20VC: The Wild Story Raising $450M From Masa and Softbank | Why My Biggest Mistakes Came From Listening to VCs | Why 100 VCs Turned Us Down | Why European Founders Are Tougher Than US Founders with Johannes Reck, GetYourGuide

24:38And he was like, so do you want to join Rocket? Internet? You want to work on your own startup? And I was like, you know, I'm going to work on my own startup. He was like, well, yeah, thank you very much. See you. And, you know, this is really the spirit of the time. It's very hard to like recollect because things are so different today, but we couldn't raise funding. Okay. So there's not the VCE ecosystem that exists. We're going through this seasonality where suddenly actually, oh shit, we're going bankrupt every twice every year. When do we start to raise money? What was your first VC meeting?

25:08So, first VC funding was from Brandt Hoberman, who invested like, you know, small seed check alongside with an outfit called Profounders, here, out of Sean. Out of London, Sean, Ceton Rogers, exactly. And that was actually really weird because I got a ticket, you know, sponsor ticket, I think, through some, like lottery or something, to go to low -wap, which is like a big startup conference at the time. And Brandt was on stage. And, you know, I couldn't raise VC funding. we had this business that was constantly going bankrupt but growing really fast. I just hit Brent up after he was on stage and said, like, I'm in travel.

25:42You found it last minute. We should talk. And he was like, okay, interesting. Here's my business card. And I picked up the business card, no, wrote him an email just like called email basically. And he said, you know, comment see me in London. So I remember I went to see Brent at the made .com offices back then. This is probably like 2011, 2012. I had to wait for four hours to get like a 10 minute meeting with Brandt. I still vividly remember the meeting I think he does too. And it was basically, you know, this is what we're doing. You know, we're creating the experiences marketplace. You know, this is the, you know, next biggest thing in travel.

26:19It's the last big green field. No one has conquered it. And Brandt looked at me and he said, you know, I made one pivotal mistake at last minute .com. I had a seed stage company, I still regret that to the present day, I'm not going to make that mistake twice, I'm going to invest in you. That was the moment really we got our first funding and the rest from their history. How much did you raise then? It was a million bucks. A million bucks at what price? It was, I think, at like a five or six million pre -money. So you did very well. Wow, a million at five or six, okay, fantastic. But that wasn't the first thing you see, meaning I heard that you got rejected a hundred times.

26:55Yeah, I tried to We raised capital, but we got rejected everywhere. Because again, we were not the copycat of anything with first -time founders. No one likes to invest in travel. This is a very weird industry for a lot of people in Silicon Valley. For the people that I met in the US, most people said, you'll move over here, or we're not going to give you funding. I said, no, we're very happy in Europe. We don't want to move to the US. What advice do you have to founders who are on the 50th meeting with VCs? And it just doesn't seem to be hitting. It does not seem to be resonating. To what extent do you go back to the drawing board?

27:25it's your story, you're not resonating versus it's just a game of numbers keep going. The constant is you have to have tremendous tenacity and you will have to pitch a hundred times and it will only work once, maybe. So we raise this million at whatever 5 or 6 or whatever the price was. What happens then? That's our first bit of money. Why do we go and double down and how does that change? You know we continue with our bootstrapping mode but you know with a little bit more money and So like not going bankrupt all the time, which is positive, but what brand actually then did is you pretty much immediately after it's set up You know meeting with a bunch of VC funds in the US and that referral from him as a proven traveler entrepreneur made all of the difference So Sunday we were starting to get meetings and people got more interested and just you know There was just a much better reference for me as a first -time founder as well ultimately there was a partner called Alex Finkelstein at Spark Capital.

28:20It took like a very keen interest in Get your Guide. And he was like, you know, this is interesting. Like there's something there. And then he let the A -Round in 2013. And that was really the moment that Get your Guide was transformed. Where was the business at that point? Business was doing somewhere around two million net revenue at that point and growing, I think, 2X to 3XC over, yeah. Got you and your blended take is like 10 20 % 25 % 25 % so it's kind of doing 8 million in bookings Yeah, and he does in a series a was the series a Series a at the time was actually very big for European standards at the time somewhere on 14 million Series a like I think like 30 35 million pretty money.

29:02Wow Yeah, can I see that's quite a lot of dilution? How do you think about an advice founders on dilution today? I would have not raised as big of a series A looking back. I think it was too much dilution. Ultimately, it all worked out because if you're in the company for long enough, there's a founder, re -ups and all of that. So I would say personally, it didn't matter, but I do think you should actually manage dilution because otherwise you end up with problems with your employees, with the other investors, and also the chair of early stage investors just gets too large, which might be a problem They don't on the road.

29:38We fortunately had Get Your Guide, got all of that fixed over the years, but I do think at the time was a little bit too much. I'm going to get in the ship for this. You think founder re -ups are kind of fair? I mean it in the nicest way. Like as you said that, with hindsight, you would have not raised as much and not reduced as much. It's like me as an investor going, oh, my bad. I paid too much. I want a better, better price now with three years of data down the line and then me wanting a better price. Oh, no. I agreed to that and that's the deal. Totally. I don't think that you should walk back and you cannot correct.

