Ryan Hoover on Growth Flywheels, Building Communities, Helping Founders, LP Investing

18:58Turner Novak:Exactly. It used to be just one-off, like everything was 99 cents, like 299. Like it was all one-off. Yeah, it was like transaction based. Yeah. Yeah. So stuff like that, like unlocked a whole new category of like opportunities for people to explore and obviously build massive businesses. But yeah, build this email list and then share it with some friends. and I found it useful and more people started sharing it. And then, yeah, it turned into a website. So was it a daily email? Like, check out these new products at lunch today? Yeah, so it was actually using this tool called LinkyDink, which is no longer around.

19:31And it was this studio based in Makeshift. Oh my gosh, so long ago now, I'm forgetting the name. But anyway, a team in Europe is building, in London, I think they were based, we're building a lot of different cool products. And one of them was LinkedIn Inc, which is a tool where you could collaboratively create email lists or email newsletters, essentially. So I could invite other friends and say, hey, share a link. And what it'll do is aggregate all the links that we put together. And then in the morning, the next day, it'll send it out to everybody. And so that's how it started. It wasn't actually wasn't me curating the products.

20:04It was like me and some friends, essentially. So that was like the MVP took 20, 30 minutes to set up, shared it on Twitter. and then that gave me like enough confidence to realize, okay, there's something here to explore. Was it just because people were interested

20:18Turner Novak:and they're like, oh, like they were just subscribing and they're reading it? And people were probably submitting too. Did you get new people come in and want to submit their stuff? Sometimes, yeah. Some people are like, oh, I want this cool app that I found or I use. Like I would love to share it with, you know, people that are subscribing. We ultimately didn't have that many subscribers. Like I don't remember the exact numbers, but it was sub a thousand. Like it was just in the hundreds. So it wasn't like there was a ton of demand or a ton of like interest in the email list. Yeah. But to your point earlier about like getting some like nudges of confidence, like I got nudges of confidence, not only from some of the just organic growth, but also people are saying, oh, I like that email.

20:51Like I read it every morning, like random people that I don't even know. We're just like, oh, this is cool. And I was like, oh, people like it. All right, cool. Let me let me explore it further.

21:02Turner Novak:And then you turn into a website at one point. Right. How did you decide that this is should be like a website versus newsletter? Like what was that whole process like getting it getting it going? Yeah. So the email was a great start, but pretty limited. Of course, you can't like interact. You can't. There's a lot of things you can't do, of course. You can't change it. Like you send in like this is the list. I have a typo. Yeah. And so I pinged my buddy Nathan Bashaw and Baschez is his name now. But he he and I had worked on an email based project in the past called Startup Edition. And so I pinged him and I was like, hey, I'm working on this thing.

21:37Do you want to work on it together? It was like Thanksgiving and he's like, oh yeah, like Thanksgiving breaks coming up. Let's like hack on it together. And he's a really talented like product designer, engineer, like hybrid. Very few people that like have kind of that, that unique skillset. And, and we just collaborated for about a week or so and built the MVP and then launched that. And we modeled it after sort of after LinkyDink a little bit, because LinkyDink was designed, you know, as a daily email. And so like that's sort of how the leaderboard, like the daily leaderboard of Product Hunt came about is like, OK, let's replicate the email experience, but let's put it online.

22:12And then, of course, we'll add comments and we'll add upvotes because there was no curation mechanism beyond just like people submitting. Someone could submit a bad product that should not get a lot of votes and not as many people see versus a good one. Right.

22:26Turner Novak:A lot of people will see it. Yeah, exactly. And it gives also people who are reading some ability to interact and communicate. And of course, we looked at like Reddit and a lot of it was like, okay, we're not going to reinvent the wheel. Like what behaviors and actions and language do people already understand? Like upvotes, people understand what that is, like especially people in tech. So we're not going to invite like a new verb, you know? So we just said, okay, upvotes. Do you recommend that? Like when somebody's thinking through like product design, it's like take things that people are familiar with and like borrow and you don't have to reinvent the wheel.

22:56Yeah, sometimes people get too cute. I think, and they're like, oh, let's come up with this new language or this really creative UX. And sometimes that works, but like, sometimes it's like people just don't understand or like, it's difficult to communicate. Like, I don't know. It's just, it's very contextual on how you choose what, what words to use. But yeah, for us, like Upvotes is really easy. There's also other decisions around language that was like, okay, well, what do we call the people that made this thing? Like, are they builders? Are they founders? Well, no, like some are founders, but we don't want to make this limited to just founders.

23:27Like we want to celebrate anyone who was involved in this project or this, this, this company. We want to celebrate them all. And so we're like, all right, makers, maker sounds like general enough. It's, it's also very flat. Like we didn't want to do hierarchy. We didn't want founders and VPs and like, like that's not the vibe that we're looking for. Senior PM. Yeah. If you're a CEO or you're just like a customer support person working on a project, you are a maker of that product. That's kind of how we saw it. Nice.

23:55Turner Novak:And then you and like, so what's kind of the scale of product on today? It's like millions of people that are, they use it, view it. I don't know what, like, what did it get to at some point? Like it got pretty big, right? Yeah. I don't know the, so I'm not, I left 2020 and I'm still on Slack. I still talk to Rajiv, the CEO and help here and there. So I don't know the exact numbers like off the top of my head, but I did look recently and what is it? there's, I know there are over 250 ,000 makers minimum per year that launch on product every year. I might be off by a scale of 2x on that. I just like, I just did some like rough napkin math the other day.

24:35So don't quote me, but it's at least 250 ,000. And I was like, wow, that's a lot of, that's a lot of people who are building. Yeah. And, and then of that, it's say a hundred thousand or so like products every single year. And it's, it's a, it's a lot. And so what was kind of interesting is going back to the very beginning, people, people who are skeptical of product and they're like, there are not enough products being launched like every day. There's a lot of interesting things out there. And I was like, I don't know, man, I think there's a lot out there and I think it's going to grow. And you fast forward to today, it's like, it feels like there are more founders.

25:04I don't know if that's true or not, but there's definitely more people building and launching products, especially with like vibe coding tools and everything. And so in terms of like scale, yeah, it's, I don't know the numbers are what I'm able to share because I can't really speak on behalf of the companies entirely.

25:18Turner Novak:It sounds like a couple hundred a day that get launched on there based on napkin mathing the numbers that you just napkin math. So maybe we're off by a little bit more even from the funky math that we're doing. But yeah, it sounds like if you're interested in understanding what's going on and what people are doing, follow and you'll see a lot of cool stuff. Yeah, it's really like I've always discovered a fire hose. If you want a fire hose of what people are building and what trends are emerging, that's probably not. It's very nerdy. It's very geeky. It's like, yeah, it's what I wanted to exist.

25:48And I still visit every morning and check it out.

25:50Turner Novak:I still see you commenting on something. And there'll be like, yeah, a pretty esoteric random product. And I'll see, I'll see you like commenting on it. And I was like, you just like really care about what people are working on. Yeah, it's, I don't know. Sometimes it's fun. Sometimes I'm curious too. I'm like, oh, this is, I like the weird stuff. I mean, on the investing side, we invest actually more in B2B than we do in consumer. But as a consumer or person, I'm like fascinated by consumer. And also like human psychology, it applies to like interacting with software is also always fascinating.

26:22Turner Novak:So, yeah, I want to talk about a little bit more later, but because we're talking about product time, what was the the reason that it grew and got so big? So you went from email list, less than a thousand people to almost a thousand products being launched a day. Like what was the big thing that kind of propelled product on back in the day? And like, is it still relevant today? Yeah. I mean, so there's a bunch of, I break it into two categories. There's one is the actual like product design and flywheel. Okay. That's like one category. And then there's a lot of, let's say accoutrements that we sprinkled on top of that.

26:54What is that? Accoutrements? Accoutrements. Like, you know, the things that you like put out that like make everything like look a little bit better and like a little fancier. Maybe that's the wrong terminology and the wrong word to use in this context.

27:05Turner Novak:Is it like sprinkles or like? Like, yeah. So example. Well, I'll describe the flywheel first and then maybe my metaphor will make sense. So the flywheel is pretty simple, actually, in hindsight. It's like, okay, a maker launches on Product Hunt, founder company, they share it with the audience. Some of those people are coming into the site, they sign up. And some of those people are makers too. And they're like, oh, cool, this site, I can get some users and get some feedback. I'm going to launch my product there too. So they launch and then they share with their audience. And so more and more people come through.

27:33And so if you look at that flywheel, like that's, that's, that's how I try to think about products, especially social related product design is like, how do you build these flywheels where the more people engage, the more it either grows or drives more engagement back to the site. So with that flywheel, you kind of can break it down now and be like, okay, well, there's a lot of things we can do to either speed up that, that spin or increase conversion. So an example could be increased conversion rate could be, how do we get more people that care about this maker or this company or this founder, how to get more people to basically be reengaged in a way that's valuable for them.

28:10So what we did in the beginning is we used Twitter as the authentication. That was the only way you could sign up for product time.

