20VC: Why Your Fund Model Should Not Rely on $10BN+ Outcomes, Why the Large Funds Got Too Large, The Rise of Solo GP's; The Pros and Cons & Is Consumer Subscription Even a Good Sector to Invest in with Nico Wittenborn @ Adjacent

24:07Once it goes from a few million to tens of millions within a pretty short period of time, and you forget a lot of a reliable data on cohorts, I guess, by that point. And you actually have a lot more to do. Yeah, but I still am somewhat disappointed. I mean, I like when people invest in my companies, right? I don't want to discourage people from it. I don't depend on it. Because usually I structure the rounds in such a way that we can get to casual, called positive with a lot of those companies or with the partner fund that they have such long runway that that is an option or there's a lot of time to prove the next round.

24:36But I think that it's a bit of a, I guess a critique that I would have about we see is that they criticize the model until it breaks out and then they fight for it. So for me true venture is venture that is thesis driven and early stage. And I know there's different ways of playing it. I know that there's different stages and different skills required. I am the first one to say I shouldn't be on a public company board. So I actually structured, we can talk about as well, but I structured my work with the companies such that I'm involved early on and I'm happy to step out once the scale that I'm not that suited for anymore.

25:07So I don't have any ego about being on the board. I actually deflect boards. I take two board sheets per fund. How do you decide which board these things? The way that I've approached it so far is that at C, you don't need a board, I think, because you're chasing product market fit. Most of the time I'm in your way, The best thing I can do is share learnings from the other companies, be a strategic thought partner and then make introductions to other founders that have faced similar issues or solve things that you're facing right now. And so that's my role and then there's some financing related things and stuff like that.

25:35But that's really how I see my role. And so then from A, I think it makes sense to have a board. Since I'm usually not the one that leads to A, I give myself an option to be an observer on the board, which will be excellent if it makes sense. But I'm also very happy to let people decide how they want to structure the board. I think there's people that invested a lot of good for example, I love USB I collaborate with them I'm one of the series eight that I co -led recently was with USB and I was very happy to have them take the board seat Yes, I want to learn and I have an observer so I can dial in if I want I do that usually because I also learn from it And I want the information after relationship with the founder, but also it's a company that will benefit from the attention of a USB partner Sure and I can give the same Do you find it's possible to co -lead the series 8?

26:19Because, bluntly, I think we're going to move back into an era where Vangeline Rasters go shit. The outcomes are lower. And so our ownership needs to be higher. And when we did take 10 % and a whole time, we now need 15, 20 again. Yeah. Aphelia, I say, who I had on the show recently, won't go less than 20. Yeah, I think there's some firms that don't want to collaborate. And if you say that, you don't want to collaborate. That is fine. I've consciously decided to keep my fund at a size where I can do that. And I think there's other funds out there that believe in small funds and that are willing to do that.

26:48Can it change with the macro yes, and is it possible that somebody will start to ask for more? Yes, but then that usually I think also would go hand in hand with valuation expectations going down, that ocean expectations going up. So maybe it fits the formula again, but I can only talk about how things are today. And from where I see them, it is possible, actually desirable by a lot of founders, by me. And I just have to be early to those companies so that I can play a part in forming how the round comes together. How does it feel to be able to make a difference? One piece of advice that Jeff Horring, the founder of Inside gave me after working with me at Inside for a while, was that his only comment was, don't be so cheap.

27:24And you can take that to the extreme and become too generous. At the same time, I've been being fair without being cheap or generous. And so the way I approach it usually is that I have a conversation with the founders about what is reasonable from both ends and then try to find a solution. and it hasn't happened yet that didn't work. But does it mean something that's not to generous? Maybe? Do you ever worry that you stretch your rounds to fit your funds strategy and not what's optimal for the company? One of the reasons why that is like, I'm looking at like, O leading an A now and the company won 15 on 80 post.

27:58And actually, for me as a fund, that's kind of uncomfortable. I'll be riding a seven and a half check alongside another co lead versus will be much better for me, which is an eight on 4550 posts where I'd be running for four versus seven, not a big different gym. Now, does Nord actually best for the company that they raise that small amount? It's better than they raise the bigger amount. Is it? You could argue both ways, but they very much are. They have a preference. They have a preference, and sure. But my point being, because of our camp fund sizes, and we're both in the same ballpark, it's better for me that.

