$400M Investor Explains the Confidence Gap Holding You Back (ft. 20VC Harry Stebbings)

21:57Harry Stebbings:Like, it's just charisma and charm at this point. So no, I think people will still dramatically underestimate it. And that's like why I think we're going to win. Like, you know, I will invest four million this year into content alone. Like, I don't know if you know any other venture firm that's investing four million into content just to be the number one content provider. Probably Andreessen. You know, the biggest mistake people make with content as well is they're like, and this really upsets me. Oh, I so want to build a brand. I so want to do content. It's just not me. And I'm like, OK, this is like going to the gym for the first time.

22:32Harry Stebbings:Who sees the treadmill and they're like, oh, hello, old friend. I feel so at home. I don't know how to work all these buttons. Incline, no idea. But you, you're wonderful. No one ever does that. It's painful. I remember I was a very fat kid when I was younger. They called me Augustus. Children are cruel. And I went on the treadmill for a kilometer and I actually went outside and threw up. I was that out of shape. It's hard. It's meant to be hard. But you do it again and you do it again and you keep showing up and you get better and better and better. And, you know, I was terrible when I started.

23:05Harry Stebbings:I sounded like a BBC presenter from the 1950s. Hello and welcome to a 20BC. And now I've done 3000. You know, I was speaking the other day at something. It's like 5000 people. I didn't prep. I didn't do anything. You just rock up and just go for it. It's like you have a playbook and you can keep it running. And so my point being like too many people think that everyone starts perfect, not seeing that actually in the early days they were terrible too. You just didn't see it. It's the other thing that's great with content. If you fail, it doesn't fucking matter because no one saw it. It's okay. That's why it's such a good business.

23:40Different people are meant for different kinds of content too. The reality is like if you're messy, you should be on TikTok. That's your channel. If you're really, really good at writing like Sophia is, you should be on LinkedIn. I teased her relentlessly through all of college because she would offer me LinkedIn merch and I was there was no way I was wearing that outside of our dorm room I still say please don't wear that to the office dear lord but like we're all yappers right like I assume you could be at a table and talk for hours and there's an intimacy of being on the microphone and someone actually choosing to like listen into that podcast that's not the same way of like if someone chooses to follow you on Instagram like sure they see you while they're scrolling through their feed if I take an hour to listen to your podcast in the morning and I'm hearing your voice you don't need to adapt to all the different kinds of content.

24:21Like you can be a huge sub stacker without ever putting your face anywhere and not being a TikToker. You just need to figure out what your vertical is.

24:28Harry Stebbings:I would just say specialize. The most important thing is finding your first a thousand true fans. Great article by Kevin Kelly, a thousand true fans. Anyone can build a great business if you have a thousand people who just love everything that you do. And too many people do a show for entrepreneurs or for, I don't know, CEOs, whatever it is. Be very specific. Target fintech founders who are pre-IPO but post-Series C. Get 1 ,000 massive fans who are specifically listening to that segment. Always expand from there. Start niche, expand from there. Especially in a world like today, discovery is the biggest problem when it comes to content.

25:03Harry Stebbings:I think what you're going to see over the next 10 years in media is more value accrue to the incumbent brands because discovery becomes such a problem that people actually just revert to the brands they know and trust. We see this today. There's so many VC shows that actually most people just go, fuck it, I can't figure out which one to go to. Fuck, 20 VC's been there for years. And I think you see that actually in incumbent media brands where value accrues because discovery is such a problem that people revert back to what they know. You've talked about yourself as less of an operator, more as like an editor and a curator of finding the best people to do different jobs.

25:36How have you grown your team over time? How big is it today? And what mistakes or learnings have you had as you've done that?

25:41Harry Stebbings:It's a very good question. You know, I didn't expect to enjoy managing people, but I actually really do. I think one of my biggest lessons has been don't respond in real time. There's so many times when you're like writing a message back and you're like, oh. And so I always make sure to remove the emotion out of the room. And actually, when you go back and ask yourself, what is the worst that happens from this? Very rarely is it actually that bad. You know, we talk about one way and two way door decisions. Most things are two way door decisions, actually. And so I'm always trying to be as calm as possible.

