. He’s like, What? He’s like, yeah, I asked him if you mind if my noodle gets involved in reviewing this deal with us? And he said, Oh, sure, of course. But, you know, and that’s, you know, you know, your perspective as an operator, scaling a good leg service, and seeing different strategies play out has been invaluable, you know, in supporting our evaluation of such opportunities as factory fix. But do you want to talk a little bit about, you know, what you see as some of the different strategies and in, you know, that are working or not working with these types of services? With with kind of gig economy, kind of, yeah, what challenges and in what, what seems to be what are some of the key takeaways you see from people that have been successful and not successful in? How does it vary by market?

30:49

Yeah, I think the, on the consumer front gig platforms are really, really successful. I think the laggers are the enterprises. Unfortunately, we are in the, in that in that group, that enterprise will, but that’s, that’s catching up. Usually, that’s always the case, people in their personal life will experience something, and then they’ll they’ll think about, you know, how does it apply in their businesses and stuff like that? So, you know, there’s a lot of, you know, kind of consumer centric gig platforms from Uber and Airbnb to, you know, grub hub to everything else that you can you can think of, but the next frontier is that enterprises, the enterprise is thinking, you know, how can I reduce my capex and OPEX? and make it more variable? Right? I mean, and, you know, if you remember, Ryan 2008, was a great recession. Yeah, it was, it was good. I mean, it was good for us to start at that time, because everybody was thinking outside the box, like what, you know, any, any financial crisis kind of creates that sense of thinking outside the box, like, we got to change, right, the status quo is not good enough. So 2008, we saw a lot of, you know, SM B’s was whether, because of the need for survival or whatnot, they were thinking outside the box, and we saw great adoption, you know, since 2009, till, you know, many years. And what we are, we are we are seeing is that this crisis, the crisis we are in the pandemic crisis is shaking up the enterprises, and they’re thinking like, Okay, we got to think outside the box in terms of, you know, variable labor. And that’s the, that’s the next wave in the I’m talking more specifically about the labor platforms like Phil nation, and others. And, and they’re much more comfortable in their understanding of the labor model. It does has its its challenge, though, you know, you know, and the biggest challenge is that the worker classification in this country, there is literally to classification and none really fit well, with the gig workers, we have the W two model the full time employees, and you have the independent contractor model. And the challenge is that, you know, some states are trying to push gig workers to be classified as employees, you’ve probably heard, you know, Eb five, assembly bill five, buy from California, although, I think there is a proposition that that got passed last November that AV five didn’t go through ultimately, but if I would have made every gig worker, employee, but that’s not gig workers want, you know, they don’t want to be employees, they want the the number one thing that gig workers really enjoy is, is the flexibility and employment, you know, full time employment doesn’t give that. So there needs to be a new type of legislation to accommodate for this new class of, you know, workers, and they do need some safety, they need benefits, they need, you know, fair treatment. But but that’s the, you know, making everybody a full time w two is not the solution. So, I would say we think that we’ll see some legislative changes, you know, next, you know, few years, hopefully, will be a more common sense approach than say, you know, move everybody make them everybody don’t. Yeah, it’s not a solution.

34:52

Yeah, it seems that regulations are struggling to keep up with the pace of technology. And this is a shining example of that, but I think I think it’s really interesting what you said about the enterprise market and in today’s environment as well. I know, we’re running up against time here. And I just want to say thank you for, for your friendship and for sharing this journey together. It’s been amazing and appreciate you being one of our first guests on on the show. And I will turn it over to Joe to take us through the next section. Thanks.

35:26

Yeah, thanks so much. My new will in a second, I’ll open it up to everybody for q&a. But I just like to kick it off with the first question. We’ve been asking everybody who comes onto our podcast? Are there any founders or startups or like organizations, or people you see supporting founders and startups that are really executing? Maybe people here? Haven’t heard of them? Maybe they have heard of them? Maybe it’s someone where, you know, maybe it’s a branch or something that everybody’s heard of, but is there anyone in particular that you see that you think is really, really just killing it?

36:01

Joseph? that’s a that’s a great question. I can’t answer that with with a lot of firsthand experience. I do hear people, you know, join young presidents. I don’t know it is a club or some some Association there is, you know, people go and get advice and stuff like that. And, but in Twin Cities, I haven’t been part of anything that that, that I could say.

36:31

Well, thanks. Yeah, well, we’ll open it up to everybody here. If you guys have any questions, or just want to pop on your video, pop off your microphone and chat a little bit. Feel free to talk ask wave for any questions for my Newell and Ryan.

36:46

And one question, I was just gonna ask my Newell, you know, you went through a lot, you know, with the immigration process, you know, what do you think of the current kind of regulatory environment on immigration? And I guess, do you have any, you have a solution that you think would work better in terms of American immigration policy? You know, after having gone through the whole experience that you had?

37:10

Yeah, it’s also a very sensitive topic, isn’t it? Look, I think, I think we need to have a common sense approach to immigration. It’s people try to, you know, make it a binary problem. Nothing is a binary problem. It’s way more complicated than this, this right. And, look, I can tell you that a smarter approach would be looking at industry by industry and look at what kind of, you know, workers we need. This country needs, high skilled workers to notes, no skilled workers. I mean, it’s every everything in between. and but there is no, there is no systematic approach to address that problem. It gets a it becomes a very slogan type of approach. Rather than, you know, this dramatic market based I would make it a market based approach, you know, what is what is very difficult for me to get my head around is that think about some of my friends, we went to St. Cloud state we got institution because the taxpayers the Minnesota taxpayers paid for our some of our tuition right under there was a great help. Many couldn’t stay in this country, because of the complexity of immigration, guess what some of them went back to India and other parts of the world and working for, you know, Google and, and Microsoft sort of the world and paying taxes in those countries. So and so there is a vicious loop for us and a virtuous loop for other countries, meaning the US companies cannot find talent here. They’re gonna go wherever the talent is, whether it’s in other parts of the world, and that talented, they cannot stay here, guess what, they’re gonna go somewhere else, you know, and, and the companies will follow the talents and, and those talents will, you know, pay taxes and enrich their community and stuff like that. So, you know, market driven approach would be my, my approach my my recommendation.

39:29

I know. And Ryan, I have a question if I if I could, so I often hear people talking about entrepreneurs putting the flame on with their ashes. What I mean by that is, they hang in there they sit, they can start things very well. But growing something that’s already started, we spend a lot of time talking about startup enterprises and businesses and we all love that. But what’s the difference in skill sets and even growing as an entrepreneur from the startup mentality, to wait a second, I have a business and I want to grow it. Are there differences? Or is it the same skill set, shed some light on that for all of us?

40:06

Well, I think the differences are enormous, you know, when when you’re starting up a business, you are a missionary, you are an inventor, you are just kind of, you’re you’re hustling and you’re trying to get get the product out, you’re the sales guy, you’re doing everything that needs to be done to get going. Right? When the company starts to scale, that’s a different, that’s a lot of lot of management and leadership. And sometimes, and I can tell you, it’s true for me, sometimes hard to get, you know, not to be involved, but to lead and to manage and hold people accountable, find the right people, you know, think about the organizational design, rather than just the the solving than the specific customer problem. Beyond the every sales call, which I used to do, now, stepping back and say no, you know, we got to figure out how to scale the sales, I used to be in every product decision, but rather now, you know, how do you design an organization that the organization can design the product. So it goes from, you know, being, I still like to be missionary, but missionary in terms of the mission of the company, not, not in the ground. And and just like you said, just doing everything, and and as you do when you’re, you know, you know, startup founder in the very beginning stage of the company. So skills are very different. And I can also tell you, Brian, is that it may not be right for everybody, you know, what you like in the earliest stage is, as a competence, start to scale, those things are not there anymore in the company. And and you may not like the new company. And if you try to, you know, hold on to those old things, the things that you really enjoyed, you may be holding back the company to scale up. And that’s that that is not good for the founder, not good for the company.

42:19

Do we have any more questions? Anybody can feel free to jump in here. We got a few minutes left.

42:25

I’ll ask a question. Hi, my name. I’m Kristen Danna. Well, I’ve got a HubSpot implementation consulting company. So we help our clients implement HubSpot and use the software. And we’re kind of in that stage that you just spoke about. And so I was hearing like the choir sing behind me. But then in respect to like, when you get to stage when you’re scaling up, in terms of your advisors who are advising you and the people that you’re speaking to, I think that’s something you constantly do through the lifecycle of your business. But when you get to that point, when you’re ready to scale up, and you want to create, like an advisory board or something like that, and you’re not necessarily looking for investors yet. Can you talk to us about that process? Did you do that? Or do you recommend that?

43:16

Absolutely, absolutely. I think that advisory group could be very helpful. And some of the things to think about for from the advisory standpoint. You know, we have advisors that are more technical focus, because that’s one area, we wanted to make sure that we know how to scale the technology stack of our company we have, we have advisor that comes from the domain expertise from our, our industry. And I personally have a CEO coach, a couple years ago, I decided, you know, how do I know I read a lot to see, because I always feel every year, I feel like, I’m probably not ready to be the CEO of this new company. Because as the company grows, the complexity grows. And, and I never been there, I never been there in that new company, CEO, the new stage of the company. And so I read it, but then a few years ago, I realized that, you know, having a live, you know, conversation with somebody who been there done that. It’s an amazing, it’s an amazing thing. So I do have a CEO coach and his his awesome. And, and I think a lot of times you hear the comment that you know, the it’s very lonely at the top. And, and having somebody that can be a sounding board and you can just be all open up and vulnerable and tell everything, all the stupid questions. It can be very, very freeing experience and and especially if you can talk to somebody who had done that. They can guide you in the right direction and say the thing that you’re working Worried about that’s really not a thing you should be worried about. Worry here, you got to really think about this. I

45:05

think we have time for one last question here. If anybody has a question for Mike Newell, or maybe Ryan,

45:11

if I could jump in? I have a quick question. It’s Simon here. This is a partial question from an old but it’s also could be one for Ryan two, which is what keeps you awake at night? Like, if you think about this people systems and process of scaling your business and evolving your leadership that you’ve described? What What keeps you awake at night? What’s the thing? Is that one thing or several things that are sort of most on your mind when all that? And then I guess the related question to Ryan, which is, as you scale the fund, is that similar? You know, is it different kind of business growth challenge as other things that you kind of think about? A lot?

45:57

That’s a great question, Simon, you know, what keeps me awake at night? If he asked me that question, last April, that would have been a different different answer, because I was I was, I was really worried, you know, as everything started to shut down, you know, not knowing, you know, where the market is going in, in a shutdown economy. But we recovered pretty well from that crisis. And we’re off to a really good start for 2021. It’s a rhetorical question, but you know, I don’t, I sleep really well. But, you know, in 2021, one of our key goal, you know, scaling one part of our market segment. And in any given year, we pick one or two areas, in the last last year was, was, you know, we created five different product packages, that was transformative for our company, it actually took took us 24 months to get that get those packages out the door, and implement in a rolling, implement, and then roll it out. And that I was, that was one thing on always on top of my mind. So now that’s all done. That’s now part of our muscle, that’s, that’s, you know, and so every year, we pick one or two things that are kind of transformative for the company, for either the product or our market, or, you know, our organization as a whole how we do it. And I tried to focus my time, in those couple of areas that are kind of still new, where we are trying to build that capability, the muscle, because it does require a lot of lot of lot of focus and attention and, and a lot of nurturing maybe the right thing, because, you know, as a CEO, I want to make sure that the new stuff that’s not part of the company’s muscle or DNA yet, and I’m hoping that I’m helping in that area to build build it. Ryan, anything you want to add?