28:29Do you see what I mean? Do you have a worry about that? We're serving founders. Long term, we will only be successful if the founders that we work with are happy with how we're collaborating with them. Does it mean that there's some tension sometimes between what you require in your fund model and what the founders require or want? Yes, but I think that the start of a partnership ideally is being open about your limitations or the things that you need to be feeling good about this and then finding the common denominator. I cannot say in this scenario specifically, but the way I would approach it is think about what I would like then really understanding their coming from their optimizing for.

29:06and then trying to fit that together as good as possible. And that might not always be possible. In which case, you're going to have to make a decision if you go with what you perceive to be better for the company or for you. But I would say long term, I would decide to choose for the benefit of the company. Nika, don't be so cheap. What's the time when you've turned down a deal because it was too high and you've lived to regress it? It's a compliment to the company. So you said, I've had many, my word. Do you pass on because of price and you ended up regretting it? I really regret Riverside. Oh, or I'm seeing you, if you like, it's amazing, dude.

29:40Brought it to me and I said, no one will do this. You know why? Because 90 % of podcasts don't earn more than $100 a month. It's $50 a month. Yeah. No way. We use it every virtual. And where were you wrong? Well, why was there wrong? It was too cheap. But no, I was too cheap and I didn't think the market size was what it was. I didn't see the evolution of the money. I just saw podcasts as a static rocket. And this is, I think, core of what I think we should be betting on as early -stage investors, which is the relative development of these markets. The way that a growth investor looks at it is at the static.

30:11They need to understand the size and the benchmarks and make it fit their formulas, and then it has to add up and make sense. These are driven investors need to understand the magnitude of change in a specific segment, or demographic, or behavior, and then bet on that. I didn't anticipate that market and sale leaders would also be content creators with income. I'm not saying I would have at all. I'm just saying I think this is exactly where inside and alpha and so on so much comes from understanding not what it looks like today but what it could look like in 10 years, right? So that was mine right?

30:45I think it's also the most horrible reminder because I use it every day but I'm described. I turn down the screen and I turn the mouse it down every round. It wasn't that bad. Hey man, it happens. I think most regrets that we have as investors are the companies we didn't invest in. And so what does it mean? Does it mean that we have to see more companies? It usually means we have to be better at making decisions on the companies that we see. So I think one of the differences obviously of our approaches is you have this and a platform and huge network and you have a lot of volume. I try to stay away from volume consciously.

31:21This is the first time I talk about it, Jason, publicly for you. And the reason for that is that I actually am very mindful of my capacity. and this is both time but specifically mind space for making these decisions. Because I think that every investor has a bigger regret portfolio of anti. And so it's not about seeing everything, seeing more, it's actually about seeing better in this small end, I think. And so to your question, did I not pay up and regret it? I honestly, nothing comes to mind. I'm not sure if that means it didn't happen or just that I didn't obsess about it enough afterwards.

31:53I think I'm willing to break my own limitations if I really believe. can you tell me why you broken your limitations? I don't want to take the full credit for it, but this is one of the reasons why this is the case. When I was with 0 .9 and reinvested in Revolute, it was both outside of the focus. Yeah. It's a mobile consumer app. It had just closed the seat round with Baloton. So there was no actionable opportunity, and the only way to get in was actually forcing them to take more money at a step -up evaluation, which was, I think, at the time the highest evaluation. We had accepted it at 0 .9 and also led to the lowest ownership that we had at least for seed.

32:32It was a great decision. So what does it tell you? I think that part of the frameworks that we set for ourselves are a litmus test for the conviction to break them. It's a very hard one because you want to have the elasticity to break them without it becoming the norm. Yes, and I'm not saying I've mastered this at all, right? I recognize it, but I'm still trying to get better at it, but I think it's the the rigidity of the model needs to be there so that breaking it is actually meaningful. You see? I totally agree. But I think another thing that's actually part of that is a partnership. A partnership reminds you that you broke the model Nico and fine, but that is the exception.

33:09It's very easy for us as solo GPs to lull us up. Wow, I mean, it's an exceptional and it's an exceptional opportunity. So I do one last time that you mentioned that kind of constraining your own time and view of the world. like how do you sasterize the solar GPs? The terms of the GP, I think also when you started, it was not yet a thing. But the way that it happened for me was really that I became confident in what I wanted to do. Early stage, Europe, US, consumer, heavy, software, heavy, some size, and some other, but that was what I wanted to do. And I wanted to do it in the way that we've discussed here today, and it was not clear to me where I could do that.