28:15Turner Novak:I'm pretty sure my account is linked to my Twitter. Yeah, probably. It's the same for me. It's like the only thing that's linked to my Twitter. Like I don't really sign up with Twitter on most sites, but I do with product time. It used to be more of a default, I think, back then. And now for a bunch of reasons, it's not. But yeah, we use Twitter because we're like, okay, we can replicate the graph. Like everybody on tech is already on Twitter. So when someone signs up, let's say a maker signs up, we know who they follow and who follows them. And now we can actually start to replicate that graph.

28:40And we have their emails as well. So when if you're launching a product and I follow you on Twitter and therefore on product hunt, I can get an email when you launch a product, say, hey, Turner just launched this new thing. And I want to see that. That was one of the highest engaging emails from an open and click your rate that we ever introduced because people want they do genuinely care about what people are building and launching. and they don't, you don't launch, like most people don't launch very often. It's like pretty infinite. Once a year, maybe. Or maybe if like there's some people that will do like monthly or

29:08Turner Novak:weekly launch projects. Like they're just, they're, they're building stuff. They're spending a month and they launch a product a day or whatever. Yeah. But those are fun too. Like they want, they want people to see those. Yeah. Yeah. So it's like, that's like an example of an accoutrement. It's like, okay, we replicate the graph and now we send these emails that are engaging, that drive more traffic, that drive more support, things like that. I mean, then there's other things that we did when it came to, part of it was like community building, part of it was growth stuff. Like we reached out to the people who, let's say in the top 10, had the top 10 upvotes for that day.

29:43They're like, hey, awesome, congrats. It's cool you made that. Do you wanna write about your experience launching and building your product? Like we'll cross promote it on the newsletter, we'll cross promote it on social. and a very, very high number of founders and makers would be like, oh yeah, of course. I'll spend, in some cases, probably like an hour or three hours like writing a blog post. And they would write it on their own blog or medium or wherever they wanted to publish. Like that was really important because they're like, we don't want to host this information. We want them to share it with their audience and also in a way that feels more authentic than like on our company blog.

30:15Yeah, because it feels like

30:16Turner Novak:if they're posting it on their own channel, it's like their own excitement. It's not like a corporate thing. It's like personal from Turner's blog. Yeah. Talking about how great product on this and how beneficial and teaching other people how to do it too. Exactly. Yeah. It was, we were giving them permission to promote themselves to promote us. So it was a really a win win. Yeah. And it became like normal. Like it was just part of like everyone, you just, everyone did it. Yeah. We had hundreds of people write these blog posts and then from a strategic perspective, it's like, okay, now we got some like good backlinks.

30:45So like SEO improved. And so there's a lot of things like that, that we implemented to like just grow. and also build like, build a community where it was like, okay, here's a place to celebrate makers and builders and people shipping.

30:58Turner Novak:Do you think like, is that general growth flywheel still a good framework or is it different in today's day and age? Like how would you approach that if you like had to try the same thing today? And you might need to have an answer to this, but like what kind of questions would you ask? Well, I mean, a lot is changing with how people are building products and what you can build today. I hate to say the words AI, but it's like so much of our conversations about AI for good reason. But there's still some fundamental things about humans, I suppose. It doesn't really change. So a little bit of a tangent, but I worked with Nir a little bit on his book, Hooked, which I'd been following his blog for a long time.

31:41He's basically taking all these psychology studies and trying to dissect what makes products really compelling, like why Snapchat and Facebook and all these and Tinder. Like what's the aspects of the design of these products that made them so compelling and engaging for people? And so I've always been really interested in like psychology and human psychology, because that's the thing that won't change. Like technology and everything is going to change dramatically, but like how people think and what they're motivated by is not going to change. And so when it comes to like now AI, the way that you build software and products is going to change dramatically.

32:12But the fundamental like goals or how people think won't. And so like things like status, like we're still going to care about status as humans. there's an element of like the human connection. Like that's why flywheel is still like the flywheel of like product hunt still is just as relevant today as it ever will be in this like AI future, because it's still about people supporting and ultimately gaining some level of like status among this audience or community. So I don't know, I don't think those types of dynamics change all that much, but it's an interesting topic to marinate on a little bit more.

32:44Turner Novak:Yeah, it's kind of like what we were talking a little bit about before we started recording. Like I've been thinking a lot about what are some things that AI can't touch or like will never take away. Yeah. You know, positioning more for that kind of a thing. Like, you know, like in terms of content, like AI will generate some content, whatever. Like you just kind of have to accept that is going to happen. And like that's the world we're going to be in. But AI can't go host a comedy show. Like host a comedy show. That was fun last night. Yeah. And like you were there. And like, I just like talk for a little bit there and you like AI won't be able to do that.

33:22Turner Novak:Maybe it will. I don't know. Maybe we do like VR comedy shows, but you don't get that like in person hanging out. So it feels like the, you almost want to do like a, like a barbell strategy where it's like, AI is going to change things. How does it change? How do you like fit into that world? Figuring out where it's going to go, but then also like, what is it not going to change? and like making sure that you also understand that world. And whether you're like building a product or company or you're an investor or you're working at a company, like making sure that you're positioned in the right kind of way.

33:54Turner Novak:And also you like it and like you enjoy what you're doing. I think that's, yeah, fundamental to like everything. Anything that's sustainable, I suppose. But when you talk about the community that you built a product on, so if you, like, how do you build a community? Like, I don't know how to tee this up in like a fun way, But like, so building community, everyone talks about community. Like, what is it? Is it like a buzzword? Is like, does it actually, does it actually benefit things? Yeah. I mean, different definitions. I think I categorize it more in like, okay, community is something that attracts a certain audience of people that want to associate themselves with it.

34:29And it's more about when it comes to community, there's a big difference between an audience and a community and people like mix them up. Like your Twitter followers are probably not a community. I'm guessing. Like that's an audience in most cases because community is about other people in that ecosystem connecting with each other and helping each other in some way or providing some sort of value in some way. And so it's more about like the connections within your ecosystem or within your community than like you as the leader, let's say, or the megaphone distributing information or anything. So like the best communities are kind of like, you know, you as a leader, you're like a really good party host and you welcome everyone in and you make sure like the environment is good and everyone's welcome.

35:09And like that, that's what you do. But at the end of the day, you're not, you're not the one hanging out with everybody and talking to everybody at once. Like they're talking to each other at a house party and hopefully having a good time. And so, yeah, a lot of people, yeah, community is a buzzword. It can be extremely valuable because it's one, getting increased like word of mouth. Like if you're a part of a community and you really care about it, like if you're a part of Chris CrossFit, like especially back in its like peak, like what is a joke? Like how do you know like someone is a CrossFitter or whatever?

35:38It's And so it can help increase word of mouth and increase like, you know, engagement slash retention because people want to be a part of that community, not maybe some other community that they have less association with. Also just like creates more, all things being equal, it creates more like to use like a sterile term, like enterprise value, like two companies, let's take two SaaS companies. Like I don't know enough about Sketch and versus Figma to know if this is the right comparison, but let's just use those two. like Figma invested a lot in community and events, kind of your point about like, bring people together in person.

36:14And let's assume that Sketch built as good of a product, like Figma having a better community is just going to be way more valuable than Sketch. And I think it applies to any kind of like SaaS company. That doesn't mean your typical fintech, like B2B SaaS company should like have a community or like invest in it, but -

36:31Turner Novak:Yeah, our mortgage servicing software has the best community. Yeah. I just love mortgages. It's so exciting. but but it can be valuable and so i don't know i think last thing i'll say on that is like i think about like utility too like people don't want to join a community they're not like i'm waking up in the morning like i need to be part of a community yeah it's like podcasts like people don't wake up and say i want to listen to more podcasts yeah it's like i don't want to join another community yeah so so how do you make it how do you start a community like would you need to find utility like a reason for it to exist i think so i think that's a good way to start like there's different ways to start a community but it's like okay what is what's like the end goal what's my motivation as a community member?

37:09Like, what am I trying to gain here? In Product Hunt, it's, and there's many motivations, but if you're like a builder or, you know, maker, founder, like you're trying to gain, get users, trying to get feedback, you're trying to, I mean, I hate to say it, but like you're trying to earn some sort of status, you know, in the status game. And so that's like the hook, let's say. That's like, maybe that's how you start being a part of the community. Cause you're like, oh, I can get users here. Let me go check it out. And then that pulls you into hopefully a higher engagement and like more part, like maybe go to our events.

37:39Like we, we hosted some like tons and tons, hundreds of, of community events. Um, which by the way, most of them were like by the committee. Like I didn't go to most of them. I went to like four of them, maybe five.