48:05

Yeah, that’s really interesting. Simon people systems and process, I think about all three on a day to day basis, but probably the one that keeps me up at night is really people I think, you know, we’re a lot of these companies that we’re investing in, and they know, their business models, checkout, strategically, they look good, they’ve got some early wins and victories with customers, but you know, they, these organizations, the type of people in the in the way they need to evolve the people in that exists at the company and the people they need to bring on, it’s a biggest challenge. I think that all of these companies face more than a strategic or process challenge. I think that at different stages, if they if you don’t keep up with, you know, the system or the process, they’ll bite you. But usually, if you if you can get just a little bit of the right people in the in on the bus at the right stage, you can do it in, you know, I have seen, you know, there’s always outliers, right? Like, there’s a, there’s a portfolio company, we I won’t name any names or anything, but they, you know, sometimes the the process that the, like the board or advisors want to put in having not really been operators at different stages, they, they think about it, like, Oh, we need to operate like this is a 200 person company when two people, you know, in the way they’re conducting board meetings, I’m just scratch shaking my head, like, and I’m usually empathetic to the founder and trying to like, hold on, that’s that maybe this is a little much here, guys, let’s like, let’s give them what looks like, you know, like, push back, let’s like relax a little bit on the process. You know, let’s just, you know, take it one step at a time, but when I think people but I think it’s not just the the management teams, it is that advisory group, and that an extended network, it goes all the way around and I think, you know, it’s it’s really easy, you know, a lot of founders want to be, you know, or you know, want to succeed and have the drive in it. But if they don’t get the right, you know, advisors and team together, it’s just not going to happen

49:59

and I think that’s really well said my my own experiences, the hardest thing to do really well is what Manal described, which is because as an entrepreneur, you’re spinning a mini unplayed to index an enormous amount of energy to get something going. But what are the one or two things that really make a difference at that stage? Right, then if you can focus that enormous amount of energy, and leverage the people around you that you know, and be self aware enough to know where you can delegate and where you need to focus. That’s, that’s the key. Well said both of you.

50:38

Thanks, everybody, for coming here today. I did have one quick question. I wanted to ask my know, what do your family members say about your hobby now?

50:47

Oh, you know, life is more normal. Now. You know, I don’t have two jobs. So and we have two boys. And you know, we spent plenty of time just, you know, with the boys and it was fun. And I think he did a lot of energy and and the sooner in your life, you you have the energy and you get some of those crazy entrepreneurial start down in life is probably probably good. Good idea.

51:17

Great. Thanks so much. Thanks, Ryan. Thanks, everybody for asking questions. Thanks, Mike Newell, for coming on and having this conversation with us. And thanks so much to Bonnie spear McGrath for hosting this event.

51:29

Thanks everyone for coming and spending the time and asking good questions. And it was just as much fun as I was anticipating. So well done.

Rob and Josef talk podcasts, and comes clean about his awkward intro to Nick Moran.

Nick talks about his path to becoming a General Partner of New Stack Ventures and the host of The Full Ratchet podcast. We talk decision-making as investors, and advice for founders, including the most common mistake: building a product then trying to find a market for it. Then dive in to address the problem of matching opportunities to investors, whether it’s founders pitching VCs, or VCs pitching institutional investors. 

Rob and Nick connect as founders-turned investors, while Josef jokes about the Insane Clown Posse in a truly additive and valuable fashion.

Not really.   

Who does Nick see executing? He calls out two companies that have pushed through the pandemic, Flamingo and Tripscout.

Full Transcript Below:

00:00

Welcome to execution is king, the Great North ventures podcast. Today we’re joined by general partner of new stack ventures, Nick Moran. He’s also the host of the full ratchet podcast. With me today also his general partner of Great North ventures Rob Weber. Thanks for having me, guys. This is such a pleasure to be here, Rob. Always good to see ya. Thanks

00:21

for joining us, Nick. First starters, talk a little bit about how you became a venture capitalist. And also tell us about a little bit about your work with the full ratchet.

00:31

Yeah, you got it. I mean, we’ve talked in the past, it was a bit accidental. This is my second career. So I started out in corporate America, doing m&a, you know, scouting out early stage tech companies to buy through a roundabout series of events, I ended up being an entrepreneur within this organization taking a product to market over three years, working with a large r&d team of 30. And we had sort of extraordinary success with that product. I was a beneficiary of that success and was able to sort of leave corporate america and, and figure out my next path in life as a young man when I was about 32. So I moved back to Chicago with my wife, I started angel investing and, you know, fell down this rabbit hole of venture and startups and, you know, how do you build the next transformational multibillion dollar tech company? And yeah, through that series of events launched the full ratchet, I think it was, maybe at best a clever hack to network with some folks on the coast. At worst, you know, it was just kind of a fun program for me to learn. And it really worked out. I mean, I think I was early to the podcast thing and got lucky. The audience sort of exploded, you know, before there were 1000s and 1000s of podcasts. And that resulted in a lot more deal flow than I knew what to do with and sort of snowballed into this investing for newstagged. ventures.

02:06

And you’re up to almost, is it almost 300 podcast episodes so far? Is that right?

02:11

Yeah, I think so. It’s probably more than that between we do these special segments in between episodes. So I can’t imagine how many we have total. But I would bet how it gets it’s more than 500 at this stage.

02:22

Yeah, it’s really impressive. I was just talking with Nick before the show about these great episodes he does with investor stories, that are just great little bites. So if you have a minute, check out the podcast, that episode I’m talking about the last one is about 11 minutes long. And it sees for investors giving post mortems on these companies that failed. And it’s just as super interesting, especially like the example around the one that failed due to COVID. Because it just this excessive headwinds and stuff. But there’s some great points from Great Investors on that podcast, urge you guys to check it out.

03:00

Yeah, I think part of the context that makes your experience, Nick, as he talked about it, you know, so interesting is having been on both sides of the table, you know, building a product, and then spending all this time interviewing all these investors, and then, you know, actually running a fund. But you know, especially as we think about, like, the product side, that’s kind of the background that my brother and I had before we started getting more adventures, you know, after, you know, spending so much time in this space. What are some of the takeaways you have, you know, for new founders, you know, in terms of product development? What are some of the common mistakes that you see, or what advice would you have, and I know, your fund is kind of in the pre seed seed stage was very early, in fact, earlier than probably a lot of other venture funds. What would be some of the advice that you would give to, you know, a first time founder who’s building their first product?

03:52

It’s a good question, I think, sort of classic mistake that still the majority of entrepreneurs make, even though we’ve we’ve said this advice over and over again, Rob, you and I have talked about it is, you know, they build a product and then look for a market later. Actually, just last week, we were talking about this episode I did with Dharmesh stacker from battery, right. And he was saying one of the weaknesses with doing investments in serial entrepreneurs. So folks that started and had success with a tech company from a previous generation is often those types of founders from you know, that learned in an old generation of tech, they often want to build super powerful tech, and then go out and you know, find a market for it. try and convince customers that this is the solution to all their problems. And in the modern world, in the modern tech world. That’s just not how things work. You need to prove value up front. You need to deliver ROI and value super fast. I think Dharmesh, his rule is in 90 seconds or less, you know, the end user needs to understand why this is transformational for them and makes their life better. And so we’ve seen this big shift to a focus on customers focus on needs, you know, what are the key problems that you’re facing in your work life or in your consumer life? And then how do we reverse engineer a solution that really delivers on on that problem? So if I were to give advice to the early stage founders, it would be you know, become obsessed with your customer, find your ICP, your ideal customer persona, spend time in a market, discover the key insights, you know, what are the key challenges facing that market, and then figure out how to build a solution that meets the need, you know, don’t just just because you’re a developer, and you’re a talented builder, that doesn’t mean you should go out and build some super powered tech, and then just assume that the market is going to love it.

06:02

Do you think that’s a consequence of tech really exploding out of, you know, the confines of being its own sector, and just kind of taking over every sector? that that that shift away from just being able to build something great, and then figure out a way to sell it, versus having to build to actually fulfill these needs?

06:22

Is that Yes, I think so. Joseph, I think it also goes a little deeper. I think it’s a mindset issue. And I think it’s, it’s the victim of arrogance, right. So we all have a bit of confidence, and maybe maybe a shred of arrogance, some more than others. But when you are arrogance, you believe the world operates like yourself, you believe that the mindset of the consumer base is much like yourself. And so you think that if you can build something, that’s your ideal product, right? That’s your ideal technology that ever the market will come? Right? If you build it, they will come? The reality is that, you know, if you’ve met one consumer, you’ve met one consumer, right? There’s a lot of shapes and sizes, there is no one size fits all anymore. That just doesn’t work. And so you need to figure out, you know, what are the segments within the market? What are the consumer groups, or the buyer groups within b2b that have a similar philosophy or ideology or buying behavior or need set, and you need to you build products that really serve a problem and serve a need. So I think it’s a problem of mindset. And it’s folks thinking that the rest of the world operates like themselves. And that’s just not the case.

07:42

It’s interesting, I do think there’s a sort of fine line between self confidence and being open to feedback, right. And I think in entrepreneurship, like you kind of have to have a balance, I think the best entrepreneurs app have developed that strong customer empathy. So they can kind of wreck, you know, they can take the feedback loops, and kind of, you know, bake that into their product development. It does take a degree of self confidence, though, because you can’t have every, every single feedback session or artifact, you know, can completely push you off your strategy. So it’s kind of a fine line of being a good listener, but also having, you know, some confidence in finding the right path forward. Right. And when you are building out your products in the past, like how much do you stock? Do you put in just like the systems for startups? Like, are your real vocal proponent of kind of lean startups and all the, you know, systems behind that? Or are you kind of take a more like open approach to, you know, in terms of the systems that these entrepreneurs are utilizing to kind of bake their strategy or their product development?

08:50

Yeah, that’s a tough one, I would say, Yes, I am a proponent of the lean startup, but more at the theoretical and philosophical level, I think some entrepreneurs can get maybe too caught up in the tactics, and you know, the details with that and chase their tails a bit. I mean, to your point before, you can’t be so wishy washy, that all feedback from customers finds its way into the product. Right? We like to say that when we’re selecting founders, or we’re investing in founders, we like to find people that are incredibly stubborn about their vision, but incredibly flexible about the path to get there. Right. So you need to have a really strong vision, here’s where we’re going. But you need to be incredibly receptive to the market in the customers and how the product actually manifest in the path. To tie this back to my experience with the product. I’ll give you a simple example. Right? I was building a handheld device, right? It was a handheld device for measuring compounds in drinking water. So things like monochloramine or chlorine or nitrate or iron, right. And a huge number of the customers That I did testing with said, I would like this to be touchscreen. Right? We launched this product in 2013 ish timeframe. And there was a big proponent of customers that said, I really need this to be touchscreen, right in the markets that we’re testing. Well guess what the reality is, there’s a lot of cold weather climates, where people are doing this testing on the back of a pickup truck in sub zero degree temperatures in places like Minneapolis, or Chicago. And they’re doing it with huge gloves, and big parkas and a hat and goggles. And you can’t have a touchscreen device in that environment. So this is just one simple example of the overwhelming feedback was we want touchscreen. But when you look at the markets we’re going to sell this product into it was not a viable decision for the product, right. And so that’s just one small thing. Like you need to collect all the different information from the customers, but it’s the job of the product manager to decide on the solution. Right? It’s the customers that surface the problems, the product manager needs to find a solution that most appropriately services the market.

11:13

That’s really interesting. Well, yeah, bringing up, you know, kind of the Midwest in Chicago. I know, that’s where you’re based. Can you describe a little bit about your experience, since you moved back to Chicago? What is the startup ecosystem like there? For those who are unfamiliar?

11:29

It’s exploding. I mean, I’m not on the ground in Minneapolis, I’m sure you’ve seen things really develop and evolve in your ecosystem. But in Chicago, I got back in 2012 2013, in 1871, had just opened, which is sort of the incubator startup Mecca. Within Chicago, we were really just finding our footing on becoming, you know, a real sort of call it a second tier tech ecosystem, not not on the level of San Francisco, New York, but a major player, right, we had had some big exits, we had some big successes, and that had spurned some talent in the ecosystem that went and started more companies. So now, you know, during the past almost 10 years, geez, it’s developed quite a bit, you know, there’s more venture capital firms than ever before. There’s more startups being funded than ever before. we’ve really seen the ecosystem progress for the better, and sort of hit its stride. So I think Chicago is only going to go from here. But you know, if you go back to the time I started investing, there was very few pools of capital. And we kind of, we had our choice of the startups we wanted to invest in now. It’s, it’s, it’s more competitive, which is better for everyone involved.

