The college dropout who keeps ending up in billion-dollar exits - Cornelius Schmahl

0:00That's how I got into Uber. and it was the week they hired me. So I've never heard of Uber before when they hired me. And I was 23, had nothing to do. I lived for work. We had very small budgets and we had to work really hard for everything. I think we were a shitty city that nobody cared about basically. They were able to ride the leverage they had so hard or we were able to build leverage and then ride it so hard and timing was perfect. Today on Billions, I'm sitting down with Cornelius Schmal, a college dropout who keeps finding his way to billion dollar outcomes. At 23, Uber sent him to markets nobody wanted.

0:33By 27, he was running Uber Russia. One problem, Yandex was winning. He helped engineer a$3.7 billion merger, then walked away from operating entirely. Started writing angel checks, Lime, Liquid Desk, Billion to One, Climbworks, 4 bets, 4 unicorns. What does this guy see that everybody else misses? Cornelius, thanks a lot for being on Billions. Wow, okay, that's very generous. And it's a very generous intro. But it's true, nobody wanted to do the markets that I did at over. That's really true. Thank you for having me here. It's really exciting. I think I have to kind of like average out some of the things because I did a bunch more bets than these four.

1:25but but yeah i got very very lucky yeah the first question i want to dive in you know it's like all your years at uber so when you joined uber it was not the uber it is today not the uber everyone knows you were 23 no mba no network and they basically needed operators and they wanted to go in countries where no operators wanted to go so how exactly did that opportunity came up and what was it like you know to go in a country and have to basically handle all the operations there yeah yeah so i was i i got really lucky in getting into rocket internet here i was i had a friend from years before that i were we learned we met each other through the art of pickup like meeting women basically and then i met him years again later at a startup weekend and he's like hey you want to go to thailand or asia for rocket internet so i ended up at rocket internet and i was very young and i was again there i didn't have my bachelor's degree and all the other guys were like you know bocconi master degrees like perfect grades and i slept in the first day because i've never been on an airplane with jet lag i've never flown with my parents and so i didn't know jet lag so i slept until 5 p.m and as a punishment they sent me to the warehouse where there's operations and then i loved it there and i was worked really hard by my boss and then we did some crazy stuff there that was rocket had this benchmark across all these ventures from like the big ones in latin america were much older to us and there was one metric next day dispatch or next same day dispatch next day delivery how many of the orders can deliver next day which is very important e-commerce and that was my project and we delivered crazy we outperformed every other market and so then one of the ladies that was in some other market got hired at uber and somehow she found me and she's like yo you want to come to germany i said oh well i still want to finish my bachelor's degree at some point so i'm coming back to germany that's how i got into uber and it was the week they hired me so i've never heard of uber before when they hired me and it was the week of oktoberfest which is crazy demand so they're like you know what we're just gonna take this guy in he's gonna grind for three months and then we can fire him no problem and but then i survived and yeah that's kind of the the story yeah how i got got into yeah and and when did they decide to uh have you launch countries i think you did like south africa uganda ghana like so i was so i always came in so i was hired by a launcher in uber germany they fired a person that was supposed to do my job and then launcher went off and then i had to do a lot of the work but there was a bit of a team i was very lucky that my the team is always a general manager and a marketing manager and operations manager but i got very lucky now in rich perspective that the marketing manager we did an event and he met a girl and he fell in love with her and from that on he was gone he was fucking gone and the gm he got his um he got he had a baby already and then he got twins in january i started in september so he got all of a sudden twins on top of one baby super overwhelmed both of them couldn't do much anymore and i was 23 had nothing to do i lived for work i used i was used to the i dropped it we had a very tight schedule we had to open the warehouse at eight close it at eleven six days a week so and it's an hour outside of the city so i was used to some crazy and i was still doing my university classes on sundays right so i was used to very high schedule and i got fat and had a lot of bad habits so it took a toll on me but i was doing work and so i would do all parts of the city basically um or a lot of the parts and learn the different aspects of supply and demand because you're on such a razor's edge in germany as in france where the margin for error is like 10 maximum between the drivers the partners going bankrupt and you don't have a business and they're doing really well and bringing on new cars and you have a thriving business so being able to do both size of the marketplace gave me a lot of learning opportunities and what was kind of the the playbook to open a country and run a country yeah i mean there was a launch playbook which is was a lot of was like 140 steps and was quite refined in getting a country off the ground but there was still so many intricacies with the legal situation that you had to figure out a bit by yourself but But still we had a really good...

6:12When you say, sorry to interrupt, when you say like a legal issue, it's like basically you arrive in a country, they already have taxes in place and legislation and you go all in, you know you're going to break the law essentially and you have to work it out. Yeah, it was always, we need to get demand and reach and scale faster than they will shut us down. Because this legal process sometimes takes years. the problem with in germany is that the adoption is so slow for germans like did you give me an example like germany would at some point be five percent the size of vienna just vienna and they launched at the same time um because the adoption and the loss which is so hard for it um but it was also good because we had very small budgets and we had to work really hard for everything and then when i got the lucky chance of going to africa i was able to see like wow like in an easier market my skills now that i've really like were hard and they didn't yield that much results in germany yet were now all of a sudden extremely valuable because i could make a lot of impact out of tiny amounts of money and and always scrap finds we had no budget for anything we were shitty city that nobody cared about basically and then in africa we was the first time that uber started to centralize businesses because before you had these city teams and it was brilliant because you had competition between the city teams so you had this crazy amount of learning like you know search came out of boston on some crazy saturday afternoon thing that they came up with and the next thing innovation came out of some other city of or Sao Paulo.

