Chris Tottman, Founding Partner @ Notion Capital

Welcome aboard Venture Passport, the podcast delivering an inside view of early-stage global markets. I'm Jack Richardson, along with my co-host Richard Armstrong, exploring insights from the most innovative investors and entrepreneurs worldwide. Before we delve into a bit about our guest, this episode is brought to you by TAV. TAV is a global early-stage VC with over 240 investments, 56 positive exits, six IPOs, and 15 unicorns, including globally recognized names like SumUp, DeepL, and many others.

They write checks ranging from $100,000 to $1 million and are sector agnostic with a dedicated global team. TAV is focusing efforts on the U.S. and Europe while also targeting emerging markets such as Indonesia, Thailand, and Brazil.

If you're an ambitious founder with a great idea, please don't hesitate to reach out. This is genuinely an amazing episode with Chris Tottman, who was part of the founding team at MessageLabs. MessageLabs was one of the first companies to offer cloud-based email scanning for viruses and spam, which grew rapidly in the early 2000s and really pioneered platforms as a service. By the time of acquisition, they scanned over 3 billion email connections per day for more than 19,000 clients worldwide.

In the process, they grew from zero to $150 million ARR in seven years and sold to Symantec in 2008 for just short of The day after the acquisition announcement, the founding team formed Notion Capital, where Chris is a founding partner. Notion is one of the first true operator-led VC firms in Europe with $1.2 billion AUM, having backed the likes of GoCardless, Paddle, Currencycloud, Mews, and so many more. Ladies and gents, this is Chris Tottman.

All indications are coming in to the control center at this time indicating we are go. Oh, go. Lift off. We have a lift off.

Chris, absolute pleasure to have you on. If you could just please give our listeners a little bit about yourself and how you came to the point that you're at now. Yeah. Hi.

Good to be here, Richard. Jack. I'm an entrepreneur turned investor, so built and sold one of the first generation SaaS businesses called MessageLabs, which we sold in 2008, and we used that capital to create a VC firm in London called Notion, which is the first B2B SaaS investor in Europe. We've got about a billion under management and seven months now after 15 years.

Nice. And you can't get off that easily. So you gotta please give us some more details about the journey at MessageLabs and, I guess, earlier in your life, because you're an East London boy. Right?

Well, yeah, I think the East London boy is kind of an interesting topic for people. I left school at sixteen with about four O-levels, managed to get into a youth training scheme in the City of London, which is more on the sort of trading back office side of stockbroking, which was pre-Big Bang in '85 and had an absolute riot and kind of realized at that stage that I was maybe a little bit different. I wasn't aware at the time that was a form of dyslexia. I then, like, left after about three and a half years because I knew this wasn't who I was or who I wanted to be.

And so then I started creating companies and went on that journey. In terms of MessageLabs, the co-founder of MessageLabs is an amazing entrepreneur called Ben White. We were best mates and flatmates earlier in the day, and he kept banging on my door to say, look, you need to get into technology, come and help me with what at the time was a company called Star Internet. They were connecting small businesses to the internet.

I think it's pretty bizarre for the younger generation now, which is like people were ringing up saying, can I have some internet, please? And there were these things called ISPs that was their job to do that. And Ben and his brother, Jos created a company called Star Internet, which was doing that for the SME market and building these great tools, these applications. When people first started to join the internet as companies, there were responsibilities and risks that came with that.

And whilst they were doing that, we realized the amount of malicious malware that was hidden in email. I remember we were at this country pub in Gloucestershire, and we had three things on the customer list that they were saying to us, they wanted us to solve. And third on the list was virus scanning because we were like a post office, but we keep delivering them mail bombs. And it's like, did you did you figure this out?

You could tell the technical resources, the CTO, and the two engineers were there at the time. Yeah. Their body language was itching to get on to the third thing, which was virus scanning. We said, look, I build an alpha and then a couple of months later, we'd switch this alpha on and we moved some traffic through.

And we had a bell on it. Every time it caught a virus, then the bell would go off. The first thing that happened is this breach just emitted out of the screen and that was the bell. We immediately realized that the amount of dark malicious wrong stuff in email was just a very high percentage.

You want every founder to find that sort of, like, I found a problem that's worth solving moment, right, because then you know you've got the conditions to build a big company. That was in about '98. And you've got 6 billion email users in the world, right, whether it's a B2B or consumer. And we just kinda had to figure out how do we then turn this into a dedicated company that's specific for that.