12:55

I was really impressed. When I went back to Northwestern in February, pre COVID. For venture capital events. I had gone to school at macdill. So I haven’t spent a lot of time at Kellogg, but when I went there, they have this fabulous new building, which they were just building when I was at Northwestern. And it was just a beautiful setting right there on the lake, the field. And it was full of all kinds of people. Betsy Ziegler was there from you mentioned 1871, some other people, all kinds of great funds represented there, mingling with just these top level up and coming VCs, out of Kellogg, and just being in that spot. And that’s not even that’s up in Evanston. That’s not in the heart of anything, which, from my experience is more towards 1871 would be kind of the heart of a lot of this action, while at least downtown in general will be more towards the heart of it. But it was super impressive. It really gave me some hope for what what we can aim for here. You know, like getting that vision, getting that idea, that vision for Minneapolis and what the ecosystem can aspire to be.

14:04

Yeah, it’s really great. I mean, you’ve cited the university’s Stanford and MIT their efforts are well documented and the stratix accelerator at Stanford, you know, one of the most prominent in the country. But look, look at Northwestern, you mentioned them, they’ve got the Wildcat challenge and look at Chicago Booth. They’ve got the NVC the new venture challenge, which I believe kicks off tomorrow on the third of June. This has become the Chicago Booth one has become one of the preeminent accelerators in the country. That ranks right up there with the YCS and Angel pads, right? The successes from that program, you know, the winners of Chicago, Booth NVC, our grub hub, Braintree tovala, I mean, you know, hundreds of millions, if not billion dollar companies that have been enormously successful. So it’s it’s really nice to see that the academic academic institutions have structured themselves in a way to really promote true Entrepreneurship, that is the challenge when you get into academia, you know, is this going to be more of a research or learning exercise, there’s this really, you know, a capitalist endeavor. And I think what we found is the Chicago based institutions have figured it out, and, you know, created some really transformational, you know, large scale tech companies. So we’re looking forward to meet and some more tomorrow at the competition, and at a future Northwestern event as well.

15:29

I think it’s really interesting, Nick, I’ve been building software companies, either as an was started off as an entrepreneur, and then an investor, the last, you know, I don’t know, 15 years, but 25 years as entrepreneur, all in Minnesota, and really, you know, from when I got started, there was very little support, there weren’t organized, you know, communities for startup competitions, accelerators, you know, maybe there was one or two venture funds, you know, now there’s, you know, just in the Twin Cities market, there’s well over a dozen early stage funds. And then we have, you know, it’s a little different in Minnesota, the University of Minnesota, I think it’s a little over 10 years old, we have a Minnesota cup, which is actually kind of built for all startups in Minnesota, it sort of lives, you know, on the campus of the University of Minnesota, but it’s not just for the U of M students. So it’s kind of interesting, I think it’s, it’s evolved a bit differently. But in many respects, I think the last decade is really brought just incredible wealth of support for entrepreneurs starting to build things. Of course, I think one of the main areas that entrepreneurs that are looking to get discovered are looking for support is on fundraising. And you know, despite the emergence of what 1500 plus venture funds around the country, you know, getting that first round of capital for many is still really challenging. And I know you’re, you’re one of the few funds that you know, invests in kind of pre seed, and then also what I’ve called, like, really early seed stage companies in the Midwest, I know you invest all around the country, what are some of the signals you look for? Or what are some of the things that you would in terms of advice would pass along to founders, you know, in terms of raising that first round of venture capital?

17:08

Well, first of all, you need to know where to aim. Right? Like before you launch a process, and before you start pitching. And before, you know you do your dog and pony show with a bunch of investors, you have to understand your ICP. Just like if you’re launching a product into a market, right, who’s your ideal customer persona. And for a fundraise is the same Rob, you just mentioned, like in the Midwest, there are seed stage investors series A investors pre seed, some will do pre traction, some won’t. Some will invest in hardware, others won’t write some, like consumer, some have a preference for b2b. We’ve got a whole crop of Life Sciences folks, right? There’s a lot of shapes and sizes to these investors. And if you just roll out of bed with a really cool product, and you know, a little bit of sales, and do your rounds in sort of Minnesota ecosystem with whoever you can get an intro to, you’re probably going to find some mismatches, right? It’s like the dating app. And you know, you’re you’re dating somebody from a different culture that doesn’t speak your language. And it’s like, where do we even begin here? So you kind of have to know where to aim. Figure out what type of startup you’re building, right? What are the sectors you appeal to? What are the technologies that you’re building around, you know, Ai, blockchain, etc? Who are the markets that you’re serving? Right? Are you serving certain demographics with your startup, let’s say, the boomers or Gen Z, for instance, or you know, maybe your startup is focused on women. And then the stage, of course, the stage is important, the geo is important. So there’s all these filters and structures that investors use to kind of think about your startup. Here. Again, it’s like sector, market technology, geo stage. And if you are honest with yourself about which boxes you check, you can find the ideal set of investors that is just well designed for your startup. Right. There are generalists that just invest in Minneapolis startups, there are specialists that just invest in AI powered startups, right, you need to know who those investors are first. Rob, you and I have discussed this tool that we built VC dash rank.com. It’s a simple questionnaire that startup founders can fill out in five minutes or less about their startup. And they generate a customized list of all the ideal early stage investors for their startup. I think we have somewhere from 15 to 30. Startups filling that out every day. So it ends up being you know, you add those up over time, there’s a lot of startups out there looking for investors, but if you’re aimed in the wrong direction, you know, you’re gonna waste a lot of your own time. In founders time is the most important thing when you’re building an early stage startup.

19:57

I think that that’s a lot a source of a lot. VC hate that you see, I mean, there is plenty of legitimate criticism about VCs, there’s there’s bad behaving VCs, don’t get me wrong. But I think that that point you just made, that it just being a mismatch, that people going into every what should be a speed date with the intention that they want to get married, without actually realizing that they need to make sure that that’s going to be a good match. I think that that manifests itself and justly so in people getting incredibly, you know, frustrated by that process, and then taking it out against just the industry in general. It kind of obfuscates a lot of the legitimate criticism of the industry, though, and and makes people you know, it makes it harder to uncover. Because when the problem is that source, what’s the real problem? It’s hard to uncover when it’s just simply a mismatch from the beginning.

20:54

100% Joseph, and I’m getting a taste of my own medicine, right, because as we embark on on raising our next fund, we’re not raising currently, but as we do that, we need to meet with the right investors for us, right. In our industry, we call them LPs limited partners. But I need to know who are the institutions that like to invest in emerging funds, right? Who are the institutions that like funds in the $50 million size range? Who are the institutions that have an interest in the middle of the country investing versus coastal, right or international, right, if I don’t do my homework, on my own ICP, then I end up spinning my own wheels with a bunch of folks that you know, want to cut billion dollar checks in the multi billion dollar funds that are focused only on San Francisco, and I’ve just wasted their time in my own. So, you know, this, this has got many different levels of extra abstraction, whether you’re a startup selling a product, you know, founder trying to, you know, sell your business, sell equity in your business, or a venture capitalist that’s, you know, trying to raise a fund.

21:55

And just some advice to anybody out there who’s going to turn around and Google ICP to figure out how to proceed, ignore the first results, or any results with pictures of crazy clown makeup. That’s the wrong result for you. Wow, flashback there. Now we’re showing our age.

22:12

It’s really interesting, Nick, when I was a sort of founder turned investor, you know, I was like you as an angel investor for a while, while while I was sort of founder, took the success as an angel investor became a VC. And the number one request we have, from founders we back is, can you help me complete my round? Or can you help me connect other capital sources, and to me is like a founder turned investor, it’s like, the least interesting thing I could help a founder with, is just finding more capital, I’d rather go deep on like product goes to market, you know, human resource and operations, like how do you scale the growth of the company? Not so much like, Hey, can I i’ve this spreadsheet, I started with 200. Plus, it’s just people in the last four years that I’ve talked to you that are involved in the VC game, and I did use the VC dash rink comm tool that you built for internal startup we had been incubating called next jam, it’s really, really useful to kind of filter down across these different dimensions, who are the funds that we should be talking to? And I think a lot of founders, it’s not even so much as like getting an intro to the funds, like, I know that a lot of the funds that we should be talking to, but they weren’t necessarily the ones top of mind for me. So just having a filter to say yes, these are the ones that based on, you know, some kind of database are probably the ones that are right for you and make some ton of sense to me. So I think it’s super valuable. I’d love to see more startups using this. And it wouldn’t solve this, like signal and noise issue when what you really want is like relevant deal flow that can make right you know, the speed for fundraising faster, right. 100%.

23:46

I mean, it’s, it’s amazing to your point, how network driven and opaque the whole fundraising landscape still is, it’s always based on referrals. And you have to have the right networking etiquette. I mean, if you go back to the origins of VC, it was a little cottage industry, you know, country clovers, and people that were insiders, Sharon deals. And that’s kind of where this industry began. But, you know, as we move forward in time, it’s institutionalized. I mean, tech is no longer, you know, a footnote in the asset class universe tech is sort of leading and driving the returns, both in privates and publics. And so I think we’re gonna see our industry, our asset class, really professionalize and become more tech fold. Right? It shouldn’t be this old insider game of who you know, and who can I get an intro to and, like, you know, can I can I get the royal treatment from the investors at benchmark I mean, amazing, firm, right benchmark, but they they don’t have a website, right? You have to know somebody to kind of get in there. And honestly, I think that’s the model of the past. I think it’s gonna die. The future is about you. Technology Solutions media, you know, having a systematic process, it’s it’s not about who you know, it’s about what you can build.

25:08

And increasingly, it’s not about where you’re located either. I mean, that’s starting to not matter at all, which used to be hugely important for VC. And even when you look at VCs who do business all over the world or across the country, you know, that geography that they do more deals, where they’re located, then states further away, like if you’re based in DC, or even if you’re based in Chicago, you know, there might be a way more deals in Silicon Valley, but you’re going to be doing more deals in Chicago, just because that’s who you run into. But increasingly, that’s becoming less and less important.

25:44

Well, I think, you know, one of the effects of COVID is no longer do I have discussions with investors that say, oh, middle of the country, investing the Tam’s too small, like the outcomes aren’t going to be big everyone? Well, not everyone, but the vast majority of folks out there realize, wow, there’s talent everywhere, you know, whether it’s talent that left the coast that moved other locations, or just the reality that great, huge, multi billion dollar tech companies are being built everywhere. We’re seeing that more and more every day, which is, it’s nice not to have to face that objection anymore. Oh, Minneapolis. Oh, yeah. No good tech companies are gonna come out of there. Chicago. Yeah. You know, you guys have your strengths, but it’s not technology. Yeah. Okay. Let’s look at you know, the cameos of the world and, and you know, these other huge successes. So it’s no longer an objection, we really have to face which is nice.

26:39

So Nick, I know, you take a very systematic approach to venture capital, kind of pioneering how to use tools and technology to make the process more efficient. I saw this survey a few months back that ranked from founders seeking capital, the number one criteria or attribute that they cared about the most was speed. Yeah, and I know you’ve interviewed a lot of funds, are there, you know, from a systematic standpoint, are there certain things you found to really speed up the investing process? Or is there any any other venture funds that, you know, obviously speeding, making a quality decision that times are enemies of each other? Right? Like, you know, how do you have you? Have you found ways to move faster in decision making, or across the VCs that you’ve interviewed? Any that really stand out to you on this dimension of speed?