37:50Turner Novak:Yeah. I feel like it was, it was a big deal when you like, there's one that you did that you went to like a year or two ago. I was going to like try to go because you were going, I wasn't an SF that day. Yeah. Yeah. I remember it was like a huge deal. Yeah. We had, we had some fun ones. We had some like yeah at in the beginning we had some like wrapped around like two blocks like lines and everything is epic has anything changed about building community like since you did it in 14 15 16 versus in 2025 that's a really good point i haven't asked myself that question is it more digital like is there less that happens offline more that happens online or maybe the opposite i don't know the answer to that one you got me stumped man so what would you do today like if If you were trying to, if there's something that you're really passionate about, you're trying to start a community on today, is there anything like that?

38:38Turner Novak:If it's something that I'm passionate about? Yeah. Like if you're going to like, I'm going to start a community. Oh yeah. I mean, if I was to start a community, I mean, I'm not going to do this, but well, I actually, okay. I have an answer actually based on my own experience and my anecdotal experience. Communities have actually gone a lot more towards like smaller group chats. Greg Eisenberg, actually a friend of mine, he built a company called islands that was like really focused on that, that thesis, I think 2016 or 17. And, and I don't know about you, but like the most engaging, I don't know if I, people wouldn't really call them communities, but you get a lot of the same benefits or value of these communities.

39:15Like I'm a part of one, which is like maybe 30 or 40 people who are always, it's all about health stuff. So people are sharing, you know, the peptides that they're using, they're sharing like their, their latest, like gadgets they're buying to like, you know, work out or whatever. And it's just like a small private group. And like those types of things are really, that's, that's actually most compelling to me. And you see this across many different categories. I have one just like some LPs that, you know, we, we just invest in funds. And so it's just focused on that. And so I think communities have shifted increasingly to like just group chats.

39:46And part of it's also the nature of, I think, how social media has evolved. Like we went through a whole, like we've gone through a lot of changes since like 2013. It's got a lot more political. It's gotten a lot more just dangerous kind of to like share everything on the internet. And so people have receded into like more private channels for a lot of things.

40:07Turner Novak:How do you think, we talked a little bit about this, but how do you think AI has changed how not just building communities, but building products? Like obviously building a product today, quite a bit different than 10 years ago. So if you think about it, like building a product is, the high level steps are like, I have an idea. Now I have to translate this idea into a piece of software and then I have to get feedback and then iterate on that. And now we've collapsed that in a number of ways. One, you can just write the software so much faster, like infinitely faster. But two, the fewer people are required to write that software.

40:41So you have marketers and PMs and designers and basically non-software engineers vibing their way into their ideas. And yeah, right now, a lot of those products are like, maybe not production ready, maybe not even good, but like it'll get better and better and better. And the fact that this is collapsing and you eliminate the entire like communication challenge, like when I have an idea and I need to translate to somebody else, not only does it take time, but it's also like there's always things missing. And so if I am an accountant, like an accountant knows exactly what problem they have and how they want to solve it.

41:14And if they can just do it themselves without translating that to somebody else, it's actually a huge, huge opportunity for them and just speeds up the process entirely. And theoretically, once Cogen is like to a point where it's like as good as like a senior engineer, theoretically, it's actually be much smarter and better to build that way. Like now, this is dependent on like what you're building, like there's certain categories of things that are going to require like very sophisticated, experienced engineers. But there's a number of categories that could just be vibed into existence by anyone.

41:46there's also some thesis i don't i don't know where i stand on this yet but people also talk about like the personalization of software too and like okay well why do i just use evernote when like i want evernote but i want it to have these features and so i'm just gonna like build it myself and i'm gonna remix it and we're investors in a company called adaptive that is kind of in that category and you know you can remix apps and change them and do it all just with natural language, which if you can speak English, then you can code. So that's really cool. So I think there's like a series of things are changing.

42:17One is like the longer term view of like software building is going to be collapsed much faster to build those ideas. But in the short term, a lot of these things can be really good for MVPs and testing. It's like, okay, maybe it's not production ready. Maybe it's missing a lot of things. Maybe it doesn't have the security that you need to like, you know, sell it to customers, but you can at least test it. So instead of like Like a PM coming up with an idea, working with a designer, creating this like clumsy Figma, like click through walkable prototype. Like you just have the PM, like just be like, all right guys, I'm going to, this afternoon I'm going to work on this thing and we're going to test it out and see how it feels.

42:49And then like from there you can kind of iterate. So I think that's really cool. And yeah, I don't know. What do you think? What does this look like? You think in the next few years, like how do you think it'll change?

43:01Turner Novak:Yeah, I think I think there's the old adage of like things happen. Fewer things happen in one year and more things happen in 10 years. Like we kind of over predict the next year and we kind of under predict 10 years. So I don't know, like one for me, it's like self-driving cars. I've always been like, they're never going to be here. Like they're always going to be 10 years away. Yeah. And then suddenly it's like, oh, wow, they are actually here. Like it actually works. And it kind of like people, we kind of hit the hype wave and it's like they're not ready yet and then you forget about it and then it's like oh but now eight years later or whatever 10 years i don't know what the actual time frame is but it's like oh now they are actually here and they do work pretty well so you know it's it's kind of like the same thing with ai like i go through these phases where you try some of the products and it's like still kind of sucks like it's it's it's like oh this is so useful but it's kind of like an intern where like you can't trust the intern to push it to production yeah yeah but it's like oh it's actually doing something And then, so you kind of like discount it a little bit.

44:02Turner Novak:And then suddenly, like, I, I kind of went through that with chat GPT. I was kind of like, this is like, isn't good enough at a lot of these things. I would try like probably about six, seven, eight months ago. I tried it again for some things I used to try it for. And I was like, oh, this actually works really well now. So it's probably like some kind of combination of, you know, we're going to, it's, it's not actually going to go as fast as we think over the next, you know, short term, but in 10 years, maybe we, maybe it is. better? I don't know. Yeah. Well, it's, this is a topic that my partner in the fund, Vedika, she, she and I have been talking about this recently is, so there's a bunch of, so what's so fascinating about AIs is if you compare it to like cloud computing or cloud hosting, more specifically, like when we moved to the cloud, when we started creating all these SaaS products, like you sign up on AWS and like throw your product up there.

44:52And it was like pretty binary. It was like, it served your software or it didn't. And that was it. And yeah, it got cheaper. And yeah, it got, you know, maybe a little faster, but it was like pretty stable. Whereas with AI, it's similar in the sense it's like it's infrastructure and a bunch of companies are using it at the foundational level, whether it's like open AIs, models, Anthropic or others, or even self-hosted like Llama and things like that. But that's just getting it better and better and better. And the cost is coming down too. And the cost is coming down. So you have like, I hope I can share this.

45:23We're investors in Rosebud, which is like a journaling app. So you talk to it and it gives you feedback and it helps you like journal and build a habit there. And in the beginning, it's like they charged, I think it was five ish dollars a month was like their base subscription. The challenge was like their power users were costing them money. It's like every single time they would use the app, they're making calls to I think it was OpenAI at the time. I'm not sure exactly what they're using now. And that's a problem. You know, when you're you're getting five dollars a month, it's costing you 20 theoretically.

45:52I don't know exactly what how much they were in the hole there. But obviously, the obvious assumption was that it's going to get cheaper and cheaper and cheaper, and it's going to decrease from like$20 to$1 or less. And so that's one thing that I think founders have to consider too is like, okay, where is the market heading? Like, where's the technology heading? Like, you have to kind of make some bets. I think it's consensus that's going to get cheaper. So maybe that's the most like novel insight per se. But what are the other things that are going to be unlocked just at the foundational level without you doing anything else.

46:26And maybe an example for me is like a year ago, I was using like OpenAI's deep research, like early version of it. And I was trying to like just do an analysis, you know? Okay, give me analysis about this market. Like I'm looking at this company. I want it to do basically like analyst level diligence for me. And it just wasn't good. It missed a bunch of companies. I was like, oh, this isn't really useful. But like it will get to the point where it is incredibly useful. And so you have to like, I guess, be prepared for that or assume, I think that it's going to be better than than you can even imagine, you know, in the coming months or years.

46:58Turner Novak:Yeah. One thing I try to get in the habit of doing is like, all it's like just like retrying some of those things, like just generally with image generation. I'd say there's a pretty like very easy down the faraway example where 2022 like Dolly. Yeah. You know, some of them were like they were like laughably bad. Like six fingers, four fingers. Yeah. And like a real stuff eating spaghetti. And it's like that was great. That was art. That was peak art. That was like a cultural. That became a meme, right? Because it was so bad. It's so bad, so good. But then now, it's suddenly like, oh, it actually does get the fingers right.

47:30Yeah.

47:30Turner Novak:And if you're not really paying attention to it, you might miss that stuff. So you kind of got to always watch and just see how they're going. So I mean, that's actually one of the things that made me start using ChatGPT way more was when the image gen came out. And I was like, oh, this is actually like, this is really good. Yeah. I think this was probably six months ago, maybe, when OpenAI, when ChatGPT had the native image gen. Yeah. Yeah, I think the interesting thing when you talk about like, so like the product rating better, the costs are coming down. If you're using the newest, latest models, though, they're still kind of expensive.