You know, we had a UK ISP. We needed a sort of cloud security business. And that started the run of MessageLabs. So we launched MessageLabs about 18 months later in 1999, and then it was just an unbelievable ride.

We went twice the venture speed. We grew to $150 million of subscription in 8 years. We had 20,000 corporate customers. We had 10 million paying users.

And so then we had the exit during the financial crisis, which was, the new part of the oh, oh, roughly. Having a massive liquidity event and then trying to figure out which bank you could put it in. That's a great story. Right?

But I would like to talk to you about the product at that time. I think you were competing with Google. They had a similar product. How did you think about the incumbent with that intense competition they had at that stage?

Right? Well, if you can go back to the original story and, you know, what was happening at the time, building the infrastructure for the Internet, then you're enabling business and consumers to join the Internet. And then there's the responsibilities of that happening. So we're in the middle of that era.

Email became a major vulnerability. So before the incident and email, you'd have to get into someone's infrastructure to steal their information. Now you could hide malicious code in software or code and then just start to distribute it because we're all connected. So there was this kind of new vulnerability, and we'd figured that out.

And what's interesting is that the security market, the existing market, you know, they just laughed us out of town. They're like, you know, who's this silly little company? In the UK, we'd ring them up and say, hey. Do you want to partner with MessageLabs?

And they're just full about laughing. Right? Mason Saren Sasha as well. Right?

It wasn't Yeah. Yeah. Sarah and sister's like when kings and queens go horse racing, that's the sort of, like, vibe. Right?

But GCHQ, by the way, our listening center is only, you know, five miles. So we moved our office next door. The analysts laughed us out of their office as well for three or four years before they had started to suck up and try to work with us. So it was a new vulnerability.

We were using existing technology. Josh had a really good way that he thought about it. He said that it was the security racket. So the security market was selling security services that weren't secure, and then they would sell you security services to clean up the mess.

What was really interesting is our proposition because we were processing people's emails in the cloud. We were able to run scripts over the top so we could see what weird. Right? And so we had 650 scripts running at any one given time, and we were using other people's commoditized filters to sort of take away some of the heavy load.

So we had known viruses filtered by commoditized, and then we had the AI stuff that was looking for the new stuff. And so we could deliver a proposition that said, you know, you get no viruses. There's a mat. There's a guarantee.

There's an SLA. So we completely changed the landscape in terms of, like, the expected performance of the security product. Every 9 to 12 months, there'd be a massive virus outbreak. Our sales pipeline would go from considered to closed 1.

That's why we were able to really grow super quickly because we kinda had a superior position. But also culturally, we were very, very aggressive in terms of, you know, driving market adoption. On the Google point, what was interesting is we had two bands specific, pedances on the West Coast, Postini, and Frontbridge, I think. They both got bought by the mail providers.

So one was bought by Microsoft. The other was bought by Gmail, and that's that moment. You know, like, if X gets into your market, you're screwed. It was like, so there was a kind of a week where we were all sitting at pondering.

I've just watched the BlackBerry movie. Right? So it's like, you know, is this the moment where something happens, right, because some titan just decides to come and squish your market. And what was really interesting is if you know in security propositions, the person that makes the doors doesn't make the locks.

And what happened in reality worked for us in our favor because when there was an outbreak, so when security was at the top of everyone's mind because they just lost their customer data, then look at Google and then look at Microsoft and say, well, why haven't you solved this? Right? Because you've got all this security in your value prop, but, you know, you're just like the old guys. Right?

And so what happened is it actually worked in our favor. We ended up when we sold, we were twice the size of our nearest competitors. And once they were bought, they filtered into the distance. And then when we sold in 2008, the, you know, the second largest competitor to us, we were at $150 million in revenue was about $10 million of revenue.

Right? So we were just the market leader, and that's really what drove the exit for Symantec. You mentioned the culture in it is very aggressive, perhaps maybe at the C-suite level. Did that permeate throughout the whole of the company and what kind of challenges did you face?

Obviously, when scaling so fast in a very short period of time. Well, obviously, cultures, as you get bigger, then cultures, so you invest a little bit more money, you're a little bit more thoughtful, and you're trying to figure out how do you sustain the certain sort of behaviors that will make the company successful, which might evolve from the kind of early-stage culture to we had 650 people When we sold. So we had hundreds of people in the UK. Between London and Gloucestershire, we had 100 people in Toronto.