27:27

Wow, that’s a tough question. Yes, we have implemented a lot of systems and processes, I can talk about that when to your ladder question on any VCs in particular, I would say that the VCs that stand out, as being great at making decisions quickly, are solo capitalists, largely, you know, when an individual is doing the meetings with the founders and can decide at first meeting or second meeting. Look, this person has the right ingredients, you know, like you’re taking all these data points, they’re mixing up in your head, we talked about this abstract concept, pattern recognition. But honestly, a lot of at bats in this industry over time, you start to figure out here are the things that I like, and you process all these data points, and you make decisions. So it’s the solo capitalists that can move quickest, because, you know, there’s no infrastructure, there’s not multiple people, there’s not, you know, a whole series of diligence. When it comes to our firm. We are not that, right. So we have a number of people at our firm that can do deals. It’s not just Nick Moran, right. And I’ve been very clear with my folks here in New sec from the beginning, this will not be the Nick Moran show. This is newstagged ventures, we are building a scalable venture capital firm. And so what we’ve had to do is get very, very clear about what we’re looking for. We kind of divided up into three segments. So when we’re looking at a deal, we look at the who, the what, and the how. So the who is the foundation, that’s the people behind it, the talent, their raw capabilities, their you know, their raw mindset. The what is kind of the business is the business, the industry, the sector, the product, is it, you know, scalable? Is it venture scale is an interesting does it have tailwinds and then the How is sort of the framework that the founders are using to access that market, build the right product. Think about you know, how we wedge into the market? How are we focused on customer needs? To that point, we did you know at the top of the interview or are we tech first. So the How is like the process that the founders are going about to access the opportunity. And then you know, at New stack we think very specifically about what are our must haves. What are important to have and what are nice to haves and across each of those three, the who, what and the how we’ve been very specific about what those three are. So we have must haves on every deal. If a must have Isn’t there we pass, we have our important hands on every deal, if a certain percentage of important to haves aren’t there, we pass. And then we have our nice to haves as well. And so that’s our attempt at taking all these patterns and all these factors that we’re vetting for, and actually codify them into a process that can be taught to young folks, you know, as we have this fellowship program of 20 young folks across the country, undergraduates, and it’s too hard to spend the next you know, five years with all of them and try and teach them all these abstract patterns, we have to codify them, we have to get very specific about here are the factors to be looking for, so that their learning curve, you know, moves quicker. And the end effect of that, Rob, is that we should be able to make a decision on a founder, and investing in that founder in less than two weeks, hopefully, less than one week. But if we know what we’re looking for, and who we are as a firm, and you know, what types of founders are positioned to succeed in a partnership with the SEC, then we can move more quickly.

31:04

I just said one more kind of a more narrow question around this process and system you have I know, one of the things they talk about in venture capitalists kind of decision making is this notion. It’s like a psychology notion of, they call it confirmation bias. And I know I’ve experienced I’ve had to sort of fight myself against is that time where I see it, even in our partnership, like the more time you spend on a deal, there’s a tendency to look for evidence to support, you know, your initial interest in that deal. And so you have this self fulfilling kind of confirmation bias to do a deal as you dig in more and more and more. Have you had any, you know, with this sort of more in this sort of system that you have? Do you have any sort of guardrails against like confirmation bias? Or have you ever felt like you’ve experienced that? And, you know, or how do you avoid confirmation bias?

31:53

It’s a good question. I don’t know, if we have an answer to that, if I’m being honest, I do know that we’ve gotten incredibly late stage in diligence on deals. I mean, I even flew with, with my deal lead to Colombia, the country to do diligence on a deal and spent two entire days, you know, in the field, like meeting with customers and whatnot, we ended up passing because something came up late stage and diligence that violated my staff. And we had to have a real honest conversation about that. And, you know, as I think about scaling this firm, I think about, you know, we need to use these moments as teaching moments of how we got to make decisions. And even if it’s even if it’s so much easier to proceed with the investment at that point, because the sunk cost is there. And the confirmation bias, is there. the right decision, if we really want to build a best in class firm, that’s going to produce great returns, and teach folks how to say no, even when you’re over committed, is you got to say no, when, when it’s right to say no. And I learned that the hard way working for dinner for years in m&a, a very aggressive acquire My god, I would do diligence on 1000s of companies, I would spend, in some cases multiple years, getting to know founders of different companies and visiting them in Spain and Italy and all around the states. And then those deals would fall apart. And so yeah, that was a painful reality in our business. I mean, we’re meeting with founders, you know, for weeks or months. And so to pull the plug on those for me is like, you know, that’s nothing. It might be harder for the younger people. But for me, it’s nothing compared to multi year. relationships.

33:39

Yeah, totally. You bet that your prior experiences is super helpful in that regard. So I think Joseph, you had a kind of a final question, right? Oh, yeah.

33:49

Yeah. So our last question here, like to ask all of our guests who come on the show, can you tell us about someone or a startup that you’ve observed executing at a really exceptional level, maybe someone in your portfolio or someone outside of your portfolio, but someone you’ve seen maybe who isn’t getting recognition for that, but who’s really killing it? There’s too many to choose from.

34:15

Maybe I’ll pick a couple that were slammed hard by the pandemic. I mean, terrible categories for the bat pandemic. One is Jude chewy, he runs a company called Flamingo. Flamingo serves the multifamily property industry. And it’s a it’s an events focused platform. And that thing, I mean, the events out of the business went to zero effectively last, I think, April or May. This guy is just a rock star. He built a SaaS business alongside his events business during the pandemic, grew it to the size of the events business. I mean, remarkable MRR and now the events have come back and so now he’s got I mean, it’s kind of amazing but he’s got a you know, two sided, you know, dangerous multifamily software business that does both events and, and software as a service, which are super complimentary for what he’s working on. And it’s just been amazing to see the resiliency. I mean, it would have been very easy for him to shut it down. And many of my LPs reached out and said, Is God gonna survive? And I said, if you ask him, there is no quit here. There is no, you know, pulling this business up and just super proud of him. Another one is Conrad Wallace Xu scheme in MDX at at a business called trip scout. This is a travel business that serves consumers and just got crushed, absolutely crushed by the pandemic. Many travel companies went out of business, many large travel public businesses just are on the ropes like the TripAdvisor is of the world. And these guys have just made magic of, of the situation. It’s, it’s unbelievable, how they doubled down created more content and special guests. You know, created a almost like an Anthony Bourdain, like series on travel during the pandemic, travel from home, you know, everyone’s stuck inside. How do you get the experience of being on a trip when you’re at home? And coming out of the pandemic? they close? I think they recently closed 4 million bucks from accomplice, I mean, tier one VC there. I mean, they are on this upward trajectory, like I haven’t seen. And it’s it’s kind of amazing. You know, there was never quit, there was never hesitation. There was optimism, despite a really tough situation. So those are two I would, I would just, you know, tip my cap to them. I’m glad and proud to be an investor in people like that more so than than anything. Trip scout and Flamingo. We’ll have to check those out. All right. Well, thanks

36:53

a lot for joining us today, Nick. It’s been a pleasure and best of luck as you continue to grow, you know, new stack and thanks for you know, launching VC dash rank.com. And the other work you do to support entrepreneurs and founders and of course, the podcast, which is one of my faves. So thanks for joining us today.

37:12

Yeah, thanks, Nick. Make sure you check out the full ratchet, visit the new stack website. They’ve got some great tools for founders on there.

37:20

Such a pleasure to be here guys. Thanks for having me and love the pod Keep it up. Can’t wait to see who the next guest is.

Ryan and Josef talk about the importance of startup communities and the importance of innovation in rural communities, including St. Cloud, MN.

Molly shares her experience working with incubators, builders, and startups with Singularity University and how that led to her position as the Entrepreneur Ecosystem Development Lead at CORI, where she works with communities to build the infrastructure necessary to help entrepreneurs succeed. Molly paints a picture of a rural America in decline, and explains the transformative value generated by tech startups and productive tech startup ecosystems.   

She explains that the key to any ecosystem is putting the entrepreneur at the center, and calls out Red Wing as a startup community that is really executing- as well as every rural community they work with. “That’s the stories that need to be told. Those are the underdogs that we need to be uplifting. Those are the people flying under the radar that I could talk about all day.” “We have so much more to go as a country in terms of entrepreneurship, in terms of innovation than just what we see in these five major metro areas.”

Full Transcript Below:

00:00

Welcome to the execution is king podcast. Today I’m talking with Ryan Weber, managing partner of Great North ventures. And joining us as a guest is Molly Pyle, the entrepreneurial ecosystem development lead at the center on rural innovation. I’m Molly, how you doing today? Hey, doing well, how are you? Good, good.

00:22

Hey everyone, Ryan Weber here in greater St. Cloud, Minnesota for my home. It’s late June 2021. And we’re starting to see things open up quickly as our vaccination rate Minnesota exceeds 50%. I moved to the St. Cloud from the Twin Cities in 1998 to attend college. The population here is around 189,000. While in college, my partner at Great North ventures Rob and I bootstrapped a company and online PC software publishing and later, ad tech focused on smartphone app marketing to 170 employees and eventual and exit. You know, at Great North ventures, we think execution is key to success. And this podcast will hope to help founders and investors learn best practices from others building the next great global startups from wherever they may be. And I’m really excited today through the work at Great North ventures I’ve had the great fortune of interacting with Corey and some of the work they’ve been doing with ecosystems in the region. So Molly, could you start off by telling us a little bit more about your background and what Korea is?

01:28

Yeah, definitely. So I got started working in entrepreneurship, working with startups, running incubators and accelerator programs at a company called Singularity University based in Silicon Valley. And I had this amazing privilege to get to work with global entrepreneurs see incredible ideas and innovators from truly everywhere, every corner of the earth, you can imagine folks would come and participate in this program that helped them, leverage these exponential technologies and build them into scalable tech startups. So that made me really fall in love with the opportunity that entrepreneurship provides for people. No matter where you come from, if you have a good idea, you can turn it into something real and impact billions of people potentially. So with that sort of becoming my professional focus, I learned about the center on real innovation, which is just a really compelling organization for me specifically, as I wanted to see entrepreneurship as an opportunity become more accessible to more people. So the center on real innovation is an organization that’s really dedicated to closing the rural opportunity gap that emerged out of the Great Recession. I joined the organization in August, like Joseph mentioned as the entrepreneur ecosystem development lead. And that’s really just a long way of saying I help rural community leaders build startup communities and entrepreneur ecosystems. And what that means is building that infrastructure that’s necessary to help entrepreneurs thrive to help aspiring entrepreneurs who have an idea, but maybe don’t know that they can take it forward and execute it. Figure out who are the people who are the programs? Where are the partnerships, what can I access that can help me actually create this tech startup, even if I am in Red Wing, Minnesota, or Cape Girardeau, Missouri, for example. So these uncommon places that you don’t often hear about, as you know, innovation and tech hubs, but center on real innovation really believes that they can become these kinds of tech hubs. And part of that why is why are we focused on rural America specifically, it’s because to be frank, it never recovered from the 2008 recession. So the urban and suburban communities really bounced back rural places failed to replace the jobs lost in that recession, let alone grow their economies. And then we all know the effects of COVID. Nationally, globally, no matter where you are, who you are, we all felt the impacts, but in rural, specifically, only 5% of tech jobs even before COVID were in rural areas, despite the same regions representing 15% of our national workforce. So all of this very unequal recovery stems from what we’re seeing the automation of jobs, so many of which were originally in rural like agriculture, manufacturing, globalization, so outsourcing some jobs that could ultimately be done by Americans if they were skilled up to be able to meet the needs that those jobs require in terms of skills and talent, and this 30 year decline that we’ve been seeing in entrepreneurship. So that’s why we’re really committed to creating sort of inclusive ownership of production in the age of automation.

04:35

That’s great just for framing today’s conversation a little bit Can you talk about for corys focus? Can you define what you mean by entrepreneur and what you mean by rural?

04:46

Yeah, totally. So rural, we talk about like a community in the population size of 5000 to 50,000, which may seem even bigger than you might think but something that we think is important is trying to Create, whether it’s through regional partnerships or through technology as well, the density that rural communities in rural areas lack, that you just naturally have population density in an urban area. So we think about rural in this way, we try to encourage the communities that we work with to take more of a regional approach and think about how they can leverage technology to build more of an ecosystem and inclusive culture. And entrepreneurs, you know, anyone with an idea who is actively working on turning that idea into a startup, and we specifically focus on folks interested in building scalable tech startups. And we do that because there are lots of organizations incredible organizations like score and co starters and the SBDC and local communities that will help folks with a main street or small business or sometimes called a mom and pop kind of business idea. And we acknowledge that that kind of entrepreneurship is critical and is a backbone to really the American economy. But what we want to see is scalable technology startups being created in rural communities, because we’ve seen the returns that those kinds of companies can have in terms of jobs, in terms of wealth being created for that community. So seeing those kinds of impacts, helping people create tech startups, also the rise of distributed work and remote teams being something that you can do, you know, build and scale a startup in rural Maine. And you could have some team members in other hubs where there’s more tech talent, perhaps, but doing that, helping bring the jobs helping bring the wealth and create that in a rural community. That’s our goal. That’s what we’re really focused on.

06:36

Right? Can you share a little bit more about what community needs to be successful? Is there a checklist of must haves that you have put together?