30:09I'm just seeing so many founder re -out packages now and my invests is getting screwed and it's like, why are we getting screwed? Do you know what I mean? Totally. No, look, I think the founder incentives that you see first and foremost should happen after a longer period of time. So if I look at myself, I think the first founder incentive package that I personally got awarded by the board with, I think happened after like a decade or so. So it's like much, much later. OK, so Finkelstein needs the A. And that's a US fund leading a European company. That's a big moment. How does that change the company?

30:43Completely changed our life because at the time, the series A was very large in terms of total quantum. So we had a lot of money and also very few US VC companies were investing in Europe at the time. So we went from a nobody to a superstar, literally overnight. Did you feel that in the ecosystem, in the presence, it's happy to respond 100%. I think the only equivalent at much greater scale happened in 2019 when we raised from South Bank version fund like that massive round. So those were like the two I think defining rounds of the company. But with the A, it was really going from being a complete nobody to someone who was like very present on the startup radar and in the scene.

31:24We could hire a completely different people, but also I must say there was the moment when I made the biggest mistakes and hindsight in building the company. So we almost lost the company after raising that A -Round. Well, what were the biggest mistakes that you made in that period? We first and foremost listen way too much to the VCs. You know, we were like these young founders not having a clue and we completely lost our way and going to the board meetings literally looking for advice of what we should be doing in our strategy instead of pushing for the strategy that we saw working in the day to day, that's interesting.

31:57What did VCs want you to do, and how did that compare to what you would have done if you'd followed your gut? Well, they had a much longer term vision around, hey, you should build SaaS products for your vendors, you should do multi -marker, you should go into all of these new customer segments into all of these new supply segments. And most importantly, you should hire all of these senior people to do all of that. And that's about the worst thing you can do as a series A company without proper management experience, it's much better to stay very narrow and go very deep and continue to drive. The growth that you're seeing from the core customer segments that you have and do much less but do that much better.

32:38So we were going way too broad, hiring a bunch of people that were completely wrong for the stage of company, no culture fits. And growth then started to really calm down while expensive spiraled up, like crazy. And I remember like a year or so after raising that a round, I needed to lay off 30 % of the company and completely rejuggle Get Your Guide to refocus us on the core. PGG that quick enough because sometimes you can leave it quite late. Thankfully I did it quick enough and I got incredibly lucky that at the time a person that's not actually not very well known in the European He could be a system of one of the most successful European founders of all time called Case Cullen called me up.

33:22You know, one Friday night I was watching Netflix with my wife, you know, sitting there and you know, he called me up and he said, you know, he is Case Cullen and I obviously knew him because he was the founder and CEO of Booking .com. And he said, you know, look, Johannes, I just left Booking .com. I heard about your company. I think you're on to something. Give me your numbers. So I run him through the numbers. was like giving me like every cohort and like you know every kind of like supplier and it was just like really going deep like on the first call and by the end of it was like you know I want to have a house and he said this is interesting I'm gonna be in Berlin tomorrow morning 9 a .m.

33:53at your office. This is Saturday morning right and next morning I 9 a .m. I'm there so a case is there and like he goes to the meeting room with me and to the white board and like he basically maps out like the entire journey of like, you know, where he sees value and like where I see value asked a ton of questions. It was literally like being in the room with the Jedi Grand Master, you know, for almost, I'd say the full day. And then he leaves and he's like, I'm going to come on board, like I'm joining a board of directors and I'm going to personally invest a million bucks in the company. That was incredibly pivotal because it happened exactly at the point of time, like when I was laying off the 30 % of the people when I need to reboot the company.

34:33At that point in time I had someone alongside with me who had done this before and was a really good mentor and that truly transformed me in, you know, I've told K's two, three years later when the company was successful probably more from you than from my dad. When we look at this bad highs, what do you wish you'd known then that you know now about what makes a good hire and what you did wrong there? I think you need fundamentally different people for a series A to series CD stage company then for a pre -IPO or public company with billions in revenue. And I do see it today being on the other side of that.

35:10People who are incredibly effective at Netflix or Matter or Google or even get your guy today are not the type of people who really thrive with a 30 or 50 people company where you still need to continue to refine that core product market fit where the way how you manage and do things so different because you're in the weeds every day with a team you need to ship stuff, you need to be really opinionated about what's going on. And then the muscle that you have later on around, you know, managing multiple teams, managing organizations, doing rope maps, and you know, creating more structure in the organization, which you need at some point.

35:45Otherwise things don't work anymore when you are a certain scale. Those are just fundamentally different scale sets and typically also different types of people. And oftentimes VCs mix these two phases. So you really need to have these very entrepreneurial people in the early days, who oftentimes by the way don't work out in the late days. So when you're going public and at that stage of your life, those are not the same type of skill sets. So it's really about can you find these people are strong culture fits who are right for your company at that point in time. What are some of the other big mistakes, hiring the wrong type of people, maybe listening to the board too much, anything else?