We had maybe 100 people in New York. We had people in Sydney and Germany. So you had this kind of big distribution of people around the world. Culturally, we had different supply and conditions that existed.

So people would join. Senior people would join in one market, and they said, well, it doesn't work like that here. You know, we'd have to kind of work through, okay, not just strategically, but culturally, does it not work right here? Because then, you know, they maybe not got the same sort of behaviors as us.

And so I think all of the core founders are very similar in terms of the fact they're very ambitious, they're very They hate losing. They're able to sort of point into problems, run into burning buildings relatively quickly and try and figure it out. They're quite irrepressible. We're all similar in that regard, but we're all very, very different people.

We have different skill sets. We have value in different ways. Our CEO, Ben White, was the CEO. Steve Chandler, who's the managing partner of Notion, was the CFO.

By the way, we were running two companies here. We were the joint CEO, joint CFO, joint COO, joint CCO. So you weren't just running MessageLabs. You were still running kind of the ISP.

So we probably all came from a sort of sporting-type mindset in the way that we thought about the way that we wanted to take this technology to market. And, you know, that at that time worked really well for us. But even in Notion, we have a very, very distinctive culture, which really works for us. We have fun.

We like to make money. We brought up. We need to do both at the same time. We play the long game.

We challenge each other and the information that we've got. We don't like dickish behavior, which the brand companies have a real struggle with when you have something like that, but it's not a positive attribute. Right? It's like, but we know what we don't want.

We were young, right, at MessageLabs, I think, you know, what really taught me was the fact of I'm not necessarily a believer when you're gonna go when you're gonna reinvent the company over three or four times over an eight-year period to go from zero to a 150. The culture needs to be the same all the way through, but also functionally whether the cultures functionally can be identical. I'm still today not necessarily a firm believer that that that works and scales. You know, I think go-to-market organizations can be distinctive.

I think engineering a product functions can be distinctive culturally in their own right. Makes sense. I think that's very clear. I want to discuss about the topic about at that time, you're probably the third or fourth biggest software company in the world behind Salesforce and Webex.

Because you exited upon the, you know, around the 2008 period of the financial crisis, right, how did you know that you were gonna get a decent multiple that time, right, multiples were very, very low? Yeah. I mean, the generation 1 SaaS players, if you actually look at them, there's not many. There were about 30-odd that got to major scale.

Very few are still around today. Salesforce being the number one from the sort of generation 1 era. We were actually delighted. We're all touching 40.

We've all got married and children like all founders, you know, you're so hyper-focused. There are a whole bunch of things in your life that you're not necessarily giving the fullest amount of attention. Us and our shareholders, you know, key members of staff. I think at the time, we were really happy with the exit.

And also we had half the cap table, so it enabled us to create Fund 1. We announced Notion the next day. So we've been pregnant with Notion for some time. We're in a bit of a hurry.

So it's always when we complete the circle on Star or MessageLabs, and we would then build this portfolio approach into software as a service stroke cloud computing. Day 1, when the newswire, the PR was going for the MessageLabs exit, the PR newswire was going for Notion being created. Symantec, I remember on the night of the close, it was, like, 2:30 in the morning. I was actually in the middle of having a party.

I can't remember why I spoke to Steve, China the next day. And he'd driven the price right up over the period of, you know, a couple of months. The financial crisis was happening, you know, it it Bear Stearns and Lehman Brothers. Lehman Brothers, I worked for, right, in the late eighties.

Said, we were really lucky to get it get it away. And he said, no, I was I I'm the opposite. I was just angry that I couldn't drive the price up further because I realized how much they needed it, right, which I thought was super interesting in two different minds. Right?

That's candidly. How did your relationship with money change after that particular liquidation event? Having gone through that period and experienced that level of wealth before. What what did that feel like?

I think psychologically, the exit, parking the money part, you've gone through the, is it happening? Is it gonna happen and get the risk associated with a big M&A transaction. By the time it happens, it's a big anticlimax. The monologue in your head is that you've got it.

You haven't got it. It's fallen away. It's such a challenging process to go through. You need to surround yourself with brilliant people, a great advice.