06:46

Yeah, so I mean, the first kind of obvious thing, which I am proud of and want to share about the center on real innovation is one of the things we do as well is help communities to apply for federal funding. So the basic funding that you need to stand up and build an incubator, for example, or get the funding to run an accelerator program or a hackathon, all of that has to start somewhere. And we support real communities and applying to this federal funding. And I’m very proud to say since 2019, only, we’ve helped communities raise more than 13 million in federal funding and match dollars. So the first kind of thing I would say is, while there’s no checklist, it’s it’s pretty obvious that you need, you need capital, you need an infusion of capital, you need folks willing to invest in the community to build the basic infrastructure for an entrepreneur ecosystem. And you know, there is no replicable formula that you can take and drag and drop. We’ve seen some things work in some communities and not working others, but ultimately to one of the most basic things in addition to just having some infusion of capital, whether it’s federal funding, or investors or a mix of that public private partnerships, is also just access to connectivity to high speed internet. So just to illustrate, and part of what Cori does, as well, another bridge organization is support communities and accessing broadband and getting broadband set up. So for example, a recent Deloitte analysis of the digital divides economic impact showed that a 10% increase in broadband access in 2014 would have produced nearly 900,000 more us jobs, and 168 billion more in economic output in 2019. So that’s, that’s kind of, I think, a really powerful statistic to show how important broadband is to economic development and particularly, to building entrepreneurship ecosystems in tech startups. If you’re again, trying to hire remote, you know, DevOps team, and you’re in whatever rural community you may be in, that’s where you love. That’s where you want to be rooted and build your business. If you’re having trouble connecting to the internet and chatting with your team on zoom, which, as we’ve seen, is such a lifeline to doing work in the 21st century, you know, the chances of your success are really limited. So starting with broadband at the most basic level, starting with capital to help you actually build out some of the physical and, you know, otherwise infrastructure that you need for programming. That’s super, super important. And then I also think it’s really, really vital for tech entrepreneurs, especially in rural areas to see visible success stories of people who look like them, who come from their community, who have made it who have been there done that, even if they failed once or twice, I would say that’s even better. Because there is this mindset of, you know, this can’t happen here. There’s this fear of well, if I try and I fail, then everybody knows me, I’ll I’ll have to run into people at the grocery store and kind of hide my head and shame. And I think that we need to really blow up that idea and celebrate the failures, which is something I think I jokingly say Silicon Valley maybe has over indexed in doing but in rural communities, we can kind of bring it back down to It’s okay. You have the courage to actually go out there and try something. And we should be celebrating you and highlighting your efforts to try to build something amazing in this community and for us and for us to be proud of. So get back out there, try again, amplify the voices of people doing this, put them on platforms, do speaker events, do tech talks, do things that the community can come in open to the public and engage because these types of things, I think, plant that seed, and shift the narrative that oh, this can’t happen here. So that’s really important. And also that leads to more that leads to you know, I go to a tech talk, I hear from an entrepreneur, who has actually made it in my rural community. And that suddenly inspires me, I can do this. Now, what do I do? What’s the next step? So having a sort of clear pathway of you go to a tech talk, you hear someone who’s made it who’s from your neighborhood? And then you think maybe this is for me? Well, where do I get started? Who can help me? Are there programs are there incubators are their mentors are their angel investors. So building all of those basic next steps for an entrepreneur to have a sort of cohesive journey, I find that that’s really, really critical. And that’s something I work a lot with our rural community leaders on developing that journey for their entrepreneurs.

11:11

So where do you see communities like starting out? Do you have like leaders come to you who are working on building that infrastructure? Or do you see it beginning with entrepreneurs trying to do a tech startup and then reaching out when they when they have, you know, things that they need that they’re not able to come up with?

11:31

Yeah, our model is working with the community leaders. So the people at that ecosystem building layer, maybe their managers or directors of incubators, co working spaces, accelerators, or general, you know, entrepreneur innovation hubs, maybe attached to a university, we work with that layer of folks to ultimately build their capacity and their ability to serve their local entrepreneurs. So trying to keep things really deeply rooted in the community because someone who has been managing the CO working space in you know, platteville, Wisconsin for five years knows much more than I do about who you should talk to and where the mentors are, or what investment may have happened two years ago with this other successful startup. So we try to help those community leaders actually be the most effective that they can for the entrepreneurs. However, I will say I, I’m a big fan, probably no surprise to anybody in the startup world and Brad Feld and Ian Hathaway in the book, startup communities, I’ve been reading that and doing a book club, actually, with the real community leaders on it. And there’s a piece in that which I love. And I always try to drive back home, which is this philosophy of keeping entrepreneurs at the center, everything in the startup community in the ecosystem should revolve around entrepreneurs at the center, what do they need? What are they looking for? How can we best be of service to them? So trying to apply that lens to the work we do with the community leaders is really front and center of ultimately, everything I’m doing is saying, Are you talking to entrepreneurs just like how we tell entrepreneurs? Are you talking to customers? Are you getting out there in the field? Are you asking questions? Are you iterating, based on what they’re telling you, the ecosystem builders and the people serving entrepreneurs need to also have an entrepreneurial mindset. They need to be flexible and adaptable, they need to respond to the changes of what the entrepreneurs are saying they’re needing or what’s working or what’s not working for them. So trying to really help them adopt that mindset and be the best possible, you know, supporters and fans and amplifiers of their local tech entrepreneurs. That’s really, again, what I think we are all about, ultimately, are the work that I do.

13:43

I got a shout out our advisor Scott Resnick, at this point. He’s he wrote a portion of a chapter or maybe it was a whole chapter I forget in the startup community, his book. He’s EIR at starting block in Madison, Wisconsin doing all kinds of good ecosystem work in Madison.

14:03

That’s really interesting, Molly, you know, I was thinking back to when we were starting there. You know, it’s obviously a larger market, but we had entrepreneur success stories. And that was a major inspiration. And I think more recently, I’ve heard about tech successes and other smaller markets, like Ben from Douala into Moines. He’s got very become very active in the ecosystem in Iowa. And Zach, founder a jam that went public in Eau Claire has done so much to help, you know, you know, ignite, you know, a spark there in Eau Claire. And, and I think that’s something people don’t realize is that there are six very successful tech startups that are being formed, you know, all around the country in the world right now. But these markets are a little bit bigger than the markets you’re targeting. I’m really curious to hear are there any markets or startups kind of entrepreneurial success stories that you could share from these smaller rural markets that you’ve engaged in started working with?

14:54

Yeah, so I, I mentioned this community earlier, and I love talking about that. Because they are a, you know, real underdog that’s come up and hence a massive success, and that is Cape Girardeau, Missouri, and this is a community 40,000 in population 25%, poverty rate 25%, lower median income household in the population. So it’s a region and an area that had been in decline in all the ways you can think of and university attendance in their some of their main industries being manufacturing. So the two entrepreneurs locally, who decided to do something about this, James and Chris, they opened, codify, which is a co working space, an innovation hub and tech incubator in Cape Girardeau, which is in Southeast Missouri. And they started this competition called the first 50k, which is ultimately aimed at attracting tech startups to the area and ultimately giving them $50,000. If they agreed to stay in that area for two years and build their company there. And they provide lots of value mentorship, they actually have a in house project shop, and an adult coding boot camp where they’re building the tech talent pipeline as well. And that’s another big thing in terms of what do entrepreneurs particularly in rural need is access to tech talent, right? So beyond hiring remotely, if you can find local tech talent within your community, that’s fantastic. And so keep Gerardo the codify folks were really trying to solve for that building out the tech talent building out the program to bring entrepreneurs, and they had some really interesting learnings in that program, and found that there were some folks who, you know, came participated, got the $50,000 for two years and then left. And that’s obviously not what they want, they want to find people who are going to stay and become rooted in the community and really, you know, give back and stay there for as long as their startup is scaling and growing and in business. And what they found is that that was actually a real goal of one of their entrepreneurs show rust of a company called show.ai, which is a sort of AI and digital marketing firm, which is just rapidly now scaling, super successful. And part of it is because show, he was doing the startup thing in LA, he was, you know, scaling and getting a lot of traction and saw the first 50k competition as an invitation to return home. He had had family he had had, you know, community and connections in Cape Girardeau, and thought that that was always maybe a place that he would like to return to and be closer to his community. But he didn’t think that there was anything there in terms of, you know, startup activity, mentors, investors, people who could support him. So he was living in LA trying to build that out. However, he saw this first 50k competition, he realized, while people or people in my hometown are trying to make it happen, actually, there’s there’s activity, there’s vision. So he applied, he won, and he has been there ever since. And he’s actually a company that our firm, the Corey Innovation Fund, actually a branch of our organization has invested in so we have a fund that invested in qualified opportunity zone startups startups based in those opportunity zones, which Cape Girardeau is. So show being back in that opportunity zone, being back in his hometown with his family, building his tech startup that was you know, doing great in Los Angeles, but now continues to thrive in Cape Girardeau. I just love that story. And I think it’s a great example of finding, finding that personal connections, people who are gonna return to a place or move to a place or stay in a place because there’s something you know, that really roots them there. I think that is really special and really notable. And I just have to add that part of the first 50k program, why I love it, and think it’s impactful is if you can find those people who are going to stay, of course, beyond the two years, that’s the goal, who have this reason or vision for saying in the community. What that has happened is seeing the awardees, seeing those startups generate over 6 million in revenue, create 40 plus local jobs, and generally, again, prove to the community be visible that this is possible that this can happen here. So ultimately, I think that that is one success story. But the program itself is so much more impactful. I think when you look at that big zoomed out view of how many jobs and how much impact and how much of a mindset shift it’s creating for folks in Cape Girardeau.

19:25

Yeah, that’s really interesting. You know, I, I hadn’t heard details of that story, but I can only imagine how transformative that is to a community like that. And, you know, there’s, you know, you know, a couple of people I wanted to get kind of shout out and in our region, you know, in Sioux Falls Matt Polson, of marketbeat, a founder has really taken a leadership role along with local other entrepreneurs and consulting groups to really shape Sioux Falls, South Dakota, and it’s really a it’s become a statewide initiative. It’s really connecting communities around the state to supercharge startup entrepreneurship and In North Dakota, you know Greg Tevin and advisor in our fund, with emerging prairie in the grand farms initiative, they’ve got a plug and play now in partnership with Microsoft building the future farm itself, you know, these are larger markets, but you would, it would just blow your mind how connected these communities are and how these entrepreneur and ecosystem leaders together can really make a difference quickly and in and that’s what, you know, in your story. It resonates that speed at which, you know, a small group of people in a smaller market, when aligned can really, really change the trajectory of a community quickly. And that’s one of the real, you know, positives, there’s obviously no, there’s some of the challenges that we discussed earlier. You know, speaking of challenges, what are some of the lessons learned, you know, what are unrealistic expectations? What are some of the past failures that we might learn from, from some of the work you’ve seen?

20:52

It’s really important, like, I like I had mentioned that tenant of keeping startups and keeping entrepreneurs at the center of everything. So anytime that there is a story of a pitfall or a failure, I tried to think about, well, what were the symptoms or the factors that caused this and almost every time, I would say, if not every single time, it’s when governments or other actors, stakeholders, people kind of outside of the direct sort of center of entrepreneurship are trying to exert control, trying to impose their views from the top down, rather than letting the entrepreneurship ecosystem be really bottom up, be led by entrepreneurs. So architecting out, entrepreneurs from leadership is the most, I would say accelerated way you can lead an ecosystem to fail, if the entrepreneurs are not the people at the center, making decisions, having their voices heard, having their needs being met. I think that that is something that, you know, will be a fast track to pitfalls. And, and I think that all too often, too, there is this expectation of these kind of actors or investors at the maybe government or other level who believe that there is such a thing is an overnight success story. And while there are there are definitely people who can move fast and break things, as they say, all over this country, and particularly in rural areas as well, because I really believe that innovation and being resourceful is kind of at the heart of a lot of people in rurals mindsets and attitudes, you had to be innovative and resourceful to survive in rural America really, for so long. And so I think that when you can see, you know, folks not understanding that this is also a long term commitment. This is a long game, like, you know, Brad Feld says think of it in 20 year segments. So when folks are expecting overnight success and have a misalignment of expectations of Oh, we want to see your first accelerator ever that you’ve done in, you know, rural Vermont produce the next Google, that’s obviously not realistic. However, it doesn’t mean that there can’t be fantastic startups coming out of these areas. And these programs, it just means that we need to in tech startups, for that matter, it’s it’s definitely our focus, like I mentioned, but it’s something that I think we need to get on the same page about early on is that this is going to take, if you’re starting from scratch, especially a longer time, you’re going to need to really stick with it to be okay, like I mentioned with the failures that you might see at first, and to understand that this is something that will happen over the course of like Cape Girardeau, that kind of massive impact and all of the, you know, millions that they’ve generated, and the hundreds of jobs that have been created beyond that first 50k program, they also have, you know, tech startups being built just within their space, all of that happened over the span of now seven, seven years or so. So it’s it’s not something that can happen within six weeks. But it’s also you know, something that I think we can stay optimistic about because it can happen, it just may look a little different than you might imagine it would in Silicon Valley. And that’s okay. I don’t think we need to recreate the next Silicon Valley, I think rural communities can create their own thriving startup ecosystems that fit with the culture in the context. So ultimately, I think it’s about keeping that in mind.

