DWAVC Episode 38 | Tae Hea Nahm (Storm Ventures)

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.

Speaker B: Whether you're a startup founder, fellow vc, LP or just curious about the investor ecosystem you found the right podcast, please like and subscribe.

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 in. I'm Vic Laquara, Co founder and GP of GreenCow Venture Capital, and as always, I'm joined by my friend and co hostess with the mostest, Bri Hanson, who heads up business development at a little law firm called Cooley. 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 collaboration collaborative hub. To learn more about how Fidelity can help your company grow, check out the episode description below. Hi Bri.

Speaker B: Hello Vic. It is good to see you again.

Speaker A: It is good to see you again. Last week you revealed that you were pregnant. And how's that going?

Speaker B: It is good. So in lieu of the normal alcohol, I'll be having a green drink today.

Speaker A: Yes, again. And an ode to drew at fiatVentures. So thank you Drew for making sure that we were refreshed and detoxed. All right. In the last episode we also let the name of our next guest slip in our conversation, but I figure we can pretend our audience is still giddy with anticipation and I can jump right into the intro.

Speaker B: Let's do it.

Speaker A: All right, let's do it. So today's guest grew up in South Korea and St. Louis and uh, he earned his BA from Harvard in advanced mathematics and a JD from the University of Chicago. He started his career as a lawyer, first in Seoul at Shin and Kim, then at Wilson Sonsini and the Venture Law Group where he advised early stage startups. During the dot com era, he co founded Storm Ventures where he's been a driving force behind dozens of early stage enterprise software success stories, including Airspace that was acquired by Cisco, MobileIron and TalkDesk, uh, which is a unicorn in the making. Along the way, he's developed a founder first investing philosophy and co authored Survival to Thrival, a series that's become a must read playbook for SaaS startups navigating the tricky transition from product market fit to go to market scale. These days he's particularly focused on what it takes to build and scale category leading companies and what founders get wrong when it comes to storytelling, sales, and strategy. Please welcome and I'm so excited for this. Please welcome to the show. Founding managing director of Storm Ventures. Taehee.

Speaker C: Thank you very much for such a, uh, kind introduction.

Speaker A: Thank you for being on the show. And as we always ask, what are we drinking today?

Speaker C: With my Korean heritage, I'm going to be drinking some soju here. Perfect. Thank Bri for that. So thank you, Bri.

Speaker B: Of course. I don't know that I've even ever had soju. I should try it next time I go out for Korean. I love Korean barbecue. Love Korean food. Actually, I mentioned I was pregnant. I'm going to be making, like, Korean birthday soup during, uh, my postnatal journey because apparently it's very good for the baby. And apparently Koreans are like, number one in taking care of women postpartum. So I'm studying up on that culture to see what I can do to ease into my recovery.

Speaker C: Sounds like your partner will be going through some intensive Korean training sessions.

Speaker B: Seaweed.

Speaker A: That's right. Started off with how you say cheers in Korean. Gombe.

Speaker C: Thank you.

Speaker A: Wow. Taehi, before the show started, you mentioned that you spent a lot of time and, uh, maybe your formidable years before college in St. Louis. What was the divide? How much time did you spend in Seoul and then how long were you in St. Louis for?

Speaker C: So I was born in St. Louis and our family immigrated to the United States when I was five years old and, uh, to St. Louis, Missouri. And so then grew up from St. Louis from five until I left for college.

Speaker A: Amazing. Amazing. It's so interesting. And we did not plan it this way, but our last guest, Drew Glover from Fiat Ventures, his father grew up in St. Louis before moving to East Oakland. I am now in St. Louis, and now we have someone who spent quite some time in his formidable years in St. Louis. What were you like as a kid growing up in St. Louis? What was that upbringing like?

Speaker C: I felt it was always like a new discovery, starting with kindergarten. I think I was probably maybe the one of the few that could actually flunk kindergarten. When I started kindergarten, I didn't know any English, and so it was a brand new experience. So I would say throughout, uh, growing up, it always was a new experience. Learning elbow grease is something that you worked on rather than you bought. So a lot of new things along the way.

Speaker B: It's hard to imagine someone who graduated from Harvard in mathematics, Advanced mathematics, flunked actually.

Speaker C: Applied mathematics or applied.

Speaker B: Applied, well, mathematics at Harvard. Nonetheless, they're very difficult to imagine. But why did your dad and mom move to St. Louis? What was the impetus?

Speaker C: In some ways I would have liked if he actually had moved to the coast. I would like to live along by a beach. But no. My, uh, father was a medical school professor in Korea and he had gone to St. Louis previously for some medical school training after the Korean War. And then he had a medical school classmate in St. Louis. And so when it came time to decide to immigrate, they picked St. Louis. They didn't ask me for anything. I just tagged along in the process.

Speaker A: That's right. How did you choose mathematics? Going to Harvard.

Speaker C: Why?

Speaker A: Uh, what in your childhood kind of drew you towards mathematics?

Speaker C: It was a combination of two things. First is I like math. Yeah. And, uh, just coming up with models. So I like that. And then the second thing is, and I mentioned I majored in applied Math is that I can then apply it, uh, to anything, whether it's economics, decision theory, game theory, physics, whatever. So it just allowed me to defer any decisions on what I wanted to do. Yeah.

Speaker A: Did your father and your mother have a, uh, strong influence on kind of the courses that you then push towards? My dad, he didn't put the kind of pressure on me to say, hey, you're going to be a computer scientist. But he would have much preferred me going to Berkeley studying computer science than going to Vassar, where I ended up studying economics. What was that like?

Speaker C: Definitely, as I mentioned, my father was a medical school professor. Yeah. And so they had had tremendous pressure to go MD, PhD and go to medical school. Fortunately, I'm the second son, whereas my older brother, he's a medical school professor, so I had a bit more freedom. But I took all the pre med courses and was able to apply to medical school and so forth. And then when I decided not to go to medical school, he was very disappointed. And, uh, it was a tough one year.

Speaker A: Uh, yeah. How did you choose the law? Because you're talking about applications of mathematics.

Speaker C: Yes.

Speaker A: Lawyering is not one of them.

Speaker C: No, it isn't. It was actually a compromise in negotiations. My father, as I mentioned, wanted me to go MD, PhD, and go be a medical school professor. And I had worked in medical research laboratories, had a paper published, all that kind of stuff. But what I wanted to do was applied math program, do startups, uh, maybe go to business school, something like that. That's the path I want to go. And we decided that we need a professional degree and so that's how I ended up in law school. And when I first went to law school, I realized I knew absolutely nothing about law. I thought Torp was something you ate. I never knew it was a field of law. Famous constitutional cases like Brown versus School of Education, I had no idea what they were. I was so hardcore. Math and science. Yeah.

Speaker B: Do you find that though there's a, uh, cross disciplinary advantage when you know a different discipline and you come into something that you may not think works but applied mathematics, to your point earlier is you get to apply it practically to different situations. Was there any advantage there?

Speaker C: It causes me to just build models and try to understand the framework. And so once I understand like the big picture, then I can operate effectively. But if I don't understand the big picture, then I flail. So yeah, that's fair.

Speaker A: Was Young Taehi, were you like a uh, builder? Did you want to like just create stuff all the time and take apart gadgets and organize like neighborhood ventures? Or were you always more cerebral and thinking about models, et cetera?

Speaker C: So I would say so I'm not the more hands on mechanical type. Much to my wife's disappointment that I'm really, really bad fixing anything.

Speaker B: Yeah.

Speaker C: But what I really liked growing up was games. So I would play a lot of chess. Panzer Leader, Panzer Blitz. I play a lot of Civilization now. Yes, would play a lot of games and so then I'd like game theory and things like that.