26:12Harry Stebbings:The energy that you bring to the room is the energy that someone else will give you. It's the other thing that you learn about personal relationships too. If you tell me something, I've had eating disorders when I was younger. If I say to my partner, hey, I feel really self-conscious right now. I feel bloated and I just hate my body. If you go, well, you look fine, don't be stupid. I'm not going to come to you again with something that's a bit sensitive. If you go, I'm really sorry, why didn't you tell me a little bit about that? I'm here. I'm going to come to you with more. The energy that you bring is the energy that someone else will give.

26:43Harry Stebbings:And so in terms of team, 100%, it's been a hard lesson, if I'm honest. We work very hard, like unwaveringly hard. We're definitely the hardest working team in Europe. We espouse 996 and people either opt in. Also, a big problem that people make, they don't have opinions around the culture. Like we choose people who want to work unreasonably hard and make a huge amount of money. If that's you, then you should join 20VC. if that's not you and you want a weekend and you're happy to make less money you should absolutely not join 20 bc i will text you at 1 a.m i don't agree with like not texting and not working hours and so we have a very clear opinion around the culture that we build it's a bit like a cult and that's important and i think where i've made big mistakes is where i've gone you know what i know that they don't fit that but they're really good at x role i can teach people most of the skills that they need to be successful.

27:36Harry Stebbings:I can't teach them the mindset in a lot of cases. That's been a big lesson for me. How do you feel like you motivate your team? What are the biggest drivers of inspiration and people working really hard? Yeah, I think you have a couple of different levers. You have like progression, you have cash and you have title. And I separate them always. And why? People need to be continuously drip fed some form of advancement, some form of well done, you did a great job. And so if I say, well done, Sophia, I'm giving you a promotion. With that promotion comes a pay rise and our numbers are looking great.

28:10Harry Stebbings:Amazing. Like dopamine hit, fucking great. But that's all at once. Now I'm kind of out of tools to use to inspire you next month. If I say, Sophia, you did amazingly well, I'm going to promote you to that head of content. You're like, yes, I get a great title promotion. I can put it on LinkedIn. My family are proud of me. Then next month I tell you about the pay rise. Yes, I get your continuously drip fed progression in a way that makes you continuously feel like you're advancing. You have to use these different assets as kind of weapons to help people feel like they're progressing continuously.

28:43What's your longest standing employee?

28:45Harry Stebbings:Five years. Okay. And how did you find them? For my sins, I smoke. And so Americans are like, oh my God, no. None of you Americans smoke. It's very funny. And I met him at a VC party and we were the only one smoking outside. And he sent me a load of deals. And I was like, this guy's an idiot. What an idiot. And then those deals went on to be billion dollar companies. And I was like, maybe maybe I was, you know. And so he then invested in my fund. And I was like, do you want a job as well as like investing in my fund? And he was like, yes. And so he joined five years ago. That's amazing. Something that I really appreciate about you is that you said that you invest in people, not ideas.

29:27And I was reading like one of your tweets where you were talking about how you had missed out on different opportunities.

29:33Harry Stebbings:Oh, do you know what I found? I found out. I actually run the numbers. I would have made more money if I'd just invested in every single founder that I'd ever met. So every single person I met, here's a check. I would have made more money than like me picking. Yeah, yeah. The founder of Deal, 2 million on like a 10 million price. It's now a 19 billion dollar company. Time and time again, I've missed great companies because I focused on the market, not on the people.

30:09What's the biggest fuck up you've ever had in terms of a deal? The one that keeps you up at night if you had to pick one that you missed.

30:14Harry Stebbings:Number one is deal. That$2 million on 10, I could have put in$300 ,000,$400 ,000 and got 3 % or 4 % of the company in an$8 million fund. I mean, if you think about that today, that's a$450 million position in an$8 million fund. So I'd say that at 11 Labs, which is a$10 billion company or soon to be a$10 billion company, we could have done$25 million seed round there. Done like 1 % or 2%, but that would have been a$300 million position. Yeah, I definitely fucked up those two. And was it because you didn't believe in the idea, but you did think the founder was interesting? Or how did those play out?

30:54Harry Stebbings:And this is the biggest lesson. I thought the founder was amazing on both. I just didn't like the market. in 11 labs I'm like voice AI open AI are gonna do this come on this is like the most obvious play of open AI obviously so Matty's amazing but no and this is actually something that I use with LPs when I was fundraising for this last fund two LPs turned me down and I emailed them and I said hi Dominic I have lost two Decacorn founders because I knew that they were brilliant but I Turn them down because of the market that they were in. You are turning me down because of the market that I'm in.