24:18

That’s really interesting. You mentioned a few of the success metrics, like job creation, and you talked about, you know, upskilling, you know, the labor, you know, workforce, but also, you know, attracting, you know, you know, skilled talent back to a region. You know, are there any other metrics that are qualitative or quantitative things that you use as measures of success? Because, you know, this is a can be a grind, and you have to, it may take a long term, but what are some of the things that you would any other anything else you might suggest focusing on, you know, for measuring the progress that’s being made?

24:50

Yeah, I mean, we definitely do look at access to capital as a indicator like like every startup ecosystem, but particularly how die The situation is in rural, that we’ve found and research shows that less than 1% of all VC money goes to rural areas 80% of all investments are made in just five major Metro cities. So tracking and looking at and supporting, how are how the companies in these rural communities are raising capital, whether it’s through traditional investment, capital micro financing grants, we’re trying to support them in all the different ways in blends that they can access capitals. So helping them do that. And tracking that is a huge metric. It’s also you know, the the, the equity investments that they can get from that wanting to see that it’s the exits we’ve had and seen a few exits a few IPOs, a few acquisitions. So trying to track all of that, but also, you know, just the the general startups if you’re starting really small, that are participating in your incubator. are you growing that number over time? Did you start off with five companies in your incubator or accelerator and then three years later, you’ve got 25, we would count that as massive progress because it means that you’re building traction at that community level. So funds raised jobs created profit generated by the new startups, those are, I think, really great and traditional metrics to look at. But helping match metrics with the early stage ecosystem development is important, too, right? You’re not going to have maybe 7 million raised in capital out of the companies in the first incubator ever, or maybe one company does that. And that’s great. But ultimately, you may not see that happen right away. But to match that metric with wherever you’re starting out, if you’re just trying to get folks to pivot, a small business idea, let’s say into a scalable tech startup in a week long, you know, startup bootcamp that’s going to have different and should have more than grounded metrics, then what you want in your accelerator program, after you’ve been doing this community building for three years, let’s say,

26:57

could you talk about, you know, kind of changing gears a little bit here? Where can someone find resources as a community leader or entrepreneur for supporting rural startups? You mentioned a book earlier startup communities? What other resources at quarry or or, or more broadly, Do you often recommend?

27:14

Yeah, I mean, like I mentioned, doing that book on Brad Feld, I mean, Hathaway book is, is, I think, a great tool for learning and for rural ecosystem builders to really get that perspective. I also, you know, selfishly would say what we’re doing at Korea is really partnering with folks to help navigate How can they build this startup community? What do they need to do? Who are the partners, where’s the funding? So we do a lot of that I also point people to the resources from the Kauffman Foundation, I think they are doing some really innovative work and are supporting entrepreneurs in you know, the heartland in rural areas where I think it’s really needed most. So I also think that as much as I mentioned before, you’ve got to get the actors and then governments and the stakeholders to really understand and put the needs of the entrepreneurs, front and center. And assuming you can do that, I think that governments actually a great source of support for entrepreneurs and for ecosystem builders. So if you know how to navigate those complexities of federal funding, SBR process can be great for non dilutive funding, though it can be challenging. There’s also a lot of programs through the Economic Development Administration, we support communities to apply for the build to scale program, which helps you really get that first infusion of capital to build out a scalable tech startup ecosystem. There’s also the USDA rise grant, which was just announced, which provides funding for tech innovation, entrepreneurship, even building physical infrastructure, building the incubator space that you may need. So I suggest you know, folks stay in touch and tuned into what federal funding opportunities are coming down the pike that Kauffman Foundation that Cory I mean, I would say the content that Joel are producing to at Great North ventures could be fantastic for people in your region. So I think it’s important, yeah, to take the national level, understand what’s happening at sort of that layer of the entrepreneurial vision and possibility in this country. But also what’s happening at your community level are they’re great people producing events and content and trying to make connections. And they would love to have more people at those events and reading their blogs and showing up and so finding whatever is in your area, but also tuning into some of those natural national resources. I also just really appreciate the work, though it may not be a resource they bring a lot of, I think thought leadership to this work is village capital and rise in the rest. So those are two that I kind of like to look to as well for what are they thinking what are they saying what are the frameworks they’re putting out? And, you know, how does that look and compare to the work that we’re trying to do in building these ecosystems in rural Specifically,

30:01

thanks so much for coming on the podcast, Molly, I usually close out with the same question every time. And that’s to ask you who is someone, or a team or a startup, or in your case, it might be an organization, but someone who’s flying under the radar, maybe people haven’t really heard about them. But that’s really executing, that people should be paying attention to.

30:24

I, it’s funny, I would take a wide approach to this question and say that every rural community that we work with is in many ways flying under the radar, right and should be looked at as a really, you know, interesting place and a inviting place to invest. And to just understand more and more about what startups are there that tech startups are actually viable and are happening and are being created in these rural communities. And I definitely think I would be remiss not to mention Red Wing, Red Wing, Minnesota being a place that we work and partner with that community. And though it’s not exactly under the radar, because one of their startups was on Shark Tank, actually. And I was just, you know, learning a little bit more about her story, and was really proud of just the way that she has built this company with her brother from the ground up and ultimately got an offer from the sharks and turned it down and is just crushing it otherwise with profit. So I love to see those kinds of things. It’s not under the radar. But I think there’s lots of other entrepreneurs in Red Wing and being served by Red Wing ignite, the one entrepreneur first collaborative that they have there, which I think is just really cool. It’s another model, like we talked about building density, that’s a great model, because they have regional collaboration, they’ve got 11 different counties within southeastern Minnesota, all working together to try to build up that, you know, pipeline of rural tech startups and amplifying those entrepreneurs. So another one I think is really cool. You guys may know is doc labs, this robot that will help people be better at basketball, I just love I mean, those kinds of stories of people having problems that really personally affected them, but then figuring out well, how can we how can we solve this because that’s a real pain point for you know, actual people in this world and solving that and going after that, I think is just, that’s the heart of what entrepreneurial ism is. It’s identifying what needs to exist in the world that doesn’t, and how can I go out there and build it? So seeing that happen in places like Red Wing in places like Wilson, North Carolina and Durango, Colorado, I mean, to me, it’s, it’s that’s the stories that need to be told those are the underdogs that we need to be uplifting. Those are the people flying under the radar that I could talk about all day, because I just think it’s really exciting that we have so much more as this as a country to give in terms of entrepreneurship in terms of innovation than just what we see in these five major metro areas.

32:57

What a great summation to that’s what it’s all about identifying problems people have and fixing them for him. That’s fantastic. Again, thanks so much for joining us on the podcast today. We’ll catch up with you later. Yeah, thanks me. So fun.

In Episode 1, Rob and Josef kick around bucket list ideas and shattered Vikings dreams, then dive into the interview with the former Co-Founder and CEO of SportsEngine.

Justin Kaufenberg shares his path to venture from childhood brainstorming sessions trying to make his dad rich, to the realization and creation of the “atomic unit” central to SportsEngine’s success. He talks M&A, and how he hit the road running as Managing Partner at Rally Ventures. Rob shares what he misses about creating startups, and relates to Justin’s experience.  

Who does Justin see executing? Tom O’Neill at Parallax, and Jazz Hampton at TurnSignl.

Full Transcript Below:

00:00

Welcome to the execution is king podcast. This week I’m joined by Great North managing partner, Rob Webber, and our guest is Justin coffin Berg, Managing Director at rally ventures, which is a venture capital firm focused on early stage enterprise technology companies. Justin was previously the CEO of sports engine. Welcome to the podcast, Justin. Thank you. Glad to be here. Appreciate it. Joseph.

00:29

It’s great to connect with you today. Justin, I know, you know, I’ve known go back many years and you know, just for our audience, can you pry a little bit of background, you know, what you’re doing before rally ventures and kind of walk us through your entrepreneurial journey a little bit? And then maybe that can take us into what you’re working on at rally?

00:46

Yeah, glad to rob good to talk to you again, too. So yeah, quick background, I was I grew up in Shakopee, Minnesota, and had a very entrepreneurial father. So we used to have to have family meetings sitting around the table once a month as kids. And it was a it was the same agenda every meeting every month for 18 years, which is what can dad invent, to make them rich. So because dad’s a little sick of sitting on 169, and traffic commuting to and from the office every day. So myself and my three brothers, we’d sit around the table with my dad writing down, you know, what I can only imagine was a series of, you know, truly awful ideas. But you do that every month for your entire childhood. And by the time you go off to college, you know, it’s kind of a foregone conclusion, you’re not going to go work for somebody else. So it was, you know, was fortunate just to have that, you know, deeply ingrained in me my whole life, and went to college in Eau Claire, Wisconsin, and along the way, actually started a college pro painters franchise, which, you know, I will say to this day is about as good entrepreneurial training as you can possibly get, you know, when they effectively say, you know, you got to go hire a couple of dozen people, you got to pay him every week, here’s a credit card at Home Depot, here’s a credit line at Sherwin Williams figure it out. That’s, that’s, that’s kind of into the deep end. So you start, you know, running around, you know, knocking on doors, you know, 1000s and 1000s and 1000s of doors, begging people to let you paint their home, and interviewing new employees. And you basically figure out how to become an entrepreneur or you don’t in about 90 days. And so that was terrific training. And along the way, started a company in our dorm rooms called third north, which was third floor North Wing of Marie Hall, Carson’s dorm room, Carson’s bedroom. And that was effectively custom design, custom development, we were building ecommerce applications for for companies. And eventually that led to sports engine, which went through a series of you know, terrible names before we settled on sports engine, which is, you know, when you and I met along the way,

02:50

yeah, it kind of reminds me of a little bit of my own entrepreneurial journey, you know, kind of building websites for others, and, you know, and then kind of deciding, like, you know, that’s not the best business model like services and deciding to build like an actual software company, like a product company and or platform company. So I know, there were, you know, you grew sport engine to quite a success, and ultimately sold it to Comcast, NBC Sports, you know, like any entrepreneurial journey, there’s inflection points along the way, can you walk us through to some of the, some of the inflection points for you and for the, you know, for the team and, and talk a little bit more about the business model? And just kind of the evolution along the way?

03:30

Yeah, it’s a good question. So, you know, for us, it was definitely an evolution. So we were running third Northwich Exactly. To your point, we were building, you know, ecommerce solutions, checkout tools, you know, websites, things like that. And one of our customers at third North was a sports organization. So we built them a proprietary CMS system. And along the way, came to realize that sports organizations, you know, the hundreds of 1000s of them that exists just the United States, all needed CMS and e commerce and checkout and payment tools. So it was the very first time when we thought that building a services business building a software development business, you know, wasn’t the right way to do it, that you had to build a recurring revenue model, you had to build a real software product. So we started doing that. So there was this early inflection point just as entrepreneurs, where we decided to take the business that was, you know, paying us I mean, building third North was, I mean, it was hard. I mean, it made you know, $0 for years, we got to the point where we finally at customers, we had customers that were giving us big projects, we were paying ourselves, we had a nice office, we had a good staff, and we had to make a big strategic decision to just simply shut it all down and transition entirely to the product company and to the software company. We tried to do both for a while. You know, we tried to basically work eight hours a day at third north, then take a break and work eight hours a day on sports engine, what was called Puck systems at the time, actually But it just, it just didn’t work. I mean, there was a time when we physically had, I mean, this is a long time ago now, but you know, two cordless phones, and one of them had a third North sticker on it, and one of them had a puck system sticker on it. And they both sat on my desk, and I would just answer them, you know, and change who I was, and change what company I worked for, and change the entire story, depending on which of the two of them rang. And, you know, eventually, we just decided you can’t, you know, it’s it’s a good idea to build a services business and transition it into a software company. But in practice, it’s really difficult not to just wake up and spend 100% of your hours on the software product and on the long term company and the long term vision. So that was probably the first major inflection point where we had to shut down third north, and start back from total zero, you know, Puck systems had $0, in revenue, zero customers, we had $0, in the bank, we had no friends money, no family money, no safety net, no investors. And we just decided that this was going to have to be a multi year product development process. And we were just going to have to make ends meet with no money, and no safety net, and things got awfully awfully skinny. That was the first really big inflection point,

06:13

I got to ask, did you ever mix up the phones?

