Harry Stebbings being interviewed at the Onstage Demo Day

0:00Thank you.

0:30LPs every week. What does your week look like? How do you fit it all in?

0:36Harry Stebbings:I think venture is actually a lot easier than people make it out to be in the way that our job is to find great talent before anyone else. I always remember Doug Leonie sitting me down and saying, hey, Sequoia will always do pre-seed investing because the only thing that matters is finding the best talent before anyone else. And I think venture is much simpler than we make it out to be. We need to find the psychologically unhinged. We need to find the completely fucking deranged. I don't know if I'm allowed to swear. Yeah, yeah, swearing is encouraged. Oh, great. Okay, thank God. Is it recorded?

1:06Yeah, it's live-streamed everywhere in the world. Wonderful.

1:09Harry Stebbings:Okay, great. How to get cancelled in real time. But it's about finding the absolutely committed beyond belief. And the truth is, like, I have nothing else in my life. Like, there is nothing I will not do to win this game, and there's nothing I won't do to get another percentage point on the boards. And what helps with that is when you're completely unhinged, it helps because when you see someone else like that, you're like, oh, I get it. And we see each other. And so actually, detection for me is simpler. You're looking me right in the eye. Do you see that in me? I don't blink. But really, it's true.

1:49Harry Stebbings:And I think we kind of fetishize or, you know, romanticize entrepreneurship today, where everyone wants to be an entrepreneur, it's fucking painful. It's like eating glass. I mean, fundraising is a nightmare for most people and 99 % of the time. Never forget, one of my dearest friends, one of the fans of Calm, said to me, you know, fundraising is very simple. You have to repeatedly get punched in the face and learn to enjoy it. Not like, oh, that's part of it, but like, I actually fucking feed off this. And you do. And so it's not normal and you should tell the people around you that it's not normal Because you kind of have to set a barometer that they need to adjust themselves to I mean my poor mum I mean Jesus Christ.

2:33Harry Stebbings:I walk with her a marathon a weekend Which by the way she's 16. She's got MS She was told she'd be in a wheelchair 15 years ago, and she does a marathon a weekend with me and she does Pilates for three hours a day She's unhinged to really but I mean I walk with her and I just like margins matter I'm talking about unit economics for AI companies and I mean poor woman she just has to kind of put up with it but I set the barometer for kind of how nuts I am you buy her great chocolate cakes I've seen them

3:07deranged people so are you getting this sense from people from founders just like through the chemistry from the connection or are you asking specific questions

3:16Harry Stebbings:I ask specific questions and for years I was actually quite scared to be myself because I thought that people wouldn't like me and then I was myself and I realized that people didn't like me.

3:29Harry Stebbings:That wasn't a joke though. Really it's true but the thing that you actually get used to is the customers that you want align with you and the customers that you don't, don't. When I talk about 996, when I talk about unwavering commitment, when I talk about obsession, for all the people that go, oh, well, you can do this, and you, that's fine. You're just not my customer. And it's not wrong. You're just not my customer. And so I think I've felt a lot more comfortable over time being willing to alienate people. And actually, any great brand, you have people who are for or against you. Nike and Adidas, McDonald's and Burger King, Apple and Windows.

4:07Harry Stebbings:And I think I've just got a lot more comfortable, honestly, being disliked. I mean Jesus I need therapy after looking at the comment section of a podcast that's brutal but if you're if you're not um if some people aren't hating on you then you're not pushing things hard enough you know absolutely absolutely and that's what I kind of love about the current state of media and venture which is it is so competitive like it's so competitive which means we have to be better we have to think differently you know This year, we looked at our numbers, honestly. And at the start, they were starting to flatten.

4:43Harry Stebbings:We're at about 30 million a month. And they were starting to flatten. And I'm going, shit, the world is getting tired of a billion dollar founder talking about management lessons. And they are, by the way. If you want to do anything in content today, broadly speaking, and this is without getting a kind of verticalization of content, which we can talk about, but the only thing people give a shit about is news and analysis. they want to sound smart in the office and at a dinner party and then second is AI from leaders like your Sam Altman's or your Demis or your Dario's. That's it. Those are the shows that we do.

5:18Harry Stebbings:It's unbelievable how binary people are in terms of what they want. And I can confirm, so I checked with Jaden who's at 20VC before this and Harry genuinely works more than 996. So that is fully confirmed, verified. When you were 18 and you started 20VC, you spotted that there was an opportunity in podcasting. What's the gap now that if you were 18 you would exploit and take advantage of? I also realised I didn't ask any of your question beforehand which was what questions do you ask to unravel? It's actually important because I don't care what any of the companies that we invest in actually do.