48:03Turner Novak:So that's I feel like sort of a tricky part of this is like the product is better, but like the cost that was coming down, it kind of goes back up. So yeah, that's an I like. And then I also think like a lot of these companies are going to have to raise prices to like or massively increase usage and adoption of AI in order to make the financial models make sense, which is how people are sort of investing in these companies when they get that big. So I don't know. I I don't know how it's all going to land, but it's but I think I would say in 10 years, like it'll it'll work itself out. Yeah, the products will be better.

48:39Turner Novak:They'll probably be cheaper. So it's like, but between then and now, I don't actually know. Does the floor fall out in six months? Do we keep running for three years? Yeah. I don't know. Well, it's not going to get any worse. You're saying the products get worse? The foundational models. Yeah, yeah. They're going to keep getting better. Yeah. So we're at the worst point that it will ever be right now. And we can, even if it like never got any better, we're still going to, like, we're still at the exploratory phase. We're still like early 2011 in mobile when it's like, okay, we have all these tools and this new, like, we discovered new land essentially is the way I describe it.

49:10and like, but we're still in the fog of war. I don't know if you played StarCraft or like, yeah, where you're like, okay, we know, we discovered this new world and we have this plot of land. We know it's here, but like, we have no idea what's over there.

49:22Turner Novak:So like with just being able to create software so quickly, like some people maybe call this taste. I feel like you think a bit more about like craft. It's like, like how important is craft in building products now when you say anyone can kind of do it? I guess it depends on how you define craft, perhaps. I don't know. There's like taste has become like almost like a hotly debated like term. Yeah, I don't know. For me, I think about it, product building is like kind of back to the basics. Like, who are you building it for? What is their goal? And then within that, I try to think about how do you build it?

50:03How do you think of it like as a system? And this depends on what you're building. I personally love building software that multiple people interact with that has like human to human interactions. Like Productent is like an ecosystem of humans. And that's actually one thing that, you know, if you think about like Productent is almost 12 years old now. And if we did nothing, if we just like left it and didn't add any new features of any kind, like it would still just spin. Like the flywheel would keep spinning. Now maybe, I mean, it could stop.

50:34Turner Novak:Eventually, you know, 100 years in the future, maybe. Yeah, well, it's and I guess what I mean is more like the fact that software development and software has changed. Like so many people have built competitors and like clones of product and it just hasn't worked because it has this this brand and it has this flywheel and it has this network and and it just keeps spinning. And so I like to think about like systems in that way. And then how do you understand the incentives of multiple different people? Angelus is also a really fascinating one, too. So product was acquired by Angelus. I sit on for four years afterwards.

51:05And I was mostly focused on the product and stuff, but occasionally worked on a couple of AngelList projects. And AngelList also has a really interesting social, like, I don't want to say social network, because that implies a lot of things, but a network of people, you have LPs, and you have GPs, and you have founders, and you have all these different like nodes within a network. And they all have their own incentives. But how do you create a system that allows all those people to help each other in a way? And And anyway, in abstract, I love those problems. I love exploring those systems because it's really fun to play with.

51:37And when you work with people, multiple people, that's when you can also build in like growth flywheels and engagement flywheels in ways that is just not entirely software driven. I think if you're building a purely software driven product, there's lots of ways to create moats. So it's not always people driven. But if you have a people aspect to it, like a network aspect to it, it's just far more defensible and sustainable, I think, from like competitors or or just being unique in the market.

52:07Turner Novak:And humans still exist. Like we still make decisions about what we want and like we have emotions. So I feel like we have feelings. Yeah. Like a product like me, you feel a certain way or want to do a certain thing. So yeah, I mean, humans won't go away. Maybe at some point the robots will completely take over. I'll be bionic, but. Yeah. Well, you mentioned something. You mentioned AngelList. So your product was acquired by AngelList. And then is that kind of when you started Weekend Fund? Yeah. Yeah, it was right after the end of 2016 acquired, started Weekend Fund in middle of 2017. And AngelList is basically like a place for, like you said, people who run a small fund, people like investing in funds.

52:51Turner Novak:so you started weekend fund as kind of like to dog food kind of angelist basically yeah they were just so they've been primarily spd focused and they were introducing funds so a way for them to like basically all in uh you're on angelists i think yeah yeah it's like so you know how it is it's like everything in one and so they're like all right we're gonna introduce funds i was thinking about starting to invest and i was like okay maybe i'll raise a million dollars like maybe i'll convince people to give me a million dollars to invest in early stage companies. I was still CEO of a product tenant, so still running that.

53:24I ended up raising three million, so still oversubscribed.

53:28Turner Novak:Yeah, way oversubscribed by 3X. Killer, right? It's hilarious, actually, to think about like three million dollars is like the smallest fund. It's like a single like pre-seed check. I know. It's true. It's true. Yeah, it's so small. But at the time, very few founders are raising funds while they were operating a company. There's also stigma around it too. It's like, okay, if you're investing or if you're raising a fund as a founder and especially a CEO, you're not seriously focusing on your company. And maybe there's some truth to that sometimes. But for me, I was like, well, I am dogfooding and I'm part of AngelList.

54:03AngelList culturally is very pro everyone should invest. Everyone who works at AngelList is encouraged to invest in companies. So yeah, I started that fund and And yeah, deployed it over two years into like 40 something companies. So nice.

54:17Turner Novak:What was your kind of stake in the ground of like, here's why it should exist? What, what, what I do, what I stand for. I mean, it's kind of like he made a joke about like, no one needs to like, we don't need another podcast in this world. Like we don't need another fund in this world either. There's some truth to that maybe. For me, honestly, it wasn't like, I just wanted to invest. And I was like, this is so aligned with what I've been doing. I wake up in the morning talking to founders and seeing what's new. And I hadn't been investing at all to date because I was so focused. I didn't want signaling issues of being an independent company, a CEO of Product Hunt, or any kind of like potential community backlash if they're thinking that I'm like pumping.

54:55Product Hunt is supporting.

54:57Turner Novak:Yeah. Yeah. So we instrumented some rules too at the company where we're like, all right, if you have any stake in any company, you cannot hunt them. Like it's just a baseline. Like you can't post them on Product Hunt, things like that. But yeah, for me, I just wanted to try it, honestly. And yeah, it was also a way to see if I was good at it. Also a way to make money. I wasn't taking any management fees at the time because also if you do the math on a$3 million fund, it's like, okay, it's a rounding error. But I'm actually glad I didn't because, well, that fund will do well. So I'd much rather have the management fees deployed into companies we've backed.

55:33Turner Novak:Yeah. How did it go? What's the current stats on the fund? Current set, the first one, well, I mean, we invest in the seed round of deal, which, I mean, you know how venture it is. It's like power law. You know, depending on how you value it, like deals, like on paper, like a 10x fund returner alone. That single position 10x return the fund? Yeah. Yeah. Not the company, but the fund. So it's like, I think individual is like 400x or something like that. I forget. Nice. And I think I remember you tweeted something about how you completely returned that fund to investors. Am I remembering that right?

56:05Yeah, I think it was about 18, almost 24 months ago. Market was like, you know, venture market shifted a ton since like 21. And we had an opportunity to sell. We sold 15 % of our position and deal to return the first fund. And, you know, in hindsight, it's like, well, shoot, we sold, like if I held, you know, Be worth even more. Yeah, it would have been, it would have been able to sell today for more than 2x that minimum. But also I felt good about it because it was like, all right, LPs, we're not getting any distributions then. And also puts us in the clear, gets into carry. So now, okay, anything beyond that, now finally get paid and carry, which is nice.

56:42Turner Novak:Finally paid off not taking those management fees. Yeah, yeah, I know. So yeah, that was great. But yeah, it's funny how venture is like so parallel. We know it intellectually, like the power law. But then when you see it, you're like, man, just one company can make all the difference. And you do a lot of experiments. Like, I think that's kind of your thing is you're always trying different things. What are some of the ones that you've done? Maybe the ones that work best. didn't work. Yeah. I find we're always tinkering. You're a beta user in a project we're working on. Thanks for kicking the tires.

57:14It's really fun. It's interesting.

57:17Turner Novak:It's helpful. Yeah, hopefully. So yeah, it's really fun. Some of the projects we worked on, we built this tool called Rolodexer. So on Twitter, the thesis was like, shoot, there's a bunch of people that follow me, follow you on Twitter. and a lot of times portfolio companies like, hey, does anybody have an introduction to Ramp or to whoever? And in some cases we're like, oh yeah, I know somebody at Ramp. But in many cases, more people know of us than we know of them. And so the theory is like, okay, if they follow me on Twitter, that's a good signal that I could probably DM them and they're probably gonna at least pay attention and read my DM.

57:53And so we built a tool to be able to search through all of my almost 200 ,000 Twitter followers, let's say half of them are fake, but still it's like a ton of people who are in tech. and now we can like search and use it for like portfolio like b2b outreach like they send us a list of here are the 50 companies that we want to reach out to we search for them on on rolodexer and then like i start dming and like making introductions it's also been used to other things like diligence if we're trying to find some random accountants let's say to give us feedback in like the accounting space i can just search accounting accounts like that follow me on twitter and so that's been really useful and then we've given us like some friendly investors and some founders too to be like, hey, you have a Twitter following, like search your followers and use this if it's useful.