7:57So we had all this innovation, but we also realized there's a limit to, there's also a lot of dumb shit that is happening, basically, a lot of non-best practices. And in these expansion markets, we also had launchers and they go there and they set up the business there and then they like run off and then someone had to run it. But we couldn't hire good people to run it. It was very hard to hire like very good locals because we only hired best of the best people. And the talent density in Africa is just lower than in say paris or in the uk right even in germany much lower than in paris or in london and so they'll to get a if someone has a harvard mba in africa they're from a billionaire like a millionaire millionaire family and they would never work for uber and so we had to centralize it and then i had to start running these cities remotely from joe burke and somehow setting up systems that they can run without anyone really being there.

8:54Besides like hands out phones basically. Yeah so that was the Africa situation. And what were like some crazy stories or issues you had to kind of like handle at the time? Oh that's good because so they brought me in for pricing and incentives because that is like the heart of uber at this point in time if you would look at outside of san francisco payroll was maybe 10 of the spend 90 was some kind of a driver or right incentives like we spent billions on this and it was not super well understood and um johannesburg or south africa was the only country that had basically accidentally created a taxi monopoly in an averted sense like people they were too scared to drop prices and so we had a wait list of drivers and so people started to pay getting an uber license exactly the thing we wanted to avoid and i was in germany like for us like every driver had my phone number right they would call me and like i knew everyone by first name because it was tiny you had like a couple hundred drivers and in jamesburg with a wait list of 5 000 guys and they're like unemployed people you can get them out of poverty so we're pushing for price cuts and i was very good at price cuts because i've done this before multiple times and so i came in for the price cut and i thought hey cool price cuts you know in germany no problem we invite everyone for a beer and tell them some stories and everyone is fine right but it was africa so and when i went to in cape town i flew into cape town and to do the price cut there and um we had like armed ex-military guys protecting us from our own drivers right okay and um so we went we did it at a big hotel and then some more drivers came and they started storming us so we had to the these protection guys like a bunch of kind of afrikaans redneck monsters armed to the teeth right with dogs and like guns and shit like serious as africa right so they like ran us down we like ran down i don't know how many flights of stairs through some back alley thing they drove us off in some you know truck of like you know black windows and then we recouped in the office and then they somehow found out that we're in the office so they came storming the office the downground office so we ran up to the office and now some hiding area up there and then you know figured it out and it was a big drama but crazy what was the biggest shock one of these guys of these protection guys he left his backpack in the office he forgot his backpack basically so i was like oh fuck i gotta bring down the back bring him down they were leaving and i thought i'll bring him so i lift this backpack and it's like clonk clonk it's mega heavy backpack like mega heavy so i like open the backpack and there's just like i don't know a handful or a dozen hand grenades oh my god what kind of grenades it was maybe which is flash grenades or like whatever but it's like we're dealing with closed rooms here and he brings a bag of grenades.

11:59So that was Africa price cuts.

12:05But we still got some clothes happening. But with that, through that we discovered a really good playbook of how to make price cuts less violent in Africa. Okay yeah what did you do? What did you do to solve that issue?

12:22So basically when you cut the prices the fares go down for everyone. So everyone is happy unhappy and angry. So the way we did that in for example Nairobi is we front-loaded the supply before so we pushed supply into the market like mad to bring down the earnings basically. so we can go like guys fuck we have no customers it's too expensive all of you are not making money we gotta do something it's like how about this we guarantee you some higher earnings than there right now we're gonna cut the prices but trust us like we cover you you're not making less money and they're like okay cool and that's how we then did it in Nairobi and went like 10x in three months okay nice yeah so you basically like yeah put more supply so basically price go down like they're not earning as much then basically you tell them i guarantee a certain amount and then everything goes back to normal with the new driver coming and okay yeah and then i mean they have to work probably because it's all about utilization like the whole uber game is about nothing but utilization which took us years to understand and i'm not sure how fully understood it is still today but it's yeah it's the sense of business right and um so with that i realized okay like the only thing we need to do is increase utilization to the max in every city and that's what i then started i just i started doing that for other cities and that's then what somehow got me into russia and this in this crazy russia role which was like three layers above my current kind of pay grade but i just understood the thing that needed to be done better than anyone through weird reasons yeah so so in russia you were like a chief operating officer yeah i was weird what was kind of like the the vibe there like uh did you have to speak russian like what what exactly happened like uh yeah um and so it's so i was at this point 26 years old okay my experience was running three markets in africa that nobody cared too much about um they did extremely well but they were not you know not important markets in uber but i did all these market analysis for our cities to kind of convince people to cut prices to fix their stuff and i started getting greedy and started just doing it for any other city because we had the data the data was public so i would write like a letter to the gm or the the boss of the gm of mexico city because at uber you can just write anyone and i was so used to dealing with pierre the gm of you know then emea that I would just write everyone.