5:58Harry Stebbings:Everyone's like, what the fuck? I really don't care. And by the way, I will tell the founder that I don't care. And I don't mean that in a disparaging or lack of care way. I just put so much emphasis on you. Markets change, products change, traction changes, COVID comes. The thing that unwaveringly stays the same. My insurance when I invest is your resilience. I don't care what your pricing model is. Seriously? I mean, this is why also so many, I think there might be VCs in the audience. I can't really see it. Dangerous. But you actually spend time talking about this shit? And market sizing? Are you serious?

6:38Harry Stebbings:You think you can estimate the size of markets? Fuck, you should be trading. Well done. When we do outcome scenario planning, Hector, are you serious? I think that's the worst thing you can do at the early stage, because you will always underestimate the size of your winners. Always. So for me, I want to know, hey, what's your relationship like with your siblings? The way that someone describes their siblings will really show you how they feel about themselves. I want to know if you were in gaming communities early. Toby Lutger taught me that he very much focuses on gaming community involvement.

7:13Harry Stebbings:You have a lot more signal derived from a gaming community or a clan leader than from an educational institution. We want to start speaking to founders' mums. What were they like when they were a kid? Dude, the amount of parents I speak to for Project Europe where they're like, My child has an internship from Bosch. What are you going to do with them? And I'm like, give them 200 grand to build rockets. It's going to be great. Obviously, I put on a very serious voice and pretend like we all know what's going to happen. But I always want to know also how old were you when you started your first venture?

7:49Harry Stebbings:Don't get me wrong. People can start a first venture late, but generally speaking, 99 % of great entrepreneurship is detected early. It's why we have the moniker of the lemonade stand. If you want to be brutal, and this will make me unpopular, a broken relationship with a parent really helps. Sorry. Yeah, if you have a really broken relationship with a mother or father, if it's a boy, money on its dad. Sadly, it's not like you're happy about it, but you're like, term sheet! Yeah, and how are you getting into these conversations? Some founders will have an allergic reaction to this line of questioning.

8:31So how do you get into it? No, they love it. So the right founders love it, do they?

8:35Harry Stebbings:And this is the other thing, which is like if you actually, and everyone, and this is why actually I think you really should go through fundraising processes. Again, I can't see anyone in the audience. I'm sorry if I'm insulting you. But for all the associates and principals who don't have to raise money, it is brutal. The same questions. Why do you like this theme? How do you think about a timeline for deployment? All these bullshit questions that every LP asks in the same way. And then you get someone who asks you something completely different. And someone who actually really cares about you and sees you in a different light.

9:06Harry Stebbings:The customer experience is amplified so much. For a founder that's on the fifth fundraising call of the day, to suddenly have someone talk in the way that you talk to them, wow. That's really cool. Yeah. So I said maybe you don't want to answer the... What's the next opportunity? I'm just, for two seconds, we don't spend any time on customer experience for founders, and it's really offensive to me, which is all founders are our customers as venture investors. It's why we have a very different team at 20VC, because different customers want different things from their venture partner that they choose.

9:41Harry Stebbings:For us, we will never, and some founders don't particularly love this, and in which case we don't have to do it, we will never not record a call. Why? Because the second call with a VC should be a progression on the first. The amount of calls where you meet an Excel or an Index or a big brand, and it's like the associate meets first, and then the principal meets, and the principal asks, oh, tell me, how did you like technology? And it's like, oh, I just said that to the associate. Every conversation needs to be a step function improvement on the last. You do that through thinking, like, hey, we're going to record the calls.

10:12Harry Stebbings:We're going to monitor them as a team. What would I do if I was an 18, 20-year-old? If you were 18 today, what would you do? How would you break in? If anything, or we can move on to number three. I just I really I don't like getting older to be honest no I really don't like I'm 30 next year that's that's not young like that's like I feel like Wayne Rooney you know where people are like oh he's so young and it's like oh shit he's not that young yeah and so I really don't like it and and I thought the other day in the gym where most thoughts happen um would I trade every dollar that I have to be 18 again?

10:53Harry Stebbings:I thought, fuck no. No way. No. But what would I do if I was 18? I would definitely focus on specialization earlier. One, I would 100 % obviously be in content. But the thing that people forget is a thousand true fans. The only thing that you need in content is a thousand true fans. And this is where everyone goes wrong. So I would do a very specific content series. I would interview the world's biggest CFOs and talk about resource allocation. By the way, there's like a$10 million business right there just in software that sells to CFOs and does accounting and planning. So you have an amazing kind of revenue stream there.