There's a sort of slight anticlimax, which a lot of founders talk about. In terms of money, I'm just one of those weirdos. Right? My expensive habits are school fees.

Right? I'm very committed to private education for both my kids and other people. And my number one job is to educate my children in the best way possible, not just at school, but in other ways. But everyone would laugh because about two years after the exit, I still had a 10-year-old Land Rover Discovery.

The three greatest luxuries, one of the intrinsic, which is calmness, the other one is a private chef. The third one is the ability to work just with pen and paper. Obviously, I felt safe and secure, which I think had a really positive effect on me in terms of that kind of calmness and the ability to work on projects that I love. I think for the outside world, there wasn't really a sort of, like, material change in my behavior.

My son, my oldest son, Harry, he just thought I was the worst dad ever because I had the shitty car. And, like, his godfather Ben and all the others have these amazing cars. It's like, why have I got the worst dad? Take me back to November 2008, right, when you first started Notion.

How long before you said it was kind of a portfolio approach you were thinking about starting with these gets so little exposure to VC as an asset class and so little exposure to PE, and you did, like, one or two rounds. Right? What kind of, like, disaster to start a VC fund and what was your, like, moment? Very driven by Steve, John.

And he pre-Message Labs was listing businesses in London. So he comes from that background, and we had to do the management buyout of Star before we sold Message Labs. Can we just look at it as sort of an era on a macro level? B2B SaaS as a percentage of IT spend was like more than 1% less than 2%.

So if you're a Generation 1, so a bit like if you're a crypto guy now, it doesn't really matter what the cycles are doing. You fundamentally believe in a world that the world will transition to. You sort of think about the world, you know, that is reconstructed with a lot of artificial intelligence driving huge amounts of automation, huge amounts of innovation. You don't see the world of all these crappy applications that we have to use at work.

And in distribution and supply chain and stuff like that. So if you're a Generation 1 SaaS person and you've had a big exit and you're thinking about it at a macro level and it's between 1% and 2% of IT spend, you think it's gonna be 50% to 100% within a time frame. And then you look at all the vendors where that money is currently being spent, and they're already starting to look old. We did a market research on the SaaS businesses in Europe.

There were 700. They were all terrible. The biggest one was like $10 million of revenue, and it went bust. Right?

It was shocking. So partly, we were worried that the thesis wasn't there, wasn't enough companies, but we fundamentally believed that there would be, like, a 50 x shift in spend from these old vendors over here. So billions and billions of dollars being spent on software, hardware, systems integrators with a high total cost of ownership where innovation slows down to time to these very, very new, shiny, shiny startups that were coming along to not only disrupt and build applications specific to certain different use cases and functions, but then cloud to cloud opportunities where they kind of are operating in unison together.

So that's a lot of money that's gonna move from an old economy to a new economy the same way that an AI person would be thinking today or a crypto person would be thinking today. For us, it was a very mathematical megatrend that was gonna happen, and we just felt like we could start some more businesses or we could take multiple shots. We could leverage other people's money on top of our own and start to build a portfolio. That's played out really, really well for us.

By the way, just like the analysts in the security days, the LPs found it really hard to understand. They're like, isn't this market too small? Is it too niche? So you know, you've gotta go with your head and your heart to think, I believe what I believe, and, you know, I'm gonna put myself and money at risk and then start to grind it out.

And I think, you know, it played out really well for this. When you first started in 2008, right, what was the overall aim of Notion? 'Cause I mean, at that stage, right, the ecosystem is very different to what it is now. So maybe you can walk us back.

What did we want to do? We wanted to be able to bench a firm the rights. We needed to have a stellar fund 1 in order to have a fund 2. I mean, it's just basic.

And if that goes well, it takes two years to raise money from external investors. So that's why fund 1 was all of our own money. It's a $30 million fund. It did super well.

Then we raised a, I think it was a $75 million fund 2 with external investors. And then actually what's interesting is in the early stage, you know, you're on that treadmill a bit like being a founder in a startup where you know, if this spring goes well, then we get the next spring. And because there's a fundraising game and an execution game, those two things are linked. If the execution goes well, then your old people flee.

What was really interesting now is we have this multi life cycle strategy. So the way we kind of think about it is that we want to be able to support founders at the zero to one, pre-seed and seed. We want to be able to do that. We see that as part of the value chain.