Speaker A: Yeah. I do have to say I was reading up on you and when it came across the fact that you love Civilization, my eyes lit up. I just really refound Civilization 6 through Netflix and I downloaded the mobile app and now I play it whenever, um, I've got a free moment here or there. Civilization 7 came out. How much time do you devote towards Civilization seven now?

Speaker C: I still stick with five. I didn't buy six. I didn't buy seven. And uh, the reason is, and I don't play new games. I, I love games, but the reason is that if I do that, I know it's going to be like 300 more hours. So I stick with the version I played. I've already played at so many hours that there's fewer newer variations and as a result fewer temptations. Yeah, I deliberately try avoiding new games.

Speaker A: Yeah, I'm interested in. I'm living in St. Louis now. We've been here for three years. It's an incredibly diverse ecosystem and region now. But I've got to think back when you were in St. Louis that maybe you were the only Korean kid.

Speaker C: Yeah, more we shows my age. So we moved to St. Louis in the late 60s and 70s. And, uh, yeah, I was not just the only Korean, like, the only Asian. In elementary school and high school. There were a few less than five.

Speaker A: Yeah.

Speaker C: I remember my mother learning how to make tofu, for example, because we couldn't buy tofu at the supermarket in the beginning. Oh, wow. Yeah.

Speaker B: So what was it like? I think a common thread from a lot of our guests have been immigration immigrating when they're very young. So that does seem to be a common theme with a lot of venture capitalists sometimes. I think Vic and I have theorized that maybe they're bigger picture thinkers and more worldly because they had that experience of living somewhere and then in another country and then coming to the US and seeing core differences. What was it like for you as an immigrant? And did you feel very lonely? Did you feel like you blended in? I'd love to hear more about that experience.

Speaker C: First of all, I'd say the St. Louis community is actually a very open and friendly community. In that sense. It was a great community experience. Clearly, as the only Asian, you feel different. But overall, I would say it was a good learning, growing experience. Two specific anecdotes come to mind. The first is by being, like, the only Korean or Asian, you learn, people pronounce my name in different ways. And so I would say. I hate to say it is a little embarrassing, but I mispronounced my own name until I was 17 years old because Koreans rarely get called by their first name amongst Koreans. And. And so, uh, at home, I wasn't called by my first name. And then there were another Korean. So it's only like when I was 17 and my mother heard me, she said that I mispronounced my own name. Yeah. So as a result, I'm completely open to anyone mispronouncing my name whatever way. There's no. I'm not offended at all. And then the other is that, uh, there are very few Koreans in St. Louis at the time. But there was this one other Korean boy who was one year ahead of me. The only good thing for him and for me is we went to different school districts, but every Friday, I remember, I would hear from my mother. He won that prize. He made this achievement, this great thing that he did. Like, for the next 12 years, I would hear about his successes. So he went to Harvard a year before me. So needless to say, I felt a strong desire to go to Harvard as well, too. And then later on, I find out that his mother did the exact same thing to him, like, every Friday as well, too. I think he was probably one of the few kids my age that my mother knew. Yeah.

Speaker A: Uh, did you. Have you been back to St. Louis?

Speaker C: We go back every few years. My sister used to live in St. Louis. Yes.

Speaker A: Oh, um, gosh. Okay. Listen, I would love to have you back in St. Louis. If you ever feel the need, or if you need a reason, I will concoct one.

Speaker C: Okay.

Speaker A: But you and I, I can't wait to introduce you to the rest of the startup ecosystem over here in some place. We're also going to have to go to side of Soul. Shout out to side of Soul. Their haemul pajeon is very good. So if you like the seafood pancake. Yeah, this is another one. You might not be able to have it right now while you're pregnant, but afterwards it's cooked, so I think you'd be fine. But the, uh. It's a seafood pancake that is just absolutely awesome. Really bonkers. It's like my favorite thing ever. That. And so either way, you become real Korean, you spend enough time in Seoul and then working at SK Telecom, you assimilate really quickly. And I think that's the point Brie was talking about earlier and even Drew, our previous guest, talk about being a chameleon in the room. I get the sense that immigration forces you to adapt the culture that's around you. And, uh, maybe you just are more aware or you just flex the EQ muscle that much more. But I really do think that some of the brightest, most relatable VCs that we've ever met, Bri, are those that are. That have immigrated to the US Versus Not. That's a really.

Speaker C: I think you're absolutely right. I would say that is probably the one skill that you're forced to learn is because, you know, your parents, your siblings don't. So it's a constant learning experience. And as, uh, a result, I've become really curious about culture. So, uh, I'll give you one specific example since we're here drinking right now, as we go from. I just comparing drinking in Korea versus, like, Germany.

Speaker A: Yeah.

Speaker C: Because I've been investing in Germany and Korea as well. And I think, Vic, as you've been in Korea, so, you know, drinking in Korea, there's a very strict ritual of depending, uh, upon whether your peers, older, younger, all who drinks first, all that kind of stuff.

Speaker A: Yeah.

Speaker C: And so when you have two people doing cheers in Korean in Korea, especially if you're a junior and a senior, it's Rare for this junior person to look the senior in the eye as they're drinking together. It would be considered a little bit offensive.

Speaker A: Yeah. Even pouring my drink. My own drink right now, as if I was a senior, I'm not there yet. But if I was pouring my own drink, that would be frowned upon. If I was a junior and not holding.

Speaker C: Yes.

Speaker A: Up with both hands, we're going to have issues, right?

Speaker C: Yes. So there's. Drinking culture is very. The rules are so sophistic, complex. But when I was in Germany and we start. It turns out in Germany, when you, like, do cheers and you don't look the person in the eyes, they think like, you're like, hiding something or. So it's like the complete reverse of two Koreans drinking.

Speaker A: Right? Yeah.

Speaker C: So that sort of struck me as the same activity, just toasting each other for a drink. Depending upon whether it's Germany or Korea, you have different. So in Germany, I have to force myself to look the person in the eye, which is not a normal Korean thing to do.

Speaker A: All right, so for all of our listeners. Viewers out there, we're gonna have a slow segue to drinking, uh, with Taehyung. Um, the right way to drink in bowl. Let's take us through this. So I've poured some sake. Let's call it Shoju, for.

Speaker C: But I actually preface this, Vic, that I'm actually a Korean American versus a Korean Korean. And, uh, I'm m. Like, Koreans would view me as bastardized.

Speaker A: Okay, okay, fair enough.

Speaker C: I mispronounced my own name.

Speaker A: Till you're 17, that's okay. I still feel like I mispronounce my own last name to this day. I feel like Laura, my wife, gets it right maybe 5 out of 10 times. We let it slide. We can say gombe again. Cheers. Here's to accepting and. And loving

Speaker B: green juice.

Speaker C: Yeah.

Speaker A: Yes, the green juice. Okay. I have to put it this way. Growing up in California is so different than if you were to grow up in Seoul. If you're in Seoul, you've been privy to an amazing Internet connection in the subway for, I don't know, at least a decade before we had good cell service anywhere. So it's really, as I think Bri mentioned, it's a little bit of a canary in the coal mine. Right. For technology, you take startups.com public and you're still on the legal side of things. How long did it take to. For you to be like, man, I

Speaker C: should correct one thing? Oh, yeah. Actually, I'm not was involved with startups.com no, that one. So that one, if you don't mind deleting that.

Speaker A: No, we'll delete it. We'll delete it. Yeah, yeah.

Speaker C: So you may want to rephrase your question. Just.

Speaker A: Yeah, no, absolutely.

Speaker C: But I do a lot in Korea, so that.

Speaker A: That's fine. So you're still great. So, by the way, this is. That is the one line that I took from a chatgpt hallucination, apparently. Oh, yeah, it must have been.

Speaker B: That's what happened.

Speaker A: Let's take this back, though. So you were at. Was it new Venture Law Group.

Speaker C: Venture Law Group.

