DWAVC: Andrew Ackerman | Ep. 36

Speaker A: Welcome to Drinks with a VC where we explore the humanity behind investments. Grab your favorite drink and join us as we laugh, learn and liquor up with some of our favorite venture capitalists.

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Speaker A: Hello and welcome to another episode of Drinks with a vc. Thanks for joining us via whichever platform you're using to watch or listen it. I'm Vic Laquara, co founder and co GP of, uh, GreenCal Venture Capital. And as always, I'm joined by my close friend and hostess with the mostest, Bri Hansen, who leads up west coast biz dev for a little law firm called Cooley. Hey Bri.

Speaker B: Hello. Good to see you, Vic.

Speaker A: Good to see you. Today's episode is brought to you by Fidelity Private Shares. Fidelity is committed to supporting startups at all stages. Using the Fidelity Private Shares platform, founders can automate their equity management, operations and financings in a single collaborative hub. To learn more about how Fidelity can help your company grow, please check out the episode description below. Bri, I know we have a guest to introduce, but today I wanted to congratulate you. A very belated congratulations from myself and our audience for your new role at Cooley. Congrats.

Speaker B: Thank you. We have been very busy over at Cooley. We've. I've had the opportunity to go to the upfront Summit south by Southwest pair demo day. It's been a lot of fun. I'm working with a lot of great people, some of the best attorneys that I've ever met. And so it's been a really fun ride.

Speaker A: Yeah. Shout out, by the way, to Rachel Proffitt and to Sasha Ross, two, uh, close friends and amazing attorneys at Cooley. If you are in need of startup advice or VCs, if you're out there, you're in need of legal counsel, please consider using Coolie and definitely reach out to Bri. She can hook you up. We were talking earlier, Bri, about how in April coming up, you've got an in person event every day of the month and today is no exception. Heading into April, now you've got March Madness and you're going to be running off to the match. I say match because I watch way too much European football. You're going to be, you're going to be off to the game at the Chase center watching Florida and Maryland, uh, is that right?

Speaker B: And Texas Tech and Arkansas. So I've got March Madness tonight. I'll be missing my Cougars over in New Jersey, which is more in the area where our guest is coming from. But yeah, I was BYU alumni, so they'll be playing the Crimson Tide tonight and I have a feeling the cult of Alabama will beat the cult of byu. But we'll see, we'll see what happens.

Speaker A: We'll see what happens. We'll see what happens and we'll try and put our next guest on the spot and we'll get his bracket predictions and we'll give us hours and uh, you know, maybe kind of look back to back at this in a few hours and say, gosh, we had it all wrong, but great, fine, that's okay. As VCs, we're used to that. Listen, I'm really excited to be back. We've had a few month hiatus here and now when we started conducting our due diligence on our next guest, I got even more excited and couldn't wait to dig in. Let me start with a pared down version of his introduction. Does that sound good to you, Bri?

Speaker B: Yeah, let's do it.

Speaker A: All right. Today's VC was born in Tel Aviv and raised in New York City. Two of, uh, the most amazing cities in the world. After receiving his undergraduate degree from Johns Hopkins and his MBA from University of Chicago, he turned to consulting at Boozinko for four years before throwing his hat into the serial entrepreneur ring. After founding two startups, he leapt to the other side of the table as an angel investor, a family office director, and now currently a VC and SPV syndicate sponsor investor. He's made 70 plus investments across vehicles, including most recently Cherry Cofi, Tritos. I'm going to butcher some of these, Pro Dia, snapped nest egg and many others. He's a frequent participant at events as a speaker, moderator and panelist across the globe. He's written 60 plus articles that have been published in everything from Fortune and Forbes and Aliwatch to Propmoto and Architect magazine and the 74 million. He's an adjunct professor of entrepreneurship at Sisim School of Business. Please welcome the pride of Frisch, uh, High School in New Jersey, Director of Reach Labs, Andrew Ackerman. Andrew, welcome to the show.

Speaker C: Happy to be here. Happy to be here.

Speaker A: Cheers to you. What are we drinking today?

Speaker C: We are drinking Laphroaig 10 years. I drink it neat because I'm an animal. Super smoky. I'll hold it up to the camera and like some of your listeners will get hair on their chest.

Speaker A: Yes, I've grown a beard and a mustache in that time of just smelling it just now. So it's perfect. It's funny, we don't normally drink this early, but it's March Madness. Bri had stuff to do. You're a busy man. I'm slammed. So I'm glad that we're getting this out at 2 o' clock ahead of the matches here. 2 o' clock central, I should say. Do you have any predictions for tonight's matchups? I'm gonna. I'm gonna. I'm gonna refer to them again, and I just want you to give us who you predict is going to win. And, Bri, I want you to also chime in here. Duke versus Arizona.

Speaker C: One of them will win. Hold on. Let me preface this right. I.

Speaker A: Yes.

Speaker C: My wife's Canadian. I got three teenage daughters. They all watch more sports than me.

Speaker A: Yes.

Speaker C: My daughter Sully in the other room has her brackets. I don't even know. I can go grab her and I'll bring her in.

Speaker A: You know what? We actually don't mind that. But no, let's keep it simple. Why don't you give us, without knowing just your blind predictions.

Speaker C: Duke.

Speaker A: Duke. I'm gonna go ahead and take Duke. Cooper Flag is a beast. And I think it's going to be his ride off into the sunset moment before he gets to the NBA. Bri, who do you have?

Speaker B: I'm in the same boat as Andrew. I'm blinding this one. I'm gonna go Duke.

Speaker A: Okay. BYU versus Alabama. Brie.

Speaker C: Alabama. Oh, sorry.

Speaker B: That's okay. I even went to byu and I'll call Alabama.

Speaker A: Yeah, no, that's okay. I think it's going to be a runaway victory for them as well. Alabama. Florida versus Maryland. I was in Florida last week with Laura's family for spring break. I got the shirt from Florida, so I'm wearing it. So I. I might as well say Florida. Andrew.

Speaker C: Oh, Maryland. Why not?

Speaker A: All right. Crab cakes. Amazing over there. Bri.

Speaker B: My parents live in Florida, so Florida it is.

Speaker A: Okay, Finally. Texas Tech versus Arkansas.

Speaker C: Arkansas. Come on. Razorbacks are like. That's a way cooler nickname for a team in any city than anyone else. I get it. Different. Different. I'm still going to go with Arizona.

Speaker A: Uh, different strikes for different folks, but I get it. Bri, who are you rolling with?

Speaker B: A little fun fact about me many of our audience may not know is I have a second podcast, which is a true crime podcast that cover cold cases in Texas. So I'm going to go with Texas Tech on this one because I'm much more familiar with Texas.

Speaker C: Yeah.

Speaker A: Okay. All right, there you have it. Those are Our predictions. We'll check back in a few hours to see if we're right. If we're right, we'll keep it in. If we're wrong, we're going to totally remove it. Yeah, we'll edit it in post. Excellent. Listen, Andrew, thank you for joining us tonight. As we do with most of our guests, we'd like to kind of get a sense of the origin story. And I mentioned that, uh, you were born in Tel Aviv and then your family immigrated to New York. Can you talk to us a little bit about what your childhood was like, the relationship that you have with your parents and if you have siblings, et cetera?

Speaker C: Sure. So I'm m going to hate to disappoint you. Both my parents were Americans. We were there because my dad was studying in med school. They were thinking about immigrating. But, you know, a couple of years of actually seeing socialized medicine up close and personal, that's enough to make anyone change their mind. So it's more like they. They spoke English to me. That's when I was 2. So this is why we have no accent. Uh, but I really didn't learn Hebrew that much in the two years. So here I am. I've got, you know, m. I got my passport. I have the devil's own time convincing the Israeli army that they didn't want me. Uh, no, hold on. This is how I convinced him. The word in Hebrew for to shoot is lirot. Um, and the. The Hebrew word for to look at or to see is lirot. So if you don't want someone in a combat situation who's not quite clear on the difference. Yeah, yeah. It took me weeks to arrange that.

Speaker B: So.

Speaker C: Yeah, we moved back to the state when I was two and a half.

Speaker A: Okay. All right. And, you know, you're not great with Hebrew, but you are somewhat of a linguist. You speak five different language, is that right?

Speaker C: So I do actually speak Hebrew very well now.

Speaker A: Okay.

Speaker C: I learned it the hard way, like picking up girls in bars. So that's if you're motivated. You will learn anything.

Speaker A: Yes.

Speaker C: I tried to learn French in high school. My teacher was Belgium. So I have a shitty accent, and I can say shitty.

Speaker B: Is that all right?

Speaker A: Absolutely.

Speaker C: And. And I can't really remember half the words. And you know, you know how it is. If you ever go to France, unless it's perfect, they can pretend they have no idea what you're saying. Yeah, I did pick up a decent amount of Spanglish along the way. Like for short conversations. I'm very convincing And I did actually try to learn Japanese when I was in business school because it was the 90s and we thought they were going to own us. So I can very convincingly ask people where the bathroom is and say, you know, scotch, we're drinking some scotch. But I'm a little limited beyond those areas. And I think the fifth one, if we're counting, is probably JavaScript.

Speaker A: Fair enough.

Speaker B: Should we have a whooping gift? 3 Vic, since we went into the languages.

Speaker A: I love it. Yeah, why not? I think this is flying by the seat of our pants.

Speaker B: Yeah, we're skipping ahead a little bit, but I'm cool with it.

Speaker C: Amazon prime is like, um, unboxing day. Yeah, that's what we call it.

Speaker B: DC Unboxing.

Speaker C: I'm gonna go with a book of some sort.

Speaker B: You got it.

Speaker A: Let me see the service. You're right.

Speaker C: One book that. If you have this book in here, that's a you book. You've bugged me. The. There's one book that I really wish I'd written. Like, when I found out about it, I'm like, I hate the world that I didn't write this. Uh, you ever hear of the book called Go the to Sleep?

Speaker B: Yes, I have. And you're not an author now, so maybe you can write the next version of it. But this is similar

Speaker C: Japanese everyday slang from what's up to Off.

Speaker A: We couldn't have timed that better if we tried. We really could. Awesome.

Speaker C: You have to transliterate it. Great. Because I can't read the Octagon of the Hiraga.

Speaker A: I'm thinking the sequel that. The sequel that you can write, Andrew, is stay the fuck asleep. You know, why not? Why not?

Speaker C: Okay, we'll see. Okay.

Speaker A: You're talking about the need to learn Hebrew in order to pick up women. How did you meet your wife?

Speaker C: I, uh, crashed her birthday party.

Speaker A: You crashed your birthday party? When was this?

Speaker C: I can't tell you the year. She'll kill me.

Speaker A: Okay, okay. Did it occur in high school? In college?

Speaker B: No.

Speaker A: No.

Speaker C: So I. If I had been with anyone. If anyone had been with me the way I was in high school or even my 20s, like, that would have been grossly unfair. I mean, it was a total moving target.

Speaker A: Sure.

Speaker C: Here, I can say this. I was just about, I guess, plus or minus 30 when we met.

Speaker A: Okay.

Speaker C: Yeah. So in New York.

Speaker B: That's a good time.

Speaker C: My wife had moved to New York, I think, a year or two prior to that. She's from Toronto, and it just so happened that I was out seeing a movie with a buddy of mine. And he's. I want to go to my friend's birthday party after this. And he said, what's with your friend? It's a joint birthday party. Oh, it's my friend Naftali. And I'm thinking, oh, it's like a dorky Jewish guy. It'll be bad beer. And, like, people wear bad shoes. I'm Jewish too, but, you know, at least I got good shoes. So I'm, uh, like, oh, fine, we'll go after. So I haven't shaved. I'm not wearing. I was wearing glasses rather than my contacts. And I walk in there, and it turns out Naftali is like this six foot four, like, impeccably dressed architect. And then, like everyone else is my wife at the time, she's getting a second degree at FIT. So it's like all these, like, fashionistas in their 20s. I turn to my buddy Ben, I'm like, I'm fucked.