33:47and I didn't want to do it somewhere where I felt like it didn't fit the positioning of the institution and I also didn't feel like burning my place in another institution because you've been at firms and it takes a while. There's hierarchy, there's... Well, I think I'm unemployable to be honest. Yes, and so I think the same for me, I've been employed and I'm grateful for the time and the learnings, but I also always operated in a very autonomous way. And I think I'm getting better with the ability to fully find my own style. I need dead space. The concern I have on the Soda GP model, one thing that pisses me off says when you're at Alp, he's like, you're getting hit by a bus and you're fucked and then they're well yes and I'm not going to worry about it then.

34:29But it's a number one killer of partnerships is that she partnerships breakups. And you're like, well it's quite a half of you in my self that much. Yeah, so I think people forget about that. My question to you is does it scale? Three funds down 20 to 25 companies, faster deployments cycles. You're 60 to 70 companies in five years. I think you're absolutely right that partnerships can be one of the biggest reasons for it not working out, especially if it's a forced partnership. Right? And so when I decided to start a firm, it was not, I will do it by myself. It was just, okay, I want to start a firm.

35:03Who do I do it with? There's a small list of people I would like to work with, but one, they're all at great firearms to we never really work that closely together. Maybe it's better to call in for a so it was not I want to be by myself. I'm going to do it. It was I want to do this and I don't want to rush into anything. Start this way and then see what happens. And so it was a very organic way of getting there. Now I'm quite comfortable with it. I don't even know if it will stay like this forever to be honest. But what it just shows is that there is people that benefit from being able to fully follow their own thesis.

35:34And I will also say that as a person I've suffered in the past from very negative feedback on my deals. So I'm sensitive as a person, I guess, if I have a strong opinion on something and that gets mistreated in some way, whether it's aggressive or just passively, I think that will change my opinion or at least give me a lot of frustrations in some sense. In the early stage where it's a lot about having a pretty unique perspective on something that is not a consensus driven thing, but it's really aligned with you believe it and nobody else. Solar GPs for the right person have very good fit for the early stage.

36:12And I think most consensus driven models at the early stage, unless it's a very aware and mindful partnership that really supports each other and can all see the complexities of human interaction, I think it's maybe beneficial to just have one opinion as long as you're right more than you're wrong. How do you do with decision making, deal decision making? It's tough on your own. Yeah, I guess you have to find your own process and I think that there's just different types of people I think there's something that really need to test their conviction with other people and then there's others And I think I'm included in that set that really challenge themselves all the time But also with their opinion on the deal.

36:53How do you challenge yourself with your opinion on the deal? First, I have to actually have eye -pophesses and have one opinion, right? So this is before I even challenge myself I think the core of how I operate is that I have a bunch of frameworks and like ways of looking at the world and technology that I've taken from the 12 years that I've been in investing and Refined to make it fit my style and I apply them every single time for example founders It's like actually interesting is I don't think I have a great framework for evaluating founders at the same time I think I've worked with amazing founders.

37:23I think in more instinctual thing where I'm attracted by a certain type of founder And they are attracted by me. Here's the best one that you've worked with the best founder. I can say, my own easy is Lee Orren hacking at triple .games in London, triple .studies. I've never seen execution machines like it. It's been an execution. Never miss the fucking numbers. They are just execution oriented lightener one else. I am happy to mention some names. I just, this is part of why I don't have a framework, is that I think that there's so many different ways of being a good entrepreneur. There is a fit of an entrepreneur with a specific topic or with a specific company, and then the ability to, you know, just push that to the limit.

38:02So I guess ambition is one of the factors, right? It's like, how driven are you, what's driving you, how ambitious can you be? Do you ever worry with ambition that you can come over time? And when I just say that, like, when I started this show, I told myself, when I get a job as an associate at Balderson, I have made it, like, and like now I want to change the whole way the vanishes stretch it. Yeah. And we talked about it that way, about some of the things we're doing. Like ambition came over time through turning over, and that's card. Yeah, as opposed to other people, I don't think that everything is set from the beginning.

38:32Yeah. I've invested in founders that told me we want to scale to 10 million and then we'll see. Right? Like, which nobody else would do that. But because I believe that if I'm right about what I call the adjacent possible, which is like, for me, this overarching macro driver for a company that is happening independently of the company and pushing them forward significantly, I think if you're in that rush, you reconsider if you sell it 10 million or if you keep going. So this adjacent possible is like a macro tide which carries companies momentum beyond yeah What about me understand that yeah, so this is I mean, it's one of the reasons to firm is call and we were three questions deep here So I don't know we might have to go back into the former questions after I called the firm adjacent because there's this Termin evolutionary biology called the adjacent possible what it says is that Evolution happens usually as a combination of the existing phenomena and in the relatively deterministic way.