36:22Not having a really tight strategy. You know, founders typically think that they have way more capacities that they really have. So being really tied on what's the core thing that we want to be doing and how can we deliver value to the customers and how can we obsessively focus on that. So this is really the core lesson from case and booking .com is don't do too much. He told me at booking, they had looked at experiences for many, many years and he said, on these type of innovation projects, people had to go to the innovation department, innovation department had one person that was himself and it was called the node department because because he was always saying no go and refocus on the core.

37:02Because typically people underestimate the runway that they have with their core products and really improving that and achieving product market fit and scaling that over a long a period of time is much more valuable than doing 10 things that are all sexy, but you're going to be mediocre at all of them. I totally agree with that. I often see it with the kind of founders who want to go into enterprise too early and I'm like SMB is so much larger than you think. Fuck, CubSpot did it for 15 years, you can too. So I totally agree with you there. Okay, so we have those three learnings. What happens then?

37:35We've got 14 million that's probably like eight now. We've laid off 30%, we're refocusing. Prashes on because now you got to perform. Absolutely, and we did perform. So the beautiful thing was we had a lot of really good people in the company. So instead of hiring expansive new execs, just promoted the best people in the company, which was the best thing I ever did and gave them responsibility. Although a lot of them were very junior to their jobs, we refocused the company reading all core segments of attraction tickets and guided tours and just the core European capital. So we weren't looking worldwide as we did after the series A, but just looked at Rome, Paris, London.

38:17We went in quite all of the supply there and no big magic, but suddenly demand was coming back and growth was coming back. We're going back to more than 100%. You have a year growth at much better unit economics. Just, you know, I think six to 12 months after that we could raise a really good series B. What was the series B series B was co -led by Spark Capital and Highland Europe. So Spark Capital was so impressed by us going through that rollercoaster of like dropping off the cliff, reshaping the company, bringing Case Cullen in that they said, hey, you guys are clearly onto something you're doing this right.

38:51And this by the way, another advice for a lot of founders, we gained so much more respect when we went against the board and said, we're not going to do this. We're not going to do that. We'll focus on this. This is my opinion. This is where I stand. You know, suddenly the VCs were like, yeah, we follow you. You're right. Instead of just saying, oh, this is a great idea. We're going to do it, you know, really shaping the opinion of the board and of the investors or something that I really learned during that period. That is something that also say, um, then afterwards helped us actually raise the subsequent runs because we're so much more opinionated about what we were doing.

39:23Series Bs often said to be a very hard round, you need to have a very clear proven model and say about kind of edging into the scale capital phase. When you think about the series being getting highland, how many meetings did it take to get the series B together? It was very easy because Highland actually co -invested with Sparic and you know, those guys actually really liked each other. And the partner who actually joined from Highland, Fogelmallen, he sat down and I vividly remember, you know, when he invested, he literally let us pitch for 30 minutes and then he pitched for 30 minutes. So we were like, you know, this guy is like something special.

39:57Like I had never seen that in VC before. You know, he showed me through his fund deck, it was like, this is my strategy for the fund. I wanted to do something for Europe, you know, Highland Europe, you know, he just came back from the US and it was really about creating that ecosystem here in Europe. So we felt it was such a good connection. So it was actually that that was a very easy one. How big was the series B? Series B was I think roughly 25 million if I remember correctly. At a like 100? Yeah, a little bit less than that, but 90, 100. To what extent do you think series B is traction versus story?

40:28It's all in the numbers, I think, from the series B and C onwards. If you don't have the numbers to prove it's very hard to raise that wrong. So we have that and we're now like totally looking great again. We've got 25 million. We've got a highland We've got a spot the numbers are good Astrology's perfect or better. What what happens then? We continue to just can nail European cities. How do you think about going broad versus deep? Talk to me about that So from then onward We basically rinse and repeat for a number of years and you know, obviously growing our supplier base for growing the demand base for growing to more European countries, who are doing a little bit in the US.

41:05But it was basically rinse and repeat all. Why did you do the US? That's the news you want. Big one to take hold of. It was a big one to take hold of. And to be honest, probably we did it prematurely if I'd go back in time. It's another lesson for a lot of founders. I would have not gone as early. I would have done more in Europe. I think we would have had even more growth and more profitability. But we did a lot of it in the US. It wasn't detrimental. So we weren't overextending ourselves. And we were building good foothold there. where all of that leads up to raising a massive round from Softbank Vision Fund and Tim Asak in 2019.

41:38How does the Softbank Round come together? A Softbank Round came together in that at the time there was a small team there with Jeff Howes and Bolt, TETFIG and Rusloto, some of which have worked at Airbnb. Airbnb had tried experiences from 2015 onwards. They had failed. They had seen Get Your Guide as being clearly the innovation leader in the space. You know, they were like, this is a big market. We just raised this massive version of fun. Let's put some dollars behind it and make that market a reality. And to be honest, the vision fund in a way actually did do that. So with that funding, our market went on to like a completely different stratosphere.

42:17How did those meetings go? People often talk about sauce, but I'm just like, 500 million and 30 minutes. Was that how it went? What was the experience like? It was not with us. I think that group of people, which was doing marketplace investments at the time out of San Francisco, they invested in DoorDash, they invested in Get your Guide. There were much more like traditional growth equity investors who are very metrics oriented. It was a very deep diligence process. Ultimately, while I did get to meet Masa, you know, he was just one meeting along the road of raising that investment, it was very much a growth equity investment process.