14:56So I would write them, yo, basically your city is shit. This is how you can fix it. And I did it for a bunch of cities. Didn't make too many friends with that. But somehow it got me to Russia. And the situation in Russia was that basically realized we have no chance against Yandex. Like Yandex had 80 % market share and we spent way too much money. We had teams in 16 cities. They did whatever the fuck they wanted. It was an absolute mess. and how from a legal standpoint you know when you enter Russia I mean you're an American company how exactly from a legal standpoint does that work like do they try to block you straight away and push Yandex is this just like business wars and the best wins like how exactly like did you see any crazy stuff with government, with police with so honestly better than I expected it's not it's not like like china where you say you can't do it right it was more more clear we obviously had the whole team was russian right everyone in team was russian and we high we spent as uber normally does very much money on very good public policy people so our public policy guy marat the guy he said like right like very close to me in the office and he was one of the few people nice to me because i never touched his shit obviously um and so it was safe in that sense but what happened or what got me in there is that basically uber works with a you have a gm and then you have a chief of staff team it's called the strategy and planning team they're like his we call it waiter's fist like they're the people who do this stuff because in a bigger market the gm is a lot more like a politician in a sense because there's so much public stuff going on because you're quite important you're part of the infrastructure of a country or a city now and so especially Russia was very important so what happened is that Yandex hired away the chief of staff of Russia and then they brought in me and another guy to help sort it out and take over from him and sort it out and then I was initially hired like yo help the new chief of staff who was also you know he was like the GM and then he was kind of the main CEO okay um and i'm like his second guy tds he gives all the work to and he's also a great politician guy and so i got a lot again a lot of kind of responsibility and power quickly because in russia like 90 of our spend was in some form of incentives on a drive and rider side and nobody is so the better than me so i that's how i got into it in a sense but the mandate when i came it was the mandate to the whole team was we're gonna win russia we didn't tell anyone like including me obviously um hey um this is this elaborate plan of how we're gonna scheme and like you know mess with mess with them to get the best return but what basically the game plan was is that we first need to get control of the situation so q1 we had to um we centralized these like 16 city teams all into who all did duplicative work in these random like russian cities like krasnoyask whatever place you've never heard of um nizhi novgorod like far out like eight times on the way sometimes like or six i think was the worst and we moved them all to russia and put them into vertical teams okay and and then i was just the one dealing with all the money basically that was the game and so everyone hated me because i took away right they all had their own in each of the cities and now i had the pnl from everyone and um and so we centralized it and with incentives if you know what you're doing you can and you don't know what you're doing you can waste all the money basically on nothing like you can waste billions without knowing where it goes and so my goal was each dollar how much do we get out of it basically how much how much trips how much suppliers do we get out of each dollar and that was so the game plan was we have to get we have to make it as painful for them as possible that because they're publicly traded and we can burn a bigger hope and they're much bigger so they have to burn purport they have to burn more money of their overall pnl on winning this market than we for us if we lose 50 million a year or 100 million which we did in russia nobody cares uber lost billions it didn't matter but for them their quarterly earnings we knew are affected right so that was the game plan that before they make their q1 okay we're sorting in q2 we make it extremely painful for them so that it's it q1 already showed in their pin and q2 is gonna show real bad in there so if they want to have a deal with us we're gonna ruin their quarterly earnings for the whole company if they want to compete with us and then the stock of the company goes down so if they want buyers who stock they're getting shit stock so that was the game and then afterwards obviously reduce the losses as much as possible okay and and when it back then you know like uh yandex like did they have like a nap and everything or was it like yandex taxi and they were just like the the basically like a taxi kind of taxi mafia that we could see in every single country no no they had the exact same thing as uber okay okay yeah it was basically like care they did the exact same thing they had a team of 300 people with like a hundred plus a bunch of contractors that did something that we found out is absolutely useless but um we had a bunch thousand of them um to like hand out flyers and get drivers that never took a trip it was madness when we discovered it but so they had a much better team and they had better technology than us for russia okay because they could yeah yeah so it was really face plus they had yandex maps which is like if you have google maps it's a massive advantage if everyone who opens google maps obviously sees by yandex yeah it's crazy yeah yeah yeah i i think the the i think it was mark uh zuckerberg was saying or no i i forgot who it was but uh was saying that they were copying like uh i think it was uh mark zuckerberg like uh that they were at some point they started copying like facebook and every time they would push out like uh yeah every time they would push out the new features i would say like uh even half a day half a day it would take them to just copy it and push it in prod which was like crazy and he was like you gotta give credit to the guys like they are extremely extremely fast and best engineer in russia is a brilliant yeah of course yeah yeah obviously who is the best engineers in russia yandex and vcontacte they said the two of the country so um yeah that was really it was such a mad battle like every day we had to come of some new shit to fight them and um and we had we had moles always in the company right like people i mean it's easy they got not great salaries if they give the guy 5k a month he would tell him everything that he can get his hands on so it was really really a dog so they so they they actually paid people from uber to give them like uh insights and information we had leaks all the time um crazy so like you know you have Would you protect yourself from that?