Our main, our core fund is obviously a venture fund. So typically, you know, in the market language, that's series A, series B. But in reality, we think about it as product market fit, you know, to highly repeatable scale. And then we have an ops fund where we are able to invest in all of our assets when they're later on.

And so each of those lanes really have a different way that you think, a different way that you invest. And because you're operating across the multi life cycle, then there's some information availability that really works for you in order to make decisions differently. You're praying more operational leverage. Right?

You can build investors for each leg. You can deploy quite specifically in different places. You can support founders for a longer period of time. So I think that multi life cycle strategy that would become more like a platform scrape franchise becomes more into focus when we got through bump three.

And then the second part of the strategy is just being multi-generational. So how do we bring in people with unbelievable high potential that we believe in that got a mixture of investing and operating experience that can become the great investors of the next generation? We work quite hard deliberately around that, and we've been fortunate not to bring cheap a bunch of partners all the way from joining at the principal level or joining even at the associate level and digging them up sort of the partner.

That's important for us because this is a long-term game. We've been in it fifteen years, and we intend to be in it for another fifteen years. We intend to keep evolving, you know, intentionally. Like, you've also gotta survive all the cycles.

Right? I'm old enough or been, you know, through a bunch of peaks and troughs. And so far, I've managed to come out battered and bruised, but still fighting and still creating and still working with brilliant people, the new generation that we've got coming through, and we gotta help them get through these cycles. You know, we know what it's like as founders and investors.

When it all starts to feel like you've got high symmetry and everything is flowing, you just know that some bomb's gotta go off somewhere. Rarely is it easy. And so for the next generation, we've gotta work really hard. They gotta work really hard, bring everyone through so that we can build a firm for a much longer duration than we've ordered.

How do you drill that into people that you bring through to partnership? You can't really teach versatility, right? You can't teach them to be resourceful when shit hits the fan and they have to scramble to save a portfolio company, especially without kind of lack of experience of a very young individual too. You must look for a certain type of characteristic, right?

Maybe we do. Maybe we don't. I think the first thing is that, like, this is an attritional business. Right?

And you know that we're, Jack, we're a sort of central-driven firm. So, you know, from us, like, the statistic of how likely it is to build a $100 million business, right, in technology, right, is super rare. Right? So that means everybody that hasn't got there, it doesn't mean they haven't done very well.

And, you know, all of our lives are supported by some entrepreneurial people and businesses that, like, make the world go tick-tock, tick-tock, right? But in our businesses, those are scarce assets that kind of drive all of the economics. So it's attritional for founders. It's attritional for members of staff.

It's attritional for investors being in a venture. It's tough. Right? It sort of can bring out the best.

It can bring out the worst in people to dogfight every day, whether you're building a portfolio company or whether you're building a venture firm. I believe in Price's Law, there are thirty people in Notion, and we got an amazing, amazing team, but there is a small percentage of people in Notion that will produce 50-odd percent of the value. So we're trying to make ourselves luckier every day by the way that we interconnect with each other, the way we interconnect with third parties.

So we're trying to create operational advantages by investing in multiple lanes. Like I said earlier, you know, in the way that we operate technologically, but also in the way that we are culturally. The best people in the world typically educate themselves. They are very participative in their future.

They don't sit in training classes. They don't wait for something else. They're hungry. They're very action-oriented.

They'll make certain demands on the tools that they need and the things that they need in order to become good at what they do. But then there's the other side in this void that an investor will have is that you're failing most of the time. Right? It's attritional in terms of the decisions that you make.

Who you back, they say about an angel, right, and you look at an angel in their third year. They look fucking miserable. I'm investing in a deal every week. I'm working with angels all at the time, and I always liked Zalvin hang out with the ones that have been doing it for 2 or 3, 4 years because they're still scratching their head thinking, you know, Chris, like, you know, what's going on there?

It's like, well, look, you know, it takes in b to b particularly. It takes, like, I 8, 9, 10, 11, 12 years to build a whopper. It's like the marshmallow test. It's delayed gratification.

Right. The the late realization, not just money realization that the things that you were doing by ten years ago are actually working. So it's the same with our investors. Whilst the bad news is turning up, you've gotta help them bring their whole self to go.

When they swing the bat, and then do they swing the bat with absolute confidence? Because sure enough, the thing that they thought was brilliant last year might be toast this year. That's the sort of game that we're in. So but we also allow them when we think about being a founder that operates a lead firm is that all of the members of our investment team could propose an agent co-invest deal from the pre-seed fund and get a deal away really early.