Speaker A: Yeah,

Speaker C: we have to get somewhere dark. We have to get them drunk, and then we'll see.

Speaker A: That's awesome.

Speaker B: That's hilarious. So is she still in fashion?

Speaker C: No, no, she was in fashion for many years. Then, you know, we had our first child. She went back, and we had our second two children, twins. And at that point, she's just went back from saying, I want to do this. And we had a good friend who was a real estate agent, the guy who actually helped me buy this apartment at my home office today. And at one point when I bought this, I said, hey, Steve, like, I got some good news and some bad news. The, you know, the bad news is I'm never moving again. Our professional relationship is over. Uh, the good news is you want to come Friday night dinner? So we've been friends with Steve ever since. And at one point, like, they're sitting around the table and they're talking like, Julie has the idea. And she's like, no, you'd probably make a really. Julie, probably make a really good real estate agent. I have a good eye and a good sense for this. So later, should I try it? And I said, you're going to go back to work after the twins, so go back, try to be a real estate agent. If it doesn't work, you spent a year at it. Just forget about it and claim you came back to work a year later and you go back into fashion.

Speaker A: Yeah.

Speaker C: So she came back, she loved it. She was able to make a go of it, and she's been doing it ever since.

Speaker B: I love that. And I know we Want to get into real estate a little bit later in the show, but let's go back a little bit to your. When you met your wife. What was. What attracted you to her? What made her interesting to you?

Speaker C: It was gonna sound corny, but her smile, like, she's got a fantastic. One of the prettiest faces ever. And it was, like, holding. She, like, laughed at a lot of things, and she was like. She saw the good in people, you know, uh, after 21 years of marriage. Okay, we've changed that. But at the time. Now, ah. Now it was. That was mainly, ah. It.

Speaker A: That is very sweet, though. I love that. I love that you have three kiddos. They're not really quite kiddos anymore. I suppose one of them is just entered University of Michigan. Is that right?

Speaker C: Yep.

Speaker A: Uh, and then you've got two twins that are younger. How old are they?

Speaker C: They're 16.

Speaker A: They're 16. Three teenage girls. You have all of your hair. You haven't grayed out. I, uh, consider. I think you are reverse aging. We were talking a little bit about health.

Speaker C: I have nothing against day drinking.

Speaker A: Yes, I think so. If anyone's a big proponent of day drinking, which we approve of here at Drinks with a vc, it's Andrew. I was talking to a friend today. This is completely off script. I was talking to a friend, and actually, Bree, I think it was you. Oh, go figure. This is what happens when you have one scotch before the episode. Bri and I were talking about raising kids and how there seems to be a dependency nowadays on screens in order to kind of be the third parent of sorts. And we're all of a generation. You're my sister's age, I believe, Andrew. And, you know, we're all sort of in this kind of spectrum of ages in which we remember what it's like to use a rotary phone and then to kind of go and be proficient with, you know, your iPhone or your Pixel, Android, etc. And what a peculiar place it is to be in there. And I didn't grow up with my phone. I didn't. You know, uh, my first cell phone that I had was senior year of college. And the kind of damage that we're doing by kind of creating this dependency on screens and with kids is not something that we subscribe to. Way back when, were you. What was your take on parenting for these three teenage daughters of yours? Were they allowed screen time, or was it sort of a, you know, a perk that they got?

Speaker C: You know, you ask any parent, you get one data point, and the Problem is, you don't know for another 30 years whether or not that's a good outcome or a bad outcome.

Speaker A: Yeah.

Speaker C: Take everything I'm going to say with a grain of salt. You know, we try to hold the line on it. We fail miserably most of the time.

Speaker A: Yeah.

Speaker C: No, you have, you know, all the tracking software on their phones and. And my daughter's still on her phone at 12:30 at night, and I'm like, oh, you know, mom can see that every morning she checks it. Where do you think you're going to get away with something on this?

Speaker A: Yeah.

Speaker C: And she's 16. She still does it. I mean, so there's. There's an element of addiction to it, but it's a behavioral addiction. All these studies you see about Reese's, uh, endorphins, you know, that's on the order of magnitude of a slice of pizza. I don't think there's a physical basis to it.

Speaker A: Yeah.

Speaker C: And I'm also. I'm also not a hater when it comes to it. So I feel like everything that's new we fear because we can see what we think is how shit can go off the rails.

Speaker A: Yeah.

Speaker C: We undervalue, like, the positives. You know, our kids are never bored. Now maybe that's bad because a little bit of boredom kind of gets the creativity going.

Speaker A: Yeah.

Speaker C: But, you know, there's a certain, like, to them picking up the phone and asking Chibi chatgpt to restate the way their textbook has it in a way that they can understand it is second nature. Yeah. So there's a, you know, there's something to be to being digitally native that us as digital immigrants won't ever quite get. I mean, I will, because, you know, I identify as 29. You guys, you know, you guys are fucked. But I go back to this sense of hysteria. There was a documentary that, that we watched. My wife made us watch. She's really. It scares her. And this guy's like, oh, the screen time is these horrible things. And he's. Nobody ever said the bicycle was going to ruin society. It's totally different.

Speaker A: Yeah.

Speaker C: And then an article in the New York Times, like, the bicycles as we know it first came out and women were riding it and they said, women can't ride bicycles. It's going to ruin humanity.

Speaker A: Oh, yeah.

Speaker B: Every.

Speaker C: Every new technology, they were that worried that women riding bicycles would have, like, physiological problems and then, like, society was going to break down. So everything new scares us.

Speaker A: Yeah. Yeah. I love. So I want to stick with the EdTech part because in 2015 you were the managing director of Dream Adventures EdTech Accelerator. And I'm curious to kind of get your perspective on how you've seen that space evolve into what it is today and did it meet your expectations? Did it kind of underwhelm? Do you feel like there's something deeper?

Speaker C: So let's put it in context. So I'll tell you. Before DreamIt I'd been doing some angel investing and then when I first started at DreamIt we were generalists. So I'd done maybe M5 Angel Investments prior, did about 22 or 23 generalist investments. And then for a whole variety of reasons we started to get a new model. We went later stage and went vertically focused and you know, built up the EdTech program. But we haven't done that. I haven't done EdTech actively since 2017. Yeah, I may be a little behind the times but I'll tell you the thing that, that uh, I didn't know going into ed tech, it's really a small market at the end. And the thing that. Here, let's make it a little more general because I did two startup sessions earlier today with different accelerator programs and every time I'm on it, like I have to, you know, I have to look. Okay, I see that. Tam Sam Som. That's very cute. Don't ever do that again. If I can find the person who came up with that, I'd slap them. Is single handedly responsible for confusing more people in this country in our sector than anyone I know. I want one number. Just tell me what your market size is. So it's got to be bottoms up and bottom right. Very simply, A times B equals C. So how many customers are there? How much do you charge? And that's your total. It's really that simple conceptually. Uh, you look at EdTech, let's say you're doing higher ed, there's something like 4 to 5 million students depending on how you count graduate school or not. Something you're charging like 10 bucks per student a semester for some kind of, you know, advanced course plug in. You can do the math on that one. It's 50 million. Yeah, that's way too small to be a market. So a lot of the things I went into. But this is really cool. It's great for society. I wish my kids would use it. That is investment.

Speaker A: Yeah.

Speaker C: And it means uh, that different. The people who do it are, I mean they're really good at either picking very cash efficient startups that those kind of Exits work for them, for their fund, or they're able to be very selective of those fewer, relatively few tech ideas that actually can become, like, you know, it was gratifying to see. I was already out at this point when Covid hit, like, all of a sudden, edtech had its moment. First time in the history of edtech. Edtech founders were getting, like, money thrown at them, and, like, exits were flush. One of my companies exited at that point. Things have not been as good to the acquiring company since. In fact, their earnout, uh, just ended yesterday. So they're pretty happy. They're probably drinking right now, too.

Speaker A: They're probably drinking as well.

Speaker C: They're probably doing exactly what we're doing.

Speaker A: Yes, absolutely.

Speaker C: Yeah.

Speaker B: Not to mention it's very hard to sell edtechs, like, into schools. So, like, your buyer is a. Has a lot of friction. It's a long sales cycle. They don't have big budgets. It can be a little bit, unfortunately. And we all wish, I think, that ed tech could be a little bit more sexy and get some really great technology into the hands of students. But I was fortunate to grow up in California, where Steve Jobs were just giving us computer labs when I was growing up. So I got to learn on a Mac when I was 8 or 9. And that was Ed Tech.

Speaker A: Yeah.

Speaker C: For me, it was logo on an Apple II plus.

Speaker A: Oh, wow. Yeah, absolutely.

Speaker C: Which was a step up off of, uh, the TRS 80s.

Speaker A: Yes, no, absolutely. My dad. And I don't know if I've told this story on the podcast before, but my dad got the first Apple ii, one of the first Apple II computers to come off the line. And we sat down, and the first thing he did was take it apart. He took it apart in front of me, and then we put it back together.

Speaker C: And for that, back then, you could add your own memory, you could add your own motherboards.

Speaker A: Yeah, absolutely. And he would sit there. I would sit there actually, with Mac, paint open and draw a rocket, and then just use a scroll bar. And my mom thought I was the smartest kid on the planet. I could take, you know, sorry, Mom. I really wasn't that smart. But I really impressed her. I impressed myself to the point where I thought maybe I'd be a, uh, computer scientist and engineer at some point in time. I failed in that regard. But, yeah, those were my earliest memories. The Apple IIC with my dad in the garage. Speaking of childhood memories, we didn't have, you know, these crazy video games to entertain ourselves. There was one game that I know that you've become a collector of, in a way. And I think we have a, uh, gift as part of our VC unboxing that we should probably just get to right off the bat.

Speaker B: Yeah, let's do it.

Speaker C: I was thinking the same thing Rattling is all about. Yeah.

Speaker B: Yeah, that's.

Speaker A: I think so. I think so.

Speaker C: It could be like, you know, pieces like a Monopoly board or something.

Speaker A: We like to weave all of these things together. Sometimes our transitions are crappy, like that last one. But while you're opening that box, I just want to point out to people, I wish we could timestamp it as we're doing this, but to all of the founders that I've ever worked with at Washu, at slu, that I've ever been a guest lecturer in your courses, please refer to this episode and to the time in which Andrew said, I wish we could have slapped the guy that came up with Tam, Sam and Som.

Speaker B: Please refer to that one.

Speaker A: All right, what do we got here in this box?

Speaker C: Tiddlywinks.

Speaker B: Tiddlywinks.

Speaker C: I'm not even. I'm not that old. Wow, look at this. Hold on, I gotta, uh. I gotta. Can you see this? Right? This is like, vintage 1950s.

Speaker B: You said you were a collector of vintage tiddlyweeks. I wasn't sure if it was a joke or not, but I went for it.

Speaker C: Oh, totally a joke. But now I am.

Speaker A: I love it. I love it. I think this is gonna be a running.

Speaker C: I don't think I've ever even seen tiddlywinks in person.

Speaker B: What's great about this is you can show your kids. Like, this is what we did when we didn't have cell phones.

Speaker C: I remember these. These are like the. Okay, for those of you in the audience who. I can't really get sense of it. I'm looking at something about the size of a dime, maybe between a dime and a nickel. Yeah, they're plastic. You can hear that. So I do remember we used to take them, and you would hold them like one would be flat. And you put the other one. You make the other one jump, that other one jump.

Speaker A: That's right. That's.

Speaker C: Yeah. You're gonna watch me lose the piece within five minutes of opening it.

Speaker A: They were like pogs, though. That's right.

Speaker B: Yeah, that's. You played it like pogs.

Speaker C: Yeah. And. Oh, that. That explains what maybe this is for. It's like, target like thing.

Speaker A: There you go. There you go.