Speaker A: Venture Law Group. Sorry, vlg. Excuse me. So you were at vlg and you were. You were working with other companies, private technology startups that were going public. This is very much within the window of a huge bubble that was getting ready to burst. But you were on the sidelines. You weren't a builder, you weren't a founder, you weren't a CEO yet. At what point in time did you get that itch and scratch that itch and say, look, I want to be an investor or I want to be a founder? And what came first?

Speaker C: In a way, a little bit of both. When we started Venture Law Group, I was one of the co founders of Venture Law Group and went through, I would say, the classic founder experience. I had made partner and Wilson Sonsini in six years. So I think it was. I was like 32. We were just expecting our first child, Brie was that my wife's not working. And then we decided to start Venture Law Group. And law firms don't get venture capital financing. So I had to go seven months with no salary. So watching our cash bonds go down as we have our first child, so really got to feel the emotional side of startups is that, uh, distress is not me, but it's the family that causes on me. And so I. And I think that's really helped for me to build empathy for any founder.

Speaker A: Yeah.

Speaker C: And one of my clients at that time, I think, really gave me great advice. He said that I had made partner at Wilson all this. And he goes. Because I felt like I was about to jump off a cliff. And he said, the higher you are, the more time you have to learn to fly. Yeah. And it all worked out. So that's on the startup side.

Speaker A: Yeah.

Speaker C: And so after that, other founding situations became emotionally much easier because it's more predictable.

Speaker A: Yeah.

Speaker C: And then the other is on the investing as a partner, Wilson and Venture Law Group, I invested in a couple of hundred startups, so that Gave me a taste. And in fact, I actually made more money investing than profits from Wilson or Venture Locker. Profit sharing.

Speaker A: Yeah, yeah, yeah. I would say I probably benefited from that profit sharing as well, with a number of investments he made at that time, probably carried through to my time at Wilson. So, uh, thank you for that. Did you feel like. So Venture Law Group is a founder scenario, right? You'd founded this law group. Now I really want to dig into Venture Law Group to Storm Ventures, because Storm Ventures really, to me, I hadn't really, I had no idea, honestly, that you would simultaneously incubated a company in aerospace. And so to me, you were one of the first people to wear multiple hats in this situation of being a investor in this company, but then also simultaneously being the company's first CEO.

Speaker C: The transition is at 2000. I was investing with actually my very first client I ever worked with, Stratacom, uh, the Stratacom management team. My first job at Wilson was incorporating Stratacom. And then from there I did a lot of the venture capital, all the venture capital, financings, ipo, corporate partnering, M and A. And ultimately it was sold for about $5 billion to Cisco at the time. And so the key executives and I, we started investing together and called it Storm Ventures because Stratacom's NASDAQ ticker symbol is STRM M. So the traders would say buy Storm, sell Storm. And so we started investing together. And in 2000, at the height of dot com, we raised 300 million and, uh, started investing in 2002. The world is different. So we went from the dot com bubble to the dot com crash. Yeah. And so at that time we, like everyone else, pulled back and was thinking about our investments and at a much higher bar. And one of the company ideas that our eir, uh, at the time at Storm and I had was to start this wireless company. And so we started this company and that became aerospace.

Speaker A: Yeah.

Speaker C: And at the beginning, I. Then I became the founding CEO. We were the sole VC. And then we brought in other VCs as well. Too.

Speaker A: Yeah.

Speaker C: And then my replacement was employee number 24 at, uh, Airspace. And I had interviewed like 15 CEO candidates personally. And I was highly motivated to find the right one because it was clear to me if the company failed, I may have a different job. So I was motivated to find the right successor.

Speaker A: Yeah, uh, the successor was this Bob Tinker then.

Speaker C: No, it was Brett Galloway.

Speaker A: Okay.

Speaker C: And I had hired Bob early on to run business development.

Speaker A: Okay, got it, got it.

Speaker B: So you got to choose a CEO kind of early on, and you'd already been working with a lot of CEOs in your capacity as a lawyer, what do you think makes a really good founder? What are the great founder traits that you were really looking for a replacement?

Speaker C: Ultimately, I like Brett a lot because I felt, as I mentioned, I like games like chess and others. And a good chess player might think five, six moves ahead. I just felt bread. Brett thinks several moves ahead of me and others and so he will just make the right decisions so that we would have the best strategy and the best execution. And Brett was co founder of a company and the lead investor in that company is a friend of mine. So I did reference checks and others. And so I just felt that he would make the right decisions and as a result help drive it to success.

Speaker A: I want to unpack so much in that last sentence. So work with me through this a little bit.

Speaker B: Sure.

Speaker A: The first aspect is how has your diligence process with regards to team and the founding team changed over time from 1998 to where we are today? And what has been the biggest learning across that?

Speaker C: Uh, so I'll start with the question you ask is something I continually ask myself. And so being an applied math major, I have this spreadsheet of different CEOs and what I liked and why I picked them and then what happened to adjust my filter. Yeah. And so, uh, today it was just different than a few years ago. I would say today the one thing that I really look for in a CEO is one that has the right vision, that can come up with the right product, market and product and market strategy. So I use the metaphor of, uh, our investment strategy is to invest in companies that become surfing unicorns.

Speaker A: Yes.

Speaker C: And so you need a big wave, you need to be a great surfer and you need to surf the wave. And so, uh, it's really someone that can read the wave to find the open spots in the wave. And the wave is going to change. And so then figuring out how to maneuver so that you're constantly surfing this wave or you may have to even jump to a different wave versus trying to fight the wave. And companies that I see that try to fight the wave are companies like you look at, like Nokia in phones or AOL in the Internet and now intel in AI. No matter how big you are, if you fight the wave, you'll get crushed. Whereas if you have the right, if you read the wave, then you can go pretty far.

Speaker A: Yeah, yeah. This sounds like the absolute perfect time to just hit pause and go to our first segment that we like to call the vc Unboxing.

Speaker C: Okay.

Speaker A: Reed, what do you think?

Speaker C: Sure.

Speaker B: Yeah. I think it needs to be box A. I believe that's the big box.

Speaker A: Box A.

Speaker C: This one or the bigger one?

Speaker B: The big.

Speaker A: That's C. Yep. Check this out. Uh, to everybody that is just listening, Tahee is rummaging through three to four boxes.

Speaker C: Okay. Uh, let me try to see if I can unblur this.

Speaker A: Okay. Yes. There. Okay. Uh, here we go. All right.

Speaker B: This could be the biggest box we've given a vc. It's very large.

Speaker C: Okay. So I can open this here.

Speaker A: Let's be real. When we gave Scott Bichuk a piano. Mini piano.

Speaker B: Yeah. That one was pretty big, too.

Speaker A: That was a big box. But this is orders of magnitude big.

Speaker C: So should I open it?

Speaker A: Yeah, absolutely. This is nothing super breakable in there.

Speaker B: No, I don't think it's super breakable.

Speaker A: Handled with care.

Speaker C: Oh, wow. I think I can see what it is. Yeah.

Speaker B: This is meant to be for your office. Hope now to represent your metaphor, which has become, I think, a very important metaphor and one that's so useful for founders to think about riding the wave. It's. It has nature, it has sports. It's something that I think people can picture in their head and makes it very clear what they should be doing as a founder. So I really appreciate the metaphor of the wave.

Speaker C: Yeah, no, this is great. I ride there.

Speaker B: So it is a surfboard with a wave.

Speaker C: This is fantastic. I should tell you that I'm actually scared of the water, so I'm done surf. But my co founder, Ryan Floyd, loves to surf.

Speaker A: Yes.

Speaker C: And he goes surfing a few times a week.

Speaker A: Listen, do not give this to him. Please put this up in your office.

Speaker C: Yeah, no, absolutely. No, this will be great.

Speaker B: It's meant to be an art piece.

Speaker C: No, thank you, Bri. Thank you very much. Thank you, Vic.