39:24So we're somewhere and based on what is available at this point, the combination of the things usually lead to the next step. So like, transformers being developed somewhere within Google, somebody taking that building that up and creating open AI, then that actually becoming consumer subs application that charges 20 bucks a month, which at GPT. Those things altogether create the breakthrough, which if you ask somebody on the street, they're They're like, overnight AI was created and it's living in this spot. Certainly this was not the case. There were very specific steps leading to this outcome that is now perceived as happening overnight.

39:59And so my belief is that understanding some of those components and where they could lead to actually can give us some understanding of the companies that can be built in the next 10 years or that really benefit from a trend. And this can be technically like the example I just brought, but it could also be behaviorally or socially like calm for meditation. And meditation was not as mainstream as a wasmen, we invested. Opao, that's why by thesis with Opao was that screen time management, we're just learning how to deal with these phones. They're always in our hands. We're talking to each other and we're looking at our phones.

40:30It's not a healthy behavior, right? And depression is on the rise in the West. I think technology and the way we're using it and the way it's disconnecting us from each other has a role to play in that. And so I try to identify these changes, current macro changes, and then think about which companies could create a category around that. And so I believe that those companies benefit from growth drivers. They're much more meaningful than any execution. I want to ask on the consumer subs element, just getting back to it. But like, I've seen so many consumer subs that leveraging open A -Ring models in particular.

41:01And what all the masses say is this, and there's no proprietary data models here, you're a thin layer on top of someone else's model. Yeah. Not interesting. Yeah. Done. It's not fair. I don't know. I'm not sure. This is also something I learned from... Jeff Horring, he talks about software in a way that is coded experience. So like, most software being workflow solutions are actually an understanding of how you can make processes better in a specific industry or in a specific workflow and then encoding that in something that automates a lot of that. And now the automation of this is coming to the next level, with AI.

41:35And this will happen both in enterprise application but also in consumer applications. And so I think that a lot of the value that has been built in software over the last 20 years has actually been in the application layer that takes these breakthroughs and just verticalizes them for specific use case or specific customer demographic and monetizes them. The way I look at AI from a JSON perspective is we're gonna have companies that are already consumer subscription companies that are implementing this to make their products even more sticky, more functional and give features that we're not possible with.

42:07I totally agree. So it's an existing player who already have existing data models and proprietary data. So you live in leverage. I look at it. I'm also just trying to find the angle that kind of fits my thesis, right? That's how I have to operate. Of course. Come on. That's like 10 years of venture. What do you think the market looks like that? I mean, it's changed. So, I think this has been the most defining five years of venture of the last 50 years of venture. Actually, when you look at the different models and innovations that for isn't, when you think about them, that is 10 years of venture.

42:38What do you think the venture model and model looks like? On a high level, I don't have any doubt that there will be innovation. If anything, it will probably keep on accelerating. There will be venture. I think there will be innovation and I think the model will persist. How the industry is structured, I don't have a crystal ball. From what I'm seeing today, I think the next few years will be pretty difficult for most firms. I think the big ones have become too big. What happens to them? It depends on the firm. It's certainly hard to make a blanket statement, but I think that funcises will go down.

43:10I think people will leave. If you have carry in a $3 billion venture fund, is that worth a lot today? I didn't even have a date and it was hit by the way. As long as Super Canada is one of the reasons the show's been successful is I couldn't forget that Canada's turned on and so I just speak freely. But I'm actively trying to have partners, investors. They still buy that they're carrying at the two billion funders worth 30 million on a three -hour fund and they trust me you ain't shooting through it on the two billion dollar fund. Yeah, I agree with you. And I think LPs agree with us? At least LPs for sure agree with us.

43:39It's a question of time from a people's perspective to put pressure on these funds that they need to see data that those type of vehicles can create the same type of outcomes. And I'm actually cautiously excited about this period, which is maybe a weird thing to say, but I think this is like earning your stripes also, right? It's like, how do you actually navigate this scenario? And I think as small funds investing early, we have a benefit there, because I do believe that it's still the best place to be. The risk is the highest, but the opportunity on the upside as well. I don't think seed is a great place to be right now, and I am a seed investor with you, but I'm saying this because you want me, I think, A &B, ABNC, no one wants to deploy big dollars.