31:31Harry Stebbings:And I'm urging you not to make the same multi-billion dollar mistake that I have made. Have a think about it. And I'll give you a call tomorrow morning. And what did they say? And I called both of them the next morning. And both of them invested five million bucks. So it was ten million dollars that was through like absolute. And because they were like, I 100 % believe in you. I just don't like seed in Europe. I don't like Europe. I don't like seed, whatever it was. and they're like, fuck it, I'll do it. Why did you still want their money? Oh, I can convince you that you're wrong. Like, also most people have to sell to someone else.

32:06Harry Stebbings:That's another thing. You have to equip people to sell to their team. And I think in the cases where they really wanted to do it, it was just a case of they needed that extra push to get over the line. It's like another really important thing that I learned is like the power of pillow talk, which is like, I don't know if you've ever seen Hitch. brilliant movie but like you know albert brenneman when he goes to the gallery the most important thing is not that um you know the girl that he's chasing likes him at the gallery it's that the friend maggie likes him and it's the same thing in business actually which is like if someone brings their other half to a dinner or to a whatever it is event i will make sure that that other half husband or wife leaves going harry is awesome harry is so great you should work with him because he was so fun.

32:53Harry Stebbings:The power of the car ride back or the discussion you have when the lights are out with your partner is the one that will govern the decision that you make. Well, it was funny because one of our podcast guests said, people overcomplicate business. People just need to like you. It is that simple. 10 ,000%. Like honestly, people want to do business with people that they like. Why do I do the PS to Mark Benning off McKellen 75? Because it adds humor. It adds personality. You know, we send LP updates to our LPs, the biggest institutions in the world, literally. I've A-B tested, sending without a picture of my mother and me walking a marathon and a PS about it, and with.

33:33Harry Stebbings:When I do it with a picture of me and my mother, we have a 92 % response rate. When we do it without, I have a 61%. It's a noticeable drop, and we've done it across 12, 6, and 6. And so you've got a good data there to suggest that there's like a meaningful, meaningful uplift. Why? Because people see it and they resonate. It's different. You also always want to be a purple cow. You know this? Like if you drive past a cow, you're like, whatever, I've seen a cow. If you drive past a purple cow, you're like, holy shit, that's different. It's sometimes better to be different than it is to be better.

34:05And it all comes back down to the people you're talking to are just people. In the same way your friends like you because you're funny and interesting, people in business will also think the same way about you. And I think people forget that sometimes and they're overly professional in a way that turns you off.

34:20Harry Stebbings:Yeah, you know one thing that people say to me a lot now is just like I'm very surprised that you talk so openly about alcoholism and bulimia. And I'm like, yeah, it's very important that I show my full self. And you don't just see this like glossy image of like, you know, managing lots of money and everything being a success. It has not been easy. And I think one of the most sad things right now is there's a huge amount of young men struggling with eating disorders who don't feel that it's okay to admit, who don't feel that it's manly. And I think it's important that for people like me who've had it and got through it, you talk about it.

34:55Harry Stebbings:And actually, it makes people resonate. Where do you think you learned these people skills? If you're obviously charismatic, people love you. Where do you think that came from? I wasn't charismatic. I used to go to the bathroom at break time when I was at school because I didn't have any friends and I didn't want anyone to see that I had no friends. I had no idea how to talk to girls and I just felt very uncomfortable talking to girls. And which is why I went to a different school where girls were because I was at all boys, all boys schools before that. And so I learned again, it's very kind you say that, but I learned it over 3000 shows.

35:28Harry Stebbings:And I say that because I think it's encouraging to other people who feel that's not me. You can literally develop these skills through continuous repetition and putting yourself in uncomfortable positions that you don't feel ready for. What are the biggest things that you've learned about communication? I think there's a couple. But like, number one, people open up when they see vulnerability in you. And so there's a couple of things I'll do before a show to make someone feel like they can open up. Number one, I'll ask them for advice, especially men. They feel empowered when you ask them for advice.