Speaker A: Yeah, no, I, uh. Bri is always literally the best gift giver on the planet.

Speaker C: Yeah. No, very thoughtful. A lot of research. Yeah.

Speaker A: We do want to stick to this analogy. I think it's so apt. And you've taken the surfing analogy, even though you're not a surfer, and you've said this right from the get go, you're not a surfer. But, uh, what I find so on brand for you, Tahi, is that you've taken something that you don't do and then still broken it down and created a model out of it and then described it so much better and more articulately than anyone else on. On the planet. Take us through a little bit because there. There are Multiple kind of iterations or versions of this kind of wave analogy. Right. There's the surfer and the founder almost. It's analogous to like hype investing and not. And then there's the post investment kind of discussion around customer discovery, product market fit, and then go to market fit, which I think is a really big flag that you like to plant nowadays. Um, talk us a little, take us through a little bit of the scenario here.

Speaker C: Yeah. Actually, can I share a couple of slides?

Speaker A: Yeah, you can? Yeah, absolutely.

Speaker B: Yeah, I think. Let me make sure you have sharing permission.

Speaker A: Yeah.

Speaker B: All yours.

Speaker C: I think I can.

Speaker A: Yeah.

Speaker C: So the first slide I see is just this is that if you read the wave correctly and you surf, the wave just pushes you.

Speaker A: Yeah.

Speaker C: And the wave can generate lots of leads, it creates new categories, it does a lot of great things. Whereas if you read it incorrectly and you try to fight, the wave will just crush you, whether you're Nokia, intel, aol. And so what I feel like is the CEO needs to have the right market and product vision in tech because things continually change. And so if you have the wrong vision, you just make bad decisions. Yeah, yeah. It's just unavoidable. And so I feel like this is something that CEOs must have. And for me, I look at it as the big wave is so critical. And then related to the big wave, this is some research that proprietary did, which I really like. Just commenting on the big waves like PC, Internet, mobile, cloud, and the shareholder value created by each wave.

Speaker B: Wow.

Speaker A: Uh, yeah, yeah.

Speaker C: And so this is why, I think why the wave is so important. And then trying to figure out then how to read the wave is the art form. And then with that, you can find the open spot in the wave. And that's how you find product market fit. You catch the wave, that's basically finding go to market fit, and then you surf the wave to become the category leader. And then as the wave adapts, you have to learn how to actually jump from one wave to the next wave.

Speaker A: Yeah. So let's dissect this a little bit. Let's just talk about the entry point. Uh-huh. We're at a period of time now where we've got this thing called artificial intelligence. And ah, to me, artificial intelligence, this paradigm shifting technology, it exists on the hype curve on so many different areas simultaneously.

Speaker C: Yes.

Speaker A: Unlike most technologies that kind of come in, they might generate a lot of hype. And then there's that drop of disillusionment. And then there's this, uh, adoption in the long tail yes. You've got AI on, uh, so many different parts of the hype curve. Where do you think is the right entry point for investors right now for AI? Is it, hey, chasing more OpenAI companies? Is it agentic AI? Is it connecting with AI in the future, whatever adaptive AI looks like? Where's the entry point for you?

Speaker C: Yeah. So this is exactly your point about, is that if we look at AI as a wave, by the way, we

Speaker A: did not plan this at all. I didn't know anything. This is literally the most fortuitous, coincidental moment.

Speaker C: We think a lot about this, right? To be an investor, where do we invest? Okay. And so we look at AI and it's a huge wave. And there are different layers of the wave, like the tech layer, the infrastructure, the model, the tools and the applications.

Speaker A: Yeah.

Speaker C: And each one is going to be huge. So this is not to say one layer is small, they're all big. It's just where is the opening.

Speaker A: Yeah.

Speaker C: And so my belief and what we're seeing is that the model layer is becoming completely free. Yeah. So companies have spent hundreds of millions, billions on the model and it's becoming free. And so as a result, and the main driver is Google, where Google is selling their AI bundle because they have a great model, they've got the cloud infrastructure, they have their own AI silicon, they have their AI tools and then AI built into applications like, uh, Search into Google Workspace and so forth. So it's like the whole bundle. And if you use Google Cloud, you get everything for free. So that's what's happening. And so I think what the model companies are doing is that they're moving up into the application layer. Like you see anthropic, really going heavy in AI coding. OpenAI trying to go to LLM, um, search, but then they have to figure partner or figure out a way of building out the right cost structure down below. So we see all this and for us we think that the real application opportunity for startups is in the application layer.

Speaker A: Yeah.

Speaker C: And so we're going heavy into applications and what we're seeing is there's going to be an AI first for every application. And it's a race between incumbents, like SaaS, companies adding AI and an AI first newcomer. And sometimes the incumbent will win, like Adobe did, going from on premise to cloud, they are the winner. Other times the newcomer wins, like in CRM, went from M. Siebel to Salesforce.

Speaker A: Yeah, yeah.

Speaker C: It just creates that particular disruption. And what we see as the opportunity in this particular area here and if I were, the metaphor I would use is what it reminds me is. And it shows my age. It was like the Internet. The browser gave people the first taste of what the Internet can do.

Speaker A: Sure.

Speaker C: And then with that we saw an explosion of dot com.

Speaker A: Yeah, yeah.

Speaker C: Uh, browser mosaic came out in 94, Yahoo started in 94, eBay 95, Google 98 age, Facebook 2004 or so forth. In the same way in mobile, iPhone came out in 2007 and the users got the first taste of mobile. Mobile Internet and then Uber 2009, Lyft 2012, WhatsApp 2009, Kakao 2010. The apps then follow. Yeah. In the same way, OpenAI with ChatGPT gave users the first taste of the power of AI, uh, in 2013. And I think we're going to see an explosion of apps. Yeah.

Speaker A: Before we move down the wave, can we just touch on the platform risk that exists for founders that are building at that AI app layer on top of existing models? Like, how do. You're a very successful vc, you've had to deal with a lot of platform risk in your career. How do you balance that risk reward?

Speaker C: Yeah. So picking the right platform is a life or death decision. That's why I'm saying the great CEOs are the ones that can read this wave correctly.

Speaker A: Sure.

Speaker C: I believe right now Google is well positioned.

Speaker A: Yeah. Uh, Gemini over Claude and Grok.

Speaker C: I think Claude and Grok are going for specialty, like Claude is going for coding. But across the board it's going to be hard to beat. Uh, the reason is Google looks at the best model as a life or death decision for them. If they don't have the best model, they could lose their search business. And that's like $100 billion a year in revenue. So they're going all out to WinSearch and they're going all out on their M model. That is.

Speaker A: Man, that is such good insight. I've had so many conversations about, hey, which pony in this race are you backing? And that is the best defense for a Google kind of lead that I've heard recently.

Speaker C: And it reminds me going back to the Internet, where Netscape came out with the first browser, when Microsoft realized how the strategic it is, they pivoted the company to go all Internet and then with their own browser and they. Yeah, uh, it's like the revenge of the empire.

Speaker A: That's right. That's right. All right, so look, we know the entry point for the founders that you're looking at. Uh, now I'm going To go back into time to your point at, at aerospace, right where you're the CEO and you have to make the tough decision of laying off half of your team that were frank focused on cellular. For all of those listening, there was a point in time in which connectivity was an issue. And, and so there were two solutions. There was wireless, there was cellular and aerospace. And correct me if I'm m wrong Taege, I'm sorry, this is, this is

Speaker C: 2002 three year life here.

Speaker A: This is, you're the, the owner.

Speaker C: It just reflects our age fig.