That's very rare with a venture firm. We're very deliberate about board exposure and the boards that they observe on and how they interoperate with companies. You know, you're gonna end up if you're gonna be successful, you're gonna be in very difficult situations with very experienced people dealing with an absolute clusterfuck in a company that you're on the board of, and you can't just land there, right, without any sort of experience. So we try to make sure that we, you know, we ingest them into various different situations that really test their mettle and build out their experience as a board member, as someone that can maybe offer some value as an operator.

We purposely made them feel uncomfortable so they learn from high-stakes situations. It doesn't make sense. Like, a quick question. On the direct side, obviously, you mentioned that you're kind of doing a deal a week for the pre-seed strategy with Notion Capital and, obviously, like, your angel investing side as well.

How much do you prioritize that experience and prior experience of the founder? Because when you look through the Notion portfolio, you see companies. I know you didn't lead this investment to see how they did, but in Paddle, where essentially, like, those are two founders who quite literally got their A-level results and started the company. So, like, I mean, they had absolutely no prior experience even working, never mind in financial services or even, you know, dreaming of what they could have built today.

Respectfully, do you believe their founder categorically has to be somewhat of a domain expert, or do you think that doesn't really matter? Well, all the rules that we have we break, right? So we'll say how we don't invest in solar panels. We do.

So there's this sort of, like, there's this zone of preference where there's, you know, some statistical evidence that suggests that this improves your odds. And then there are exceptions that turn up all the time. Harrison and I were messaging each other yesterday from Paddle, actually. So the founder, one of the founders of Paddle, and, you know, he's just a phenomenal guy, should be on the show.

You'd have a riot. By the time we got involved in Paddle, they'd been noodling around and doing what they were doing successfully, for about three or four years. They'd already executed to a point where they realized that was not what they were gonna be doing, and then they pivoted from that, from the experience of where they were originally. They then, they pivoted the company, and then we came in a little bit after that.

And it was a super competitive deal, and, you know, we were delighted that we were able to go in on the journey with them, from the Series A. We debate sort of problem-founder fit a lot, right, every deal. You know, we are trying to reconcile. We also debate, particularly in the early-stage deals in pre-seed and seed, we debate the complementary combinations.

Is it a well-rounded team? Is there an engine product lead? You know, is there someone that's commercial? And that's obviously not always available, but we did debate those areas pretty significantly.

And particularly when we're doing programmatic investing, slightly more process investing in pre-seed and seed, you know, you focus quite a lot on the team and the people around the company because you've got very little data to operate on because there's no revenue or there's no hits to the website. We have a deal at the moment that we're proposing to invest in a repeat founder. There's no company, no website, no product, just two people. Right?

So, you know, set the company up. Yeah. We'll give you the money. So we're more indexing on the fact that we think that they're a pioneer.

We believe in them. We believe in the thesis of what they're gonna do. I wanna chat about the platform team you guys have. Right?

I heard it's very exceptional, led by a guy called Stephen Millard. You know, we'd love to dive in a bit more on that. You know, you have people from Microsoft, GE, Workday. How does this help founders?

And maybe you can share more about it. I used to say he's my company-wide, and he used to say, no. You're my company-wide. We have an incredibly kind of close relationship.

We conceived the platform back in 2012, and he's been leading it, I think, since 2014. Back then, he was at MessageLabs. It is actually quite like MessageLabs version 2.0 in Notion.

Right? It's pretty much all the same gang. If not, 1 or 2 people dropping out. That's it.

There's only 5 out of 30. So, like, you know, we got if you wanna talk data, it's a lot less. But this was a mission that he wanted to go on. When you actually unpick the person, he says things that are completely untrue.

Like, everyone in my family is a teacher. None of them are teachers. But what he means is that we like to learn information and impart to others, really what he means. He's now, like, a 10-year veteran on Notion.

And what we think about is we think about a multisided market where you've got founders that are at different stages of their evolution and the maturity of their business. And there are a whole bunch of experts and support infrastructure that they can draw on if it's available, and there are great resources out there. Like YC's resources are phenomenal. Right.