44:17All the money says funds system want to put cash out the door, but they all want to be in market. So they're all moving earlier in early at seed. They're telling their principles and associates, hey, go write some teed chats while we deal with this morass of shit on the board of all these companies. Yeah, and that leads to massive info of capital that's less price sensitive to seed. And it may sell jobs hard there. I guess you have a point that this is happening. At the same time, it's a temporary issue, right? Where these sons, they have to also work on their growth funds that are sitting untouched.

44:43Right, otherwise they're not raising it. I guess they have some flexibility, but I didn't do that. They cut cheap for a while. Remember, a lot of them have to increase their GP commits to get the new fund size. So every time they do a cant cool, they have a bunch of cheap five, ten million. Yeah, that's a good point. On top of that, they committed to your fund and my fund to ten other friends funds and then they borrowed against the carry water marks at the Super high prices from SVB and F .O .P. Okay, so this is why I'm not so worried about them being really difficult for us in the seat. They're worried about other things right now.

45:11For sure. Right? Like their core existence is in peril if you describe it like this, right? And so will they come down and just fully focus all of their energy and competing for seed? Is that really what will save them? No, they just avoid that team too. They deploy that team. Yeah, that's right. Okay, but did they start those funds? No, but they come with a big name brand. Yeah, put five on 25. Okay, so this is also, I guess, true. I'm not a big brand fund and I'm not trying to be. I, in fact, think that I'm working with the person that actually things those firms are the establishment. I actually don't think I should be competing for a seed round with where the founder is trying to get a big brand name on board in the seat.

45:51It's not their core business. It's a defensive strategy to keep ownership in the companies that will be big outliers, right? It's a strategic part of their game that leads to hopefully the core being most successful. This is all I do, and I'm fully focused on it. I'm the founder of the firm. You only get me, and I move faster. that is appealing to a certain type of founder. It's not appealing to all founders, and I accept that. And I don't try to be in all those processes. So it's very rare that I actually come up against one of these firms because I don't think we're shooting for the same type of founder.

46:23Who cares more about the brand name firms? American, European founders. So one thing I've actually noticed is that the European founders care about having a US investor. They really do. But this is also something that... Even the shit ones. They're like, oh wow, it's pretty... I don't think that the real bad they came from the valley. Yeah, I guess I'm European, right? I think it's a little sad that we have as Europeans just biased towards the US investors are clearly better. Yeah, idealization of the session. Idealization? That being said, I've met many more investors that I'm impressed with in the US than in Europe, right?

46:57100%. If you think of how few investors I have on from Europe. Yeah, that's true. Very kindly said to the US being here for the first time, you're like one of three in 3 ,000. That's crazy. Which says something. What's the hardest thing with adjacent feet of they in anything? That's the hardest thing. But we discussed a lot of what I'm thinking about. It's like, how do we make sure these companies can realize their full potential? Do you think the majority of your acts will come from repeating rollups? I'm not all of you here. They pull these companies. What do we do with this enormous abundance?

47:26They're not all going to be in public and not going to go on. Not all, but let me see. I think the best ones will go public. I would just want to stress this. In this current macro, they have a much higher multiple on their revenue run rate than comparable sales companies. Do you like it? Do you like it? That's the price. But it surprises everybody else. Because this is the price of the VELO .com, which is at like a 1 .6X revenue multiple. And you need to compare it to your future cash flows. I would absolutely enjoy it. Me too. I agree. But that seems to not have arrived in the general multi -stage firm investors mindset.

48:00And so my hope is that in the few years, we have more examples. And so it will open the door for smaller IPOs. but more IPOs. And so I think that will happen. The best of them will do that. And I have companies that portfolio I'm confident we can do it. And so the others, yes, there will be a M &A roll -up. In fact, I'm not stupid. I also realize that there will be an opportunity in rolling some of these up because they are reaching some of them are reaching a ceiling, but they're very highly profitable, right? Yes, 10 million, but 3 million in EBITDA, comment. And so you roll up a couple of these.

48:30It becomes a very interesting financial thing, right? And so I've invested in three companies that are doing that. I have the best of them, I have the infrastructure and then I have the hedge, which is let's take the ones that don't work. And so I think it will happen. I think there will be acquisitions. I think there will be a lot of big firm that one example is RocketMoney, but true bill, and I want to have for something like that billion, which might have been early because I think they're still accelerating. I have a competitor in the portfolio that's building around AI first. It's called Chargeback that I think can take them on.