Speaker A: No, not at all. And look so you had this box that had cellular and wi fi and I think if you uh, say okay, connectivity is the entry point now right in the curve back then, then you had to as a founder, as a CEO, as a technologist, understand the use case. And to understand the use case there's diplock like day in the life of the customer. Then there's just asking the customer wireless or cellular. And the reality was is that majority of them were saying hey look we're interested in the wireless, not the cellular stuff. And so you dropped half the team. I feel like we've gotten away from customer discovery a little bit. And in your ideal kind of profile of the founder that you want to invest in, how important is it for the founder to have market fit but to really understand and have sort of an understanding of an imaginative understanding of the pain points that they're trying to solve for their ideal customer profile?

Speaker C: Yeah, I would say empathy for their champion is critical for a B2B company. One is as you say, to make the right product decisions. But also it's the key to your go to market as well too. Uh, I view the key to go to market as uh, how to make your champion a hero. So you really need to have empathy for your champion uh, as well as understanding how to build what your product roadmap should be.

Speaker A: Do you feel like founders still emphasize appropriately the customer journey enough now or do we feel like a lot of founders have forgotten that founders are founders

Speaker C: because they are very passionate about their belief. Right. If uh, normal people many times are just not founders to be a founder, especially if you're like a uh, senior executive at Google or Meta or a partner Wilson Sonsigning. You're a very high income, life is good. And the question is why take this risk and to be a founder because this is pre revenue, pre customers is you believe in the, you believe in the idea so much.

Speaker A: Yeah.

Speaker C: So they have all this and so when they come out of a customer meeting where the, the customer doesn't buy the product. What I hear a lot of times would be, ah, uh, the customer stupid. It's a political decision. All these kind of reasons why that they wouldn't. Versus really understanding the customer.

Speaker A: Yeah, yeah.

Speaker C: And here again. So as a result, I have this slide that I share with them.

Speaker A: Uh, I love this. This is amazing.

Speaker B: Yes.

Speaker C: Please share.

Speaker A: By the way, we, uh, are going to put a disclaimer on this episode. If you do not watch this, you're going to miss out because these slides are awesome and, uh, they're really powerful in conveying the points that you want to get across. So thank you.

Speaker C: Yeah. Because as you said, the right thing of how to communicate for me to communicate, because as a vc, I don't run the company. I'm not the CEO.

Speaker A: No.

Speaker C: So the question is, how can I persuade?

Speaker A: Yeah.

Speaker C: And so this is the picture I give is to say, you may think the customer is stupid, but this is how a customer looks at you. You're asking a customer to be their first. Your first customer. It's like going to them and saying, I want to be your first patient. Yeah. And who would want to go to a young doctor or like breed when you're giving a birth? You don't want to go to an OBGYN that looks like this. It's nothing personal. You just want someone. You don't want to take the risk.

Speaker A: Yeah. Yeah. Who knew by the way, that we were going to. I was thinking about referencing Doogie Howser just now, but we don't want toddlers identifying and trying to solve our problems. And, uh, so actually you bring up a really interesting.

Speaker C: So this is why having empathy for your customer. Your point was the importance of the customer.

Speaker A: Sure.

Speaker C: Bound to understand. And that's what I'm saying. Having empathy for the customer, both logically in terms of what they may want from a product standpoint, roadmap, but also emotionally what they want from their career and internal risk and all that is important.

Speaker A: So I understand this is going to be a crazy question, but I'm going to go ahead and ask it anyway. If you just assume that the founder pool we know are different. Right. There are more founders out there than there were back then. But if you've taken part, the founder pools are the same size. Do you feel like the number of founders with customer empathy has increased or decreased since you've got into the game?

Speaker C: I feel like it's decreased, yeah.

Speaker A: Yeah.

Speaker C: I think there's desire to be like, uh, Elon Musk or, uh, Steve Jobs and are the ones that know the answer versus someone that's very. I think Bezos is very custom. Their mantra is customer focused.

Speaker A: Yeah. Interesting.

Speaker B: What, what do you think that a founder or a budding founder can do to exercise their empathy muscle and be more customer focused?

Speaker C: And um, by the way, I should say difference in B2B and B2C. Yeah, good. B2C founders can be this way, but B2B is different. I think is. I don't know how you. I think empathy is something you either have or you don't.

Speaker A: Wow. So I've.

Speaker C: You can direct the empathy, but I think empathy is either you have rhythm.

Speaker A: Yeah. You are a special professor at Seoul National University. I not a special professor there. I'm a investor in residence at Washu and Scanlara Center. They let me in the room at SLU and U of I, etc. One way that I've seen them teach customer empathy is through emphasizing customer discovery. Do you feel like the way that it's taught right now, like entrepreneurship is taught to young founders, provides enough emphasis on what's right about customer discovery that it's not just about asking questions, but it's about inferring and an understanding of the pain points that they're going through?

Speaker C: Yeah, I think it's much better than it used to be. And every year the education, startup education is growing exponentially.

Speaker A: Yeah.

Speaker C: I think people that are in, have this empathy in them will listen and will adapt and some that think that they're right will just have a hard time.

Speaker A: Yeah.

Speaker C: Because. And as I said, it's because to be a, uh, founder is such a risk that having empathy, especially if it's different than you, sounds like heresy.

Speaker B: M. It's like counterintuitive to the passion that you're trying to elicit, uh, for your vision.

Speaker C: And so one of an ideal and a trait of an ideal CEO in my mind is a person, uh, almost with a split personality. Externally, they have to appear like Moses. They believe in the faith, they're going to take the people to the promised land. And so everyone believes you're Moses. That's the founding idea.

Speaker A: Yeah.

Speaker C: But internally you can't make decisions based on that. And you have to be like Galileo. A skeptic.

Speaker A: Yeah.

Speaker B: Interesting. I like that.

Speaker C: Uh, but if you could. Then people leave.

Speaker B: Yeah, yeah, that's a really good point. If you're practical advice for founders, you're a founder, you need to conduct customer discovery. What are the questions that they should be thinking about asking and Then also how many customer discovery interviews should they be doing and how often?

Speaker C: So in founding a company, I'd recommend like at least 50.

Speaker B: Okay.

Speaker C: And what were what ideally you want to find is like their urgent pain.

Speaker A: Yeah.

Speaker C: So reason why they want to buy now, not six months from now or 12 months from now. Identify an urgent pain as like the entry point and then what they ultimately want so you can build a roadmap with the right vision.

Speaker B: Okay, I think that's a really good answer. My, my next question is, it's going to be funny. It's how do you define product market fit? And I ask this, Some people say there's a definition and I would say I've asked 50 different VCs and they've all had a different definition. So how would you describe product market fit?

Speaker C: Yeah, I would say for me, product market fits when you have 10 happy customers.

Speaker B: 10 happy customers. Okay.

Speaker A: Yeah. No caveats to that.

Speaker C: They can't be.

Speaker B: And that, that's B2B, right?

Speaker C: Yes. And B2B. Yes.

Speaker A: Okay.

Speaker C: B2B software in particular. Yes. And one's a relative or family connected, all that. Then they're completely just. That's why I'm saying 10, because one may be personal and so.

Speaker A: Sure.

Speaker B: How do you know they're happy?

Speaker C: Ah, that's a great question. Define happy. I look for three things in terms of if they're happy. The first thing is that if they're a passionate reference, they're willing to be a public reference, go social, all that kind of stuff. So they're a, uh, passionate believer in the faith. But it's not enough because I've had deals where I did references and I got this sort of passionate reference and they just churned. M. So one is passionate reference. The second is that they're an active user. So look for usage metrics, especially amongst the team, to see if it's actively used. And ideally it's something that just becomes part of their standard workflow. So, uh, it becomes a habit, something that you're, you know, if you use it once a year, at least for me, I forget the password. I'm looking this up. So something that is usage, so that's something that can be measured. And so I like to ask, what's your usage metric? What is it? And if they don't know what their usage metric is, then the problem is they're not tracking it. And then. Yeah. So usage. And the third is value M and the value test I use. And by the way, usage is important because if you're Passionate, uh, as your champion. So you want your champion to be passionate, but we have a lot of customers that churn if the champion leaves. And so that's when I find that if you have active usage for a standard workflow, then even if your champion leaves, your product is sticky. So that's why you have the second test of what's a happy customer. And the third, uh, test is that even if the team loves it, I've had churn or contraction, because we failed the CFO test, because the CFO is constantly trying to cut budget and it's the value test and trying to see if the value is more than three times the price.