58:35Was this thing you like

58:36Turner Novak:kind of showed me a little bit a couple months ago? Or is this like an older, older one? It's been a while. Yeah. It's been a couple, almost a couple years since we've been using it. Oh, got it. Okay. I'll send you a new link to your followers too if it's useful. Yeah. Could be useful. I mean, I definitely do that. I'll just notice like, oh, this person's like, whoever, like that's interesting. Just DM them. See if they want to chat. Yeah. Yeah. Yeah, it's like, and that's also like my rant against CRMs is like no one needs no CRM. I actually think a better angle of CRMs is like, who knows you, not who do you know?

59:10So I think there's like a version of Rolodex that could be more productized, like much better than what it is now. It's super janky. It's like, it barely works, but that's actually why I'm like so impressed by it because it like barely works and it's extremely valuable for me.

59:24Turner Novak:Interesting. Okay. And so like, what do you think that you do differently than other investors? Like you do a ton of Zoom meetings, right? You do a ton of. There's different ways to play the game, I guess. There's like everything from like your fund size. Like, are you a collaborative small investor writing small checks? Are you, you know, leading deals? Are you someone who likes to hop on jets and meet founders in person? Or do you just like live on Zoom and your PJs like I do every day? Like I had to shower to come meet you, man. That's a huge ask. I know. I had to shower and take a taxi. And sweat.

59:55I know. Yeah. So I don't know, I try to honestly, I just, I want to do what I want to do. I know it sounds super selfish, but like also I think it's sustainable. And I also want to do what I think I'm better suited for. So one reason why, even if we could raise a$200 million fund, let's assume we could, like I wouldn't want to, because now you have to lead deals, like you have to sharp elbow, you can't be as collaborative with people. You honestly probably have to like do more flying and meeting in person and schmoozing. And you're not a schmoozer. I mean, I don't I don't like going to I don't like transactional conversations.

1:00:32And I'll be honest, like there's parts of investing I don't like, even when I speak with founders. I know this is a transactional conversation when I'm speaking to a founder like you want money. I have money. Hopefully we can like build a relationship as well. But there's an element of that that like irks me because I'm like, I don't like that. I don't like I don't like rejecting people either. Because who am I to like say that your idea is not going to work. So there's parts of that that I don't like. Like there's parts of like the investor to investor networking where it's like, hey, let's catch up.

1:01:00And sometimes it's really energizing and like intellectually stimulating. But also I just feel like it's so transactional. Like you want me to just tell you what companies you should be investing in. And I want that too. Don't get me wrong. But there's like some social dynamics of investing that I don't like. And so for that reason, like I try to live on Zoom, stay small, try to spend more time like building things like Rolodex or like products that like give us leverage that allow to help in ways that don't require me to talk to people. I know it sounds like so robotic. But it's like, if you think about, you know, adding value or whatever,

1:01:33Turner Novak:like you're doing it in your sleep. Like you don't actually do the work personally. It's just the things that you built are benefiting your network and the companies you invested in. Yeah, that's the hope. Like the project we're working on now is like, you know, honestly, probably never charged for it. And it might not be used more than like by 400 people. and that actually be success for me. If it's like useful for 400 investors, that'd be great. So what have you learned over the past eight years of investing? Nine years, 10? Just over eight, I guess. Oh, wow. Yeah. What have I learned? Or anything you've evolved on?

1:02:13Yeah, I continually oscillate between like, I don't. We're very much a generalist, both myself and Vedica. And and what I mean by that is like, we're not super thesis driven, even though we have like certain categories that we're interested in. And that's partly because it's everything's changing and we don't want to block ourself also into a certain niche, let's say, and miss out on this really cool idea in a space that we haven't thought of or explored personally. So I think that's the right strategy for us. I do oscillate between how valuation sensitive we should be and things like that. Because obviously, in hindsight, you look back on the misses and like, oh, we passed because it was 30 mil post and it was pre-launched and then it becomes a multi-billion dollar company.

1:02:58And of course, I wish I would have invested in that.

1:03:00Turner Novak:But at that time, in that moment, with the information we had, was it the right decision and just wrong outcome? I don't know. So, yeah, I don't know. I'm constantly questioning a lot of these things and also thinking through even fund model. Like there's arguments to be made that we actually be making more investments and spreading wider bets because today we have so much activity and things are moving so quickly. And there's so much noise and really compelling spaces with multiple companies competing for the same thing. So the end of the day is like smart as I think I might be. it's like, I don't really know who's going to, when it's this early, when investing like precede first round, like don't really, really know if it's gonna be successful.

1:03:40And so anyway, we're not really answering your question, but I'm, this is actively something I'm thinking about right now is like, how do we think like, where's our bar and what does our fun model look like in the next fund? And how do we want to change kind of the game we're playing and what's also working well? Like what do we want to continue doing, which continue building more products, keep the funds small. Yeah.

1:04:02Turner Novak:Why is a small fund important? Like, don't you want a bigger fund because it's cooler or you get more money? Like, why not? Yeah. I mean, it's appealing. I mean, if you could really do the math on like management fees, just on like a 200 million dollar fund with a small team is like, you're instantly wealthy. That's cool. Yeah. For me, it's more like the game I want to play is I want to be collaborative and I don't want to, I want to be able to share deal flow back with me. I want to be able to, well, so that's, that's one thing. That's a selfish side. But then also I think, and in raising a big fund and leading is the right strategy and the right choice for some founders for sure.

1:04:42But I also think like a founder in their very first round, theoretically get a lot more value by having, let's say 20 investors on their cap table for the same amount of equity as one lead investor in most cases. Yeah.

1:04:53Turner Novak:And it might be someone who is a lead investor in 20 other companies and will give you just as much time as one of those one of 20. Yeah. So if you get 20 of those people, you'll get, in theory, so much more. Yeah. There might be somebody who's like, I'm going to give you eight hours a day. Yeah. Yeah. Five, six days a week. You could also get that. Yeah. I think my position is like if I put my founder hat on, like the only scenario, if I was to raise a round and let's say a first round, let's say I'm raising$3 million, only scenario where I'd take like a two and a half million dollar check, like a majority of the round from a lead would be if I had a strong relationship with them and they were like exceptional in like an area that I extremely needed deep help with.

1:05:37And I had extremely high confidence in that. But in most cases, I don't think that's true. I think like in most cases, I don't think most lead investors can do that for most companies. And so most founders say, okay, well, here's two and a half million dollars. They're offering it right now. I don't have to do a bunch more meetings with a bunch more investors. I'll just take the check. And I don't blame them. Maybe that's the right decision for them. But for me, I'd much rather have 20, 30, honestly, maybe even 40 investors, whether angels and small funds supporting me. And then it's my responsibility to put them to work.

1:06:10Turner Novak:So from that frame of thinking, having a fund strategy that requires you to get 20 % ownership means you're not going to be getting the best founders from your view. Like the best founders will probably. Well, no, I don't think that's necessarily true because I think great founders are taking money from lead checks like that. I guess I'm speaking more from my position of what I would do as a founder. And maybe what I would do is not the norm. And therefore, I shouldn't use that as a bias towards my fund strategy. but I don't want to sell a product I don't believe in. And if, if I'm, to be honest, like if I'm leading around writing a$2 million check and squeezing out a lot of other people, I don't know if I'm going to be as valuable as 20 other highly credible other people who are around the table, like as great as I think I might be.

1:06:57Like, I just don't think I'm going to be as helpful. So I don't want to put myself in that position and play that game.

1:07:01Turner Novak:Yeah. There's a lot of cases where I'm like, you know, second, third, fourth largest check. And they're like, like, you know, great ROI, like great value for the check. But it's like, if I would have done the$3 million check instead of the$250K or$100K check, I don't think the ROI would be there to the same extent. So it's like, it's kind of nice just being like, you know, third biggest check, like the founder can rely on you. You do some stuff. You're not over-promising, under-delivering. So yeah. Yeah. And I don't know. It's, there's so many investors too. It's nice to, that's actually one benefit right now is there's so many people angel investing, so many people with funds.

1:07:36There's a lot of people that you can't bring around the table that could be helpful in a variety of different ways. Yeah.

1:07:41Turner Novak:And you, so in terms of the things you're investing in right now, you have seemed to be doing a lot in sort of consumer health. I know that maybe VC 101 is consumer's bad. Yeah. Like, so why are you investing in consumer health? Mostly because I'm just getting older. That's part of it. 338, you're like, I'm trying to invest in, you know, my future survival. Do you selfishly invest? Like when you're investing, it's like, what am I personally interested in? some of that yeah yeah i just find it way more fun um and i mean i we invest in no offense and i won't name them but no offense to some of the portfolio companies i don't really care about the particular care is the wrong word i don't find it particularly intellectually interesting let's say a particular category that we may invest in but i think it's gonna be great business and i believe the team and the founder like that's okay too but when i meet a founder and i'm like well i love this space i could be your customer like i i feel so much more drawn to support and i think they'll hopefully be more helpful, especially on the product side.