42:51So there was nothing crazy about it. Dude, how was meeting Masa? Very interesting. So was it in London or? No, it was in his private home in San Francisco. He had this incredible painting of Napoleon right behind him Which I still vividly remember this kind of funny. Are you nervous? I was very nervous Yeah, of course because he could have just put his thumb down We had just worked on this investment for you know half a year and this meeting of like one hour determines whether you get it or not Right, but Masa was very friendly person. He's Japanese So you know, he's in a way very calm and he's very gentle He was very interested actually in the P &L surprisingly.

43:29So he was literally looking at, okay, how do we value this business? How can this be very profitable over time? So with marketplace investments, I think he's much more financially oriented than with the deep tech stuff. So he's really going deep there, surprisingly deep. And he's actually really good at this. So I was surprised because you know, you have these stories of Masa that he's just this crazy person, but he's actually a really good financial investor as well. So don't be kidded by all of the headlines. He knows what he's doing. And then the second part of the meeting, apart from the financial traction, the KPIs and the PNL and all of that, was really about the product vision itself.

44:06And to give him credit, he was already completely onto AI in 2019. So he was like, how is AI going to transform this? How do you think about the UX of the future? Now, how can you build an app that is much more personalized, much more engaging? How can you embed virtual reality in their in a sense of finding the meeting points or even like being in the Louvre or how can that experience transform? So he is really very visionary and at the same time very grounded in the financials both of that. Wow, that's amazing. Okay, so you have this and you have that second half of the meeting. What happens then?

44:41You leave and you get a call from Jeff saying, hey, he liked you. Pretty much. We like this. Let's go make it up. How big was their check? Between Softbank Vision Fund and Tim Asset, we raised an aggregate of roughly $450 million at the time. We did take some of that capital to buy out earlier shareholders, so not all of that was primary. Do you think that was the right decision? It's a lot of money. Do you think you needed that much money? It was the decision that ultimately made Get Your Guide into what it is today, because just six months after we raised that money, COVID hit. So we would be bankrupt without that round.

45:19And so we have that. What was the price of that round? I think there was at the time 1 .5, 1 .6 billion. Did you feel the weight of that point? 1 .5, 1 .6? No, not really, to be honest. What did change was that suddenly I felt like a celebrity. It was like you're going into rooms like everyone was trying to please you, everyone wanted to do business with you, all of like, you know, the VPs of like the Google some matters like we're calling me up and you know all of the VCs in the world wanted to have a meeting and was suddenly speaking of you as as if you were like the greatest and like smartest person on the planet.

45:52Did you believe the hype? To be honest, I had too little time to really reflect on that because six months later we're managing the biggest crisis in the history of online travels. So that was such a brief honeymoon period that to me was very surreal looking back, but I actually did learn the hard way that when you're down, then none of these people call. So, okay, so six months go by, we have this honeymoon period, and then COVID happens. And there was this kind of week or two -week period where it was like, like, what is this coronavirus that started off with? Hey, me to that, the internal discussions there on how bad is this going to be, and then how it transformed.

46:30So in February 2020, we have this point meeting with Softbank, Tim Masek, those obviously Asian funds, and they're already seeing what's going on in Asia, where you've locked on and everything. And they were saying, we better build some contingency plans, if there's actually spreads to Europe and the US. And the naive, still very gung -ho founders that we were, we said, look, we've managed crises before. We've had the Bata Claw attacks in Paris in 2015, which hit us hard. We managed to survive and all of that, we're going to manage. Famous last words it took three weeks from that board meeting to us being at zero revenue literally zero like I was going on the website I think there was like maybe 15 bookings a day down from like tens of thousands there was no one on our website looked at Google Analytics it was just really no one it was just no traffic we had 600 700 employees we had no revenue what do you do it's a really go crash.

47:29Like you get in a room with town go fuck. I mean the closest I can describe to the feeling that I had was like having a car crash on the highway at like a hundred miles an hour just straight on hitting a wall basically. So it was like you're almost like my analytics must be broken. For like two or three days I felt like this is surreal, this can't happen, this can't happen to me. I did this for more than a decade. This is just not right. I felt I like know the world is not right. There's something wrong in the world right now. But then I quickly turned into a mode that in retrospect, I described as being the surgeon.

48:03So I tried to put myself outside of the car and the car accident and just said, OK, everything is broken. Like the car is completely destroyed. The patient needs to survive. I need to help the patient survive. So I put my strategy hat on and thought about, you know, what are the potential scenarios that we have from here? And how am I going to survive? and not only survive, but also thrive after this crisis. And the good thing was I had a lot of cash on the bank. The bad thing was I had a lot of investors who basically called me up and said, you have to lay off the entire company immediately to save all of the dollars you have on the balance sheet and then afterwards will rebuild.

48:38You know, with these different pieces of information, I needed to build a picture of what the right solution was for Get Your Guide at the time. and how Niels, the CFO and I, we all huddled in a room for multiple days to work out that crisis plan. In hindsight, we made all of the right moves at the time, which is number one not to listen to the investors who wanted to lay off the entire company, but to rather focus on different scenarios of how long this crisis could take, and then how we could build a company that is actually prepared for the rebound. because already in March 2020, we thought that this is a massive crisis, but there's also a tremendous opportunity in here.