Speaker C: And the rules. Oh, wow. I could actually read. Who wants to read the rules?

Speaker A: Look, I do think maybe this would have been a pandemic treat for the family, but now you should just kind of gather the girls together, get your wife around the table, and play tiddlywinks.

Speaker C: You want to hear a funny story?

Speaker A: Yeah, we love funny story.

Speaker C: My parents. My mom now my dad passed a year ago. Um, they have a place out in Long beach for those you don't know. The east Coast. That's on Long Island. And in the basement, I'm going through that basement, and I come across lawn darts. Yeah, lawn darts were perhaps the dumbest idea for a children's toy ever. They're darts about this big, made of, like, hard plastic, and they're like. You know, it's kind of. The cross section is like an X, but it's like a long garden. They come in cheerful yellow, red, and I think there was blue. And at the end, they come to a point. It's a little blunt, but it's weighted. And the idea was you put this, like, hula hoop on the grass, and you would throw the darts up in the air, and you would try to get them to come down into that. You know, into that hoop, because they were weighted, and they would stick into the lawn like lawn darts. But what they didn't realize is all these kids throwing straight up in the air. They were basically throwing arrows up in the air, came down, went down and killed them. Like, people died. Long darts. And I'm like, mom, you have long darts. I thought the kids would play with it. I'm like, no, those are.

Speaker A: That feels overtly dangerous. Yeah, yeah. No, I think maybe stick to tiddly winks.

Speaker C: Archery. Catch is what lon darts were seeing.

Speaker A: What I think the listeners and the viewers need to understand, and some of the faithful that have been on this journey from episode one to now will understand. We send out a questionnaire to all of our guests ahead of time, and most of our guests take us very seriously and fill out to the t very specific details about their lives so that it just aids Bree and I in our due diligence of our guests. Andrew, however, has clearly tried to deceive us, and I fear that future guests. Uh, I feel like future guests. Yeah, Andrew must have been day drinking, But I feel like future guests are going to look at this episode and say, you know what? Maybe we should think of the most extravagant, random thing that Brie and Vic can go track down and give as presents to us.

Speaker C: Just to go back. I honestly don't remember saying tiddlywings, but it might have been like a throwaway line. I had to go check that out.

Speaker A: There are no throwaway lines here, folks.

Speaker B: You also can do some quarter trick with your arm. Maybe you can put the tiddlywinks on

Speaker C: your arm and try the same trick. Huh? Totally. By chance, my daughter's change drawer is still here.

Speaker A: Is that a roll of quarters or are you just.

Speaker C: It's a mixed bag. It's a little harder with different shapes, so I'm going to drop.

Speaker A: Fair enough. Fair enough. Andrew also mentioned in his question.

Speaker C: Yeah, uh, we can do it later if you want to.

Speaker A: No, you can prepare yourself. But Andrew did mention that he was gifted in a very specific way that, uh, he could put quarters on his elbow and balance them and then snap his arm fast enough where he could catch those quarters. And he claims that he hasn't practiced these things, which I. You know, I'm not here to judge. If you've sat in front of a mirror and done this with quarters for a while, Andrew, that's fine, too. But I tend to believe you and take people at their face value, so I am interested to see if you can do this.

Speaker C: Okay, so this is kind of a mixed stack of, like, quarters and nickels. Let me see if I can put the nickels on top for, you know.

Speaker A: Okay.

Speaker C: For aerodynamics and stability.

Speaker A: Yes. Yeah. The physics of it.

Speaker C: All the work here. Okay, sitting down. Let's see.

Speaker A: To our audience, Andrew has balanced. How many coins do you say you have on your.

Speaker C: I had ten. Now I have five.

Speaker A: You have five.

Speaker B: Just.

Speaker A: Let's go with five. Let's go with five.

Speaker C: Okay. Hold on. I just. I just dropped it. Might have been the first drink we had. We'll see. Yeah.

Speaker B: Uh, yeah.

Speaker A: Yeah. All right. So he's balancing five coins, maybe ten on his elbow.

Speaker B: Oh, there you go.

Speaker A: Oh, my. Wow.

Speaker C: And I have no idea how I found out that I could do that.

Speaker B: Isn't that like on squid games?

Speaker A: That's incredible. First of all, I think you would be very good at lawn darts. I'm sure you're going to be very good at tiddlywinks now. But Andrew has really astounded us with this kind of, like, feat of human. I don't know, just quickness, like, cat, like, reflexes.

Speaker C: I've still tried to, like. I can't get this to work in a bar where I can win a drink out of it. So it's really not a useful skill.

Speaker A: Gosh. Honestly, I feel like there's a way of doing that.

Speaker C: When did you discover you had Work on that later. We have to figure out where I can actually monetize that skill.

Speaker A: Yeah, exactly. Speaking of monetizing, you've got a book that comes out in June and I'm really excited to, to dig into it when it does come out because I have seen a number of the chapters and the descriptions of the chapters. Let me go through a couple because I think it's pretty cool. Here we go. Tell me where it hurts. Chapter four. I'm pretty sure it's a conversation about pain points and customer discovery.

Speaker C: Yep.

Speaker A: Okay, lovely. There's another one. Go to market or go home. Show me the money Financials. I'm, I'm really excited about this book because it's not written as a textbook, business style book. It's got this fictional first time entrepreneur kind of perspective that you're bringing to it. I'm really excited to kind of just learn from you. Like, uh, how did you. What was the aha moment that said, hey Andrew, sit down and write a book, number one. Number two, how did you come up with hey, I'm gonna, I'm gonna write it from this perspective.

Speaker C: Okay. Number one was day drinking. Number two was day drinking though. Okay, now I'll give you a semi serious answer on this one. Back in the dawn of time, I went to business school. Chicago Booth. Before it was called Booth. So now you roughly know how old I am. And there was a book that was assigned to us in a strategy and operations class called the Goal. Now if anyone roughly went to business school, anywhere from the late 80s to the late 90s, probably came across the book. And it was written about a guy. It was written as a novel about a guy who had to turn around this printing plant in the Midwest, uh, maybe even St. Louis, who knows? And he had no idea how to do it. And he ends up running into this high priced consultant on the airplane who kind of talks him through and ends up becoming his mentor. And all the challenges that he goes through are written as like parts of a novel. So for finding the constraint that's the bottleneck on his process. It actually talks about him taking his son on a boy Scout trip. And there's one kid named Herbie who's slowing everybody down. People today, by the way, if you tell anyone like what's the Herbie? You'll know if they've read the book. People remember it. And I was always struck, wow, this is not like all the other textbooks. I can't remember any of the other textbooks. This wasn't awesome writing, but it was Far more memorable. It was a far more effective way to get the information across. I mean, you guys, do you remember any of your textbooks from undergrad or business school, if you went, or law school? No, not a lot. I also remember Zen and the Art of Archery. That's about it.

Speaker B: I do remember a lot of the ones that were like books that I read. They're allegorical. I think there's one by the Arbinger Institute about being in the box that I remember that had that kind of storyline. So those ones are much more memorable. For sure.

Speaker C: Yeah. So I mean, now it's 30 years later. Is it 30 years? Yeah, yeah, it's like decades later. I still remember it. So I always wanted, you know, ever since about 10 years ago, as I'd started doing my angel investing and I'd started working with a lot of companies in the accelerator format that Dreamit was when I first started there, like, I really want to write the goal for startups. So it's something that always been on my mind to do, but I was always 120% doing one thing. And then after Covid, I ended up, for a variety of reasons, leaving Dreamit. And I'm doing six or seven different things and it's not like any one of those things or the total of them are any less time. But it occurred to me that if I don't write this book now, I'm never going to do it. M. I sat down, I'm like, okay, I know what I want to write about. It's basically the outline of what I want to write about is all the curriculum and material that we developed for the first iteration of DreamIt for all our startups. That's great, but I needed to do, I need to prove to myself I could do three things. So number one, I actually had to tell them his stories. I didn't want it to m be like two guys sitting around their deck at a wework coffee table and try to. It had to be like spaced in actual action, for lack of a better word. And like, for example, I have the conversation between the founder and his son. He's taking his son to school on the subway and he kind of says in passing, isn't it cool that we. And for the same $2.90 we can go four stops on the subway if we go all the way out to Coney Island. And it sounds like that sucks, dad, you should pay for a half. One just stops. You go on the railroad. I'd make tons of money. And that worked into a discussion of revenue models. So I had to be able to do that consistently. And number two, I had to be able to talk in more than just my own voice. I'm writing an article for the trade press. My voice is okay, I think they seem to like it. But there's more than one person in the book. So I ultimately came to this method. And I don't know if this is a good thing or a bad thing, but it worked for me where for every person in the book, I actually have somebody in real life that I'm thinking about, and I just. I picture them saying it.

Speaker A: Yeah.

Speaker C: And there are a couple of Easter eggs around the names of the different people in the book. Curious to see if they could figure out who they are. And the last piece was just. I hadn't written anything more than 800 words in years. I just didn't know if I could do it. Uh, so I managed to get about halfway through, and I'm like, okay, I think I can do this. And actually, funny side story, out of the blue, I get a LinkedIn message from a guy named Rami Goldrat. He's. You may recognize my last name. My father, Eliyahu Goldrat, wrote the goal, and, you know, he passed a few years ago, and I've taken over his consulting firm. Uh, I'm going to be in New York. I'd like to meet. I'm like, Google Docs is spying on me and selling

Speaker A: on.

Speaker C: Um, so it turns out, uh, full chance, he wanted to talk to me about something unrelated. It was about this consulting. He wanted to consult for me private equity funds in terms of. To improve their portfolio companies and maybe get a piece of the exit, which was kind of cool. We had a nice conversation about that. And then at the end, I'm like, rami, you want to hear something really funny? I tell him what I'm doing. He did not write me a blurb, though.

Speaker B: Oh.

Speaker A: Oh, that's. That's disappointing. And I think that's a missed opportunity.

Speaker B: We're gonna send him this podcast and we're gonna. We're gonna let him know. Yeah, he needs to come back and write you a blurb.

Speaker C: I get it.

Speaker B: I get it.

Speaker A: First, how much of. Oh, sorry. Go ahead, Bri.

Speaker B: Oh, I was going to ask. So when it came to the character of the founder, which, you know, so many VCs have such strong opinions on what makes a great founder, how did you develop that character? I know it was based on a person that, you know, but I'm sure that you tried to add Some realistic other pieces.

Speaker C: No. That's a great thought. You know, from the very beginning, I knew where I wanted to start, which was basically as close to the beginning as I could. So I started off in a law firm's evening eventually where founders are pitching their ideas to VCs. I'd been to far more of those than I care to remember back when I was an entrepreneur and when I was investing. Um, the best I can say is the really good ones have macadamia nuts in back as part of their spread. So that's usually a good sign of quality.

Speaker B: I'll keep that in mind.

Speaker C: I wanted to start there because that was an opportunity for the founder to meet the angel investor that was going to be his mentor. I think that was a good way to make that intro. And I also wanted the founder to be a solo founder because that's an issue. Right. There's a lot of business who won't invest in solo founders. And I want to be able to talk about the process of finding a co founder. Can't really do that if they already have one. And I wanted also serve Solana. The real issues, what it feels like to be a founder, what the reality is. Not like the Steve Jobs biopic and the drama, but the actual reality of you're spending a lot of time in front of a computer, right? Pulled away from the computer to go out and do your customer discovery. And you have to actually think about how to do that. So I wanted to get the sense of the reality of the situation. That's where I did. Now just so happens that the entrepreneur that I wanted a voice. So the best entrepreneurs, I always say, and, um, I got this quote from somebody else. I wish I could remember who told me it because I use it a lot. So he should get credit for it. The best entrepreneurs have reasoned but loosely held opinions. They should know why they're doing it. And if somebody just gives them other advice and they don't really say, they shouldn't be like a weather vane and just swing with whatever they heard last. But if they get good logic behind it, they should be, uh, like, okay, that's right. That makes sense. I'm going to do it. Not be overly wedded to their original idea when there's a strong case to be made. So there was one investor, one founder in particular when I was doing EdTech, um, actually before I was doing EdTech. But he was an ed tech startup who had this kind of unflappable, no drama kind of way about him. And really good example of that, okay, tell me why. If it makes sense, I'll get kind of attitude. And by complete chance it turns out that entrepreneur is black. So I ended up making the main character black because I figured m. That's what I'm thinking. I might as well have, like, my description match, you know, the image I have in my mind's eye. But I was actually a little hesitant to do it because I didn't want to hit any false notes about any other issues or not talking about any other issues. But at the end of the day, I'm like, if that's who it's based on, then that's how I'm going to describe the character. Yeah, cool.