22:16Or do you think it's an uphill battle that you would never be able to... Yeah, I mean, we found out two people who were sure they were not leaks because we tested them quite a bit or we tested everyone and we knew that these guys are for sure safe because they had very sensitive information and these ones didn't come out. So it was me and these two, one girl and a guy, to run the whole money part, basically. And all these incentives because they were the thing that decided this kind of a war. so it was a very very small team and everyone else was literally on the beach like we shut down the marketing team, we shut down half the driver acquisition team, all these marketplace teams because it didn't matter it was all about how can we basically match supply and demand in the most perfect way, that you have your demand graph across each geofence in the city like say 10 different areas in the city and how can you match the supply to that in the most perfect way and that was the whole thing that all the money was decided on and basically like when when you're fighting like this against someone who was essentially kind of like ruled the market already um like like the more money you spend the more money they spend it's kind of like a an uphill battle so at what time do you decide okay maybe it's time uh for a merger because if you look at the story of uh uber like uh i mean i think travis at some point had like uh the opportunity to uh acquire lyft he didn't do it uh you know like so so the story is more like yeah so it's like the story is more like let's go to war and uh and always win but in the end in russia that's that's not what happened so when lost everywhere basically we lost in southeast asia to grab we lost in china to dd we lost kind of dubai to kareem because like they underestimated how much better because the whole thing about ubers we're hyper local and that's why we win but obviously at some point you're a huge global conglomerate and tech was always the bottleneck like the local teams always beat us in tech and beat us on we're local we look i mean thing right and so um so there was a time i think in 14 15 we're like oh we're winning everywhere and then they came out and then they got also huge funding and and some of them more some of them less and then they started beating us in 2016 17 16 mainly everywhere and then we had to take somewhat shittier deals yandex we got very lucky i think it was one of the best deals um from kind of what was our market share to how much of a value how much you got we get and but it was also because we had in fathomly lucky timing and they were a public company Everyone else had to fight against other private companies where you have more investor money to burn.

25:07Versus Yandex was an easy target because they're public and they had to report quarterlies and they're not that big of a company. So if they invest and fight with us and their quarterly earnings go down by like 20, 30, 40%, and we're like, we're doing this two or fucking quarters and you're going to be at zero if you fight with us. And so that's why then they were like, yo, maybe now is a good time to make a decent deal. and it was perfect because literally like i don't know how many weeks later a few weeks later they found out a way to in a sense hack the uber app and that they knew whoever our drivers were because everyone had like yandex mail and yandex maps somehow find out whenever someone books an uber trip who books uber trips where do these people go so they had literally all the data to then snipe all of our customers because you send you send email every time you take like a uber trip to the driver with how much they earned etc exactly so they had all the data and then it was really hard but then we were able to make the business from going in june before the merger we lost like 12 15 million a month and then we went to break even in in december wow so it was really because once you like in cutting out spend is very easy usually um it's a lot harder to find levers to increase business than to cut out spend and make it more lean if you're spending that much dumb money obviously and and i think the deal it's like yandex acquired uber for like uh i mean the uber russia for like 3.7 billion can you like all the whole combined entity of yandex taxi plus Uber Russia was then a 3.7 billion entity.

26:57Uber's share was 1.2 billion. We had 37 % out of that 3.7, something like that. Okay, so after this journey of Rocket Internet, because I think we didn't touch base a lot on that part, but when you were at Rocket, also the company got... I'm talking to Michael, actually. He was a co-founder at Lazada. where you worked i think which which country because each country had a co-founder very smart okay okay okay yeah that's smart before they got acquired to uh i i need to double check where he was uh but before it got acquired to alibaba then you you basically like worked at uber for uh i think it was five five years five more years or something four and a half years yeah yeah four and a half years and then after that I guess you had worked a lot for a very long time so you got some cash out and started investing.

27:58First maybe do you mind sharing a bit the number of the cash out of both operations and whether or not you were incentivized on the merger with Yandex like how the whole things play out yeah so we did not really get anything out of the merger on Yandex I got a huge bonus obviously like the biggest bonus you can get at uber for performance and we got some sort of a like merger bonus thing for and then I had mine translated into uber shares but it was not a lot of money like considering the like the the hours the involvement in that thing it was ridiculous right but it was good because i think that at uber germany which is a shitty market and there was like not much going on but i got i benefited from the whole of uber rising and so the shares that i got we had like a 40x stock split or something like that like the valuation went mad um on the shares i got and so all of a sudden i was sitting on tens of thousands of uber shares despite like i could have gotten the same shares without the whole russia madness by just like in i could have done customer service in germany right um as long as you don't get fired but um so i think with that russia i earned this mad cash out from the uber shares but i didn't really get anything from the from the russia okay okay okay so so that's actually quite insane when you think of it but from everyone i talk to usually it's like uh what matters more is like what time do you join in and how much shares do you negotiate when you join because everything you do after essentially you're not getting so much upside absolutely and but with with that money so i'm guessing you have like a few millions or tens of millions at that time few millions not millions i few millions i joined like two weeks too late for tens of millions because we had a stock split right before I joined.