49:18We have the cash on the bank, so if we are the first ones out of the gates afterwards, if we do really well by all the suppliers in the interim, and we help them survive as well, if we're really agile, if we continue to build our product, we could be a much better company actually coming out of this pandemic than going in. And that was really the mindset that we took. That same week I sent an email to the entire staff and I told them about something that I had learned a year to years earlier when I did a tour with my wife, Anika, through Sequoia National Park. And one of the interesting things about the big Sequoia trees is that they actually grow after wildfires.

49:57So when the park is devastated, the biggest trees grow because they have the nutrient -rich soil after wildfire and they have full exposure to the Sun. And I said, I want to be that Sequoia after the COVID crisis. So that's built that Sequoia now. So where did you invest in that time that allowed you to come out stronger postfire? So we did a couple of very extraordinary measures. First of all, we came back with that vision and that target picture to our entire organization and particularly the engineering and product org, which is the majority of our expenses on the people side. And we told them, we would love for you to reduce your salary, but we'll give you shares as a compensation.

50:36So if this actually works out, financially it will be great for you. But you'll need to take the short term hit. And what happened was magical, our product and end organization, and even beyond that, into management function, people on average reduce their salaries by more than 30 % in exchange for shares. Some people went down to like 80 % salary reduction. In leadership, I kid you not, it was crazy. And with these type of measures, we basically could go very deep into the pandemic and only had to cut marginally. So we only had to ultimately lay off throughout the entire two years, roughly 15 to 20 % off the staff, not a single engineer, not a single product person, despite being a zero revenues for more than a year.

51:18Knowing all that you know now, what did you not do that you wish you had done? I think the thing that really helped our plans was that the recovery then after I forgot the Delta virus, like it was the Benign virus, I think in early 2022, people were storming back to travel, right? And suddenly there was like this complete over demand. Did you really see the numbers just go? We went from, you know, late 2021 to March 2022, we grew 10X. It was crazy. And then all of 2022, we already double pre -pandemic volumes. When did you get back to 2019 levels? Literally, like in 2022, we're double 2019 levels.

52:01Wow. And 2021 was still half 2019 levels. Was that quicker and more than you thought? Yeah. I didn't expect the rebound to be as forceful and as quick. But I did expect it to happen. You know what I was saying? In mid 2022, when everything's starting to come back and oh, thank God, the world, it looks better. How much cash do you have then? We thankfully, because all of the measures still had plenty of cash. And we did another thing during the pandemic, which actually helped us quite a lot, and that we raised some convertible debt. On top, we raised roughly 100 million, both from existing and some new investors.

52:35So that was kind of like the reserve that we had on the bank. But people that don't know what's convertible debt now. Convertible debt basically means that's a note that converts with your next equity around at a discount to that price. The only thing that was kind of not so great was the moment we came back, the equity markets went on like crazy. So this completely weird world where everyone in 2021 was celebrating and tech. It was like the boom you have tech. We were deeply depressed. We were saving the business. We were nowhere. And then in 2022, we had this massive year growing super fast.

53:09Everything was working out, but like no VC was available because they were all like working on saving their portfolio. for most of their companies, it was really doomsday at the time. So it was a very interesting dynamic. So we actually held off raising more capital until early 2023, which was like the first round than we raised after COVID. And as given all just before we moved to that, before we say, do you advise founders then always take the money if it's on the table? Yeah, you could look at your soft bank round and go, well, it's a ridiculous, crazy amount of money. But no, it wasn't. And it turned out to be incredibly prescient.

53:44If it's there, take it or not. I do think that founders can over race, particularly in the early days I told the story of my 2013 race, so I don't think founders should take too much cash to early, so I often advise against that. But fundamentally, if you have traction and if there is a big market opportunity and if it's clear that there will be plenty of competition later down the road, make sure you raise the capital and make sure that you go fast. the tricky part is to maintain the discipline of raising and then not overspending in your own organization and staying nimble and staying focused.

54:19So you need to do both. You need to stay incredibly focused on building out your core customer segments, your core value of proposition, and then you ultimately need to out -raise your competition. You need to be both at the same time. You mentioned also earlier, and I forgot to welcome you. You mentioned the USVCs come in sparking particular do you think that brand name VCs are incredibly important for signaling? Yes, I do. I've seen that time again also with my personal investments if you have a Sequoia capital on index or Spark Capital on your cap table the reality is that your next round will be so much easier.

54:55Would you say they should take them to the discount? I wouldn't take anyone at a discount. I would actually have a competitive process and then I would really look at the GP I think that's very undervalued because you know there are many people at these different funds and I think the GP Prime matters more than the fund itself Well, you know, I do think the brand name really does matter the GP probably even matters more You know what no one considers is like is this GP gonna be here in 10 years exactly and and I promise you No GP's will be there in 10 years. I promise you they will not like 95 % will not be there in 10 years is why most species are not rich actually, is because they're not that long enough for the carrier to hit.