Speaker A: You mentioned, and we talked about it a little bit while you were opening the gift kind of this. A standard practice in a lot of accelerators is going through market sizing. And, uh, many of them have a template about what market sizing looks like. It's a TAM Sam som. Everyone knows those acronyms. And you know, whether you're looking at a bottoms up or a top down approach, it always feels very prevalent on slide decks, et cetera, that you review and you judge. And what other kind of frameworks like that did you approach in your book with care, but also just say, look, this isn't taught.

Speaker C: Right.

Speaker A: This is total bullshit. Let's cut it down to brass tacks. What other kind of things come to mind that you touched on?

Speaker C: You know, I'm so tactful and shy, so I would never tell people they're doing it wrong. Yeah, TAM Sam sounds like the big one. In fact, I wrote an article a couple of years back and I always like to mess around with the editors because I know the editors always change your headline or your article title to what they want it to be. So I always make it like outrageous and they always tone it down. Yeah, my working title on that one was you know why your market slide probably sucks. Strike through on the word prop. Probably.

Speaker A: Yeah.

Speaker C: And the editor is the first time editors punched up my title. It went to press as why Andrew Ackerman hates your market slide.

Speaker A: Wow.

Speaker C: They really personalized it, Franco. And he's a good friend, so I just appreciated that. So what other things do people do crazy wrong?

Speaker A: And specifically that you address in the book, because

Speaker C: the other one, this is an order of magnitude lower and I'm more gentle about it, is the go to market slide. So the go to market slide is most of the people who do it and a lot of people actually just forget about it. Don't Put it in their deck. But it's oh, you know, we're gonna go to conferences and we're gonna do direct, you know, outbound sales, et cetera, et cetera. But that's only a third of, uh, your go to market slide. Yeah, how. But what I really want to understand before that is who and why. So talking to a startup earlier today, and you know they're starting off and they're actually doing this Nintendo, the ability for retailers in Latin America to offer store credit in rural areas, which is tough, there are a lot of people unbanked. So in his case, he's starting in Colombia because he lives in Colombia and then he's going to do rest of Latam. That's kind of a trivial example. But it could be a case where you're creating call recording software, which is the fictional startup in the book. But you're going to start with real estate agents because they are on the go all the time, live off their phone and they're jumping from place to place. So it's a big issue for them, even bigger than it would be for someone else who might still use it but might be at a desk more of the time. You know who in that case would be real estate agents or general contractors. We were talking about that as well. Contractors. The why? Because they live on the road all the time, so it's a bigger pain point for them. Then the how is. Okay, we're going to go through realtor associations or we're going to scrape lists or what have you. But that last piece, the how is what most startups will have and they just kind of either don't talk about or they assume that you understand why it was in the initial market. They have.

Speaker A: Yeah. So I've been teaching a class called velocity here in St. Louis in Alton, Illinois, at the Wedge Innovation Center. Shout out to John Simmons and Kiku and all my friends there. But as part of the Velocity coursework, we talked about value proposition and what was intriguing to me, and I'm curious because you're adjunct professor of entrepreneurship, you work with a lot of younger, uh, founders as well, but earlier founders, whether they're young, old, I don't care what it is. One thing that's been consistent is that their first attempt at value proposition, where you're trying to create conviction in your audience that there's differentiation in your, in what you're doing vis a vis what the status quo is. They focus so much on the feature set and not why the customer experience. That's right. And I Feel like the customer experience. And we recognize there, there are different customers along a value delivery chain, different links, and everyone might get different utility from that. But in your target customer, in that target link. It's so important for founders to really focus on why a customer would choose your solution product over the status quo. Because of uh, what, what is their experience, how is it enhanced, how is their journey from point A to point B better, faster, cheaper, easier, et cetera. And I'm curious to see, has that been your experience too? That's always a, a point of correction for early stage founders that you deal with, say always.

Speaker C: Yeah. Let me just roll it back though. There are very few hard and fast rules when it comes to what should be in a pitch deck. You know, the acid test is does it get you the meeting, does it get you a, uh, startup to give you a term sheet? And I don't care if it's in crayon on the back of a cereal box if it does that, but to maximize your odds of getting there, you know, there's certain things that work better than others, but other than Tam Sam som, which is horrible and we should put a stake through it in the Crossroads at midnight, I'm kind of okay with different ways of getting it across if it works. So I don't generally recommend that the startups actually have a slide on their icp, their ideal customer profile, on their value proposition. But if you don't, it has to be very clear in the other slides. Like it comes out in your solution slide. It comes out. That's right, competition slide. Like it's the nine tenths of the iceberg that's below the waterline. It has to be there and it has to show. It has to manifest itself in different places. And I, by the way, I go in the other direction. I have a what I call milestone slide, which is pretty non standard, but I recommend it because it pulls together elements of information that's usually in 12 different places or just not that I want to see. So I recommend that in the book that other people and I recommend that to all my startups. Yeah, but so early on there's a lot of founders that become enamored of a certain solution and lose sight of uh, what problem are you really solving? How painful. Yeah, really. Or they're like, you know, you got to be a quantum level different and better and obviously different and better for people to switch. We don't switch for like incremental improvements. They fall into the trap of, you know, I really wanted this solution It's a small improvement. So I'm going to have five other features and maybe the five features together will add up to one big benefit. That rarely works. Also, I see that a fair amount. You know, I also see a bunch of record scratches where they're like, oh, here's my problem. And then the solution doesn't actually solve that problem.

Speaker A: Yes, there's that disconnect.

Speaker C: There is that disconnect, the overarching question that we didn't talk about that again, it could be a slide, but I don't. I said you put it in other slides. But the one that's the big overall deal breaker that a lot of entrepreneurs miss is the ynet. So you guys get it. You've seen a zillion times. I'll just, I'll make it explicit for anyone listening who's not quite sure. So there are a lot of hungry, talented founders out there. There are a lot of like, uh, morons out there too, but there's a lot of hungry, talented founders out there. And the moment something becomes technically feasible, or the moment like the regulations change to allow it or whatever, there's this discontinuity in time that makes something possible that wasn't possible a year ago. A lot of entrepreneurs are like, oh, man, that's changing everything. I can do something with that. Whether it was machine vision, was AI, whether it was speech to text, drop all the buzzwords, blockchain. Once you've opened up that bridge, whatever it is, a lot of people are going to start banging against those problems that were not solvable before, or at least not solvable as well. With the new tech or the new regulations that allow whatever they allow. And they're going to come up with a bunch of new solutions. And over time, a lot of people end up with very similar solutions. It's like parallel evolutions, dolphins and sharks. They look similar, totally different, but that's a great design. You have this pressure where you're going to get with a fairly short order after whatever this discontinuity is, a bunch of startups hitting this new virgin territory with these new ideas, which is an awesome time to be in vc. But what startups don't get is that the flip side is also true. If there isn't a discontinuity within the past two or three years that you can point to, and a sharp duck discontinuity now there's more millennials. That's a gradual demographic change, or none of that. It has to be pretty sharp. No sharp discontinuity then that means what you as the founder are working on right now could have been done five years ago. And I'll tell you, if it could have been done five years ago, 99.9% of the time, someone has done it. Multiple someones have done it. Either somebody who's far ahead of you and then they didn't do their homework on competition because they just want to code, or they're not anyone in that space because a lot of people tried it and failed because it turns out it's not something the market really needs. So whenever I come across a startup like, where's your why now? And I explain that to them and there's a lot of hemming and hawing, I say, listen, like, you got to go back to basics there and really hit all the VCs that invest in the sectors, look at their portfolio pages, use the Way Back machine, look at their portfolio page. Three years ago, back when AngelList actually had like startups listed that you could look through, go through, look at everything in that space. Now you can use Crunchbase, Mattermark, you name it, PitchBook. But you really gotta be. If you don't have a why now? It's an uphill battle. So what you're really telling me is you're saying, hey, Vic, listen, I know a lot of startups have tried this before, but they're all freaking morons. I am the only one who's figured this out. That's tough. It's like an argument of elimination. Is a, you know, it's a. You know, I've seen company in my entire career where there was no why now? Actually, two, I think about two companies in my entire career where there wasn't a why now? And they were right. But this is at like 10,000 startups plus.

Speaker B: Right. I'm seeing a lot of AI companies that are kind of falling into this category of, hey, I've got some cool new shiny tech. Maybe they don't figure out their ICP and the why Now? But I wanted to kind of bring it actually to AI tools and your book of your process and how you wrote your book and did you use any AI tools and what did you find? What tools did you find to be useful in the writing process of your book?

Speaker C: Sure. By the way, I'll give. If you're an AI company, I'll give you a buy on why now. Because AI is early. It's still the quantum level jump in the availability of AI tools and the quality of it that is a good why now. Yeah, yeah, now we've got a whole lot of I'm doing this too or I'm doing this too. And maybe they still suck, but at least they passed the first sniff test. Okay, so the irony is I didn't use any AI tools in the writing of the book, but I'm using a lot of them right now in the marketing.

Speaker B: Oh, okay. I'd love to hear more about that.

Speaker A: Yeah.

Speaker C: In fact, this morning I've been banging my head against uh, using an AI tool called hold on. I don't know why I'm trying to remember it. I have it in the screen right behind me. It's called uh, which they all run together. This was Poe.

Speaker A: Andrew is literally multitasking as he's on the podcast.

Speaker C: Well, the query is running the back. No, it's not. I stopped slowly during the actual interview. I'm using PO to iterate through different Google Apps scripts. What I'm trying to do is I want to send out my hey world, the book is out now email. But I don't like sending out purely generic emails. So even when I do kind of mass ish emails, I do mass custom. So I used to use yet another mail merge back in the day and I would make it so you like the first sentence was a merge and it was personal to each person. Where I use contactually before Compass bought them and took them in where they queue up your mail merge. But you can customize each one? Yep. Because I think it's a better experience, get better response rates. I'm like, I don't want to be that guy. So what I'm trying to do is I'm trying to pull out from all my contacts and all the people that I've emailed over the past couple of years and bucket them into people that I've spoken to recently and maybe have already talked about the book with them. People that is going to be totally new to them and send them and maybe even parse them a little differently and really customize that outreach. But my first step is to actually be able to go into my into Gmail and pull the information out so I could pull my contacts out easily enough. That's a straight export. And I had ChatGPT actually clean up the data comes out in a really disgusting format. So I had chatgpt cleans it up nicely, tries to determine what the right email address is to use. I even had a parse like who do I know that may be a podcaster? Who do I know that may teach entrepreneurship? And that was a fairly low hanging fruit. But this. Actually, there's a couple of different ways to do what I'm thinking. One is you buy a, uh, browser plugin that can scrape or put hooks into your Gmail, or you do the Google scripts. And I have too many browser plugins. I said, let's try to do the script first. So there was a script. It was actually on Reddit to begin with. I did it and I kind of timed out and it didn't get what I needed because the date that it was the thread was initiated, not the date that the thread ended. And one of the things that I do to help people out when I'm reconnecting with them is I'll actually just take an old email, I'll reply to it, change the subject line, and I'll take and see the history if they want to remember. M. Right. So that's a big issue for me. Initial email on the thread versus the last email in the thread. Sure. So I've been debugging this and it's kind of weird. So I feel like I'm halfway between being the product manager, dealing with, uh, a very eager and very fast but not that talented programmer. Programmer versus me actually writing, trying to debug my own script. Like, I'm looking at it and it kind of looks like JavaScript. I can kind of follow what's going on to do to begin with, to see is it right? And I'm like, uh, it. Like I'm just going to keep doing it. It's faster for me to do it, see if it works, and then go back and say, hey, dude, it timed out after 500. Okay. We're going to do it in smaller batches. So that's been an interesting experience. That's example number one. I can give you if you want.