1:08:41So yeah, and the health stuff, like some of it's I'm getting older, I've been exploring, like also I had some new issues like a few years ago. So that led me down like the whole peptide rabbit hole. And I was like, oh, this is interesting. We have this like technology that you can like, basically give your body instructions to do things and fix itself. I'm like, that's cool. Wait, so what is that? So like peptides, like GLP ones are a peptide as an example. And like the way that I describe it. So I know nothing about science or biotech. Okay. Yeah, set the record straight. It's just like a classic tech bro on a podcast.

1:09:12Exactly.

1:09:12Turner Novak:We're just telling people things we know nothing about. No. I just inject myself with needles every night and, you know, things seem to be okay. But the way I describe it is it's almost like telling your body, like giving it little instructions to be like, okay, do this. Like produce this or heal this. And the first thing that I started using was BPC-157, which is really well known in certain circles as reducing inflammation and just helping with like muscle repair and recovery and injuries generally. And then I've explored like some others too. There's this one that I experimented with that was quite interesting.

1:09:46It's called melanotan. Have you heard of it? Melanotan? Wait, is it different than... Oh, melatonin. Not the thing you take to sleep, but melanotan.

1:09:57Turner Novak:Melon no tan. Yeah, I believe I'm pronouncing it correctly. Melatonin, melon no tan. Yeah. Yeah. It's a strange word. But yeah, it's kind of wild. You can take it in many different ways, but usually you inject it and it tells your body to produce more melanin to get more tan. And that one's actually, I use an example of a peptide because it's immediate. Like in the first day, first 24 hours, your skin will get more tan. And if you want to, yeah. I'm going to check this out with my like pasty white. I'm like the whitest person you can imagine. I'd be curious. Like, what do I do for you? Interesting.

1:10:30And you can go too far, though, too. If you if you like Google this, like there are people who go from like white to black and they look, of course, like really strange. Yeah. Interesting. The downside, though, I took it for a little while because I was just curious. I was like, I would like to be more tan, but I don't want like skin damage or sun damage. The only problem is like moles or any blemishes will also get darker. and so the net result can actually be net negative because you might look like more less smooth yeah in complexion but anyway that's a good example because it's like wow i can just inject myself with this and like instantly it's going to change my entire like skin tone interesting and it's kind

1:11:07Turner Novak:of like to the point it's like your your body just whatever hormones or like whatever your rna is coding and saying like oh you know turner have a big nose or like be cross-eyed or like make a sixth finger right like i don't know i don't know if we can go that far well maybe i don't know yeah but it's basically like oh produce more metabolism or like meta metabol metabolitize i don't know if that's where like the food faster like break down faster yeah it's yeah it's like little program little instructions interesting so anyway that that's like just one of many different health things that i've kind of like explored and i'm looking at like companies in the peptide space right now because you know glp ones of course are massive and that's also opening people's eyes now to like this whole other world of peptides for other types of improvements so why are they good investments because i think vc 101 will just say like consumers really hard like you should do b2b sas there's a spreadsheet um why why is consumer like even a trailer are there even attractive returns in consumer consumer broadly yeah yeah i mean most most of our investments are probably 80 percent have been b2b in nature b2b to c partially because historically we that seems to be a clear path to revenue and clear path to success so as much as i love the next consumer social play like we've passed on a majority of those but i'm always you got to be open-minded too and like things change culture changes you know technology of course is changing like we We have a lot of shifts happening right now.

1:12:39When it comes to consumer health in particular, we have one, like GLP-1s, they're opening people's eyes to a different, almost like a different way to approach their health. It's not just like, here's the food pyramid and here's what your general practitioner says to do and here are the basics, but things like that that are opening people's eyes to like, oh, there's a whole world of things that you could be doing off insurance in many cases. it's also acclimating people to injecting themselves with needles. We're investors in a company called Mindbloom, which is I think the largest at-home ketamine provider for therapy.

1:13:18And they do a lot of really good work. And they instrumented lozenges was their default application. They ship you some lozenges that you'd put in your mouth.

1:13:26Turner Novak:That sounds way better than a needle. Yeah, but here's where I was surprised. They introduced injectables so you can inject ketamine yourself at home. And I initially thought like, oh, people are not going to want to do that. Like, it's scary. I hate needles. Yeah. Personally. Well, I think most people do. I think they're getting over that, though, because, I mean, in the case of GLP-1s, people are like, I want to look better. Okay, fine. I'll figure out this out. Like if you're a heroin addict, you will inject yourself. You'll put anything in. Yeah. Yeah. So if there's value from the needle, you will do it.

1:13:56Totally. And so I don't know the stats yet, but from the information that Dylan's CEO has told me like people prefer the injections over the lozenges, even though the administration method is like more uncomfortable for, I would think most people. But anyway, the other thing about health stuff, it's like, there's a ton of, we have all this data, like I go to Function Health and get my blood work done all the time. And we have AI now to interpret all this information. Like there's so much material and ingredients to like do really cool things for people's health. And, and then health is like, if you're not healthy and nothing else matters.

1:14:31It's like a huge, ridiculously large market. So anyway, that's why I'm excited about it.

1:14:36Turner Novak:It's kind of like with AI, it's like you just, you get your, your, your, all your stats and it like puts in AI. It's like, oh, by the way, you probably have diabetes. And you're like, whoa, did not know I had diabetes. Yeah. The doctor might have not even picked that up because I didn't mention the, the things where we're like, you can pick like any, anything that you might have. Like, oh, you, you might have cancer right now based on the keto. And you're like, oh, this is good to know. Oh yeah. So I had this, I was, do you ever get floaters in your eyes? like little dots that like float around like no okay i don't so you're just looking at something and there's like like a black dot that's like floating i know yeah it's it's not uncommon okay i don't i've never got that i do have it it sucks like even if i pay attention i can like see one sometimes oh actually i did get that when i was a kid when i would close my eyes i would see light designs sort of but i got a bunch of eye surgery when i was younger it might have been really it's like scarring because I was born I have a strabismus you basically have like two cross-eyed eyes and I've just gotten it's basically like one of your eye muscles is way stronger than the other and just messes things up I think it's one's like way stronger than it should be one's way weaker I don't know exactly I've had like five surgeries when I was younger like between two weeks old and then seven two weeks you had surgery I had surgery when I was two weeks old wow because i did like notice something or something yeah like i actually don't know how you do that on a two-year-old but that's what my parents told me so wow you don't remember it no i think i have like some flashes if i really think hard enough yeah i could see that so so so what's the eye floaters well so i think floaters which is like i know that's not a big deal like people have them it's fine benign but then i was in new york walking around and i was like, it looks like a little like hazier in the distance.

1:16:23And then of course, I go to chat and I start asking, Hey, I got these floaters. And like, sometimes it looks a little hazy. And they're like, it could be these four things. And then like the fourth thing was like, if it's this, you need to see a doctor now, like today, because he might go blind. And I'm like, Oh, God. So anyway, the point is, like, there is an element of like the self directed health stuff, which spirals people into like scary potential issues. But It's better to have that than like the reverse, which is like you have no information, then all of a sudden you're blind.

1:16:51Turner Novak:Yeah. And also, I mean, health care is like 20 percent of GDP, something like that. I mean, I think a lot of it's actually just old people. Just end of life, like last six months, their life is like a huge portion of costs. Yeah. And if you think about like somebody's compensation, like when you get paid at work, you've got a salary, there's like taxes, health insurance and health coverage is like depending on how much money you make. and all stuff, like it can be 15, 30 % of your compensation is the premium that your employer is paying for your healthcare coverage. So it's a pretty massive market.

1:17:25Turner Novak:Maybe like housing is a big expense that people make, food, everyone buys food, but like the cost of being healthy or staying alive in some capacity, it's like an extremely high share of wallet. It's highly more variable than housing and food too. Like food can only kind of go up too much and housing, if you're rich, you can of course go up infinitely but health is like no matter how wealthy you are it can go up a lot yeah like i'm i'm definitely someone i do not pay a lot of money for my health like i don't go to the doctor ever but i do i do do other things like you go you work out and like you eat in a certain way like is that health care like eating healthy eating vegetables and yeah things that are good for you versus mcdonald's like is that a health care thing i don't know yeah thinking self-directed consumer, like that is, goes in your body, kind of, kind of health related.

1:18:13Turner Novak:So. I mean, it absolutely is. Yeah. It's a portfolio plug. Cause I think it's my duty as an investor. We're investors in, in true med, which helps consumers user FSH and HSA funds to like Peloton and AG one and those types of things. Oh, nice. I didn't realize that's what they did. That's cool. Yeah. Yeah. It's really cool. Cause I mean, it's, it's really encouraging consumers to, to use their their one user funds. Sometimes people just don't even use them. And two, it's a pain in the ass. You actually can't. It's not like you can just like easily buy a Peloton bike using this. You have to get like a doctor's note, you know, effectively.