30:02Like two weeks before I joined, they split the stock, but still good, still good. Still good, yeah. Still enough to start doing investments. What made you make the switch? You started writing checks, so how exactly did you get your pipe? How exactly did you come up with the investment you were making? so i think a why did i do the switches i've been doing long distance with my wife for years before i was forced in africa then i wasn't she moved to germany for me and then i went to africa and then russia thing and obviously i didn't have too much energy or time for her given that work situation and um plus i actually then finished my bachelor's degree at some point in munich on like the last fucking thing that you can possibly do as i was already three years deep at uber um but um we're like hey i'm fully vested now so i like and the stock went up so much and then they offered me stuff obviously to stay but it was like compared to that mountain that i had in inequity it was pointless in a sense it was still good money obviously but he's a 20 more is like not gonna make any difference to my life and plus at this point i was like 100 kilo smoking half a pack of cigarettes and went on like three to five beers a day like i was a mess i would use these pictures like this like no more neck really not in that shape because i just gave it all to the business right i sacrificed health friends yeah health yeah yeah and so we did a honeymoon for six months um and then obviously i got you know the the momentum of doing shit like a maniac obviously carries on like the hormones your whole system the beliefs that got you there are not gone just because your pockets are full of money so i immediately started doing shit again and since then it's been like an up and down of not and it's getting better obviously got a lot better of diving headfirst into dumb activities again and one of the dumb activities and i know this is the first dumb activity everyone does when they exit is they start angel investing because now you're on the other side of the table and you're the one with the money and when it's really fun and cool and it's so like you just like it's such an easy life i mean you don't obviously make any money of it it takes years decades to get half a decade to a decade to get the money out but it was another outlet for my energy in a sense yeah it feels like casino a bit you know like like going to the casino and just betting and uh exactly exactly so and then getting pipeline is if you don't know what good pipeline looks like it's very easy to get pipeline because i didn't i mean like the problem is like i was so confident from uber or i see that with most of my founder buddies you you know how to run a business like like you know how this shit works no you don't angel investing is an entirely different skill like making money as a salary person or as entrepreneur is entirely different than investing money it's just an utterly different and skillset and i was always not aware of this and um if it was a time of uber ipo so like if you had uber in your title and they like people would hit you up for money so i got in i got hundreds of pitch decks a year just by being like a random guy on linkedin who had uber on it and then it was in a bunch of angel syndicates um there was obviously an uber angel syndicate there was some other syndicate i was in where i thought this might be a bit better than just dropping my own money in um and yeah that's how the deal flow came okay and you did like a lime liquid desk billion to one climb works like climb works was a client of mine right i didn't invest there i was a client that i then came off the crazy idea i'm gonna do unicorn coaching help people do unicorn hubris times 10 um but it actually worked actually became a unicorn was ridiculous um um yeah but um through crazy timing leverage and luck much more than fundamentals to be honest like that was one of the least fundamentally sound unicorns i've ever seen in terms of they had they were able to ride the leverage they had so hard or we were able to build leverage and then ride it so hard and timing was perfect they closed 600 million maybe a bit the the story like what the company does like how exactly did you have leverage so people uh maybe we don't so it's a bit closer to billion to one in a sense that it's a and that's why we invested in billion to one it's like a fund like it is a technology that can fundamentally alter a big market climb works like if you can suck co2 out of the air you're changing like the oil company i think the ceo of exxon mobile called it the holy grail and if oil companies call something the holy grail there's a lot of money in it because they make that money already right um and so that's what intrigued me about climbworks and um they needed someone to help them just run a better business operation set up their stuff better and that's how i got in there um and then if it's about hyping something up i had a bunch of experience with that at uber and then all the startup investments and um so yeah what are the things you did to kind of like help them hype up the company i mean honestly for them they were riding that wave of great technology in a mark back then carbon it's hard to remember but back then climate tech was really cool it was the ai to a certain degree of stuff like people really went into climate tech and um we just realized that you can manufacture press very easily and people believe in press and so we just double tripled quadrupled down on just pushing press like maniacs and how do you do it like do you go through PR agencies and you work with a certain narrative and then you push a certain narrative like how do you kind of like engineer the whole things do you have like a maybe one example of an article and an angle that you wanted or narrative that you wanted to push and how you'd laid it out yeah so so i've now learned a lot more than i knew back then um okay so um generally what i learned with press is that you can just buy your way in like that is the we learned that over we're like hey we go to a radio we're like hey we want to make an advertisement and your radio just german some radio in germany right and then they they They call us.

36:46They're like, hey, cool. Well, if you increase it by like 50 % your budget, we will be very happily offering you a slot on some show on the radio plus two tickets for Champions League Bayern Munich. We're like, oh, that sounds like a great idea. Let's get some more money going here. But this opened my mind to like, wow, like you can just buy your way into press basically. Like you just make deals with them. They need to make money and you just get editorials and you just spend money on ads and you get editorials. You invite them. plus they're very easily I wouldn't say like influenceable because you just invite them right you just invite them you make a fancy dinner like this is going to be the Uber did this all the time we're doing a press dinner for the launch you invite all the journalists you give them the fanciest food they've ever seen you give them some free Uber rides and they will love you right they will like you and that kind of game is very actually straightforward okay most of crypto is basically press not most a lot of it is press leverage fraud like they just hammer out press articles that they pay for themselves buy this shit coin buy this shit coin buy this shit coin and yeah it's crazy and the same for ipos a friend of mine is like he ipo the company at new york stock exchange and they do the same shit you just buy a lot of press before the ipo and everyone writes nice stuff about the thing so all the retail guys just dump the money and the banks can cash out that's that's how it works um and same for fundraising and same for access so yeah so for an exit you would uh prior to an exit you would uh actually do uh do a lot of press yeah because x so the beauty so i did a lot of fundraising right and the problem with fundraising is that you then have to do it's it's not money you get it's debt that you take on to a certain degree like psychologically it's that you now have to work it off and you actually have to work it off versus with a um and the same applies like how is a good fundraiser you create a bidding war supply and demand you have only one company as your supply and you just have to ramp up demand like a maniac and the same obviously applies in every business and especially exits but in exits you do not have to do years of work afterwards so it's much better like the return is much much better um yeah and because in fundraising help the problem was often that like if you get someone in who's very good at fundraising and who coaches you through it you will get a much better valuation that you should have and you get a lot more money than you should have but like it's like if you if you're in first grade next you're coming second grade that's why bootstrapping is so good because you go year by year you have a linear progression in a sense you control it but fundraising is like well you're super good in first grade congratulations now you're going to seventh grade fuck if you would do it yourself you might get to third grade and then exit to fifth but if you hire someone and you think it's a great deal it is but then you end up in seventh grade and you're out of your debt massively and that's what you don't have in an exit, this downside that's why you don't do earn out never do earn out yeah it's actually funny i've got like a few friends who uh exited their companies with like massive earnouts or uh or you know like in 2021 i guess that was kind of a trend also like you had uh companies acquiring others and they were announcing like a massive exit and then when you dig in you see that it's like uh they they use uh you know their uh overpriced valuation to give shares that are like common shares under, let's say, like the third grade of preferences that the fund have.