Speaker B: Nice.

Speaker C: Because if it isn't, then I know I'm going to face huge pressure at some point.

Speaker A: To our listeners and our viewers. Let's recap that because I think it's so important.

Speaker C: Right. You've got to have passionate champion. A passionate champion.

Speaker A: Yep.

Speaker C: Active usage by the active. And then pass the CFO test for value.

Speaker B: And that's three times what they're paying. They must see the value. Yeah, I think that's. Those are really, I think, important. I think that is probably the best product market fit, kind of.

Speaker C: That's how I define a happy customer. And say you need about 10 of these. And then at that point, because what I'm trying to avoid is deals that I've been into is I invest and with these customers, next thing I know, the customers are leaving.

Speaker A: It's like the artificial bloat that, um, Pumping from growth and then.

Speaker C: Yes.

Speaker B: Gone.

Speaker A: Um, man. By the way, cheers. Thank you. I knew this. Bri, I just want to point this out. Ah. I knew that this episode was going to have 1,000 nuggets of great information for founders out there, and Taggy hasn't disappointed. So cheers to that.

Speaker C: M. Oh, uh, thank you. As I said, I'm an applied math major, so unless I have a model of these things, I just. I get confused.

Speaker A: So let's continue on our ride down the wave.

Speaker C: Okay.

Speaker A: Shall we? Just before our next VC unboxing, By the way, Bri, I'm just preempting this one, but I think once you've established those 10 happy customers, there's always a dilemma. Maybe you disagree, maybe you don't think this, but hear me out. The founder has to change from founder mode to manager mode, Right. All of a sudden, there's a scale issue, right?

Speaker C: You're going from founder sales to scaling growth. Yeah, that's right.

Speaker A: There was an interesting debate that occurred a couple of Months back, I think Paul Graham alluded to it was founder mode versus managerial mode. Where do you. I think I know, but where do you end up? Um, on. On that and in agreement and disagreement and in between. Let's start there.

Speaker C: What I saw is going through our spreadsheets of founder CEOs and all that kind of stuff is I look at it in two ways. One is you look at all these companies and you ask, are founder CEOs getting changed?

Speaker A: Yeah.

Speaker C: And it turns out it's actually more than it's a lot. But then I look at the other end and I look at our successful exits, and a large percentage of them have founder CEOs. Interesting look at right now. Meta. Even Amazon, until recently that was stepped down. Tesla with M. Musk and so forth. Is uh, that it's hard when a founder CEO can grow. That's when the companies go the farest. Yeah, but it's very hard for founder CEOs to grow. It's hard for anyone to grow. And so that's what we found is when you invest, is this a founder CEO, uh, that can really grow. I mean, take is adaptability, right? Yes, Coachability. Yeah. So that's a big question. And as an investor, that's where I found that we can get very high ROI if we can help the founder CEO grow in this particular manner. Because the ideal CEO at the founding phase is very different than the ce. The uh, CEO at product market fit or scale or category leader each stage. Take Mark Zuckerberg as CEO today. Probably one of his top three skills has to be the US Government with all this antitrust litigation and everything.

Speaker B: And I don't think he likes having to flex that skill, but I think it's a necessary thing.

Speaker C: I'm just saying, for any CEO of nada, uh, at this stage, one of your top three skill has to be antitrust, right?

Speaker A: Yeah.

Speaker C: But if you look at Facebook, when it first got started, the first year at Harvard, I think antitrust was like far off his lips.

Speaker A: Sure, go ahead, Vic. Uh, so, uh, related to this, Bri and I were talking to Drew last episode. This has come up many times in our podcast. There's this concept of you learn more from your failures. Now diving into that a little bit more. So I think a lot of people think about like failures on like this large scale, like and 0 to 0 to 100 to 0 kind of failures. Whereas you haven't. Look, this is not me fanboying out right now. I'm a huge fan of yours. But you haven't had a lot of failures in your life, so let's just put it that way.

Speaker C: Yeah.

Speaker A: But there have been individual failures on the part of a CEO or a founder. You do what I think you're describing, which is to grow from founder, CEO to then CEO of growth.

Speaker C: Yeah. Different stage company. Yeah.

Speaker A: And the number one person that comes up, we mentioned his name earlier. That was my bad. I actually thought he might have been employee number 24. He was not. But Bob Tinker. Yeah. Yeah. Like maybe the best example in your experience of um, a failure. Right. That wasn't a failure. I'm using air quotes now for all of you listening. Can you walk us through sort of the realization that he wasn't the right person to take MobileIron?

Speaker C: Sure. So the context between Bob and I is we worked together for 15 years, airspace, as I mentioned, I incubated, I was the founding CEO, I hired Bob as employee number I think nine or ten to run business development. And then later on after we sold Airspace to Cisco and then saw what's happening in mobile with the uh, iPhone, we started MobileIron and I recruited the three co founders and the third co founder was Bob Tinker again and brought him out of Cisco to become the CEO, uh, of MobileIron. And I've worked with Bob before, brought him in as the third co founder CEO of the company. We worked together. We actually afterwards wrote two books, Survival of Thrival and all that. And we still work very closely together. And then he took M Mobileiron public and I think it was like a couple hundred million in revenue and so forth. And then we as a board, and we were m. Bob was actively involved too as a board, felt that it was time to make a CEO change. And that's what we did with Bob as well.

Speaker A: Yeah, yeah. Did you feel. And by the way, this is not news or anything. There's an amazing series, video series that I watched on this and we'll, we'll include that on uh, the. So details below. I just thought it was so informative about, really about how Bob and you and the board came to this decision. But then also the relinquishing of the position from Bob was not a. This was a combative thing. It was really organic.

Speaker C: I think what helped is that it wasn't like it happened in one night. It was a process where we first talked about as the company is growing, what changes need to be done, how he's handling it and what's required to succeed. So at the end the discussion wasn't around Bob. But it was around what is required as CEO for the company to succeed.

Speaker A: Yes. And there's a, uh, level of, hey, I've got to abandon my ego a little bit.

Speaker C: Yes, yes.

Speaker A: And Bob talks about it. You've talked about it with regards to, like, writing or reading the founder oath.

Speaker C: Yes, it's very much about that. It's about the mission rather than your ego. Yeah, yeah.

Speaker A: Do you. So here's a question for you. If you had to talk to a lot of seed stage founders.

Speaker C: Yes.

Speaker A: About the founder oath, what's the best way for me to communicate that to them?

Speaker C: I think it's just to really emphasize the mission.

Speaker B: Yeah.

Speaker C: The mission is about building great company. What is a great company. And with that, it defines the culture of the company, the vision of the company, uh, and will result in who wants to join the journey, whether it's employees, investors, customers, partners, all the key stakeholders.

Speaker B: So in terms going back to what you talked about earlier, which is founders need to evolve. There needs to be an evolution in skill set.

Speaker C: It's just not even just founders, but every executive, like, yeah, across the board. Because the question people ask me a lot is who should I hire as my VP of sales? And so your VP of sales, when you have no sales reps, is very different than if when you have five sales reps versus when you have 20 sales reps or a hundred sales reps or a thousand sales reps. It's the same title, but what you look for is very different. Yeah.

Speaker B: So what types of resources, mentors, coaches do you typically recommend to founders and executives as they're scaling up the journey?

Speaker C: The first thing is this, why Bob and I wrote the books, because we want to explain how things are going to change and why.

Speaker A: Yeah.