36:00Harry Stebbings:And suddenly you see them much more willing to share more and to give more because they feel like they're in a position of superiority. And then number two, I will talk about bulimia, alcoholism, my mother's MS, you name it. Because you break the barrier of comfort where most people don't go that quickly. And they're like, wow, he's really opening up. People really engage with that. And so I'll do those two things pretty quickly. And how do you keep in touch with people? WhatsApp is a secret weapon. I'm trying now to build an integration where, I mean, who uses Facebook anymore? Seriously. But like the notifications for people's birthdays is the best thing about WhatsApp.

36:40Harry Stebbings:And so I'm building an integration which basically triggers a WhatsApp message to the person. It says your birthday on Facebook and then it sends a WhatsApp with a template response like, hey, you know, Sophia, happy birthday. Hope you're celebrating in style. Always let me know when you're in London. And then everyone gets that from me because my job is to productize network in a way that no one else has done. And that is a very secret weapon to do that. WhatsApp is how I build that relationship with people at scale. Because what did you say? You raised$17 million just off of WhatsApp? $70. $70 million off of WhatsApp.

37:15Harry Stebbings:Yeah, literally pacing around my gym in between sets. What are you saying to people? Dude, I'm going to raise the new fund. Would love to have you in. Let me know if you're game, but it would be a lot of fun to have you with us. And then how do they usually respond? Any diligence, anything? No, but yeah, like count me in for a million. Hey, dude. What's the largest check someone has sent over WhatsApp? Ten. Ten? Ten. So you send them a fun message. They come back and they're like, count me in for 10 million. Yeah. Wow. How did that make you feel? Yeah, that was pretty fun. It's years to get to that point of relationship building.

37:50Harry Stebbings:But yeah, you feel pretty good about that. And why do you think people trust you so much with their money? I'm like gonna die on this fucking hill like no one will outwork me this is a game of who can survive the longest content's very easy actually it's a game of who can survive the longest you know 11 years ago no one gave a shit for four years we did not get over a thousand plays per show most people would just give up we didn't make money for three years again it's just about showing up continuously continuously continuously and so why do people trust me in a world of like very, very commoditized venture capital.

38:22Harry Stebbings:You guys have met BCs. They're all kind of the same. So a lot of them are Excel monkeys. Yeah, they're Excel monkeys. They're all kind of the same. I'm completely different. And we have a very different offering. And so when you're thinking about how do I build outsized returns in the portfolios that we have as an endowment fund, as a foundation, fuck, I want Harry and I want 20 BC because it's just totally different. That's going to bring stuff that we don't normally see. So that makes people trust you. How do you know when you trust someone else? Oh, I can trust someone pretty quickly. My job is to read people.

38:52Harry Stebbings:We joked before about like, oh, I don't take notes and I'm very people oriented. Like my job very quickly is to read you. And there are questions that I will ask that really get to that. I talked to him about your relationship with your sibling. How you describe your relationship with your sibling is a very clear indicator of how you think about yourself. Talk to me about a time you really doubted yourself and all hope was lost. These moments really reveal a lot. What kind of answers do you look for from people? Real self-reflection. Like the worst answers, like, you know, when we're super busy and I just don't know what to do with X or Y and time management.

39:29Harry Stebbings:You know, I remember when I was very, very bulimic when I was 16 or 17 and I would make myself so sick that I would pass out. Like, that's a moment when you really have to look at yourself in the mirror and question, like, this is really damaging. Someone being able to talk about that and having the humility and confidence will tell you a lot about how they engage. I understand why it makes people trust you and you're able to be so open. And I'm curious if you think that the founders that you invest in have that same ability to really emote and be open. Because to your point, I mean, so much of this is about being able to just be punched in the face over and over again and kind of to be like an army soldier and just let it roll off the back.

40:11and I would say that probably makes it harder to open up or to be able to weather a storm. You have to have a shield up. So I'm curious like how you think that plays out in the founders that you invest in.

40:22Harry Stebbings:Yeah, I think honestly it can do one or two things. It can give you the shield that's like, I can't open up to anyone because life is hard and you get continuously hit or it's like actually I've been hit so many times that I'm willing to open up completely because I've kind of been so broken before. And actually I think it's quite a helpful thing where like my job is to detect it in people where it's not obvious and then helps them tell stories. You know, storytelling is probably the greatest lost art and it will continue to be in the world of AI. I think this is the greatest worry that I have or one of the big worries I have is in the world of AI, we just lose creativity.