Speaker A: No more examples is perfectly fun. I would like to just point out Routledge, Taylor and Francis Group, you've published this book. Invest in AI, uh, data scientists. Bring them on board, get them to utilize these tools so that Andrew doesn't. He can focus on writing, you know, shut the fuck up and go back to sleep. Or An Entrepreneur's Odyssey, Part 2.

Speaker C: Publishing is one of the slower industries to adopt tech. So when. So you can see behind me. This is the COVID guys.

Speaker A: Yes, absolutely.

Speaker C: You can't see all of it, but part of the whole idea of the maze. I can give you the backstory, but let me first tell you, like, why I'm bringing it up. So I wanted a cover that was as distinct as the style of the book itself. Yeah, right. I didn't want it to look like a textbook. I didn't want to look like a generic business book, which was very nice. They sent me like all these stock cover and I'm looking at them like it's okay, but it looks generic. So I hooked back up with one of the designers from the first cohorts I ran at Dreamit, who's a fantastic designer, very cool human being. I don't know whether his design shop is his main business and his brewery is his sideline, or if it's the other way around. He's that kind of guy, anything red hair, Helena bar mustache, very cool guy. And he's very talented at what he does. So the first couple of iterations on, um, themes we used, I don't know if we used Dall E or I don't remember which tool it was, we used AI to generate a whole bunch of different cover themes quickly. Uh, but Routledge wouldn't let us use an AI generated cover because they're concerned about the copyrights. In theory, you could make the argument that everything that you've trained your AI model on are the originals and then whatever it spits out as a derivative work. Now, in practice, I don't buy that. It's the same as like a human being, like spending an early part of their career as an artist, you know, drawing fruit or kind of try to draw similar stuff to the masters. And that all becomes kind of part of the mental inputs as they develop their own styles and unique work. But since that wasn't litigated yet, they're like, no, you have to have an old school designer do it.

Speaker B: Trust me, we know about the AI litigation.

Speaker C: Yeah. So I'm not going to get sued. So I won't need Cooley on this because I spent.

Speaker A: You're in the clear. No, that's perfect. I really do. I, uh, will say this, I think. And again, I have to read the book. By the way. We should have some sort of thing where the first 10 viewers, listeners to like retweet, call us out on LinkedIn. We will buy the book and send it to you immediately when it comes out.

Speaker B: You read my mind.

Speaker A: Yes.

Speaker C: By the way, I actually do have an offer that I've been doing. I did an in person event. It was only 40 people in the room. I did it. Yes. Tuesday.

Speaker A: Yeah.

Speaker C: And I said to them, listen, it's just out in pre order right now. It's not going to ship until it actually is going to ship on May 15th. I just found out it's going to Ship a little early.

Speaker B: Oh, great.

Speaker A: Okay. Early, yes, yeah, absolutely.

Speaker C: Which was like, when does that happen? So, uh, well, because I hit my deadlines on the editing, I was a couple of days late, but not horribly late. I said, listen, it's not out in print yet, but I'll tell you what I want to do for the people who are brave enough or, you know, motivated enough to take a leap of faith for the first 100 people to pre order it. I'm going to open up the master classes that I give for startups in accelerators that I've run or that uh, friends of mine run.

Speaker A: Very cool.

Speaker C: Everything from prospecting firm to investors to writing the perfect pitch deck to making your elevator pitch really effective. All these things that I give to guys like to reach, which is the second century Ventures, accelerator programs, techstars. I've done it for, I did it actually two hours ago for Seed Starts, a Latin American program. All those things that I do only for accelerator programs. I'm going to open up a few of them to the general public and I'm going to reserve maximum 20 people per session and they can pick elevator pitch deck, uh, you know, customer discovery, whatever it is they want. They can have access to that master class the same way as if they were going through, you know, YC or Tech Stars. And I've already had from that event, I've already had five people forward me the, the uh, purchase confirmation from Amazon saying sign me up.

Speaker B: That's fantastic.

Speaker A: We're in. Listen, if you are here with us right now, please reach out to myself or Bri and we'll make sure that you're part of that offer with Andrew. One of the things that I love about your approach to this book is that it's so anchored in storytelling. The fact that it's not written like a typical textbook business book and that it is in this kind of first person fictitious founder perspective allows I think a lot of flexibility for the founder to understand how the road ahead isn't a template and that uh, it's unique. I, I think, Andrew, and correct me if I'm wrong, but I think what makes a good VC is, is an ability to pattern match so that they don't invest in that pattern and that they actually invest in the outliers of those patterns.

Speaker C: That's an interesting way to put it actually. Okay, I'll tell you what I was going to say, which is kind of responsible to think about the way you formulated because it's kind of an interesting way to think about it. I tell People that startups are a chain, not a rope. And what I mean by that is in a rope, if a couple of strands are frayed or they break, the rope still holds. But in a chain, if one link is broken, the chain's useless. So it doesn't matter how strong your go to market is. If your market size is too small for me to make money on it, fix that link. Like different revenue, different market, whatever it is, that link is not fixable. You don't have anything. So we're using that as my mental template. When I was first getting in and angel investing started to do it, I would go through their deck, checking each link, every link, and in a weird sort of way, every slide in the deck that I recommend in my format, that's a link in the chain.

Speaker A: Yeah, yeah.

Speaker C: Uh, I used to do that. But as you start getting better at being a vc, and certainly like now that I've focused, uh, on specific industries and you get to know those industries really well, you can kind of look at it once you get the idea like, oh, they're selling. Architects skip forward to their market size, it may be too small. Um, you get to know which link is probably going to be the weaker link first. So your pattern recognition lets you just, you know, get to the heart of the matter faster.

Speaker A: Yeah.

Speaker C: To find a broken link, you don't have to read the rest of it. So it's a little depressing because you're going out there looking for things that are wrong.

Speaker B: Yeah, it's true though. That's exactly what happens. And most VCs I know, like, they, they know exactly where to look and they're like, oh, the pricing's off. They're not going to be able to have a high enough ltv. They're out or there you go. Exactly. Icp. There's not enough of them. Um, their TAM is too small. That's exactly what I've heard from other VCs, and I think that's important perspective for entrepreneurs to understand. That's. That is how rigorous your deck is being looked at. They're looking for the weakest link.

Speaker A: Yeah, yeah. I mean, it's just the sheer volume that all of us have to deal with. I've probably looked at 10 to 20,000 decks over the course of my, you know, career. And at the end of the day, you've got to have an initial filter, an initial screening process. And it's nothing against the founders that come out here, but a, uh, pitch deck is really gaming a system. It's learning how to develop enough conviction in your audience to get that first or second meeting with the investor. And so often people kind of approach it like it's a throwaway item. And at the end of the day, if you don't check all the boxes, then you're just not going to get to where you want to be.

Speaker C: Yeah, I'm going to take what you just said about 10 seconds ago, just turn it sideways a little bit. I don't think it's a throwaway item per se. Think about a lot of things in life, like in a sales funnel. So you really, you're getting from one step to the next and you know you lose a certain percentage at each step. But your ultimate goal is to get down to the bottom of the funnel. When you've got a signed contract, legal blesses it and the money hits the. The bank. Yep. So if you think about the fundraising process like a sales funnel, which it very much is, you've got your top of your funnel where you're prospecting to try to come up with 100 plus investors that might be interested in the kind of startup you're doing.

Speaker A: Yeah.

Speaker C: There's actually interesting data behind the hundred. But I got lucky. It felt right to me. And then I found the data later.

Speaker B: Uh, it's not in your book.

Speaker C: What's that? Is it in your book, the data? No.

Speaker B: Okay.

Speaker C: Maybe as a throwaway line. Actually, I might have said that. Actually, it might have been a line or two in the book explaining it. I'll tell you, it, it was A while ago, DocuSign did a study of pitch decks that were sent and uh, they correlated it to closed rounds, I think they're doing at the seed and series A level within six months to a year. And what they found, they curved it. Right. They graphed it. I'm sorry. And the graph keeps rising pretty steeply until you get about 50. And then it keeps rising a little less steeply and it starts to, I won't say exactly, top off, but get a little shallower when you hit 100.

Speaker A: Yeah.

Speaker C: So I tell, uh, I just intuitively like the feel that I've gotten from doing a lot of it. And when the data come along like, okay, I'm not full of crap. So there is actually good data behind it, but you need to fill the top of your funnel, otherwise if it's not enough at the top of the funnel, you're not going to get enough at the bottom. That's axiomatic. And your top of the funnel, other than like compiling the list and Figuring out who they are. Your elevator pitch, your 20 to 30 second description, like that exists to get you three or four minutes of the investor's attention, come up to that person at the end of a conference where she's been on a panel and you know, the 40 other people behind you and she just wants to go home or feed her, or she's got to look at five other decks that companies are actually in due diligence with. Or the guy's like, I'd like to see my kid before he falls asleep. And so you only have those 30 seconds and they're only going to give you two or three minutes. But if you give like the 30 seconds, they're like, oh, that's interesting. How do you do this then? Uh, first of all, the question, like, wait, I have no idea what the fuck you do. That's not the right question, but like a meaningful question that shows that they're thinking about it. That's all the elevator pitch exists to do to get you that one step down in the funnel.

Speaker A: That's right.

Speaker C: Your. Your pitch deck is, you know, kind of in the middle of the funnel. Right. You. So I've said, hey, Vic, do you know Bri? You know, she's invested in these three startups and they're in the same kind of industry and type of customers mine. So I think they might be interested in mine.

Speaker A: Yeah.

Speaker C: And you make the intro and Bree's great. Have him send me his pitch deck. So I send the pitch deck and then, um, you know, either I sent it beforehand or I'm sitting down with Bri for a half hour. That pitch deck just buys me that next step. Either the half hour meeting or if I've got the half hour meeting, it needs to get me. Needs to get Bri. Sorry. To be interested enough that she takes it to the Monday morning meeting and says, hey, interesting startup. What do you guys think about? And hopefully it was compelling enough that they say that. Okay, run with that, Brie. That's interesting. Put another couple hours into looking to the market, what the competitors are like, et cetera, et cetera. Yeah, throw away. But it's a step, it's a, it's a key that unlocks the next step. And where all these tools go wrong is where people don't realize what it's supposed to do. So people who think the elevator pitch is going to get them funding try to put everything about their company into. And they sound like the end of a pharmaceutical ad.

Speaker A: That's so spot, uh, on.

Speaker C: Yeah, so spot on. Back in the day. Hey, I have a question for you guys. Do you guys see one pagers anymore?

Speaker A: No, I try not to. I actively avoid them.

Speaker B: Sometimes we ask for them at Cooley. We actually ask them to create one for us, but I don't see them just being sent.

Speaker C: So I actually like one pagers and I think very useful when done right. I just know that 80% of the time they suck.

Speaker A: So I think that's why I don't

Speaker C: ask for the members. They're literally a one page where highlights your company, not your entire pitch, but enough highlights so that the VC can look at it and decide, oh, I do want this meeting. It's almost, you know, a bit of an overview.

Speaker A: Yeah, I think so. Here's my take on this and you let me know if you agree with this or not. If someone gave me a one pager and it was just one line, it was their elevator pitch. I'd be much happier than if they gave me a one pager that was just full of stuff. And uh, I didn't. My eye didn't know how to train where to go. And it was just there's too much content on it.