40:33So basically, like most of my friends who took shares from acquisitions when they sold companies, they never saw like any money from these shares. They went to almost zero. And for earnouts, I actually have like one friend who sold this company and the earnout was massive. Like I think it was three times what he got upfront. and for him it worked out well he managed to over exceed the expectation because he knew he was really good at sales and the way they structured the deal was very um just um top line uh oriented and they had like uh almost like uh unlimited budget to reach that top line uh so whenever they did the deal they thought that he would keep like the same way of managing the company and not spend too much so that's why they wanted ambitious like top line but he went like crazy gave like insane incentives to sales to sign like a three or four year deal and within a year like he had reached like all the goals and objective it was quite quite fun wow that's amazing that's i'm so happy for him because as he said like and that's why i'm doing this exit stuff now because like i fucked myself all with exits before like i had three startups to myself one my wife and we would dumb on each of them and um and i thought of all these founders and you said it's like most exits are really shit yeah yeah they are venture funded like you bootstrap totally different game you have an actual like your your cap table is usually very beautiful um but man these exits on venture funded businesses are usually horrendous yeah it's very rare actually i mean i i think what But in the pod, I've interviewed a few people who build a billion-dollar company.

42:20And what I think is the best way to do it once you have leverage to raise massive funds as a founder is to always take secondary. Take as much secondary as you can whenever you're running your company to a billion-dollar. Because down the line, of course, in a nine-deal world, you IPO or you exit massively and everyone's happy, investors are happy, you're happy, etc. But the reality is like the chances for it to happen is so low that down the line you need to de-risk yourself because, you know, it's your life, it's your life work and you also deserve like some of it, you know. Absolutely, absolutely.

43:00And... And yeah, sorry, go ahead. And that extra money doesn't do you anything. Like if you say I'm doing and I'm pushing always for the biggest secondaries possible in fundraising rounds because like, oh, I mean, they usually like they don't let you do secondaries much that's something yeah exactly but if you can like yeah but these extra tempers i think bro these extra tempers that mean nothing for you when this thing i feel it's like are you gonna make 100 you know 120 million like doesn't matter yeah but now having two million in the bank or five million in the bank to buy a house changes everything changes your whole life yeah so so yeah i'm and a secondary yeah from your investment what was the one that uh that brought you like the the best returns

43:51so first of all i'm super anti-angel investing now okay so i have to be very upfront of this because i look at my angel portfolio and there's i mean they're unicorns on paper right um but they're not for money yeah yeah like they have an ipo lime has an ipo billion to one has an IPO'd, Liquid Death hasn't IPO'd they're obviously on paper like you know 50 times X, great, okay cool but the money is not in my bank account yet, I got some smaller exits out like a 20X somewhere that might have also been a unicorn I don't know I don't remember some crazy fusion thing that that got bought by some other thing, I didn't really look into it much because like that's really yeah I got lucky on that one too but yeah I don't really I'm really not into angel investing anymore because it's like the money is so illiquid just so illiquid it may be good so you don't spend it on dumb shit but like it's still very illiquid money and there's just yeah I think it's just part of the journey of entrepreneurs like you're an entrepreneur and then you just do a bunch of angel investments and you realize someone oh shit I spend a lot more money on this it's like going to the casino and I'm obviously not getting any money out and then hopefully usually if you spare enough five to seven years later you get some christmas gifts which you hopefully won't need anyways but you get some christmas gifts here and there and so it's like i mean better than going to you know right away but yeah i'm i'm not super big on it and even though you like you're not into angel investing anymore like is there like a company you passed on and uh that you kind of like regret today because it became like a huge success yeah i mean in this uber syndicate there was a bunch of a bunch of good stuff that i afterwards like shit now csa they just raised 300 million or something but not that any that i didn't as far as i remember uh pass on anything that um um i had it was a secondary of spacex at like 30 million or something like that 20 million that would have been very nice um and um yeah i was i didn't see it and then it was close to okay whatever um that would have been a good one that would have been a very good one but overall i don't know i don't believe anymore in just getting free money like usually you have to do something to get money there's some kind of a trade-off and um i'm not a stock picker much i i'm actually a very good stock picker i'm just a horrible stock seller like crazy stocks um like tesla bitcoin all this stuff but then i also sell at the worst possible moment so okay i'm just taking care of that better buy real estate and some etfs yeah but um so so now you're like investment strategy it's like what very boring you just buy like uh i don't know etfs and uh on a dca like dollar yeah just every month basically every month like like and real like if i were a salaried employee somewhere i'm just like yeah but it's really yeah and i love long term and cash cash is so good cash yeah gold and um if i invest i do some random gambling shit like bitcoin because you know there you have some higher potential and but really boring plus bitcoin or like plus some now less holds used to be more bitcoins um but um yeah i don't and from the from the companies you invested you mentioned you know you have like a lot of them um didn't reach like the unicorn status but you still have like a a few like a significant few that actually like reach that status do you think that uh these companies like the the billion dollar ones like they they all have something in in common or do you see like common traits yeah yeah um so so i see very strong common traits between rocket internet and uber like lazada and uber very strong common traits lime as well obviously the ceo of lime is ex-chief of staff at uber like he's a brilliant guy I know him obviously I want to give money to him because I know he's gonna you know whip everything in the right direction and like what they all had in common is that they really and it's more or less my framework that I use to help people exit because it's the same shit for like success as then for exit in a sense with a bit different twist it's like you go up the mountain in a different way than you come down but you still need some basic skills.