40:54Harry Stebbings:There's two types of people. There's Walt Disney, which is like, tell me a story. Okay, most often very early. And there's Jerry Maguire, show me the fucking money. And it's actually easier to be, show me the fucking money because you just show the data. But actually telling a compelling story, much harder. I work with founders a lot on how do we tell compelling stories. So to your point there, no, very often they don't feel comfortable sharing it. But my job is to package it in a way that people want to buy it. What are your goals for the future for yourself? Oh, I feel like Madonna. Every single day, there is new, fresh content that is different, different formats, different guests.

41:34Harry Stebbings:I have to continuously be better and continuously reinvent. We have to do news shows, AI shows, different formats because if you don't you will die like i am the most self-conscious nervous person in this business and i think you have to be it goes to the andy grove book only the paranoid survive i am freaking paranoid all the time and i spend every single day at 1am i go down admittedly with a cigarette or two and i watch tiktok for 20 minutes instagram for 20 minutes and youtube for 20 minutes and i make notes on what works on each channel and then i send those notes to our team for the next day so they can take it in learn agree disagree with me but we constantly have to be assessing what everyone else is doing and seeing what works so do you keep tabs on your competition all the fucking time the biggest way to piss me off is when they get someone who i want to get which honestly can happen quite a lot who do you think are your competition?

42:31Harry Stebbings:I would say very clearly invest like the best and I would say Jack Altman's podcast. Honestly I find the rest just pretty freaking dull. I really want good content and then I just end up listening to Taylor Swift because like there's just not many good podcasts today I find. And people also don't understand the science of podcasts which is that in the first three minutes you need to get to a lesson. You'll see a 68 % churn rate if you don't get to a lesson in the first three minutes. So do you know what every podcaster does? Oh, tell me about how you started the company. Fuck. Three minutes of like, you know, you talking about your college days.

43:09Harry Stebbings:No one cares about your college days. You want, hey, what is the single biggest advice for someone starting a content brand today? You've got to specialize. Like you have to have a lesson in the first three minutes. Well, people also have such short attention spans nowadays that if you have any fluff in the beginning at all. There's no way they're even going to get to the value portion, which is why hooks are so important. But also something that has been really interesting for me listening to you talk is that you are clearly extremely data oriented. When you have a statistic for everything, you A-B test so many different things.

43:42How did data become such a big part of the work that you've been doing?

43:46Harry Stebbings:I didn't start like this. I learned it over time. The defensibility a company has is in the thousands of little actions and processes that make you who you are. It's not actually the main thing. It's the lots and lots of little things. And so when did I learn it? I learned it over time, bluntly by speaking to every single person that I, every single person at a drinks party, I asked them what podcast you listen to and why. And then what podcast do you hate and why. My mother at Christmas drinks parties, I know I please not the podcast question again. And then I just study the data. And the data is pretty easy.

44:20Harry Stebbings:You go onto YouTube, you go onto your RSS provider, and you just study the data and you just A-B test. This might be an awkward question, but if you have a founder, one of your portfolio companies, who is underperforming, the company's not doing well, what is that relationship like? What do you usually say to them? I'm very direct and people always know that was me. And I think the other thing is like, if someone's company is not performing if you're feeling it as an investor you have no idea how much they're feeling it as a founder and you know you never know what battle someone is going through be kind the job of an investor is to be the cheerleader when things are really bad and to be actually the critic when things are really good you need to neutralize the person when it's shit I need to inflate them and bring them up because they need to inspire their team.

45:14Harry Stebbings:They need to inspire their customers. And it's really important that you're a neutralizer, not a double negative. Any last pieces of advice for people who are starting businesses today? Take the first step. Most people do not take that first step. And that's why they're not successful. And then another thing, which I always remember my mother telling me, which is like, I don't know if you've gone with the wind, you're probably too young. Okay, tomorrow is another day. And it's like, no matter how bad a day today was, which it will be really hard and shit, tomorrow's a new day. And when tomorrow's a new day, that's yours to make of it.

45:49Harry Stebbings:And you have to continuously wake up with fresh eyes to make the most of every day. Okay, Harry, thank you so much for coming on The Burnout today. This was such a pleasure. We learned so much. Lovely to do it in London in person. And thanks for having us at the new studio. It's beautiful. Awesome.