There's a whole bunch of resources. So our job is to try and build a bunch of infrastructure and relationships and people where we can make these available that founders can plug in. And then we have operating partners that really work with founders in order to try and really unlock the relationship between converting demand, generating a large market share versus extracting more value per deal and the way you might package and price. You'll take it up.

And we have someone on and we have Adi Vaxman who's got, like, incredible history in building the global software businesses, unbelievable Rolodex, and he might be helping founders on the relationship between direct and mid-end and enterprise, defaulted, execution, pricing. What do you think, extents of the founders that have to be coachable? Right? How fine is the line between, you know, knowing what a founder knows that they're doing, or do you just seem to be investing in similar businesses, right, how do you portray the, sort of, the two different perspectives?

There's no statistical evidence that I know of that coachable founders are more successful than complete assholes who aren't coachable. Right? Let's just put that out there. You can kinda look at the titans and the founders of the biggest software businesses in the world, and you can see really unlikable characteristics in them.

Really focused on maybe creating absolute dissonance and friction between their senior leadership teams, whether that's in terms of the product legend, like Jobs or whether that's, you know, in a SaaS legend like Benioff, these these generally are kind of irreplaceable, mission-driven, you know, probably very hard to work for people. Ochre boys isn't necessarily the word that you use. I think what is important is that they are able to operate and consume information at an extraordinarily high clip.

And they're able to take more and more complex information and convert that decision making on a weighted basis. They make more winning bets on the decisions that they make and the work the people they surround themselves with in order to make that decision and then execute, they're able to do that at a faster pace, and they're able to do that with a higher weighting of winning decisions versus losing decisions. I don't think that word is coaching, I think that is them owning.

It's not best practice. Right? It's knee practice. From that comes an edge case.

We bring out the word coachable and stuff like that. We go, it's not the right word. We all know what we mean. If you know what I mean, but I think it's just they genuinely own it.

It's the relationship between the impossible mission and the steps that need to get done, which is quite often uncharted territory. How are they able to, you know, lean into that and synthesize information, make those decisions, increasingly more rapidly? If you have to look back in your total career, if you have to say one single biggest lesson from the 15 years of investing in multiple sectors, what would you say that that would be? Yeah.

I mean, the first thing is centaurs are obviously very, very rare, right? $100 million revenue technology businesses sound like there's lots of them. Actually, our analysis at Notion, there's very few. I think at the moment, private ones, there's about 30 to 35 in Europe, which will shock a lot of people that it's such a small number.

We've got three of those in one of the Notion portfolios, and we built a centaur in MessageLabs. There's an extraordinary problem that you're solving where a huge amount of economics is gonna transition from an old way of being transacted or managed to a completely different way. So you need to find a problem where that wave is most likely to occur. There's scaling problems that exist.

So I think you always come back to reflecting on how extraordinary the people are in these businesses and how they transition from that start phase in the build to the intermediate phase where they have to get through the first major transformation of a business being built to something that's fundamentally a much more scalable, international, multi-product, multi-market, multi-channel, and so on and so forth. Our founders tend to hire and surround themselves with extraordinary people, and they adapt.

So it's the adaptive nature of the founders. And almost ruthlessness with themselves, right, that they have to keep upping their game and operating on a different level of complexity and sophistication, and translating that into strategy and action. So I think it's those two parts, really, for me. It all seems so obvious and easy, but not in practice.

Your board exposure and board experience is something that really interests me personally. You've obviously shared some boards with some incredible people. Obviously, a chat so joined from the sharing of from Babel and that respect from Microsoft Ventures donation all those years ago. Who it asked you to say essentially two or three names that you were most impressed by from a board level point of view who who would be those two, three names.

I'm predisposed to, like, the operators that are investors or the operators that are on the board. And quite often, that's not the case, but they're very incredible board members that are investors that aren't operators, but they bring other extraordinary things to the table. John Rosenberg is ex-TCV and built TCV, the crossover, the the U.S.

fund, but he built the EMEA business for, I think, maybe 15 to 20 years. He joined the NewVoiceMedia board and is more the kind of pure investor. He just had an extraordinary manner around the table and did really align everybody at critical moments. He could add some information and then simplify.

It was phenomenal and really excited about what he's doing with Farview, his funding in London. And then, and then on the operator side, I smile because there's so many. It's funny. When you're at a board and there's maybe not a critical decision, but something like we're gonna have a quick start to the year extra bonus they've found some sandbags and money in the budgets.