Speaker C: So we did that. But I think more importantly, mentors are the best. Mentors have gone through a, uh, similar stage, like two to four years earlier. So they're ahead, but not too far, so they can relate. Mentors that you can build trust with and can help you anticipate what's next. So it's the first, uh, I think requirement to change is for people to anticipate.

Speaker A: To anticipate.

Speaker C: Because if you know something's going to happen and why, then it's easier to then figure out why and how you need to change.

Speaker B: And what is a good mentor mentee relationship really look like so that the founder gets the most out of the relationship.

Speaker C: I think someone that they trust, that they can meet with and just have private conversations. So that's why we encourage executives to have mentors and give them shares in the company.

Speaker B: Okay. You hear that, founders? Be generous to your mentors

Speaker A: because if

Speaker C: they can help you avoid a mistake, that could be huge.

Speaker B: Yeah.

Speaker A: Say I look at you as someone who's been there, done that, seen everything. I often grapple with working with founders that ask me like, hey, there's an advisor or mentor that's giving me a lot of value, but I don't know how to compensate them. What's a good rule of thumb for you for a seed stage company that's trying to give some equity away to the advisor and mentor in that stage?

Speaker C: Yeah. So generally what assuming that if this is a new advisor, then what tend to do is, as I mentioned, is to encourage people to have advisors, but then knowing which advisor can really add a lot of value, we double down on that. So I would say just 2,000 shares, but vesting over two years.

Speaker A: Okay.

Speaker C: So short vest, relatively small number, but this way you can have a lot. And then out of every five advisors, one could be extremely helpful. And then you really double, triple down on that person. And if that person's like a former boss, where there's a prior history, then you skip the first step. Yeah, but in the beginning, I find it's better to have more and then figure out who is special and then double down. Double down or triple down. Yeah, because then everyone knows what they're getting and that includes how much time can the advisor spend with the founder. Yeah.

Speaker A: Yeah. I'd love to jump to the next unboxing if you would.

Speaker C: Sure.

Speaker B: Yeah, let's do it.

Speaker A: And this is really to commemorate your time with Bob Tinker in writing really incredible resources for founders. I can't think of a better resource, honestly. Www.survivaltothrival.com Is that.

Speaker C: Yes, that's right. And we've now made the books free online as well.

Speaker B: They're free online, Honestly, have the resource in the description.

Speaker C: Okay. Yeah.

Speaker A: If you're a founder or an investor. I've learned so much, Tahi, from just researching you, but then reading the resources that you have available.

Speaker C: Uh, thank you.

Speaker A: And so I really do want to emphasize if you are a founder, if you are an investor, there is so much value not hidden, it's in plain sight in these resources that are available that Tahee and Bob have made available.

Speaker C: For me personally, I feel like I'm fulfilling my father's desire because he always wanted me to be a professor.

Speaker A: Professor.

Speaker C: But now I'm an unpaid professor. But yeah, yeah, There you go.

Speaker A: 100% please open up. Which box is it, Bri?

Speaker B: B.

Speaker A: B box B.

Speaker C: Is this the box?

Speaker B: I think so.

Speaker A: I think that's the box.

Speaker B: Does it say C or B? I. I marked them all with a Sharpie, so.

Speaker A: No, C is on the other side. I think we're good.

Speaker C: Okay. Oh, this is C, you're right.

Speaker B: Oh, yeah.

Speaker A: Okay, never mind.

Speaker B: Other one. Other one.

Speaker C: Uh, this is the.

Speaker A: Yes, yes. I'm excited about this one. Three. You really, man.

Speaker C: Oh, I tell you put a lot of thought in all she did.

Speaker B: This one was fun. I know you're not one that can build things, but I found a LEGO unicorn.

Speaker A: Yeah. You do not have to have a ton of manual skills in order to get her LEGO system. But there's a unicorn. But it can also be what?

Speaker B: A seahorse.

Speaker A: A seahorse, yes. Perfect combination between surfing unicorn is a seahorse. Yeah.

Speaker C: No, this is great. This is great.

Speaker A: Yeah.

Speaker B: Off to the races.

Speaker A: Off to the races. Exactly.

Speaker B: So I wanted to get into the topic, I think that's been on a lot of founders minds, especially here over at Cooley is the topic of fundraising, because it is. There are some headwinds. Although the amount of money being deployed is high. Thanks to, I think the outlier of OpenAI raising their huge round, the number of fundraisers have gone down a bit, quarter over quarter. So what would be some advice to founders on fundraising in general? And then we'll get into more specifics.

Speaker C: I would say, first of all, this is a fantastic time to start a company just because of the AI wave and the opportunity. So I think historically this is a great time. I think the, uh, the advice I have to a founder fundraising is really focus on two things. One is you gotta get a champion. So you want to figure out. It could be an associate, it could be a partner, but you need someone in that VC firm that m really wants to invest in you, that wants to work with you. So you got to get that person as your champion. And the second thing is you have to help your champion get approval from the investment committee. And those are two very different things. And in terms of getting a champion, the advice I have there is really qualify. Who do you think could be that champion? A person that's really interested in your space or there's some reason why. Try to think, uh, of why that person wants. Would want to take this. And then once you have that is try to get the best introduction to that person. And that introduction is just someone that the VC knows and trusts.

Speaker A: Yeah.

Speaker C: So if, because that introduction means so much, that and it doesn't have to be that it's a great idea, but just this is a trustworthy person or a superstar. Other things that can come in. But figure out who makes the introduction and you pick the right person, then I think you've got a good shot then of getting someone to believe in you. Okay. And then you need to help your champion get the committee, uh, approval. And here I have one very. Uh, what I would do if I were a founder is I would write a, ah, one page, highly persuasive summary that my champion can present on a Monday meeting. Yeah. Because every VC firm have these Monday meetings. They're talking about deals and you have 10 minutes to really talk about it. And usually the VC championing the deal writes a summary. All this kind of stuff. Yeah. Uh, instead of doing that, I would just have that person copy and paste that one page. It's my opportunity to talk through this person, to excite them so that they want to meet with me.

Speaker B: And what would you say are some key metrics or key storytelling tricks that they should have in that memo? Because I know a lot of. I've seen a lot of these memos and sometimes they're focused on all the wrong things.

Speaker C: Yeah. And they're. Every firm is different in terms of what they're looking for. I can tell you what I'm looking for is, I ask myself is, can this company be a category leader? Okay. Because if it's a category leader, then it probably will get to 100 million ARR. It's a category. Maybe about 500 million. It's 1ah, hundred million ARR. It can be a unicorn. And then we can get a substantial return.

Speaker A: Yeah. For entry into Storm Ventures. Now we're gonna to you. Is it the entrepreneurs in residence? Is it the principals of the fund? I don't think you have an operating partner. Right. Someone just focus on that. Are those the best champions for Storm Ventures? To get in front of te. To get in front of you.

Speaker C: The best way to get in front is it could be through them or it could be like asking Bob Tinker. Yeah. Bob says, and he does one. He says, you gotta meet this person. I think he's a superstar. She's a superstar. Then go and meet. Yeah. So someone that I know that really says he should meet then will automatically will set up a meeting.

Speaker A: Yeah.

Speaker C: And, um, it's not just me, but I would say with any vc, there's a group of people, if they say you gotta meet, then we'll definitely meet. Like Bree. Now that I met Eric, your partner, Cooley. If Eric sends an email and says, you gotta really meet this founder, I'll meet the founder.

Speaker A: Yeah, Eric's great and all, but if

Speaker C: Bree sends you a founder, then that would do it too. Absolutely. Absolutely.

Speaker A: No, no offense to Eric, to Rachel, Profit, to tj, Graham, to Sasha.

Speaker C: And the thing is, someone like that, uh, like Bri, they don't send a hundred of these a year, so. Yeah. So that's why means is special.