48:58It's a huge market. But I think that there will be a lot of companies that want to own that type of customer relationship, right? They all have millions of subscribers that are heavily engaged for the product in the certain demographic. That's strategic value. I also think Spotify, Netflix potentially are interested in some of those more content focused companies. At one point, maybe even interactive ones are going into gaming more and things like that. So I think that there will be strategic acquisitions. I think there can be financial acquisitions and I think the best of them will have public outcomes.

49:25But anyways, this is one of the things I'm worried about trying to navigate, right? It is also clear to me that we have few data points because of what I've seen and because of the thesis that I have formulated over the last eight years, I believe more than others that it will happen, but I would be much more comfortable in five years if there's four more fronts we can talk about. When is your anti -establishment vibe from from? You're a hipster, you're cool, like the clothes, the shoes, the socks, people don't say it, but like you're an anti -establishment. I am too, but I look like a push boy.

49:52Why is it, I don't know, I think, I mean, for me, I grew up in my mom and I didn't have a father figure. I did go on vacations and they saw him, he was involved, he was an advocate, absent absent father, but he lived many hours away, and I think that made me just find my own path more and be comfortable with my own world view and decision making. I didn't have so many other role models either I would say. We look back now, do you wish you had? Let's say this way. I know I have one kid, I'm expecting a second. It's very important to me to be a good father to the family. Both has been a father to my kids because I think it really did hurt when I think when your dad leaves at a young age, it just leaves a mark.

50:30And I think that's part of where my drive comes from. So I don't think it's all of it, right? I think there's genetics and serendipity and how things play out and so on, but we grew up with very little money. My mom hit three kids from different fathers by herself when I grew up that was also there were limitations. I tried to just have agency and independence. How did it actually impact your mindset? I didn't want me to go ahead, but it kind of gave me an understanding that my, same with my father. It's like that actually at the end of the day, it's all about money and everyone will kind of be there for the money and then have you when the money starts.

51:01Yeah, so there I have to disagree. You believe people get? Yes, I actually I'm an optimist and I do believe that people are ignorant and in pain and suffer because of how others have treated them or because of their circumstances, but I don't think it's their fault. I think it's just the product of their environment. And so I think that at the core we all want to be happy, loved and grow. Only few people have the ability to do that. I was lucky to escape. I don't want to make it sound like I had everything that I needed. I never was hungry. My mom, I know loved me and did as much worse up rings.

51:38So I don't want to go there. Niko, track to cross the desert with nothing. I've got a shot, but Lennon. Oh, I started. Oh, so now in Germany, right? So this is also what are we complaining about? I'm a white man that grew up in the Western world, right? So there's very little things. But still, do I have some trauma from how I grew up in my circumstance? Yeah. And it's for me and that's everybody has those, right? Yeah. And so I think I don't think for me money is any ultimate goal. I need money to be independent and have the freedom to do the work that I want to... Did children make you more hungry for money?

52:12It's something we've been very proud of in the past. I actually am quite concerned about people that grow up with too much money. I think that it can be very harmful for kids to be too pampered. And so I want to provide security for my family and I really enjoy being able to take my wife. We went to Japan recently as a baby moon before an ex -baby and went to Naiso -Tels and that's, I feel very grateful that I'm able to do that and I really appreciate it. It's not that I really don't take that for granted at all. So I'm proud that I achieved that. At the same time, I don't have a number in mind.

52:44I don't think that more money will make me any happier. I don't think I need more money to make my kids happier. Like, it's really not what's driving me today. And I think what changed with the kids more understanding that I think it makes you think even more long term in some ways because you want the world to look good For your kids and so you think about things that might happen beyond your like next but lifespan whatever it is But I think that also for me I think that has a positive impact on where I want to focus my Investments right and do I want to be in the company that I wouldn't feel good about telling my daughter of a question Chris Zachary says that one.

53:19And my prounds tell me chosen, invested in axioms. Kids, this is a bit of a rush to have a thing. But I think kids are a very smart invention, by nature, or forcing function to force us to think long term. We're all, and especially us, right? We're like, solar GPs started from like, nah, nah, we think a lot about ourselves. We're like, we have a lot of ego. This is everybody, but I think us as well. So, like, learning how to think about other people is a process, right? And we see that I'm not the best at it. And so awareness of we're part of a whole, this is my family, these are my friends, these are the companies I work with, these are all the employees that they have.