06:17

Oh, plenty of times. I mean, we were we, you know, one one business, you know, had management that I needed to check with, you know, the other business had a sales manager that I needed to consult with, you know, all of whom were, you know, imaginary people. So not only did I screw up the name, I mean, I screwed up all of it. So, yeah, it’s probably more often than not,

06:37

you must have gotten pretty flexible at troubleshooting those those relationship issues.

06:43

Yeah, I mean, it’s, it’s hard, you know, large businesses, you know, are skeptical, you know, of a two person, you know, company. And so you do everything you can to, you know, try to, you know, engender just a little bit of confidence.

06:54

Kind of a follow up question. I have kind of privilege of getting to know you throughout this time while you’re scaling your company. And as a founder who, you know, really bootstrapped a company, in particular, not being very acquisitive, and are in the business I started. I always thought it was really interesting. I know, your team made you guys made a number of acquisitions over the years. And I think that’s something I see with a lot of founders kind of struggle with that. And I’ve always been impressed by kind of your vision is, obviously a lot of people really fail at m&a. And it seemed like it was a, you know, became a part of a growth strategy, a sport engine, quite frankly, before you guys, there’s a really fragmented market. Right? And can you talk a little bit about maybe some of the lessons you learned as a founder and CEO kind of driving overall just market strategy and kind of m&a? And how did you wrestle with, you know, which kind of targets to go after as you were scaling? And I think it’d be really interesting to, you know, maybe to hear a little bit more about, you know, some of the lessons learned there?

07:49

Yeah, I do think it’s an area that that doesn’t get enough focus. And I think it’s an area that’s, you know, underutilized as a tool by most founders. You know, for us, we had those early days, when the company was still called pucks systems were mean, frankly, we were making a lot of mistakes when it came to kind of pure architecture, pure software design. But they were, it was a good time to be making mistakes, we were learning about what a sports organization was going to need from their software solution. We had, you know, I think the time and the space, you know, because we were bootstrapping it, because we didn’t have any outside investment. We had a couple of years there, where, frankly, we could, we could experiment. And we did, and ultimately, you know, Puck systems came to market, we changed the name actually along the way to TST media, and then eventually team sport technologies, and eventually the sports engine. And you know, along the way, we raised four rounds of venture capital financing, or one Angel round and three rounds of venture capital financing. But it was back in those very early days when we were having those architectural decisions, where we decided on what an m&a strategy would look like. And what we came to believe is that if you architected the core platform in such a way, where you had a single instance of an athlete is what we call it, or kind of a true atomic unit where one person, one asset existed only one time within the system globally. So there was a single version of an athlete, a single version of a coach, a single version of a referee, a single version of a sports facility. And to that single instance of a person to that single profile, you would append additional data depending on what they did. So your soccer life, your hockey life, your softball, life, all of those things became data points added onto your single core profile over time. And because of that, the system was going to be very, very intelligent about understanding who the user was, what their credit card was on file, what was the single aggregate family calendar for all the sports in which you participate. If you have that type of technical architecture, then you get very smart at the profile and the identity level. Our belief is that if we always own the identity, and we always own the profile, and we always own kind of the things that go natively around Like the FinTech stack the credit card on file, the calendar, then we could add on acquisitions that were complimentary on a sports specific basis. So we came to believe that you didn’t have to build the soccer statistics engine, you could go buy a company that did that you didn’t have to build the volleyball tournament management engine, you could go by that you didn’t have to build the wrestling, meat management engine, you could go by that, as long as each of those things were integrated deeply into the core identity at the sports engine level, so that you were never duplicating an instance of a person, you are never creating a second login for Mom and Dad, you were never creating a second credit card on file. So as long as that core identity remained true, and always was the identity, even for the acquired entities, that you could build a really effective m&a strategy, where the end user didn’t see any degradation of usability. It truly felt like native applications, even though they were acquired. I think the actual technical architecture and the strategy of m&a was why it ultimately became a success and a financial success.

11:09

In my experience of, you know, observing other startups and growth companies, you know, where usually things kind of go wrong, or kind of twofold. It’s either the cultural fit is just really bad. And, and or, you know, you just never have a really strong integration. You know, many of your acquisitions that with sport engine over the years, where there are large teams involved, or was it generally more you requiring this, this kind of a Jason, functionality that you could plug on the platform, but it wasn’t a lot. There weren’t a lot of people and cultural issues. I don’t know how many employees did sport engine have no through the eggs, it was got to be a pretty large group. Right. And I’m just kind of curious how you maintain a strong culture, you know, throughout these acquisitions?

11:50

Yeah, it’s a good question, Rob. So yeah, sports engineers, we did have more than 500 full time employees at the company. And the way we thought about m&a was that, you know, it was kind of like a layer cake, like a series of priorities. So So priority one, don’t even consider acquiring a company unless it can be technically integrated in the way we want to integrate it. As long as that’s true, then the second consideration becomes, you know, who are the people? You know, the people are critical to successful m&a. So, are they a cultural fit? Are they good people? Do they want to be part of the combined entity, you know, what are their respective skill sets, so we spent a ton of time on that. And we were really fortunate in the sense that we had a HR team, and an HR leader at sports engine, who was exceptionally bright and exceptionally thoughtful and smart around that topic. So we were going in and meeting with the teams during the m&a process, we were really spending a lot of time looking at what our current company organization chart looked like. And then what the potential new org chart would look like, we were talking about how people who might come with the acquire entity plug into that org chart, or how they don’t fit into that org chart. So we were spending a lot of time on the people. And then what we tried to do is following an acquisition, we tried to just be, you know, really forthright, and talk to the staffs that had been acquired, and talk to them about what the vision for our businesses, what the vision for that acquisition is, you know, how we see them fitting into that, and trying to just be, you know, really frank with them. And I think that built a lot of trust. It also forced us to get comfortable with our remote work environment. You know, we had some acquisitions where there were, you know, five employees, we had other acquisitions where there were 50 employees. But it doesn’t matter if there’s five or 50, you know, you have to do it the same way. They have to have a good onboarding experience. They have to feel like they’re part of the family, they have to feel like they’re not off on an island in a remote office. They don’t they can’t feel like a second class citizen because they’ve been acquired. You’re right. It’s as long as you can integrate. Then after that the other 90% of the work is people.

13:57

It’s great to hear the background on sport engine and some of the lessons learned. I like to commend change gears and talk about more about what you’re doing. Now. I know you have joined rally ventures, being on both sides of the table. I think it’s already it’s very interesting. You know, how is your entrepreneurial background kind of shape, the kinds of investments you’re looking for at rally? And maybe some of the other activities that you get involved with working with startups?

14:23

Yeah, you bet. So the background with myself in rally was that the firm founded by two partners, Jeff pink and Charles beeler. And they actually prior to rally they were running a venture capital firm called Eldorado ventures, and Eldorado ventures led sports engine series A in 2011 $3.5 million. Series A and Jeff and Charles led that investment. Jeff joined our board at that time, and he was an immediate impact board member and immediate impact investor. So 12 months later when we went out to raise a series Be, they had decided to start rally formally. And they shared with me what their vision for the firm was, which was to not just have a, you know, set of great partners, and to have a set of great, you know, investors, but also to have this concept of tech partners, where they would have, you know, up to 100 other individuals, all of whom would be investors in the fund, all of whom would be available to me as a CEO gratis, to help with marketing or engineering or sales. And it was just a model that really resonated with me. So you get like these big VC firm resources in a very small agile firm, so kind of the best of both worlds. So they then also led our B round, which I think technically was the first investment ever out of rally ventures fund one, they then participated in our C round in 2014. Also, and after we sold the company, I began talking to Jeff and Charles about joining the firm. And the reason was that we had some other terrific investors at sports engine, we were very fortunate, we had good investors and good board members. But rally and Jeff and Charles just stood out. You know, one thing, at least for me, when I was a CEO, on the other side of the table, the thing that I most wanted, and most rarely got was just very, very specific advice and very, very direct feedback. And I just absolutely couldn’t stand you know, when an investor would parachute into a board meeting, and start just generally opining on the state of our business or on the state of the industry. Or you’d ask a question, and they’d give generalist advice or compare you to a different portfolio company, that was just the most worthless shit. It just I hated that advice. And take that same question and pose it to Jeff. And you know, we’d say Alright, we’re thinking about hiring a VP of sales, you know, what should we do? You know, some of the investors would give kind of more generalist advice, Jeff would say, Well, here’s a spreadsheet of the last 50 VPS of sales we’ve hired within our portfolio, I’ve broken them down by west coast, Midwest, East Coast, I broken them down by stage, I’ve categorized them by base salary, commission, compensation, equity grants, all broken down by stage. I mean, they were just ridiculously specific answers. And when you’re a first time CEO, that is so empowering, you feel like you’re making a decision with confidence for the first time in your life. And that’s how Jeff answers every question. So by the time I decided to go into venture capital, I was just really passionate about being the type of investor to other entrepreneurs, that Jeff and Charles were to me.

17:32

You know, in my prior experience, before starting our fund, I did a lot of angel investments. And through those experiences, saw a lot of the same bad advice or generic generic advice that, you know, it’s it’s great when operators, you know, start a fun and great when a when you have talented people like Charles and Jeff, who can really share, you know, true wisdom that comes from actual experience and not just, you know, speak in generalities, and whatever. And I think it’s really special, what, you know, what they’ve been able to build. And now with you there, I noticed, why not? You have this new also this new venture studio called rally build. Can you tell us a little about, you know, why you started that and kind of compare and contrast that to maybe, you know, starting a business outside of a venture studio? Since you’ve done both?

18:21

Yeah, no, glad glad to it. And I’d actually love to hear a little bit about what you’re doing. at Great North, also, with with your studio, from a rally perspective, kind of the way we think about it is that, you know, the overwhelming majority of our time is spent on traditional investments. For us, that’s, you know, seed or we call it kind of late seed, or early series A, and typically, it’s about 1/3, into cyber security about 1/3 into what we call SAS plus, which is basically like a core business software plus FinTech and then about a third into what we consider kind of deep tech, typically, it’s AI or ml, but applied to a given vertical industry. And so we’re pretty, we’re pretty narrow, really, it’s kind of 1/3 1/3 1/3, but only late seed early a only enterprise software. So that’s still the overwhelming majority of our time. But what we’ve come to believe is that in a couple of situations, not often, but in rare situations, maybe once a year, maybe a couple of times per fund, there’s a particular problem that we have unique insights on. And we feel like we might have an unfair advantage in that specific area. In those situations. We believe that based on our networks, based on the other, you know, entrepreneurs, we know the other executives we know and want to work with, again, that there’s an opportunity for us to actually incubate that business inside of rally. And it’s an opportunity for us to bring our whole tech partner network to bear our whole networks to bear early capital to bear and to help a company be created, build it inside of rally, and then ultimately spin that out and invest in it as a proper fund investment. So we done that now three times, at rally, we’ve done that once in a company called yard stick, which is in what we call the human security service space, which is background screening, certification management and verification management, all bundled as a pure white label pure API platform that can be consumed by other platforms. So if you’re running a hospital system, software platform, or your school system software platform, or a four H or Boy Scouts, software platform, or a delivery or b2b logistics platform, you should have a platform like yardstick deeply natively integrated. So all of your employees, all of your drivers, all of your gig workers are not just being background screen, but their certifications are being verified. Their verifications are being confirmed if they need ongoing training that happens natively within the platform. And that was all inspired by my experience at sports engine, where we background screened millions of coaches, which had a direct impact at the safety of youth athletes. So that’s the first one, we did another one in the cybersecurity space, that we’re not quite at liberty to talk about yet, but that one is going to be kind of getting public here in the coming months. And then we’re working on one right now, in what we generally refer to as kind of the kind of deep FinTech rails space, having to do with payments optimization kind of deep, deep at the interchange level. So that’s a company that we haven’t begun to talk about yet, but it’s going through the process now. So we won’t do this terribly often. But we’ll do it when we believe that it’s a space, we have a lot of passion around, we have a lot of insight into, and there’s not a suitable traditional investment to make.