Speaker C: So six fails on the one pager. Yeah.

Speaker B: Okay, let's hear them.

Speaker C: I promise you I'll give them to you.

Speaker B: Yeah.

Speaker C: The elevator pitch is like a set of Legos. You use those set of legos in a couple of different places, but it's usually in the warm intro request you

Speaker B: put your M microphone. Mhm.

Speaker C: Drake, as you know, my startup does A, B and C. Now I'm telling you that you know what I do. I'm telling you that. So at least I know that it's being conveyed in a clear and concise way. And I want to make life easy on you. I don't want you to have to actually think or type things out. So I'm feeling you that. But that's my elevator pitch right there. It's two sentences maybe.

Speaker A: Yeah.

Speaker C: Then it's I see the breeze invested in A, B and C and that's. I think she's a good fit that I'm um. M not. You don't have to think about that either. Okay, that makes sense. It would be a good fit. Yeah. I say, do you know Bri well enough to make an intro? That's my way of giving you an easy out. If you don't want to do it, sure.

Speaker A: Double up.

Speaker C: Ask somebody else. So I use the elevator pitch there. The one pager. When done right. It's not everything in your deck it's the key elements, like one step below that elevator pitch. Where I, uh, might have told you my market size in the elevator pitch. But I probably didn't tell you my revenue model. You might be curious about that. I should have told you how much I'm raising in my elevator pitch. But I am right. I've raised X dollars previously. I probably didn't do a lot about the competition. And we'll give you a little bit more about it in it.

Speaker B: Yeah.

Speaker C: Where? Okay. I promised you Priya, I'd give you the fails. Let me see if I get all six. Remember, um, there is the wall of text fail. Right. I'm going to get all the information from my deck. I'm going to shrink it down to a six point. So that's a fail number one. And what that tells me is the startup A has no aesthetics, but also may not actually know the important things about their startup. It's amazing M how often the founders don't actually know what their superpower is. And sometimes they have one, they just don't know which one it is. Number two is the feature list. Right. It comes in blue. I don't freaking care. I don't care about all those features. That's probably not what's going to get you into the meeting. Oh, it integrates with this. I'm like, I didn't even know it was important. Related to that is the faq. Who cares? As an attempt to predict all the questions you might possibly have about my startup.

Speaker A: Yeah.

Speaker C: And it's deliberate, boring and sometimes it gives me reasons like, oh, I didn't even think about that. But that could be a problem. I probably shouldn't invest. Right. So that backfires.

Speaker A: The comparison of that is and what I like to call it is the forces me to ask more questions than you have answers for.

Speaker C: Yeah. That's not what the point of this is anyway.

Speaker A: Yeah.

Speaker C: I don't remember if this is a separate one in all the text, but I just call it the butt ugly. And it's usually a combination of me putting everything in one. I've taken all my slides, I've shrunk them down and I just. That's my competition section.

Speaker A: Yeah.

Speaker C: And the sixth one is the two page one pager, which is particularly annoying because it's in the fucking name. But really like the mentality behind it is always. My startup's really complicated. I understand why other people should have one pagers, but I'm a special snowflake and I should have two. And um, I'm like Dude, I've had. I've had like stuff that like the DoD invests in or they give free money for. It's usually in Q Tel that gives the money for like. Sure they were okay. They managed to get it across in like a one pager or the equivalent.

Speaker A: Yeah.

Speaker C: But of course this is all kind of academic because it's kind of fall on the way of the cummerbund. But yeah, technically the right thing to wear. But not many people rock it anymore.

Speaker A: Yeah, yeah. I do think kind of getting to the storytelling aspect of it and this is one of the reasons why.

Speaker C: I'm sorry I avoided your question.

Speaker A: No, I think you got it. I don't know.

Speaker C: Hold on. I wanted to tell you something I wanted to do. This is a little embarrassing confession. Oh, keep drinking.

Speaker A: Oh, yeah.

Speaker C: Refill while we're talking? I actually don't like business books.

Speaker A: Yeah, I don't either.

Speaker C: So I find that most business. And there are a couple of exceptions, Like I'll give a quick shout out to Jeff Bus gang, who wrote Ages and Ages ago, wrote Mastering the VC game book coming out right now. So the difference between what he writes and a few other people writes, and most of it is that most of the business books you'll see on the shelf are a 20 page PowerPoint that has been stretched to 220 pages because the publisher print anything that short, 100% they get the same boring, bland, probably Midwestern ghostwriter in this kind of upbeat but, you know, same, oh my God, he want Valium tone of voice, who then, you know, follows a series of name drops, anecdotes illustrate the point. And then at the end of each chapter, there's like a shaded box text with the key points. And if I just went into the book, I ripped out those last pages and just read those last pages, I'd have the entire book.

Speaker A: Uh, this is the premise, by the way, of Blinkist. I don't know if you're familiar with Blinkist. You know, just, it's the Cliff Notes of today. I agree 100% with you. I think it's one of the reasons why I've decidedly told myself I'm not gonna just put out on Twitter, LinkedIn,

Speaker C: and I'm not gonna say it unless it's something that I would because it's already been said.

Speaker A: You know what, I just don't feel the need to regurgitate what everyone else is.

Speaker C: Amen, you know, explaining.

Speaker A: So I. I'm with you on that. Let me move on a little bit to kind of probably the tail end of the book when we're talking about fundraising. Bree's also got a guide book coming out in the near future about helping founders to position themselves for a successful fundraise. And we've seen the goal post kind of move. How did you approach that aspect of the book? The fundraising side of the book or the founder?

Speaker C: So there's a couple different angles to this. Let's start with the whole goal posting. Right. Yeah, you know, there's depending on where the market is, like it was a hot market, a frothy market or you know, a dead market or you know, now we're kind of on the upswing again. I feel like we're kind of in a lukewarm to warm market. Depending on, I mean not AI.

Speaker A: Yeah, that's a different most industries.

Speaker C: It's not bad, right? It's a little harder than average I think. But you know, fundraising is never fun. It's never even in great environments.

Speaker A: Sure.

Speaker C: Don't be disheartened about that. Like the people who walk in there with a cocktail napkin. That doesn't really happen, but the people who like get money thrown at them. It's pretty rare. It happens in golden moments in time and even then there are people who can't raise. So if you're a founder out there, don't let other people's idealized view of a handful of startups too much. The basic goal behind fundraising on a tactical level is you want to know how much money it's going to take you to reach a meaningful fundable next milestone within usually 18 to 24 months. Yeah, it can be a little earlier in some cases. You know, it's like you really just need to get that extra little hump over the hump and you don't want to get too much dilution. But it's not going to be much longer because VCs don't like to give you that much rope.

Speaker A: Uh, no.

Speaker C: Nor do you want to take it because if you make a lot of progress, you can raise money at a better valuation later. Sure. Raise it all like ah, at a low price per share.

Speaker A: That's right. Much less expensive with regards to the equity that you're giving away.

Speaker C: But yeah, yeah, where you need to be to raise that next round changes a little bit by industry, changes a little bit by sector. The gold standard is you want to talk to the investors who are one step ahead of where you are now or you talk to the investors that might invest in you because they also know what their portfolio companies need to hit to get to that next round and you say, hey Bri, if I get to $2,000,000, ARR. All ARR. Let's just say for sake of argument, does that open up series A for me these days? And then like, oh yeah, it might or it might not or you know, usually it's a pretty fair target. But you test the water to figure out where that next goalpost is and then you got to figure out okay for me to hit that number in 18 months, which really means I want to hit it closer to 12 months because I want to give myself, you

Speaker A: know, six months of the next round. Absolutely.

Speaker C: Market less in a bad market more. But really means what do I need to get there in a year? What resources do I need to do what things are? And then that, that works backwards into how much money you need to raise. And as long as you're kind of in this kind of Goldilocks zone of the right amount of money for the kind of round you're raising to get to the right next step, you know, and then, you know, then you're going to be okay. But when you're outside of that zone, usually because you need to raise a lot more to get to the next step, then it's difficult to the point of maybe not possible.

Speaker A: Yeah, yeah. I think there are a lot of founders out there that don't go to the Stanfords, the Berkeley's, even the University of Chicago's Harvard MITs that are building right now that you know, see uh, an opportunity. And uh, because the tech stack and building has never been more accessible than ever, they feel like, hey, I've got something here, I'm solving a problem, I'm building towards something. The value proposition, the elevator pitch, all of these things are like uh, we see some, you know, a potential successful outcome here. They don't have that network of people that can create warm intros for them, that can even get them in front of folks. I know this is an easy question to answer, right?

Speaker C: But yeah.

Speaker A: What do you think is the best route for a founder to go who has, you know, they're working their ass off, they've got a value proposition, they're reading the Entrepreneur's Odyssey and now they're looking at like, where do I go from here? How do I access that capital?

Speaker C: Let's start with the first thing there. The smartest people that I went to school with weren't always the most successful. Mhm. And there's uh, a fuck ton of really great entrepreneurs who did not come from Berkeley, mit, that's not in any way a disqualifier. Especially since not at all the myths that I think people are starting to realize is a myth. It's not the college founder. It's very rarely somebody in their college dorm room doing things.

Speaker A: Yeah.

Speaker C: Especially in the B2B world. You gotta have lived the problem and worked in the industry, know what the pain points are to know what, how you're really solving them. To talk your customers language. So most of the time you're talking about people. Like most of my entrepreneurs are 30, younger. I got one entrepreneurs like in his mid-50s.

Speaker A: Sure.

Speaker C: Right. Now the beauty of it is he's got years of experience and he's got tons of contacts. So it makes his life on the customer side at the very least. So they're better entrepreneurs in some ways it's harder because then they have families and they have a high not to support. And you can't just drop everything and not get paid for a while. So there's a, uh, might be a sweet spot where you're about to have your first kid, but your first kid doesn't cost that much until they have to go to school. That's okay. Especially if you have a spouse or a partner who's got a more traditional job and you've got healthcare covered. You know, don't stress about school that much. It's not as big a signal for real startups as, as maybe you might think. Now the second question is warm intros are the gold standard.

Speaker A: Yeah.

Speaker C: So I mean here, let's just walk it through. I get a cold email over the transom. Like usually I glance at it but it's like the last thing I do in a day.

Speaker A: Sure.

Speaker C: And I ah, will occasionally respond to them because I used to work the accelerators. I still have a little bit of a warm spot for the people who are like so young and clueless. And we used to still get stuff that came in but a lot of VCs won't even look at anything that's not a warm intro or that they didn't reach out for. And the logic behind it is there's so many startups out there and we as entrepreneurs uh, as VCs are so networked. We're on. I mean I'm not on everything. I'm on TikTok to ruin it for my kids. I'm LinkedIn, I'm on Twitter, I'm m resurrecting my Instagram account because you know, I think that's the right thing to do here. I thought about Doing TikTok, like why not Zig? Why are the people zag? But I'm like, uh, I just don't have the energy to do it. You know when house party was a thing, people were on House party was

Speaker A: a thing where they were short lived by the way.

Speaker C: Yeah, we'll talk about that at different time. Yeah, that's how we're wired. Yeah, we are available that way. So there's a little bit of a mentality on our end. If you can't get to us, how are you going to get the customers?

Speaker A: Yeah, yeah.

Speaker C: Also by the way, I will say nobody is. Listen, if you're in Sofia, Bulgaria and you're a startup, I totally forgive you for not having any warm connections in the New York startup ecosystem.

Speaker A: Yeah.

Speaker C: And if you want to go in that case and you pay like somebody to help make intros, I'll give you a pass on that. Sure. I don't. If you're a uh, us uh based startup like Paid Introductions, that's a huge yellow flag to me. You should be able to find your way to me or at least to a bunch of other people. And if not, that should be part of building your business, building your network. Sure.