55:35That's why you go with people who founded the firm, because they're fucking stuck. They're never leaving. Exactly, so Alex Finkelstein, the guy who wrote the check from Spark and then also from Milan, of Island Europe, they were both co -founders of their respective firms. Yeah, they're never leaving. Which I didn't consider at the time, but there was genius fast, because they are still with those firms today, they're still crushing it. That's like a very important consideration. So I would take a discard for that. So for these type of people, I would take a discard. I've seen so many recently where people have led rounds at firms.

56:07They go to another firm. And something, even if you're doing okay, that you're not doing badly. No one in that firm wants to do you, because you're just orphaned. It's the most dangerous thing. Okay, so we have that. World comes back, we're like, oh, thank God, we're now double pre -pandemic levels. 2023, then we raise another round. We raise another round. We never touched any of that capital because we broke even at the same time. Wow. Now, which is great, but you know, I love that a special moment. Yeah, totally special, particularly after the pandemic, you know, we were at scale at that point in time, you know, fast forward today, we're now five times the size of pre -pandemic and we're profitable and it's a very different company in the sense that suddenly we can invest our own cash flows into innovation, right?

56:49We can do all of these great projects, you know, we can do all of this stuff, but it is actually our own cash flow. and it's your cash flow enough to invest in innovation to the extent that you'd like. Yes, really. Today it is. Yeah. Today it is. So if I were to ask you the question, if you had unlimited cash, what would you do? If I had an idea where I'd say we absolutely have to do this and we can't stomach it from our own cashless, I would go out and raise that capital and do it. But the reality is when you break even and you have that constrained and you start to grow your e -bid. It's a wonderful constraint in a way that you're much more disciplined about investing your own cash actually.

57:29And that is an important lesson I wish I had a little bit earlier being an entrepreneur because it's very often we're like investing and we hope for the best and we don't cut these projects but they're not really working. And again we dilute our focus and the beautiful thing is if you're a profitable company I feel it actually forces you to focus a lot more. That's super interesting. No, I can absolutely see that. And so, 2023 then we do go out and raise more though. How does that go? And how much we raise then? Back then we only raised an incremental 100 million. We still had quite a bit of cash on the balance sheet.

58:01Was this the convertible debt? No, that was after the convertible. So we converted the convertible debt and we raised some additional capital back then. What price did you do that at? Because it was on top of the one and a half billion from software. So we raised at an up -round compared to that. Will you please put that price? You've done so much better as a business, but the price is probably quite high from 2021. It's a tough one to kind of match. This is where you get into the whining of the CEO and consumer internet company these days. We all feel that we're very undervalued compared to a lot of other AI or even SaaS businesses.

58:34But the reality is, it is what it is. I do think that at the end of the day, these valuations will expand and sometimes they will contract and you need to build a really good business. I very much empathize now with Jeff Bezos who said, you know, willing to be misunderstood, right? So I think you need to invest for the long term and then maybe the valuation will be slightly below where you would personally want it. No, that's fine as well because ultimately I don't need to sell any shares, right? I'm going to be in this for longer and we're profitable. We're investing. We're growing that crazy numbers.

59:05Amazing. They're better than they've ever been. I'm pretty sure that over time, you know, the valuation will take care of itself. Can I ask, did you sell secondaries? You mentioned that selling shares. I did sell secondaries, thankfully, in 2019, as part of the soft bank round, which actually was very helpful. It was very adverse against selling secondaries before that. And I had a very hard time. Why were you ever against it before? Because I felt I wanted to be all in. I felt like I, you know, that would show that I'm not 100 % committed to the company anymore. And I was really wrestling with myself whether I should be selling or not.

59:37I told you, I had even debt from my parents and you know, please tell me you paid them back. Family and friends, I offer they never wanted to. With the soft bang runner, I said, you know, finally I can pay you back, but my mom said, you know, this is your heritage. Go be happy. Don't worry, like we love you. Look, I'm very happy ultimately that I did because that gave me another level of calm in the pandemic. Because I want you to think it's a reasonable amount to take off. A couple million bucks is probably the right thing if you're a mature company. I don't think that you should be taking too much off the table.

1:00:10So it shouldn't be enough so that you retire forever, never need to work again. I think that's not the right amount. Do you think 10 million is too much? Probably on the upper hand. Yeah. I had a founder on the show the other day and they're like, why would you bother an asset like 30 or 40 million? You can't live life without 30 or 40 million. And I was like, oh. But that's the point. Like, you should not. I was like, wow, okay. It's, uh... You should not get into that lifestyle, right? So the way, I'm like also like for me, right? to put that money into MSCWT, right? So like, haven't touched it, right?

1:00:39So like, you shouldn't change your lifestyle. I think that's the most important part. Do you know what the you should? And like, what I mean by that is, I might do change your lifestyle, do up level. Being blunt now, I have the best food, which I never had so much more healthy. I have the best gym, so I'm much healthier. I have a PT. I changed my lifestyle phenomenally, and my performance has gone up too, X. Okay, let me rephrase. All of these things totally found I do that as well. You should not lift the lifestyle of all of your paper wealth being liquid. And I think that's what a lot of people do.