11:31Harry Stebbings:But I would do specialized content for a small audience and then expand and expand and expand from there. Okay. And again, winding back to 18-year-old Harry, were you thinking two steps ahead? Were you thinking, right, this is my route to being a VC? Or was it, this is something I'm passionate about. let's see where it goes. It's one of the most annoying things for me which is people are like, oh and then the funds came, huh? It's like, no, no, no. It was always a very specific route into venture. Every founder that I meet, I always ask, what is your insight development? And an insight development is, what is a way that you see the world that other people don't see?

12:07Harry Stebbings:They don't share it with you. And when I was 18, I thought that we would see the commoditization of venture, meaning that there'd be this huge supply side increase, lots more money coming in, and differentiation goes to shit, basically. So I thought we'd see that. And then I thought we'd see, and I'm slightly to blame for this, but the celebritization of VCs with brands being in the people, not necessarily in the firms. Kleiner Perkins used to be this brand. Now it's your Keith Raboy, it's your Eli Gill, it's your Josh Kushner. And I believed we would see that. And so the media company was really a platform to enable that.

12:41Harry Stebbings:And then I very much wanted to build funds on top of it. But we wouldn't have the funds without the media company. I wouldn't do Venture without the media company. Well, I guess it got you into stride before even 20VC. Yeah, I mean, 100%. I mean, it got me into... I remember I got rejected by Excel and Felix. And I don't normally name names, but it's like 5 p.m. So I'm just like, fuck it. I'm just too old and I just don't care anymore. And they both wisely rejected me. I was like 18 years old. It was probably the right thing that they rejected me. But I just remember going to San Francisco and I was like I gotta be so good that you can't ignore me because there's just no other way like there was a small scene in London and honestly I had nothing I dropped out of university the show made two or three grand a month so sure it's good for an 18 year old but like you need to you need to work and actually sometimes burning the boats is one of the most valuable things you can do in life and I literally burnt the boats there because I just had to make it a success but it was it was it was so clear back then i mean i remember being in a board meeting with fred deston um i don't know what year it would have been about 2021 probably um company was raising 50 million and we were like okay well we're gonna make a lot need to make a lot of intros for that to happen like and fred was like well don't worry i've got my secret weapon and you were even by then probably the best connected vc yeah in the uk europe maybe the world and um i'm sure you helped make that round happen but it was that being so well connected that is a superpower adventure and Presumably that is what's got you.

14:16Yeah, it is.

14:17Harry Stebbings:But I think now also in a world of ARR acceleration being one of the most important things, how quickly can I get to 100 million in revenue? We did a post the other day on LinkedIn for a company and it got 3.5 million in ARR directly through a LinkedIn post. That's very, very meaningful. The way that VCs help companies needs to change and I think is changing. And I think with the mediafication of venture, the brands in media companies, that changes even more. How do you refine your product to really move the needle on companies you invest in using yours and 20VC's reach? Number one is distribution.

14:54Harry Stebbings:Now we have, as I said, 40 million players a month. It's a very, very meaningful part of the media ecosystem. And we have the most incredible media team that creates content for our companies that you can leverage on demand to create incredible content. So I'd say number one is media and distribution. I'd say number two is fundraising. You know, being able to raise cash is one of the most important things you can do as a founder and being able to raise the best cash. And in a world of AI, kingmaking is more important than ever. What is kingmaking? Kingmaking is where signal is derived from the person and the quantum of cash that you raise.

15:26Harry Stebbings:So if you look at like a Harvey and a Lagora in the AI legal space, they've raised so much money so quickly. They've kingmade. If you're in the AI legal space, honestly, what every single person is doing right now is going, do I want to go off against Harvey and Lagora? King made. It's really important to have access to the best cash very, very fast. I've done 3 ,000 shows, dude. There's very few VCs that I don't know personally and have the WhatsApps of. We're able to make rounds happen very, very fast. So I'd say that. And then I'd say hiring. without being a dick. Most hires, if they kind of get a call from me and I say, oh, you're so amazing, you're so amazing, you should join the company, they tend to join.

16:10Harry Stebbings:So we can win candidates for people they wouldn't normally get. Super interesting insight. Tell us about Project Europe, your latest project. Well, this is probably the most meaningful work that we do. I think this is like an existential crisis for Europe. We are about to fall into the abyss if we don't all do something between the rising powers of China and the US. And they're laughing at us. And quite rightly, actually. And so this was like a fight back against the US and China to prove that we can build amazing companies in Europe. And I honestly thought, I meet the most unbelievable 18-year-olds.