Speaker B: I think you kind of mentioned a story earlier where it's like you were, it was from the VC's perspective of they're doing a panel and you're going and you're giving an elevator pitch. I mean I think that's a great way to try to get in front of VCs, go where they are and elevator pitch them.

Speaker C: Talk us in an appropriate way.

Speaker B: Yeah, that's why you have to have a good elevator pitch.

Speaker C: Yeah.

Speaker A: I think you bring up a really good point. Here's the counterpoint that I want to challenge all of us on. And when I say all of us, all VCS, I'm in St. Louis. I think we've got a lot of amazing talent. The data actually shows that the very talented folks that have gone on to the west coast and the east coast to receive funding, build billion dollar plus companies do it very well. We want them to build here. And I think that's a different problem. I think we need more funders, we need better access to capital, all that great stuff. But if you are in an area and so colleges aside, right. Stanford, Harvard, mit, whatever side, you're outside of Silicon Valley, you're outside of New York, you don't have that short list and you don't have the access in terms of hey, I'm in New York City, I can Bump into Andrew at, uh, you, uh, know one of the 100 events that you're at.

Speaker C: Right.

Speaker A: Is the cold email the way to go?

Speaker C: Is it last resort?

Speaker A: It's the last resort. So what's the in between?

Speaker C: So, uh, let's take it step by step. Right. So we talked before the show about, you know my friend Ira Weiss at Hyde Park Ventures in Chicago.

Speaker A: Yeah.

Speaker C: He would not look at any startups on either of the coasts. And his philosophy was, you're in Silicon Valley and you're coming to Chicago for money. Did everybody in the Valley pass on you? My mind's open. So his philosophy was like, uh, he hasn't put it this way. And again, I wish I could tell you who told me this because it's a great way to put it. Talent is evenly distributed, but opportunity is not. So you've got really sharp people in all parts of the country. Maybe not Alabama.

Speaker A: Oh boy.

Speaker C: Sorry about that. I just lost 1 50th of my sales. I'm sorry, guys. I'm kidding. No.

Speaker A: So, yeah, I think everyone's gonna just kind of think about your initial, you know, group of 16 pick and.

Speaker B: Yeah,

Speaker C: that was my pick though. Yeah. Yeah. Based on nothing.

Speaker A: Yeah.

Speaker C: But no. So it's the, uh, the talent is there. Yeah. The question is, how do you access A, customers and B capital?

Speaker A: Yep.

Speaker C: You gotta be near one and preferably both. If you're not near your customers, you're screwed. No, you're building like a B2C, like gaming app. Who cares? Like, you could be virtually everywhere B2B. So the beauty of things like ed tech is there's schools everywhere, health tech, there's hospitals everywhere, construction tech. I mean, there's construction cranes everywhere, right?

Speaker A: Yeah.

Speaker C: So you're okay there on customers. So then the question becomes like, how do you access capital? And that's a lot harder because a lot of the second and tertiary startup ecosystems, you've got a couple of angel groups, maybe a co working space. Uh, and that's kind of it. Now, as a good University of Chicago school kind of economics guy, like, the funding will flow. So people do move out there. I've had VCs. Uh, during COVID they moved out to Tampa. We were always going to move down to Tampa. We'll move a couple years early and there's some startups there. And you know, worst case scenario, the airport in Tampa is actually really efficient. They can go anywhere they want to.

Speaker A: Yeah.

Speaker C: So over time, if there are pools of startups with talent that are not getting hooked up with capital the capital will find its way to it, to a degree. Then you ask yourself if you are a youngish founder, you're in your late 20s, early 30s and you could move anywhere. Right. Your kids aren't like deep in school yet or you don't have kids yet. You want to be so thinking globally, you want to be in a country that respects the rule of law, so if you build something, it won't be taken away and given to one of the Chinese princelings. And they just, I want that to work mine now.

Speaker A: Yeah.

Speaker C: I want to be in a country like, oh, it's a huge success. Oh, but you can't sell now. It's a national treasure. France, I'm looking at you, they got a little better. But you want to be in a country where if you start the startup and successful, you will benefit from it. Taxes low, high. You know, I don't think that's a huge deal. Like there's no. Within the developed west where you have good rule of law. We are still actually fairly low taxes relative to the rest, but I think that's a smaller issue.

Speaker A: Sure.

Speaker C: And then it comes down to where do I want to live? Where's fun? Where my uh, customers obviously, but where's fun?

Speaker A: Yeah.

Speaker C: So that's kind of a problem if you're in Biscayne, North Dakota. So there's going to be a bit of brain drain to the places where more customers, more capital and even just a more fun place for them to be.

Speaker A: Yeah, yeah. It occurs to me in your questionnaire you mentioned Robert Heinlein, who is the author of Starship Troopers, Stranger in a Strange Land, the door into summer. He for listeners, viewers out there, American science fiction author. But more than that, he was the pioneer of the hard science fiction.

Speaker C: Yeah, one of them. There was a bunch of them at that time that were. Sorry, go on. I mean.

Speaker A: No, no, it's okay. But did you ever think that the reason why you wrote the Entrepreneur's Odyssey as a fictional founder going through a very realistic kind of experience was sort of because of the hard science fiction that you love?

Speaker C: I never really thought about it that way. I'll tell you, the, the more obvious, and I'm going to think about this when we're done. I feel firm believer. And you don't get to, you know, you don't get anywhere meaningful in the first five seconds. You think about something.

Speaker A: Yeah.

Speaker C: Think about that some more when we're done. The thing about reading like a hard sci fi, probably when you're a little too young to Be a good idea. You look at the world kind of a different way. Like you look at the world in, I would say a more orderly way, but a more framework, ish way. You look at a thing and you're trying to fit it into the pattern that makes sense. And especially at that point in time, it was. This was before the whole dystopian, you know, science fiction, before, like shows like Blade Runner had this view of the future where it's like today, but dirtier and crappier. Also very cool. But then it was still very much, you know, science was the answer. Science was going to solve the problems. Uh, you know, it could be. I mean, it could be some, like, tight squeezes. But at the end of the day, science wasn't the villain back then. So there's a way to look at the world where you're like, it's a problem, but this problem's solvable. Are you just gonna sit down, unemotionally dissect it and figure out where the solution is? You know, for writing this book? I don't know. I mean, I have to think about it, but I think it's, uh. I'm not that complicated a guy. I think it was just. I really liked the goal. Yeah, I really don't like other business books because they're boring and the signal to noise ratio is too low. I'm going to write it. I want to write a book that's interesting enough for even a picky SOB like me to read.

Speaker A: That's great. And we can't wait to read it. The book is called the Entrepreneur's Odyssey. A novel Approach to. Give it to me again.

Speaker C: Startup Success.

Speaker A: Startup success. There it is. Yeah. The Entrepreneur's Odyssey, A novel approach to startup success. Really quickly. And I want to ask this before we jump into the Fidelity five questions you've worked with. You've had a hand in building two startups. You've invested in over 70 companies over the past two decades. You've seen a lot of trends. I'm curious, maybe it was your wife with her jumping into real estate. How did you get into prop tech? And then really quickly, you know, as investors, we kind of are attuned to following curves. The power law curve really shows us how distributions of outsized returns might occur. And then we've got the hype curve. And the hype curve is interesting because as a. From a thesis perspective, we don't necessarily look at something like proptech as. Where is it on the hype curve? Proptech back in 2012 through 15ish. Felt like to me that it was at the height of its hype.

Speaker C: And then 2015.

Speaker A: Or do you mean, uh, 2012? 2012.

Speaker C: Interesting. 2022, yeah. Was like peak prop tech.

Speaker A: Do you feel like, okay, so this is. As someone who's not in prop tech.

Speaker C: Right.

Speaker A: At all, this is not my sweet spot.

Speaker C: Yeah.

Speaker A: Question is, what made you really excited about proptech? Where you really made that, you know, a, uh, part of your foundational thesis investing?

Speaker C: That's a great question.

Speaker A: And then where are we on the hype curve with proptech? Are we now past the trough of disillusionment? And there are some really fundamental. I know you've been on panels with AI and how it's being applied to proptech. Where are we at with proptech?

Speaker C: Right, sure. Let's take that step by step. Right. 2014 and 2015. I'm running the New York office of DreamIt. It's an archetypical generalist pre seed program. We decide that, you know, it's not bad being a top five or top ten accelerator. We want to be number one. And we take a cold, hard look in the mirror and we say, Y combinators is too far ahead. There's that virtuous cycle. The best founders want to be with the best program to get the best investors, but the best investors want to be with the best program because then they get the best founders. And when you're too far ahead, like you could do everything right, but you're still going to top out at number two or three. So he said, what can we do to be number one? And I wish I could take credit for it. It wasn't me, it was Avi. Sabar was a CEO, new CEO of DreamIt at the time. And it was kind of an awkward conversation that he kicked off. It's blindingly obvious in retrospect. He said, we can't be number one at this. Where can we be?

Speaker A: Yeah.

Speaker C: So that kicked off a discussion. Like we have all these later stage startups that want to work with us, but you know, they're not going to give us 5%, 8% of their company for 50, 75 grand. All these corporates who are like, bring us the cutting edge startups and we bring them cutting edge startups. And they're like, wow, those guys are sharp. That's a real painful problem. I love their solution. You have to smile at it. But they're a little too early to work with a Fortune 100 company. So we're going to. Oh, yes, for six to 12 months. And like morons, we kept bringing them the early stage stuff and they kept saying six to 12 months. You know, when Avi challenged us like this, we have those more mature startups and we could just say, yeah, that's cute what you're saying. These are what we really want. Yeah. We had supply and demand for a new model. No one was playing there. We had to change two things, two small things. One was the program itself and the other was the financial offer. You know, other than that, it was perfect. Yeah. Ripped all that up and rebuilt it. But at that point, one of the key elements of going in that direction was to shift very hard the main focus or foci of the program. We're getting them customers and getting them the investors who could lead a Series A, not seed rounds, demo day, we threw it out the door. But to do that, we really had to focus on the biz dev side. Do that effectively. It's a lot more efficient if you're focused on an industry rather than being a generalist. You're doing biz dev for 12 different companies. It's hard if you're doing it for six companies. They're all kind of K12 or higher ed. That's easier. There's a lot more economies of scale.

Speaker A: Sure.

Speaker C: So the reason we chose, we'd always been doing health tech on a side. It's kind of a separate story. But the reason we chose EdTech to pioneer the new model was very simple. One of the founders went to Penn State and he convinced them that they should do an EdTech program. They gave us a million dollars. So that is the wrong reason to go into a sector

Speaker A: because an LP says so.

Speaker C: That, uh, was a great reason to give me the money. It's not a great reason, if you want to think about it from like a perspective of where is this industry on the adoption curve. It was interesting, it was great, and the model worked very well. I made 17 of my investments for an edtech, all made in 2016. And some were doing like, knock wood very well. But then we made the decision the right way. By a series of fortunate coincidences, we got introduced to Jeff Vinick. And if anything's familiar to you, it's either because you're a hockey fan and you know he owns the Tampa Bay Lightning, or you were in finance and you used to run Magellan.

Speaker A: That's right.