1:18:48So they've bundled this entire like process into the checkout flow of like Peloton and some other companies like that. So, yeah, it's pretty cool.

1:18:55Turner Novak:So you speak on investing. You've also on Twitter, you talked about you're investing in funds. You invest in 30 funds. You're an LPN. why are you investing in funds? What's the interest there? Yeah, it's, I guess it kind of started organically when like, I think Andreas, who you mentioned at the beginning of the podcast, former CTO, productent and friend, he's one of the first ones actually, back in like 2017 or 18. And yeah, I mean, part of it was just to support friends. Some of it was, I want to say to make money, but the honest truth is like my checks are so small that like a 10K check, 10X, if it's an amazing fund, in 10 years is not going to like, you know, do much for me financially.

1:19:37But, you know, I do also like try to invest in funds. I think I'll do well. And then some of it's just like, yeah, to sometimes it's been deal flow a little bit. It's not like the primary motivation, but getting LP updates. And this goes back to why we're a small fund. It's like, OK, well, if I was a lead fund having to write$2 million checks, if I get an LP update and there's this company that I'm like, oh, that's really cool. Can I get an intro? It's pretty unlikely that they'll be able to like take a$2 million check, you know, after they've closed around, but they might take a 200K check. And, um, and so I don't know, it's just kind of been fun too.

1:20:07I don't know. Half the things I do are just because they seem fun for better or worse.

1:20:13Turner Novak:I don't know. I feel like too many people just optimize for like making the most amount of money or getting the most social status or whatever from things. But then ultimately, like, did you actually enjoy doing that thing? Like, sure. You made a bunch of money, but you seem miserable and you only live once, right? YOLO. So it's like, sure, making money is important, but do you actually like your life? That's a big thing. It's like, are you enjoying it? Yeah. There's a Porter Robinson song called Get Your Wish. That's all about that. Oh, is it? I'll leave it at that, but go to Spotify, go to YouTube, listen to the song.

1:20:51Yeah.

1:20:52Turner Novak:In terms of investing in funds, what are ways that LPs can actually help GPs? Like, can they add value in some way? Yeah, I mean, I think the number one thing they could do is just do their capital calls. That's the number one thing. That's the baseline, actually. That should be like par for the course. We've had surprisingly like very few issues compared to how many LPs we have, like over 350 LPs. But we have had a few LPs, one in particular just decided not to do their capital call and just said like, I'm not doing it. And I'm like, that's not how it goes. Like you made a commitment and like, yeah.

1:21:30Okay. So anyway, it's fine. It was a small, really, really small amount relatively speaking, but do you just like adjust it out of the fund, like just reduce the commitment

1:21:38Turner Novak:kind of a thing? Yeah, we can just do that. And it's, it's like, I think in this particular case, it's like 0.2 % of the fund or something. It's like so small. Yeah. That's what I did with 2022 fund. Just, you know, there's going to be LPs that don't have, they don't want to fulfill the commitment. So just reduce it. It's not a big deal. Yeah, it's not a big deal. It's more for me personally. I'm fine with it. I it's fine, but you need to approach it with be proactive and like be upfront and apologetic. If you're not apologetic as an LP and you're like backing out on your commitments, like that's not cool.

1:22:12And I remember that. So anyway, that's the one thing that LPs can do. I mean, otherwise, I think the best thing that LP can do is like make introductions to other LPs, I think. Really? I think so. Why is that such a big deal? I mean, fundraising is tough for most people, both as a founder and as a fund manager. And the LP classes, you know, it's like, I mean, you know, a ton of LPs, you have a lot of LPs, but they're in the shadows, relatively speaking. VCs are out there. They're tweeting. They have blogs. They have, here's how to email us and contact us. LPs are just like, you don't know who's investing as an LP.

1:22:48Oftentimes they're like intentionally not trying to be super out there. They want to like work through networks. So that's why I think like introductions can be really helpful. And like when I invest, I, I have like an email list of LPs that I reach out to and like this WhatsApp group. So I try to help there.

1:23:04Turner Novak:And you talking about being public, you used to write a lot. What's, what's the value of writing? Yeah. I mean, the beginning of, I was used to write every day. I published over 100 blog posts in like before product in like 2012, I think it was or 2013. And it was really fun. It was like a vehicle to like explore ideas. Now I don't write as much, but I still use it like a vehicle to like, okay, I have an idea. Is this right? If I can't write about it, like if I can't like dissect the idea into written form, then maybe I don't understand it enough or I don't have a strong perspective. So I use it for that.

1:23:40I use it also just like throw ideas out there and like serendipity happens sometimes. Like some of the things I write about now today, it's like totally not tech related, it's just like personal stuff. And I'm like, I'll put it on the internet and see what happens. And so I enjoy it. Yeah.

1:23:53Turner Novak:You had a post like how status has changed in Silicon Valley in, in 2024, I think. Yeah. I think that was the post. So what was the concept of that? Yeah. I was just, I don't know. Sometimes I think it's in my head. I'm like, oh, interesting. I hadn't thought about that. And then I was like, okay, let me write a post and see how, like what thesis or not thesis, but like where it goes. And yeah, it's changed a bit. It's like, you know, in 2010, like when I first moved to San Francisco, it was like raising money. It was, it was like, I mean, all these things are still all high status to some extent, like raising money is still high status to a large degree, but actually more so today, it's like revenue, like showing off your revenue numbers.

1:24:29Turner Novak:Like do you have a business versus did you raise money? Exactly. Yeah. Some of it's also like credentialing, credentialing, again, still matters, but like people who are shipping stuff is more high status today because people actually showing and demoing and Twitter's also changed quite a bit too. And how Twitter's had a huge influence on tech, I think more than people realize. Like Twitter, few things change. One, it became more algorithmic, just like TikTok style. So like anyone with like a few followers can still get a lot of attention to the prioritize videos. And so videos are fantastic for like product demos for a number of categories.

1:25:02And so those things combined allow Twitter in some ways has become the launchpad for companies and startups because it has the tech town hall like mindshare. And when an investor, whether they like to admit it or not, when they see some demo with like 1000 likes, they instantly one have some sort of like signal of, okay, there's something here, maybe. And two, they're like, a bunch of other investors probably saw this too. And so it creates more of this like momentum to like pursue if they have any interest in that company because they know everyone's looking at it.

1:25:34Turner Novak:It's like addicting to be like, I was the first. I'm like on the board of that company that everyone knows about. Yeah, exactly. Yeah. And also, you know how fast things move sometimes where it's like, you know, in days, you know, rounds are getting done sometimes and preempted. And so anyway, it's just interesting to see like how Twitter has actually shifted tech significantly and think how - So more so than the press, like a TechCrunch article? Yeah, it's like social reach. Like if I think about like a press and getting on TechCrunch, you know, was seen as a high status thing and like scarce.

1:26:08Now it's become less so. And product has a role in the sense that like when we started actually, who was it? Someone at YSD, I'm forgetting exactly who, was like, oh, you're actually rethinking the press. like when it comes to product launches. And my belief was always like TechCrunch's job is not to promote your company or your startup. And also they cannot do that for everybody. And so the press is actually not a good vehicle for product launches. And so Product Hunt served a role of like, okay, here's a community-led approach to create a launchpad for companies. Before that, it was TechCrunch.

1:26:42Then it was Product Hunt. In some ways, Twitter is the launchpad now. So yeah, it's interesting how all this has changed.

1:26:51Turner Novak:Does status still matter? Like a status still something that you feel like people are ascribing to? Did I say that right? Aspiring to? Yeah. I mean, we can say how we don't want to care about it. Like high status people don't talk about how important status is for them, but like we all care. I mean, there's like fundamental like objective like benefits to high status. It's like if you're selling a product and you have high status, it might open doors and give you access to more customers. It might be easier to recruit people. There's like a lot of benefits to status, even though like I don't like the status games.

1:27:28And now when it comes to status, so I think it's also if I was to like, think about, okay, if you care about status, how do you get status? Well, don't, I would recommend not doing it in ways that are inauthentic. They might work actually in the short term, but then in the long term, either it's not going to be people going to see through it. Like, for example, if you're like chasing a fad, like all of a sudden you're like, I am the person for X because this is a high status thing. when it's not really you're too calling or like you're too authentic, like skill or vibe for lack of a better word.

1:27:59You might actually a lot of attention today, but like in two, three years when like that, that trend changes, is that going to be like high status? So you, so you almost lose some status then when you're, when there's a new thing and you like try to attach to that new thing and there's another new thing and you try to test to that. Yeah. And people are like, what do you stand for? Yeah, exactly. Exactly. Exactly. And we see that with venture funds. And I don't blame them too. But like when they're super vertically focused on certain categories that are like really, really trendy. There's actually business reason to do that sometimes.