16:49Harry Stebbings:We should be supporting them in a way that venture ecosystems aren't. Whether you're building robots in garages, or you're building drone rucksacks, which one of our Portuguese companies does, and there's absolutely no criteria that suggests you will be able to succeed, we will absolutely support you. We need to support the most ambitious young people. And I think what's been so striking to me is now we're six, seven months in, we've had one company be acquired, one company get into YC, and two tier ones do two companies. Out of 10, four out of 10, that's a pretty freaking great hit rate, which is amazing.

17:25Harry Stebbings:and I think for us now it's like how do we encourage as many completely cracked deranged 18 to 25 year olds to not go to a university, controversial, not go to Bosch or Siemens and build companies as early as possible. What do you think it can become 10 years from now? How do you see Project Europe? I think Project Europe will be the gateway for the most ambitious European founders to build companies And we have a very clear metric, which is we want 10 ,000-person companies in Europe that we started. That's really, really important. I think not many of us think actually like, what is success? The funds, the carry, building big companies.

18:06Harry Stebbings:What's it all for? Again, I feel old these days. I think about this more. And it's like I care deeply about my family. I love children, and I would like to have a big family. I want my grandchildren to run around the house and my armchair when I'm 75. And I want to be able to point to amazing companies and say, you know, I remember when we met Hector when he was starting. And I want to see their face go, wow, that's amazing. Because honestly, the money doesn't make you happy. That was a weird one. I don't drink. And, you know, I remember it might be overshare, but I think also like authenticity is so lacking today.

18:45Harry Stebbings:I remember I made a million when I was like 21 and I sat there with you know a big bottle of tequila and a packet of cigarettes on my balcony and I was like yeah and I was like wow this isn't what it fucking said on the tin so what's still driving you then uh mostly coffee uh uh what's still driving we have to it's that and this is a real thing I actually like really believe that richer investors and richer founders tend to make better founders because you lose the downside fear. I didn't have money growing up and it was always about protecting downside and I was scared. I was permanently scared.

19:27Harry Stebbings:And the exercise of what really makes me happy, walking the park with my mum and getting an espresso. And it's like six quid for two espressos. That's like my bar for happiness. It's like a low bar. I can't legally drive, so cars out the question. You can't wear a watch in London, so that's out the question. I'm really messy, so a big house is out the question. What's it about? It's about winning. And this is why I love being a VC, like a therapist. You're like, well, why are you so obsessed about winning? We have to win. There's no other way that we can do this without winning. And I wouldn't do it if we didn't win.

20:02Harry Stebbings:But then it's like, well, why do you need to win? is this desperate insecurity that you're worthy. And that's the truth. Has that drive changed in any way over the years? Do you think it will change? Once you have your big family, maybe you do have a bigger house that's very messy. Do you think that will... No cars. No cars, a driver or two. Do you think that drive will change? No. No. No. Because that would mean that I become secure. No, I think, you know... Pursuit of insecurity. Yeah, but it's true actually, and you want to be, you know, David Goggins says it quite well, which is, you know, you don't want to be civilized.

20:47Harry Stebbings:Civilized people don't create unreasonably great things. Like the benefits of, if we remove gender from this, I'm not getting into a gender debate, but the joys of the uncivilized man and the unreasonable man, which is, you know, Mike Cannon, Brooks at Atlassian is called The Unreasonable Man. You will things into existence by being unreasonable. And so I think you constantly want to seek out being unreasonable. Love it. How has your role changed over the years? I mean, I love to think of, you know, you're working like 10, 10, 7, maybe we can call it or something like that. But working super hard, you're hustling.

21:26Are you still a pure hustler or has your role changed? Are you now a leader, a manager? how have you navigated that change?

21:32Harry Stebbings:Yeah, and it's not actually easy. I didn't find it supernatural to just, oh, you're a leader and there's teams and there's people. And I really learned that most of the things that we're taught are complete crap. Like culture. Oh, we have a culture. It's kind of crap, actually. One, it's mostly fluffy and full of shit. And two, your job as a leader is to work in orchestra. You've got a flautist, you've got a violinist, you've got a saxophonist. I need to know how each player plays in the band and what it takes to get the best out of them and play to their tune. And when it comes together, it's beautiful, but it takes different elements to get the best out of them, not just saying 996 and work harder.