21:39

I think it’s, it’s awesome. And when I hear you describe how you use your tech partners, to provide this high level, you know, this really top of sort of the tier support to a startup, I’m a huge fan of kind of fractional support in the startup, I think it’s, you know, so important that you build a, you know, a strong foundation from the beginning. But you cannot a startup can have, you know, super senior person in every functional role, or every technical role at the beginning. But also the the thing that kills startups, and I think a really common mistake is, you know, you end up hiring, like really Junior people who don’t have perspective, and then you can end up you know, creating all this technical debt or, or just make, you know, too many mistakes, and that can kind of kill a startup. And I think the beauty of the model, you described it, the way I sort of kind of come to understand it is getting these fractional experts to kind of really set up the company for success. Without you know, having these sort of periods, we have to go back and make corrections due to some kind of technical debt or something that you know, something wrong with a business model, or what have you. That seems super compelling in I think, for a founding a company outside of such a platform, it would be very difficult not to probably pull in, you know, that sort of bench of tech partner relationships that you guys have. So it gives you some huge advantages, right?

22:58

Yeah, we really think so, you know, when we talked to the portfolio companies, especially those that are being incubated inside of rally, you know, we really ensure that they know exactly who the tech partners are, where their expertise is, we make those connections. If you’re building a cybersecurity company inside of rally, you know, you should talk to our tech partner, you know, Julie Bushman, the longtime CIO of three m, you know, you’re not going to find somebody that has deeper experience, in terms of choosing cybersecurity solutions for some of the largest fortune five hundreds, or you should reach out to Ben freed the CIO at Google, and other one of our tech partners and bounce these ideas off people like that, before making important decisions. If you’re thinking about building a sales organization, don’t just blindly build it, you know, talk to our tech partner, Jean DeWitt, who runs, you know, all of North American revenue for stripe, for example, you know, one of the brightest minds and go to market strategy. So it’s really important to us that those people surround these companies with love and advice, which, you know, we think just give them you know, tremendous advantage.

23:58

Totally. So you mentioned earlier about the types of business models that you’re pretty focused on with rally, typically, you would have been more probably SAS in the past. And now it’s more SAS plus, as you described, and then, you know, you’re heavy, you have a lot of background and kind of payments in in that side. Have you seen these kind of markets evolve? And, and I guess, also, I’d love to hear what you think about like, you know, the newer ways to finance SAS companies like pipe and how does that change the way? You know, venture capitalists used to maybe may have looked at typical SaaS companies in the past knowing there’s these other competing kind of capital sources?

24:35

Yeah, no, yeah. It’s a good question, Rob. So I think for our portfolio, it’s been pretty consistent across funds, one, two, and three, and now four, but with some nuance. So I think we’ll, we’ll continue to have roughly a third of the portfolio in cybersecurity. My partner, Charles is an expert there. We have a number of tech partners, you know, kind of deep in that industry, you know, and it’s just like this enormous looming threat of Our economy, I mean, one of the biggest. So we just think there’s, there’s great businesses to be built in cybersecurity. My partner, Jeff has, you know, some real expertise in what you’d consider like applied AI and applied ml. And these kind of hardcore business software solutions that can transform the market. And then for myself, I concentrate a little bit more to your point on companies that we generally call SAS plus. And typically, that’s a CRM in a given vertical market, teamed with payments and other revenue streams. And, you know, in terms of like the big themes and software, you know, I think that’s one of the big themes in software, the idea that a verticalized software solution is almost always going to be the horizontal solution. So just increasingly, we see that most companies are willing to move away from like a Salesforce, for example, to go to a platform that’s been very specifically built for their industry, with all the tiny little nuances that makes it better for their industry easier to implement easier to integrate handles all the edge cases that Salesforce just never will. So we love those vertical platforms of record. And one big theme is that we’ve seen these vertical platforms of record just earn incredible trust with their customers. So if you’re the vertical platform of record in sports, like we were at sports engine, or like, some of our other portfolio companies are in their respective areas, your customers want to use you for more than just CRM, they want to use you for payments, they want to use you for background screening, they want to use you for their lending needs and their borrowing needs and their revolving credit facility needs. They want to use you for their insurance needs, they frankly, want to use you for everything because you know their business, well, you are already a trusted vendor, you already are controlling their funds flow. So we just think that having the vertical platform of record approach and then adding on top of it a FinTech layer and a payments revenue stream, and additional revenue streams is just one of those big themes that you know, we happen to have some experience in. So it tends to be where I spend a lot of my time.

26:58

Excellent. Excellent. So I know, obviously, you’re super passionate about supporting entrepreneurs, and you know, have this great success. Woody, do you ever find time for any, any hobbies or anything else that, you know, that you can squeeze in there these days?

27:15

Yeah, well, you know, I’d ask that ask the same you it’s, it’s not easy, you know, I, I will say that, I think I you know, I had kind of a personal epiphany. And, you know, after we you know, sold the company sold sports engine, you know, NBC Sports was, you know, just a terrific buyer. Like, they were awesome, great parent company, great partners, great people just had an awesome experience being part of NBC. And I think in some ways that shaped my personal epiphany was that I don’t ever want to stop working, like ever. I love what I do. I just love it. I love being part of starting companies, I love being part of supporting other entrepreneurs. I have a huge amount of pride in our economy here in Minneapolis and our startup ecosystem. And I want to do it forever. So that was a big, just personal decision. And then the moment that you decide that, then it just becomes an easier question, which is, well, what’s the best way to do it? What’s the most impactful way to do it, and I came to the conclusion that being on the venture capital side, and being on the capital supply side, was the most impactful way to do it. Because I thought it’s one of the biggest gaps in our ecosystem, which is access to early stage capital, and access to you know, seed and series a capital. So, from a business perspective, that was a big revelation, because that is my biggest hobby. Like, you know, when I’m not working, I’m basically like, thinking about what else I can do to impact my work. I love it. Like, I just, I just love it, I feel super fortunate. And I know you feel the same way. But I’d like to hear you talk about it too. And as far as other hobbies are concerned, you know, in the moments when you do wind down, I mean, my family is just, you know, my kids are super important to me. They’re 10, eight and five, coach, all three of their hockey teams go to their baseball teams, we play golf together, fishing is my passion. Like, that’s my, that’s my single largest personal passion. So I’m desperately working on each one of them in their ability to, you know, get to get the leeches on the hook themselves.

29:14

You know, we are so similar. It’s, it’s, it’s just crazy. I know, I think it’s something about, you know, once you have a chance to reflect like, Look, we’re all living in America, we’re in, we’re in like the greatest industry in the history of the world. And the wealth sort of comes to the people who our true builders, like, if you get to a point where it’s, it’s, you really don’t do it because of the money. You know, you do it because you love to build. That’s sort of how I kind of like, that’s how it sort of evolved for me, like building. I was really happy building startups in the mid 90s. Like, you know, just publishing websites and, you know, experimenting with things and trying out ideas. And, you know, that’s the beauty of like, you know, software based businesses is just being able to build something and see if you can create value for people and there’s something just so rewarding about that. And I think the reason I really became attracted to investing is a lot of the same reasons that you mentioned is, and I guess, for me, especially early stage, I really liked early stage. You know, we didn’t quite get to 500 employees at our company, but we had 170, across Minnesota and San Francisco. And I have to say, like, I lost a little bit of a joy over time, you know, it’s still it, still enjoyed it. But like, I don’t really like love all the, as the company’s company gets bigger, and you have middle management, and then there’s just a lot of it’s sold leadership. And I’ve always really, I know about myself, it’s like, the customer empathy, the sort of product engineering, and then just a sort of go to market strategy. Those are the things that I really enjoy about entrepreneurship. It’s not necessarily like, there’s great managers out there, I think I became a better manager, but and I guess, in running an early stage fund, I felt like, Wow, what a perfect opportunity to just ensure that I can focus on that combinate, that sort of entrepreneurial discipline and that early execution, that is I just feel so much of the magic there. And then, you know, I think he didn’t, if that man, if you become so passionate about that, you know, I’m definitely a family guy too. And the beauty of this COVID period is I can be working at my cabin, and I can take the kids out fishing for copies or doing something. And then I can be hopping right back on a call or something. And, you know, and I think that’s been, it’s, it’s pretty incredible. Well, we, it’s, it’s great to have you on our podcast, I’ve been a huge fan of everything you’ve been able to achieve. And you know, super proud of all your success and what you guys are doing at rally. So thanks for joining us today.

31:33

Yeah, thanks. Wow, that’s kind of you to say, I feel the same way about you guys. It’s you know, we’re, we’re fortunate to have some co investments together, you know, excited to do a lot more. And I just think the way you guys approach the business, you know, the way you approach these entrepreneurs the way you surround them with support and operational expertise, you know, it’s just super inspiring. So yeah, we feel the same way. Thanks so much.

31:54

before we let you go, Justin, I just have one last question. You know, I like to ask all of our guests, if there’s someone you’ve seen lately, that’s executing at a really high level that are you know, our listeners might not have heard of somebody who’s been flying under the radar, or maybe it’s a startup?

32:11

Yeah. Good question, Joseph. Let me think about that. Well, you know, I’ll mention two of them. Two that come to mind. So one of them is a rally portfolio company locally here. One of them is not. So the rally portfolio company, located locally here is a company called parallax. And parallax is it’s founded by a gentleman named Tom O’Neil, who prior to this was the CEO at the nerdery, you know, was part of a you know, team that built a very, very successful business there. And, you know, we talked about this concept of founder market fit. And Tom has extreme founder market fit. So he saw very, very firsthand the needs of a large scale software engineering firm and a large scale outsourcing firm. And he saw that there was no software that could truly help them manage their capacity, maximize their hours work, understand what their incoming work is, understanding what talent they had in the building, understanding how that influenced you know, what they needed to recruit for and hire for to match the people to the work. And he built an incredible software platform, one of the better tools I’ve seen built in yours, beautiful UX, super usable, called parallax. And now I just I mean, I’ve just like find so much joy in watching how they operate, like they grind, like grind. I mean, nobody out works this team, he and Dave and Amanda and the rest of the team there. And to now see them go from just grinding and grinding and grinding for the first year and a half, to now sales look like they should look like they deserve to look which is a really steep curve, you know, they’ve got from zero to more than a million in ARR quickly. Now they’re just you know, accelerating beyond that. So that’s one that you know, we get to see day in and day out operate as part of the portfolio. And they’re just the type of people that you want to see rewarded because there’s such executioner’s and such grinders. And they are there, they’re just doing a fantastic job. The other one that’s not a portfolio company, but I met recently, gentleman named jazz Hampton over a company called turn signal. And I got introduced to jazz a few months ago. And we talked at that time, a little bit about his vision for turn signal being effectively an onboard application, you know, in your car as you are driving. And in the event of a traffic stop, you can effectively turn on turn signal, have an attorney or have a lawyer instantly present in the car, talking to both you the driver and the officer who may be approaching the vehicle, ensuring that it’s a traffic stop where everybody knows their rights. It’s a traffic stop that doesn’t result in unnecessary violence, a traffic stop that’s handled the right way by everybody involved. And I thought just a super smart way to approach that problem. I was really blown away by jazz and by his co founders and then to see their updates, you know, a couple weeks later and a couple weeks later And a couple weeks later and to see the progress they are making, I was just really inspired by the way they’re executing. So they’re not not part of the rally portfolio company, at least not at this time, but I’ve just been super impressed with them.

35:12

Great. Thanks for sharing and again, thanks for coming and visiting us and being on the podcast. Yeah. Glad to do it.

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