1:01:10They even take loans against their paper and all of that. So don't do that. Don't do the private jet. Don't go to the most expensive resorts. Don't hang out with all of the crowd. That has that level of wealth and don't dilute yourself. That's what I'm saying. Did you ever find that tempting? No. Both in this world. No, it's not my thing. Not your thing. No. What do you advise young founders? who are approaching that. You invest as well and you see some founders where you can almost see them getting sucked into the vortex of tech power and influence and money and you're like, oh, that's going to lead you badly.

1:01:46Yeah, I don't think you'll be successful if you will. If you look at the most successful founders in Europe, they're super smart. They've been working on their companies for a long period of time. They don't get eaten up by their success and by their wealth. In fact, they reinvest a lot of this into the startup ecosystem. I don't think that hanging out with that type of crowd or living in that world brings you joy and fulfillment. Like what brings me joy and fulfillment personally is seeing the next funder succeed. Reinvesting success, seeing the next funder succeed. You angel invest now today.

1:02:19Correct. Yes, I do quite a bit now. Okay, how many angel investments have you done? 3040. 3040. What's the best one? I was literally like with some pocket cash and some advisory shares in the C -Drawn of Travel Park, which was a big success. So Avi Meyer was amazing. I love him. Fantastic. Amazing CEO. I was early on in Trade Republic, which was amazing success. And next to Revolute, this is probably one of the best ones. And there's lots of small, lot of SaaS companies that are growing really fast. Love that. Did you have a strategy going into Angel Investing? No. So it's the strategy of investing, you know, great people and business models that are really in joy and also spaces where I think I want to learn.

1:02:59So it wasn't a consistent check size? No, it was somewhere between 550K, 250K, somewhere 200K, somewhere there. Got you. How has investing changed how you think about operating? Seeing 30, 40 companies grow, build the founders within them. How is seeing that as an investor change how you think about operating? Very much so before investing I thought there was just one way to be successful and there was the way how we build get your guide Because I saw how that worked and I had some such strong beliefs and I'm such an opinionated CEO and I was so opinionated and deliberate about building our culture and all of that even the operating model and the strategy I thought there was just one way to do it and then for instance take a trade republic which Very successful FinTech company probably one of the most underrated companies in Europe.

1:03:46You know, they're absolutely crushing it And the founder is great, but in many ways, what he's built in terms of culture and in terms of operating model is 180 degrees different to what I've built. I would not make the same decisions at all in many instances, but he's very, very successful. Now, what decision did he make that you would not have made the same as? He's centralizing all of product under him, you know, basically every product review runs through him. You know, he has a culture that is much, much harder hustling than we are. And maybe two degree you might call You have to worry that you're soft.

1:04:19Little less empathetic. So what I like my take on this is different markets deserve different cultures. So we're in the business of selling experiences. We're in the business of hospitality. We're in the business of unlocking unforgettable memories for our customers, the way how we have to build our cultural DNA by its nature has to be different. It needs to be a little bit softer than a revolution. Because we're just serving a different type of customer and also the employees that will join us will have very different motivations and personal needs than people working at a Fintech company or people working at a SaaS company.

1:04:55So it's really, how can you build a culture for your market and for your customer base? I posted the other day, if you want to win today, in other words, be 0 .01 % successful, you have to work seven days a week. Silicon Valley has turned up the intensity and that is in the reality. Do you agree with me? This is a very tough question, because any founder who's built a successful company will remember that they did work seven days a week, right? So it does happen. I don't know of any founder personally, none of the ones that I've backed, and certainly not me personally, who have not been absolutely obsessed and have not worked insane working hours.

1:05:36At the same point in time, I think the danger with the general statements is It is not always the same throughout the entire journey. And clearly, I would not expect today people to work seven days a week at Get Your Guide. And I don't work seven days a week anymore. In fact, there comes a time when working too much can actually destroy your startup as well. Because after a time, it is actually much more about sustainable growth and sustainable working hours at very high intensity at scale. So today, you know, I'm much more focused on it. If I would have pushed back in the nicest way, you see Jensen.

1:06:13Yeah. Jensen does not take a day off. Very openly admits it. You know, when you look at the greatest founders that they still don't. And we talk about sustainability. I don't know. I'm not arguing, they're more just like ideating. Because I totally at first five years, 100%, there's just no debate, I don't think. But when you build in for sure, you have the ability to be a little bit more. I don't know the exact routines of the different CEOs. I think as a CEO, you need to see yourself as a system ultimately and you need to build up your own capabilities and your strengths as part of that system and you need to understand what you're uniquely qualified to do and what you can do different than anyone else in the organization.

1:06:50That's particularly true for a founder CEO with all of that history and that context. So for me what that means is I have a strong spike in strategy. I think I've built a really successful business because I've made the right bets and my intuition is very good. That means for me personally, I need to take some time off to actually brainstorm, talk to people, understand where we add, review the numbers, review the metrics and refine the strategy and bring that back to the company, because that's my unique position and my unique role. And I structure my day exactly like that. The other people know I'd say Daniel Eckford instance is probably one of the world's best people had like product.