Speaker A: Yep. Yeah. So taking from the investor perspective, as a investor that looks up to you.

Speaker C: Right.

Speaker A: How do you qualify your inner circle? Like, how do you decide? Okay, these are the folks that are really going to funnel the best deals that I'm going to trust the most.

Speaker C: When it comes to deal sourcing, it really changes. The reason is that there could be like, Washu may all of a sudden have this brilliant AI professor that has the best graduate student.

Speaker A: Yeah.

Speaker C: Or it could be in Berlin or it could be the deep mind. I'm just saying they're all sure talent will come from many different areas all around the world. It doesn't mean it has to come just from Stanford.

Speaker B: I appreciate that because there can be some myopic thinking in the Valley about where big founders come from or what this founder profile is.

Speaker C: Yeah, A, uh, brilliant AI person can do a lot of things because it's really about quality versus quantity. For me to, like, hunt at Washu from the Bay Area is tough, but. Vic, you're in St. Louis. I got spending time there. And you say it's the one, then.

Speaker A: Yeah, absolutely.

Speaker C: Completely different from.

Speaker A: Absolutely. And not just Washu. I.

Speaker C: This is. I think I just took Washu because. You're insane.

Speaker A: Look. No, I agree 100%. Look, there needs to be more taking noms in this world. And we had this discussion with Drew in the previous episode. I have firsthand seen emails. I've been forwarded emails from potential LPs and in. In my fund and they start saying, gosh, if it's not. If it's not Stanford or Berkeley or Harvard or mit, I just don't give a shit. Sorry. And I think there needs to be more investors that haven't pigeonholed founders based on their geography and realize that there are great founders that are adapting.

Speaker C: Ah. Uh,

Speaker A: yeah.

Speaker C: But there's no filter.

Speaker A: But there's no filter.

Speaker C: In other words, the filter you need someone like you.

Speaker A: Yeah.

Speaker C: A trusted intermediary.

Speaker A: Yeah. Yeah.

Speaker C: Without a trusted intermediary, it's hard.

Speaker A: Yeah. I got you from Vanderbilt in Tennessee all the way through okay.

Speaker C: No, that's good.

Speaker A: I'm your guy.

Speaker C: Yeah. That's why that introduction. Who introduces makes a big difference.

Speaker A: Yeah.

Speaker C: Yeah.

Speaker A: That is important. So important. All right, listen. We are coming towards the end of the show, and I don't want it to be the end. I really. I have a proposition for you, Tahi. One that might be too good for you to refuse.

Speaker C: Okay.

Speaker A: You want to hear it?

Speaker C: Yeah, absolutely.

Speaker A: So I think that you are not only an OG with regards to venture investing, but with your ideal around go to market fit. And I've alluded to this before, but Drew from Fiat Ventures is also just one of the most amazing guests that we've had on with regards to growth, marketing, and how, uh, to find scale. I would love to have a roundtable with you and Drew on the show sometime in the future.

Speaker C: Yeah. Be happy to participate. Love to be.

Speaker A: Fantastic.

Speaker C: Yeah.

Speaker A: All right. Okay. Done. Breed. Did you hear that?

Speaker B: Yes.

Speaker C: It's, uh, something I enjoy talking about and hearing other people's thoughts and questions.

Speaker A: I love it. I love it. All right, so we are going to make that happen to all the listeners and viewers of the pod. Amazing things are going on now. We have come towards the end of the episode and, uh, as always, we have a segment called the Fidelity five questions. We're going to ask you five questions in rapid fire format. You're going to give us the one answer. We can't really ask you any follow ons. We're not supposed to. And, uh, at the end, if you win, you get a prize. Okay?

Speaker C: Okay. Okay.

Speaker A: All right. Excellent. Bri, do you want to kick us off?

Speaker B: Okay. What is your go to karaoke song?

Speaker C: I want to hold your hand.

Speaker A: Oh, the Beatles.

Speaker C: Wow. Yeah.

Speaker A: Okay. All right. Very. I want to.

Speaker C: This is after trying a lot of different songs. Also, I'm a horrible singer too. No, I don't believe.

Speaker A: I don't believe.

Speaker C: No, No. I wish I could, but no, I'm not a very good singer.

Speaker A: Okay.

Speaker C: It's very un. Korean. Yeah.

Speaker A: Okay. Yeah. I just don't believe it. I really don't. We're gonna. We're gonna test this theory out when you come Visit us in St. Louis. All right, next question. If you could invest in any fictional startup from a movie, TV show, book, what would it be?

Speaker C: I'd, uh, love to invest in Underdog.

Speaker A: Nice.

Speaker C: Uh, I just like the character Underdog. I've always liked the character Underdog.

Speaker A: I love it. I love it. Sorry, Bree. Go.

Speaker B: Okay. If you could do it all over again. And this is another case where he's both. Would you rather be an investor or a builder? But you're both, guy.

Speaker C: Yeah, I'd rather be a builder. Oh, yes.

Speaker A: Okay. All right.

Speaker C: Take that, Drew.

Speaker A: He didn't stand on the fence. He jumped on one side. Okay, next. What movie best fits your vision for the future of the human race? Is it Wall E where we've all degenerated into an obese state due to anti gravity? In the metaverse is an avatar where we are dominated by this quest for resources, new worlds and walking around in avatar bodies. Or the Matrix where we're all in a simulation.

Speaker C: I'd say Matrix, since I love civilization and just games in general. Yeah. I can see myself in a Matrix world.

Speaker A: Okay.

Speaker C: All right. That's what I'm trying to avoid. That's why I limit my game playing. Otherwise I would be in the Matrix world. Yeah.

Speaker B: Okay. I'm hoping for a good one on this one. What is the one deal that you passed on that you wish you hadn't?

Speaker C: The problem is there's so many. That's the problem. I'd say it's a Korean game company called Bluehole. Oh, uh, yeah. But I also passed on Bill.com and others. Yeah, yeah, yeah.

Speaker A: I would like to point out that I was at SK Telecom Ventures when we may or may not have passed on MobileIron. I'm just gonna go ahead and say, yeah, uh, biggest mistake.

Speaker C: I've learned not to have any regrets over those.

Speaker A: Yeah.

Speaker C: And the reason is, first, if you do, then, you know, emotionally you just burn out. So self survival. And the other is, I just look at. Is that I just had a lot of. I must make good investments if I always have good opportunities that I pass on. So then the ones you make. Kambika.

Speaker A: Yeah.

Speaker C: You're in the game.

Speaker A: Yeah. I love that attitude. Thank you so much, Tahi. With that, I think we can all say that you've won, clearly.

Speaker C: Uh, thank you.

Speaker A: And we can open up finally. It has been sitting in front of you. Box C, please. Let's open this up, which I think

Speaker B: could be the perfect gift.

Speaker C: This is box C right here.

Speaker B: Yes. I think it'll be the perfect gift, given an earlier issue you had with finding the right cup. So these are like soju cups.

Speaker C: Yes.

Speaker B: And there's supposed to be an emperor's version of it. So hopefully next time we do this, you don't have to drink out of a teacup.

Speaker A: No, no teacups. Although I'm very, uh, artsy of you. So.

Speaker C: Yeah, no, this is fantastic. Yeah, no, thank you very much.

Speaker B: Aren't those cool little vessels?

Speaker C: Yeah.

Speaker A: So as we normally do, the last cheers is for our guest. It's 20 seconds for you to call to attention. Anything that you might want to. To just say thank you to your friends and family, whatever it might be. The last 20 seconds and the last cheers is yours.

Speaker C: Okay. No, I just want to thank both Brie and, um, Vikram for this opportunity and really enjoy the time together.

Speaker A: Yeah.

Speaker C: No, thank you very much. Thank you, thank you and all your hard work putting this together. I know there's a lot of thought behind it. Uh, so thank you very much.

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.