48:41So first is expertise, like experience. They really, at Rocket, at Uber, they really valued paying for experience. Like they hired the best people and then they gave them some sort of freedom and data. So experience, data, like learning, how can you learn really fast? That was something that did super well. And then they, with that really fast learning, getting a lot of experience to learn, sorry, the birds, and some very good people, then they focus. So it's like experience and focus. But you need first experience before you can focus because otherwise you focus on the wrong shit. And then they really were so hard on focus.

49:21Like Rocket, when we realized that we have super bad retention because they order something from us in Lazada and nobody trusts e-commerce and they get their stuff two weeks later, half the orders are canceled. It's a nightmare, right? So they said, okay, we need to do next. state delivery and the whole company was revolving around it like again i got into this weird position of being able to go to all the teams in the company say guys you can't do this anymore this is the new thing we have to do right because everyone likes to be liked and back then i was a dickhead so it fell into my lap very easily but they focused very hard on what what made the essence of the thing right um so everyone was subdued to this company goal and everyone knew it so the focus was public and usually the focus is only in the founder's head but if you ask someone what to do they're like next day delivery, next day delivery Lazada promise, that was the promise Lazada promise, that was everywhere and then at Uber the same thing we had like a motto or like a mantra or like every one or two years it changed but like the mantra growth at all costs so first a lot of experience and then they focused like maniacs on something, which is painful.

50:35At Uber, we said first growth at all costs. So that helped everyone make, all these smart people you hired could run independently. They were all entrepreneurs in a sense, but they had a strong goal that they had to run towards. And then they figure out what they do themselves. And then, so we had first experience and then we had a lot of focus that the whole company was on. At Uber was more cars. at some point where all we need to do is get more cars we shut down half the marketing teams or more than half the marketing teams all over the world because we don't need marketing we just need low prices and more cars that's the only game where and then next step is then leverage it like a maniac like and then you go into everything you possibly do to have this point of advantage and just crank it like a month and that is what uber did super well what elon must did super well or rocketed super well and that the startups that I see that fail, they're messing up there somewhere.

51:39They're breaking one of these rules in a sense and that's what usually fails them. Like they don't empower the people. They don't look at the fucking data that they have. They have a marketing mix of 70 different acquisition channels, right? Like all these things. And then they sit on some gold mines and they just let these gold mines like fizzle out and not just go all in on them. So these are the three things that I've seen and it's in a sequence. Like experience and then with experience you can focus and with these two together you have to crank the lever and you need to be a maniac for it.

52:17Like when you look at how they're maniacs, like you're not, a normal person does not build a billion dollar company usually. And not a 10 billion dollar company or a 100 billion dollar company. like and yeah is there is there something you wish uh that you know now that you wish you knew when you were like 23 i got super lucky i cannot complain i think honestly like like when i now look how nice my life is um i would i'm glad i cannot go back in future in the past and mess it up um like really i do think like i think the biggest lever in my personal development and my well-being and also i think financial now later more my later financial success is therapy okay like therapy meditation is by far the best thing you can do i think it's the biggest roi activity anyone can do nobody does it because someone tells you you're a dick and that's not good for the ego but that's by far i think the best the best thing that's that's why for our exit coaching we're if we call it like a mindset resilience coach but it's a therapist right it's a psychologist because usually the reason why you haven't exit your business yet is because you cling to it and there's a lot of ego involved and it's a messy psychologically very complex and scary thing to let go of that identity of being that thing and then not being that thing anymore so having some support makes the exit much better and then the life after exit even more better yeah i agree now it's super cool and is there a question that uh nobody asks you but uh that they should i honestly think when they ask me like people ask like because a lot of people see my lifestyle and they're like yo like why do you live so nice you don't even have that much money like most people i now work with or or a lot of my friends are a lot richer than me and they grind like monkeys all the time they work 50 60 hours a week and i'm like why do you do this and i really think that's like i think the key thing that changed for me i always want to be a billionaire right like my my family business my my grandpa bankrupted it so there was always this thing like going back to the glory of it was a very big influential like business in germany and then was always like you got to bring up the name again this shit and so i always want to be a billionaire to kind of even what was the business can you share or metal stuff in germany like they had like a big metal thing and they did like a huge association and were like like advisors to the like since the what the emperor of germany like that kind of shit and like really like industrialists this kind of stuff and um then bankrupted it and the grandpa died in misery and the other grandpa he died age 98 he did his own taxes at 98 still died in peace at home with his wife of 70 years and me his favorite person besides his wife holding his hands like how much better can you fucking go right and so i shifted my my idol from like elon musk or steve jobs who also died miserably um to like my own grandpa so um that really changed it because now i'm up have you heard of this hawkins scale of consciousness no what is it it's basically from a doctor from the us richard hawkins um he explained basically our consciousness which is sort of our well-being goes in like layers and the higher the layer is the better mood you have and the better your life is.