1:28:29But then other times it's like, okay, well, what happens when that is out of trend? Like, do you now pivot the entire fund and rebrand it to something else in this new category? Or that's why partially we're, we're generalists and we're like, we're open to like any idea in any space.

1:28:44Turner Novak:That was a big, a big reason for, for me too. Like I think if you just look at the data, like when you invest in like a hot category, like the hottest category at the time is probably like not a good category to be investing in. So like, you know, we'll maybe say that's AI today. What's like the least sexy category? It's like CPG or something like, should you be investing in CPG? I don't know. Yeah. But do you, do you invest in CPG? I'm interested in it. I've made one CPG investment. Yeah. I would like to more. I think anything can make sense. It's basically like our job is like we own a chunk of a company that becomes a big business.

1:29:17Turner Novak:Can you a billion revenue? It's like a public company, whatever. Does it need to be AI? Does it need to be deep tech? Is it a CPG company? Is it like an accounting firm that's enabled by AI? I mean, like kind of any of these things could become a publicly traded company. It's really the founders, the creativity, like how fast do they move? Like it depends maybe on the market, like certain markets are better than others. There's NAI, you're seeing super quick adoption, but negative gross margins, tons of competition. CPG, maybe like margins less attractive, but like it's a bad, like nobody else is there.

1:29:52Turner Novak:If you make a good product, it's like, I think too, I think the thing is interesting about CPG, if you just look at who, like you want to compete against bad competitors. So if you look at what is the stereotypical CPG company, it's a big, massive corporation. They have a lot of advantages, but they're mostly the shareholders are just like passively owned index funds. And the people who all run the company, they don't really have that much stock in it. And they're mostly just getting paid off the income statement. And there, you know, you get to like expend stuff. You have a private jet that's paid for by the company.

1:30:24Turner Novak:You're really worried about like, do we hit our next earnings and next annual target? So I get my bonus. So I get my 20 million bucks and keep the kids in private school and keep a couple of the houses that we have. like the incentives on that are very different from somebody who like I own 60 % of the company and I want it to be worth$10 billion and like I'm doing these certain things. And so I think it's interesting about CPG, if I were to say that. And like CPG is not a category that people are investing a lot in. So the valuations are a little bit more reasonable. So like you have a lower entry point, maybe the outcome isn't as big, maybe it is, I don't know.

1:31:00Turner Novak:But The only thing you can really control is where you come in at. Like you're investing, I have a friend who invests in a CBG company at 1 million post. Oh, wow. And it's like, it's his best investment. It's not like the valuation isn't even that high. I mean, if it's a 100 mil exit, damn, that's a good return. That's better than anyone's going to get in SaaS and AI. So it's like, you just got to be open to that stuff. And yeah, I mean, there's always pitfalls, like all these different categories. And like, you got to make sure you're backing the right founders and stuff like that. But yeah, I mean, you can, there's always ways to make money doing this.

1:31:29Turner Novak:It's basically people starting companies, building a product, give them some money, help them out, get out of the way. Like there's not much more you can do. Yeah. That's why I try to understand like the secret. What's the secret when I talk to founders? Like, what did you figure it out? And sometimes I'm like, I'm direct in how I ask it. Sometimes a little like, I try to like ask it more creative ways, but sometimes like, what do you see that other people don't? And just sit back and like hear their response. And it's sometimes fascinating. Unfortunately, a lot of times I find like, I find a lot of people chasing ideas and spaces without a lot of secrets.

1:32:00And I tweeted this the other day. I was like, you know, I think if I was to raise money for a company, assuming I need to raise money, but let's just assume that, I would only do it if I had like a secret, like a secret or traction. And I would wait for one of those to be true first. And I find a lot of founders who don't have a secret and they don't have traction and they might do fine. And I don't blame them because like many people can raise money, you know, just a pitch deck or less. But I don't know, you don't want to go that path. You don't want to raise venture when I don't think you have either of those two.

1:32:32So why do people do it?

1:32:33Turner Novak:Is it a status thing? I mean, you see, that way you get a job sometimes. I mean, honestly, sometimes it's like, okay, I could get a job or I could be a founder and I want to be a founder and I want to build this thing. Sometimes it's delusion and I'm delusional. Like every founder is somewhat delusional. I don't know. I guess I'm just a little bit more cautious on raising capital because I've done it before and I'm like, I know what it takes to build a company. and I do worry that some founders go that path and then they realize a year or two and they're like, shoot, I shouldn't have raised money or I don't actually want to build this.

1:33:06So, yeah. Wow, that's pretty deep. Yeah, I don't know. It's dark out there. People don't talk about this stuff because we can't. The founders can talk to other founders. They're close friends. But yeah, otherwise people don't talk about the difficulty of building. Yeah.

1:33:24Turner Novak:So what's it maybe it's an interesting way to end is just like, what is the thing that people don't talk about enough about how hard it is? Like, why? Why is it so hard? Why is it such a big deal raising too much money? Yeah, I mean, you can't give it. Well, you can't give it back. You can't just bounce. But like once you do it, you commit to something and then you build a team and you tell people to like quit their job and join you and then sometimes move across the country. And you have all of this pressure as a founder. And, you know, people talk about how lonely it is because you can't be 100 % honest.

1:33:52You can't be honest with your board. At least I honestly wouldn't advise it. You can't be honest with your team entirely. Maybe you're honest if you have a husband or wife or partner or something like you probably be honest with them, I hope. But otherwise it's like professionally you're sort of isolated and you have to, in some ways you owe it to the team to exude confidence because that's going to affect their ability to be motivated and execute. And inside, you might not feel confident. I've had moments during product time where I was like, just crying inside while smiling and trying to like raise money and do a bunch of things like is painful because like the inside was like the opposite of the outside appearance that I was giving.

1:34:38So anyway, I felt that and I have like, you know, a lot of like scars in a good way. I even get emotional, like thinking about some of those days. but yeah i think it's all worth going through just know what you're getting into as a founder so how do you get through it hopefully really good friends is like the number one thing i think and then also realize at the end of the day if it all collapses you're going to be fine you're going to be you're going to be able to get a job probably i think most people most founders are gonna be able to get a job and like they're not gonna be in the streets so there's like some truth to that, where it's like actually the worst case scenario is not that bad.

1:35:17It's just like when you have so much of your identity and your time and you convince all these people to do something like it's so much pressure. That pressure is tough when you've raised money, especially and built a team.

1:35:29Turner Novak:Yeah. Yeah. I mean, I can definitely I mean, I can't fully relate. I've never started a company company, but there's definitely like an identity with just like, you know, like my identity, like, oh, yeah, I failed. Like I didn't work. Right. Like you want to be successful. Everyone does. Yeah. Yeah. Totally. And then when things go, the highs are so high though. They're so great. It's just the lows are tough. And I just had a company get acquired and like when they do nice, it's not going to like return the fund or anything. It was like more than we invested. It was like returned a bunch of cash back to LPs.

1:36:01Turner Novak:It's like, ah, first one in fund two. Sick. Pretty cool. Yeah. It's like feels good. That's great. That's a great feeling. I think that the best feeling of that is like when I've been able to like email LPs and be like, here's money back. Yeah. Yeah. Like that's great. I've been asking for it. It's like, here's your money back. I promised I was going to give you your money back. Hopefully more than you gave me. Yeah. Well, that's a great way to end it. We're all happy. We have all made a bunch of money. We're turned capital LPs. Yeah. Just give us like 15 years. Yeah. What can people like follow you, find you anywhere?

1:36:30Turner Novak:What should they do? Twitter? Yeah. I'm on Twitter. Hoover. I'm Ryan Hoover dot me is my website with blog posts from a decade We can not fund. We can not fund website. Yeah. What else am I on? I don't really have a Tik Tok. I do technically you could find it. If you search, you'll find some like embarrassing Tik Tok videos, but maybe I shouldn't have said that signature block. Do you guys still write signature block? We have it. Yeah. I mean, it's still there. We, we intentionally also like focus on like evergreen content. So if you're like investing or thinking about building a fund, like signature block.co has a bunch of content on there and yeah, you've, you've contributed to it.

1:37:11I think I've read every post too

1:37:13Turner Novak:they're all good it's like how to raise your fund or like how to do investor updates how to actually add value to portfolio companies I think was maybe one of them but yeah this was a lot of fun I got to catch my flight in about an hour and 45 minutes but no I should be good but no this is a lot of fun thanks for doing it and thank you for listening and thanks to Ramp for supporting this episode upgrade your corporate card and get$250 at ramp.com slash the peel If you missed it, check out last week's episode with Sahil on growing Paraffin to nearly$100 million in revenue in four years. And tune in next week for a conversation with Michael Dempsey, Managing Partner on Compound, an early investor, and some of your favorite AI self-driving and other deep tech companies.

1:37:54Turner Novak:If you like this conversation, please comment, subscribe, and name your next product on launch afternoon. If you don't want to miss a future episode, subscribe to my newsletter, The Split, linked in the description to get each episode plus a transcript emailed directly to your inbox every week. Thanks again for listening. See you next time.