53:55This is all the customers that we're touching, like a lot of people's lives indirectly, and that comes with responsibility with that, of making sure that we do our part so that all of this doesn't only serve ourselves, but also the broader community of people even beyond that. So I try to think more broadly about how we fit into everything else. Yes, I'm also an egoistic person in some ways and yes, I want to be successful But I try more and I think kids are one of the ways that this has changed for me to have a broader perspective I could judge it all day I want to do a quick fire answer I'm gonna say a short statement, you give me your immediate thoughts, that's not okay We try, okay, so they're not easy.

54:34You can invest in one seed firm. seed firm is it? 29th, why? One, I like them. Two, the returns are great and three, I think they're doing it in a way where it's very found as focused smart, low ego. I think I was very lucky to start my career with them because I come from a family of artisan. I think it's a very unique thing to have people so low ego doing so well. I agree with that. You can invest in a series A -Found which one did you do? You wish me? I'm a big fan of how they're operating thesis driven, good people, diverse, not just isolated venture people, small funds, high returns, certainly also a model.

55:12final one on the L .P. selection. What was family? Kennedy. I would probably say Founders Fund, because I also respect their approach a lot. But I think they found it focused. They are willing to think independently and act on that without too much concerns about what other people think, which can be controversial, but I think overall will serve them well. Also, they're the only ones that cut their fun size in half proactively when the mac would change. So they went from, I don't know, 1 .8 to 900 million in two funds, right? So it's a good way to do it, right? Because all of this, I knew, operate on its different constraints, and you still keep the next fund in the back pocket.

55:50So I think they're quick to adapt. I think they have a really good way of appealing to founders. And I think they really act with conviction. I know from multiple investments, and it's also public that they've put a very big percentage of their funds to one company. Branchingman says the enemy of great venture returns is capital concentration on Yes, I'm an eraser. Tell me, what have you changed your mind on in the last 12 months? This is personal about having another kid. I think because it took quite a while to get over the sleep deprivation of her. And so really just a year ago that we started talking about should we maybe have a second one.

56:28And in the end, I think the answer is yes and everybody says you forget about the first year, maybe two years where it's a bit more difficult and all the love and growth of the child really makes up for it. But that's something I was walking with someone the other day and we were talking about you And I said the thing with Niko is he seems like one of the rare people to be actually happy I just can't say do you know what I mean? They were like I'm happy But I'm not really like most people now you just seem very content in a lovely way I appreciate that I do feel content right now I will say that like every other human I have phases where I don't and I think it's something that we have to also talk about more because I think one of the problems with social media is that it has become a highlight reel of us right and we are social animals that compare ourselves to others and so that's be real right one of the thesis for me at least was like it's kind of cutting through that and it's like no what are you doing right now I think that is something that I would hope we just are more open about that's the sound of these changes just don't lead to us being content with ourselves but just comparing ourselves to others all the time and not having you be a human interactions but just like digital bird and I'm a tech investor right so I'm like I'm pro technology I just think we have to learn the right way of dealing with it because I was kind of thrown into the point nine waters when I was super young similar to you I just had to find ways to be good with a lot of things and change and like probably overwhelmed in some ways and so I just really tried to find the right balance on things and like do the exercise and read and have time for my friends and family and take vacations and just not be fully consumed by this drive.

57:58We have, but really have the drive be one of the components of my life. It is the most valuable bullman that you've sat on the board with. There's a couple that come to mind, the one that I want to single out because I just really appreciate him as a person and what he can add is actually not if we see, but it's the founder of Belkin, Chad Pipkin, who is sitting on the backbone board with me, which is a company. The balcony is in the accessories. I have an adventure. Wow. That's so many balcony devices. Yeah, he's a legend. And so he bootstrapped the company and sold it for a billion to Foxconn.

58:31He was one of the first to do accessories for Apple devices. And this company backbone that I'm working with, they're on the West Coast. And it's a gaming device for your phone. So you slot your phone into it and then you have a software there on top of it that you pay subscription for, which turns your phone into a mobile gaming device. So it's an Nintendo Switch, but it costs $99. And so it's a great product the hardware angle and then the software angle and actually I invested before they did the subscriptions With the pitch that's due to subscriptions together and so now it's both a hardware and the subscription company and I'm a gamer So I enjoy it a lot.