1:07:29For him it's really a lot about introspection and understanding what product he types that he likes to build and no, he actually I think said that he doesn't have anything on his agenda all day long. So I think they're just like different ways of doing it. Any founder is going to be in the business anyways all the time. If you're not thinking about your business all the time, you're not doing something that you love and then you won't be successful anyway. So any founder thinks about it all the time. So you think we have too many tourists? I think there are a lot of people who think that being a founder is sexy.

1:07:57There's so much we see money that they get funded and they kind of can start the life and say you didn't get it. Yeah. And that's I think the point where we need to be careful with ourselves and we need to make sure that we have a sustainable lifestyle. We don't become you. And no look, I think ultimately life is long and I do think, you know, when I'm 60, 70, I want to look back at my life and I want to make sure that I've spent the time way and that means I will want to have built a very big business. But my lesson has also been, you don't build that in a year or two, you build that in decades, right?

1:08:32And you need to sustain over decades, you need to sustain that pressure, you need to have that high level of energy over decades, right? How do you do that? That's like a question I ask myself quite a lot. I've completely changed my own lifestyle because of that. You know, I do a lot more sports. You know, I do spend more, I deliver time with my family, my kids, fun, since that actually helps me sustain. that is the antidote. Listen, I want to do a quick fire on. I love this. So I say a short statement, you give me your immediate thoughts. Does that sound okay? Absolutely. So you can add anyone to your board that you don't have.

1:09:02Who would you add? Jeff Bezos. He's been one of the most inspirational leaders for me and how I built the company, I think, for most people in marketplaces. I think just his love, love, rigor, and thinking about the customer and about building the business would be amazing to have on the board. Will you have more engineers or less engineers in five years' time. We'll have more but a lot less than we thought we would add. So in other words, we'll gradually grow, but I think the productivity gains from these engineers will be massive. Where has AI most impacted get your guide today? On the supply side.

1:09:36The supply side is completely transformed. It used to take, I think, days to upload a product because experiences are so complex. You need to add a description and photos and take a hundred boxes in the meeting point and the tour at an hour, etc. I know you just paste in a URL or you upload a bunch of files and done. It's huge and then the pricing and availability management and like the AI insights on how you can improve your experience. I mean all of that is pure magic. What supply do you still not have that you would love to have? I would love to go deeper into what we announced this year is shows in events.

1:10:11I think it's actually massively important for tourists. So when I come here to London, I want to see Arsenal London, I want to see Chelsea, etc. right? And we're just dipping our toes into that market. There's tremendous interest also from these clubs from this event. Is that not a shit show going into the ticketing market? It's such mafia. We're not going into the core ticketing market. We're going into the touristic part of the ticketing market. Very different markets, much higher margin, people love to spend on hospitality tickets. That's something that the clubs also love because they get the true fans.

1:10:39They get to both their brand internationally. And at the same point in time, those are people that spent much more when they come to the games and the shows, etc. So it's a different part of the market that I think is very interesting. It's going to grow a lot over the next couple of years. How have you most changed the CEO when you look back at the last 15 years? Yeah, I've become a lot more humble. I do know my deficiencies and I think the things that I get wrong a lot more. I really was very, very self -confident when I started the company, which really helped to survive and I think grow over the first five years.

1:11:14Today I'm still very self -confident but I also understand much more how I need to be complemented. Where did your confidence hurt you? Why did it help you? I think it helped me in just having the sheer stamina and energy to drive the company forward time and again and not take failure as an option. I think it hurt me and that I don't think I was as inclusive serve as I could have been and I think that has hurt innovation to a certain degree at times. My brother just had a baby. What's your biggest advice to a new parent on being a killer at work and also smashing parenting? Yeah, exactly. Don't do that.

1:11:52Don't be too hard on yourself. You will not be a perfect parent and that's fine and you also want to be a perfect CEO and that's also fine. I think find your balance. I think balance is the most important thing when your parent and your growing attack company and you have that demand on you. So really, make sure that you find time for both. At the end of the day, when we're 60, 70, 80, I mean, get your guide will be a very important part of my life. And I want to make sure that that is as successful as possible. But at the same point in time, I think my kids will mean more than anything else in the world.

1:12:25Is that your guide your last job? I think we'll be very hard to have a job after that. Yeah. Final one. What do you most want to be remembered for? Like when people say about Johannes and the impact you had, what do you most want to be remembered for? At the highest level, if Johannes had a massive impact on creating more human connection, I think. And that's across Get Your Guide in the Product Resale, but then also the topic of Europe and recreating the future of Europe, I think if I put that under one theme in this creating human connection. Dude, this has been such a joy. So as I said, I'm a European.

1:12:59I've had so many wonderful things about you for so many years. So this was such a joy to do. What an incredible story. Thank you for coming on the show, man. Thank you so much, Harry. I mean, what an incredible journey. The first two years, just five bookings, now 35 ,000 per day and a $2 billion valuation. What an incredible story. Huge thank you to your handers for giving up the time today. And if you want to watch the video, you can find it on YouTube by searching for 20 VC. But before we leave you today, I love seeing the team come together to make this show happen. What I don't love is trying to keep track of all the information, the data and the projects that we're working on across dozens of platform's products and tools.

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