And you go around and the investors will all be, why would we do that? When you get to the operators and the operators will be like, yeah, let's do that because then the human software of the company, right, is the people. My favorite is gonna be Fergus Gloster who in essence was the sort of founder of Salesforce. So everything you think about Salesforce in Europe and the infrastructure they have built in Dublin, right, the first person on the ground was Fergus.

He's just such an incredible person, and he spends his time really thinking about the economics from lead to cash. So very much kind of the go-to-market side, which is my background. He teaches underprivileged kids math in his spare time. I mean, it's just an extraordinary person.

He's very direct in terms of the way that he communicates. He leaves no stone unturned. Founders will often say, hey, listen. Can you come and spend a few hours with the sales and marketing team, and he, you know, he always makes himself available.

A lot of the great work of good board members gets done outside of the board meeting. Yeah. I mean, maybe we can ask a bit of a personal question here, Chris. I mean, Jack tells me, you know, the only person who's more of an avid reader than him.

Maybe you can share a favorite book and why. Maybe. I can read a book over and over again, like it's the first time I've read it. I've spent a lot of my career really obsessing about the untapped potential of people.

And then when you start to add people together like pairings and trios and then teams, do you multiply the untapped potential, or do you yield a lot more results from those people working together? So a lot of the stuff that I read that really touches a chord in me is people and skills and how to get more out of oneself, because I quite often am working with very embryonic ideas, experiments, and small teams in the ideation phase. It's a book by Scott Belsky called Making Ideas Happen.

That relates so much to that initial group of people we're getting together. Whether that's on a project or a company or an idea or a community that they might build and the different, you know, styles and roles that are required, and there's a sort of Venn diagram of three to do that. Nice. Absolutely.

I had to give everyone a read. And we're into a bit of a quick fire now if that's okay with you. So super short answers to some quick questions. One thing that you would change about venture I don't think I would change really that much about venture.

Obviously, an extremely natural product, and the market thinks of it as being a generalist financial product. So I think probably just that you know, more education about what it is and what it is not. With Included VC, obviously, I am very, very motivated about getting underrepresented groups into venture capital, and that's an, you know, it's an extraordinary not-for-profit that we've created. You often refer to, amongst others, obviously, like the McKinsey's kind of three-horizon model, but if I asked you to kind of touch upon your most compelling or stalwart mental model out there, what would that be?

Well, there's one, which is Price's law. Incompetence grows non-linearly in a company because the square root of the employee base, so 10 of the 100 or 100 of 10,000 create 50 percent of the value. I think once you get very focused on that as a rule or as a framework, then the actions and reactions that you can do as a consequence are kind of phenomenal. And you also understand how hard it is to scale, you know, departments or companies, or grow the employee base very rapidly without losing all of the growth of kind of productivity that exists.

Maybe I could just ask when you're, you know, Chris, what's one thing you wish you had known that you know now at the start of your career? Oh my God. I don't know. I think someone asked me a question the other day that if you had 10,000 pounds and you were 25 again, what would you do?

And there's a mantra that I have for young people that are at work, which is, so you're in the build phase. I'm in the yield phase. Right? I'm 55.

I have a huge amount of assets that are out there in the market and relationships and things that I'm building. I'm learning a lot of the things in some areas. When you're younger, it's like you've got attributes and you have to then add skills to those attributes, and some skills have more monetary value than others. But you've got a breadth and depth of skills and then how you use those skills determines your sort of market value.

If you work on the range of skills that you've got, how those evolve and develop the performance that you have within a role, your brand and reputation rises. And you just end up in this completely different parallel marketplace where you're in demand. The world is your oyster, you can choose what you do, where you do it, how you work, who you work with, whether you'll work for somebody else, whether you work for yourself. I think about where the fast-flowing water is, where the quantum shift is happening.

But, really, I think for younger people, like, you know, you're working on self is the number one important thing. Chris, thank you so much for coming on today. We really appreciate it. Guys, I really appreciate it.

Have a great day. Wow. That was an awesome episode. Thanks so much for joining us on Venture Passport.

We hope you've discovered new insights and inspirations from today's episode that you can apply in your own line of work, and make sure to tune in to us next time as we continue to unveil the extraordinary in every corner of the global markets. In the meantime, you can follow us on socials at VC Passport. Safe travels.