Speaker C: You know, very successful guy, very nice guy, could sit next to on an airplane and not even know it. And he wanted to do something with the Tampa ecosystem. He bought the Lightning. And all of a sudden he comes out to Tampa. He said, probably, look at the city. Falls in love with the city. And I was using the startup ecosystem. And my first reaction when my friends, oh, I have this guy in Florida, wants to build a startup ecosystem in Tampa, is like, tampa, I'm not going to Tampa. Why am I going to bribe a crappy startup to go to Tampa? And uh, he's okay, Andrew, I just need you to like, go Google Jeff Vinick and then come back to me in five minutes and then you'll understand why, uh, you're a moron. Which happens to me on a regular basis. So I Google it and I realized, oh, there's three more zeros involved in this equation. And I'm like, okay, I'm wrong. Bronnie, what do you have in mind? And it turns out that he was, he didn't want to like just, you know, bribe startups that, you know, didn't have any other choice to come to Tampa. He wanted the best startups to not come to Tampa permanently, necessarily. That would be nice. But to bring their technology down to Tampa to meet with the large companies like the Raymond James's that have their headquarters down there so they could have access to the technology at the same time that their competitors in New York or Silicon Valley or Boston were getting it. So they competitive. And it's like those big companies that actually, you know, to a large degree drive the economy. And you know, when I heard it, I was like, that's exactly what we're doing with customer sprints. That's brilliant. We gotta do this. So all this is bubbling around and we've done our first program with the first two programs in one, um, yeah, two programs in Ed Tech. And I'd actually signed up ETS, the guys that do the SATs, for a little bit more money. They got approved of their board, they had to check in. And then it occurs to us like, oh my God, Vinnick is. He bought up like 50 plus acres of the waterfront down there and he was redeveloping it. So he's talking with gcs, he's talking to property managers with, you know, real estate agents. That's a customer sprint right there. We've been talking about doing dream real estate for a while and construction tech. So we said, let's do this. So we went in there and we looked at all of the activity at the set in Series a level in 2016. This is the year before we did it. And we then did the same thing for health tech back in I believe it was 2011, which was the year before we launched health Tech. And um, it turned out that within 1 or 2% they were the exact same level of activity. Wow. And then we'd gotten in and HealthTech had just taken off in a huge way. So then our thesis was, do we think that, you know, real estate, we didn't call it prop tech back then. We had real estate technology, real estate tech, large developers, large general contractors, property managers, real estate brokers. Do we think architects, do we think those firms are on a cusp of starting to actually adopt technology?

Speaker A: Yeah.

Speaker C: Bunch of interviews, like customer discovery. And we really felt like that change was in the air, that they were being more open to adopt technology than ever before. Placed a bet on it. We placed a bet that it wasn't like stable at that kind of low level. But we were right at the beginning of an uptick. Right. It was, we were stretch a little bit to pat ourselves on the back. We were actually spot on with that. Sure. Worked out very well. I made another 31 investments between my prop tech and construction type portfolio after that, you know, 2022 was probably peak prop tech, frothy. Everyone else who wasn't in the space was like, oh, that's pretty cool, we should do that too. And you know, when your cabbie is asking you about a stock, you know it's time to sell. There's a lot of people in there. There were a lot of people coming out of the real world and like I $500 million real estate fund, I'll tell my buddies, hey, you should give me a, uh, $2 million each and I'll start a $20 million seed fund in proptech and which like, you know, for them, like a million dollars, it's like rounding error. So you had all these people coming in from like the top end and bidding up valuations for a bit. And then there was a reversal when the economy slowed down a bit. A lot of these companies are mostly B2B. Right. So you're dealing with a Brookfield, you're dealing with a related and their business is a little slower. You're trying to sell them like a six or five figure, six figure enterprise software deal. And you think it's going to take you six to eight months. That's kind of what these do if you're good at it. And they're like, yeah, with the economy the way it is, we're just going to put a pause for another quarter.

Speaker A: Yeah.

Speaker C: And a quarter is like a blink of an eye for a corporation.

Speaker A: Sure.

Speaker C: For a startup that's raising an 18 month increments 1/6 of their Runway. Ah, like that was a big problem for a lot of startups. Yeah.

Speaker B: Wow. Yeah, that makes sense.

Speaker C: That's really what happened. Now answer. Ah, the last part of your question. Do. I think we've hit peak prop tech and we're on the way down so I don't know. Yeah, I think that in. I've been doing this long enough that we go through waves where oh my God, there's so much cool stuff happening. A few years later we're like, yeah, I'm only seeing all the same stuff. I'm not seeing anything exciting again.

Speaker A: Yeah. You and Breech alluded to AI and sort of applications of AI and PropTech. I think we're beyond the trough of disillusionment. I think we're at the point where we're starting to see real use cases be impacted and disrupted in positive ways by kind of novel technologies. AI obviously is simultaneously at the top of the hype curve but then also is already being adopted in, in so many different ways that it's really like this paradigm shifting technology. I have so many thoughts and things that I want to bring up from, you know the differences between an accelerator and a scale up program. You've got so much experience in that as well. I know we're running out of time. I want to encourage people to find you on all the different social media and uh, channels that they can find you.

Speaker B: Links will be in the description.

Speaker A: Links will be in the description. You've got a master class, you've got any number of uh, bits of content that are out there and then of course the book that comes out hopefully sooner rather than later. Right. So we're looking at May instead of June.

Speaker C: May 15th is what they tell me.

Speaker A: May 15th. So we'll figure that out for all of our listeners and watchers. You will be the first to know the first 20 or so. I think we're gonna, we're gonna hook you up. Do you want to play a little game called Fidelity 5 Questions with Us?

Speaker C: Sure. But are we gonna get the, this other big. Yeah.

Speaker B: Ah, you get to open that after the Fidelity five questions.

Speaker A: Oh yeah, yeah. That is for after the fidelity.

Speaker C: I'm not really good at this patience thing, so let's play the.

Speaker A: It's okay, it's okay.

Speaker B: This is rapid fire, so answer very quickly.

Speaker A: Ah, rapid fire. I will say this. Look, VCs, we're used to these 10 year cycles, right? But so whenever we get a chance for instant gratification, Bri. Amen. We're gonna take it.

Speaker B: Fair enough.

Speaker A: All right, go for it. But anyway, here we go. Each podcast we have a segment that we now call Drinks with the vc. Um, Fidelity five questions brought to you by Fidelity Private Chairs. Andrew, are you ready to play?

Speaker C: I'm ready to play.

Speaker A: Okay, he's laser focused. He's in there. He's locked in. Bree, do you want to start us off? Sure.

Speaker B: What is your go to karaoke song?

Speaker C: Oh, another one bites the dust. Oh, good one.

Speaker A: Brilliant. Also, what I think about when I think about my portfolio right now. No, I'm just kidding. Here we go. Here we go. Here we go. If you could invest in any fictional startup from a movie, TV show or book, what would it be? I'm actually very interested in this answer from you, Andrew, because you don't watch a lot.

Speaker C: Not.

Speaker A: You're not a binger, or at least you don't have the time.

Speaker C: I am a binger.

Speaker A: Are you a binger?

Speaker C: Oh, yeah.

Speaker A: Okay, you're a binger. So this could be. I mean, now I'm even worse.

Speaker C: There's not a lot of good fictional startups. You gotta go with Pied Piper.

Speaker B: Yeah, the Pied Piper. Okay.

Speaker A: All right. Okay. Nothing from Robert Heinlein, uh, that you want to bring up right now.

Speaker C: That's 80 year old startups.

Speaker B: Okay. If you could do it all over again, would you rather be an investor or a builder?

Speaker A: Builder. Ooh.

Speaker C: I would still be a builder first, but I think I would have left my first startup a few years earlier to make the transition into VC sooner.

Speaker A: Okay. Do you feel like you're always just as a random, uh, follow up to this? Do you think you're ever going to go back to being a builder?

Speaker C: Maybe. I think about it four or five times a day.

Speaker A: Yeah. Nice. Also, just for the emerging managers that are out there, for the authors that are out there, I think writing a book is building.

Speaker B: True.

Speaker A: Neither here nor there. Cool. All right, what movie best fits the future of the human race? Wall E, where we've degenerated into an obese state due to anti gravity in the metaverse. Avatar, where we're dominated by this quest for resources. New worlds walking around in Avatar bodies, or the Matrix, where we're all in a simulation and robots are really ruling the world.

Speaker C: So it's Avatar, but not for the reasons that you think.

Speaker A: Okay.

Speaker C: We're going to be stuck in this shallow worldview of black and white that really doesn't capture the nuance of the realities of the situation.

Speaker A: Okay.

Speaker C: Which is why, by the way, Avatar hasn't held up as a movie. Great.

Speaker B: Uh, it never did. Okay, next question. What is the one deal you passed on that you wish you hadn't?

Speaker C: Don't laugh at me. Palantir. I didn't pass on it, per se. I was three months into my new job at the family office, or four months in. I had just sourced Facebook shares on the secondary market. Before there was really a secondary market. Got in at a buck 35 a share. This is 2009. So it's like March 2009. The world's imploding, and my boss had just put half a million dollars into Facebook, and I had the opportunity to get into Palantir's a round. And I'm looking at, like, I know this is gonna. This is it. But, like, on their customer chart, 40% of their customers were undisclosed, which we knew at CIA, but I couldn't. Three, four months into the job. I just couldn't sell that to my boss.

Speaker A: Yeah. Fair enough. Ah, wow.

Speaker B: All right, let's.

Speaker A: That is open the gift. That is a solid miss.

Speaker B: Yeah.

Speaker C: Yeah. Uh, take my mind off of that one.

Speaker A: Yeah, let's, ah, blame the investment committee. It's not your fault, Andrew.

Speaker C: Yeah, there's no shortage of other people to blame. Yeah, but I know it's my own damn fault.

Speaker A: Yeah.

Speaker C: Never as an homage to the great Jimmy Butler. Okay, so here's what I got here. Having taken the plastic out, Andrew is.

Speaker A: Yeah. He's got this big black box, uh,

Speaker C: in front of them. G. Premium decanter. Luxury gift for men. Right up until the for men part, I wasn't worried. Now I'm a little worried.

Speaker B: I don't know.

Speaker A: I don't know if the decanter for women looks any different, but let's roll with this.

Speaker B: It sure does.

Speaker C: I do have three teenage girls, so. And there's only certain things I can't keep around the house.

Speaker A: Just as long as it's not shaped like a phallic kind of. You know what?

Speaker C: Uh, at this point, they'd be like, yeah, that's cool, dad. Ah. Uh, there we go. Okay, I think I got it. Here we go.

Speaker A: Here we go. Let's see this.

Speaker C: Okay. Oh, I realized by putting the box there, you can't see it.

Speaker A: No, I. I will point out that. Look, Andrew, Bri and I have gotten. Bree is very locked in when it comes to giving gifts. Typically, we've got a vest with some silly inscription on it, plus our logo. We will get one to you, but. Oh, wow.

Speaker C: Yeah, so that's not very cool. Background. It's a little hard to see. So you got. Now you can see the nice top to it, and it gives this twist down here at the bottom.

Speaker B: Yeah, I liked that.

Speaker C: Some of the nice skyscrapers that we've seen these days.

Speaker A: So now you can put the smokiest scotch that you can find, decant it, and enjoy it at leisure.

Speaker C: Rick, there's more. Ah. Uh, it's a matching set of four glasses with the same twisty base on the bottom twist. I can have three friends.

Speaker B: Absolutely.

Speaker C: And whoever's doing the, uh, the back office. So come on down, have a drink.

Speaker A: Hey, listen, don't thank us. Thank Fidelity Private Shares. We are happy to be the messengers on this front. Andrew, honestly, we could probably spend 10 more hours with you, but Bree's got a Final Four game. Or not final.

Speaker B: Sorry, I gotta head over to March Madness.

Speaker A: March Madness to get to at Chase Center. And I just want to thank you for being on the show and thank

Speaker C: you for having me. This was great.

Speaker B: You get to get the last toast out, so. Yes, you get to toast to whomever you'd like.

Speaker C: And so I gotta pour more. Okay. If I give it. If I toast somebody, everyone else is going to be pissed, so I'm gonna take my favorite Irish toast ever. You ready?

Speaker B: Yes.

Speaker C: May you die and go to heaven a half hour before the devil knows you're dead.

Speaker B: Thanks for listening to Drinks with a vc. We are so grateful for our listener support. Feel free to reach out and add any of your questions to the comment section. If you have an idea for a guest or have some feedback, reach out to us on LinkedIn.

Speaker A: As always, don't forget to like and subscribe. Cheers.