56:01Very basic, right? And at some point I felt like, well, if I focus on that thing, then everything in my life gets better. Money gets better, relationships get better. Like everything just automatically gets better. So I shifted my maniac drive to a certain degree from becoming rich and having impact. You know, I did a lot of clean tech, so this impact thing is same shit as being rich. Like just another layer of confusion on top of being rich, I think. um plus some guilt so i'm not big on impact stuff anymore so much but to really like fixing my own shit facing my own demons like doing inner child work stuff like this doing massages doing yoga doing workouts like just working on myself and then all the other thing comes by itself anyways so that's what's one thing that uh what's one thing that you've tried and potentially it can be the inner child thing but what's one thing that you've tried that people who would listen to this podcast would think this guy is crazy but explain it in a way that could potentially like benefit someone who's listening and was open-minded about like esoteric things yeah so i think first of all esoteric is a very dangerous word but in a sense i think any form for yoga yoga i think is not even you just stretch stretching i think stretching is yoga or he has this like eastern thing it's pointless stretching yoga is nothing but stretching and breathing now this whole breathing thing is hype anyways but the stretching is so under undervalued like when i see people and they're like ah i'm not sure if i can let go of my company it's like so how's your finger look can you stretch your finger and they literally can't stretch their fingers because they're always like this and then always on the phone So the whole system, the whole mind is like closed up, like, like Gollum, right?

57:57My precious. Yeah, my precious, exactly. So stretching, I think it's like the easiest thing. Stretching plus therapy, you're good. Plus, what's interesting now is like neurofeedback is quite interesting. Neurofeedback. What is that? Basically, it's assisted meditation. In a sense, you put some neurons on your head, some thing on your head, and then you get instant feedback on where your consciousness is, where your mind is when you're drifting off. You have a lot faster progress, but you need to combine it with therapy. Otherwise you become a psycho. I've seen a bunch of people who only do this and they are psychos.

58:30So I don't know what it does to them, but I really think, especially for guys, therapy is so good. Like some good therapist who works with you long-term, who points out your shit. I think the single best thing you can do. no esoteric no fucking anything yeah i think therapy is for the best thing that's super cool super interesting i think we're almost uh out of time so where can people like uh follow you or reach out to you uh after the the listen to show i mean probably my linkedin i i was incognitive for the last half decade and now i started doing linkedin three weeks ago and by the way you're doing great i like We met on LinkedIn actually.

59:15And thanks to you, I had my first viral post. I got 500 comments on it. Ah, nice, nice, nice. I've been having out LinkedIn all the time. I have one slot to fill for April and I don't know how to do that because I'm getting overrun by people already. So thank you very much. That's awesome. Actually, we forgot to tell the story about Mark Benioff. Maybe you want to share it as a bonus for the end. oh yes so how we met is through mark benioff and harry stevens they kind of introduced us so um harry stevens has this famous story where he said he had to send mark benioff 53 emails to get a response to get him onto the podcast and i sent one email to harry stevens semi-drunk at uber after you know mark benioff to mark benioff mark benioff i sent an email to mark benioff ceo at salesforce.com um and i complained to him it was like why is exact target usability so shit and then i detailed why mailchimp is so much better and i said this is horrendous i'm forced to use it because of uber i used to match much better so and then um yeah i nearly got fired because someone got really mad at uber for me doing my mad stuff um but the ceo of mark benioff reach out to the CEO of Xtarget or something.

1:00:34They bought Xtarget just there for like 8 billion or something and then he connected with Scott McCrockle the CEO of Xtarget who was super nice and said hey I heard about your feedback I would like to have a call with you and our head of some other like big person there can we have a call in two days and get your feedback and I was like fuck yeah I'm winning and I got an email from super high up and Uber was like what the fuck are you doing you're ruining our relationship say it's worse like big drama and yeah you get like you know because performance is good but you're getting formal warning but that close to getting fired so yeah awesome great story well Cornelius thanks a lot for being here and yeah I'll drive people to your profile and put the link in the comments so many french people now I see all these people from Paris I'm like Oh, bonjour!

1:01:25Because I go every year to France anyways for my meditation retreat. So there's some connection. I'm really happy. Thank you very much, Gilles. Have a great day. Thank you. You too. Bye.