59:03I usually have it with me when I travel and this guy is probably one of the smartest about Hardware what I appreciate is just like his operational Experience and what you can add in an area that I have no idea about I learn a lot from it He's also very kind as a person, very good at sharing credit, giving compliments, also being very direct and pushing on things that are not good in his eyes. He has seven kids. He was one of the first people to tell me that it took him years. Seven kids to know I have kids. I don't know how he's doing it. He's crazy, right? Think about that. I can't imagine. But he also said it took him many years to learn how to distance his person from the business.

59:44I've never been able to. No, and I'm not there for the business. But part of the growth is being able to do both, right? Except that you started it and that your self -worth and ego is tied up into the company in a big way, but then also going out of it and being able to drop it and not having it determine your mood and going to your family or your partner or your friends and not having them feel it so much. I think who's in Manchester is like, two willingness. The willingness to be learning. Like, low knee in your views that you're right and people say you're wrong and consume subscription is not great.

1:00:18And then also the winning is to be innovative. Sometimes it is just, there's not anything else. And actually sitting in the sounds is tough. Yeah, I agree fully with this. And there's also my approach where I think people fall into the trap of being busy. Right? You have to see every company, every conference, read every blog post, tweet every time. Right? I think there's into every 20 VC. But at least they learn something. I think it actually is a medium where people learn because it's a conversation. So I actually think it's beneficial. I learn a lot from it. But then I think that some of my best ideas or breakthroughs or thesis, I get when I'm sitting in my desk and I have no appointments for three hours and I just can let my mind go.

1:00:57Or maybe even not even in the hours when I'm taking a walk through London between my meetings and I see how people are using some kind of gadget. Oh, I still achieve. I see how people can see my media time games. and yeah, wow. Harley, you've had him on. We worked inside together. He's like watching mainstream US TV to get a sense for what the consumer thinks about. Here's about it, so the advertising. So I think you find your ways and your style to be creating those thesis. And I think for me, it is not being busy all the time. Last one, sorry, I'm not belivering this. But I think it's also important.

1:01:29It's like, I used to always be on all the time. And I still think I'm on most of the time, right? Like I'm checking my emails in the morning and the night. But we had a coaching session at Insight and there was a guy who's like that's sad You have to take a view like a athlete. There's three seasons. There's preparation training Then there's performance the race and then there's rest and I really adopted that where I think that there's Sprints where you just have to go right whether it's like the right company comes along and you just jump on it whether It's a fundraise right whether it's something in that regard you just have to be there for it and there's preparation for it You want to do it in a thoughtful way you want to be mindful about you want it to get your ducks in a row You want to make sure that there's enough to talk about, and then there's also rest, right?

1:02:09I don't feel guilty for going on vacation and for a week turning off my phone. I mean, that's an exaggeration. I don't think that I can be there. But like, I have... I left it at home on the wall. Yeah, yeah, no, no, no, but a few days. Like, when we went to Japan, I really, for five days, and I checked my emails. And I think that's important, because I come back and I'm so energized, right? And we have to also be able to do that. There's a final one, my friend, but I'm excited for this. Next five years for you and adjacent. Yeah, I think the next five years will be very similar to the last four and that I just keep on doing what I think will be very good You do have another partner.

1:02:43I would assume not but not there's probably not a zero percent chance So I'm not operating and I'm also very transparent with you with LPs about this is the way that I talk about is that there's a small Group of people that I would be interested in exploring there, but it's a very small universe I wanted to happen organically because my role model again and public risk of it. Part nine was that Chris was an LP in the point nine fund. We co -invested in 30 % of the deals of that fund, and then they decided to do the fund together. Right, so there was trust, there was co -investment. So I am very neat, the trust.

1:03:13Do you need the trust? And you need to have this feeling of the collaboration is powerful and works and complimentary, and as a person you get along, there's so many aspects to it. So am I open to it in theory, yes, for sure? But I have no rush in doing it, and I also know that I give up and give a lot to that person, because we're already somewhere. And so giving up flexibility, independence, decision -making, all the economics, right? There's a high bar to be crossed for that. So I would assume no, maybe yes, we'll see. But I think the more important is there has to be more data points for consumer subscriptions in five years from now.

1:03:49If there's not, I have to reconsider my strategy. And if there are, I think the portfolio will be very good. Yeah, listen, I love this. It was so recent eight years ago that we'd the last one. I can't allow all this, man. I'm so touched that you also allowed me to do this because I know you don't speak publicly, so thank you so much for doing it. No, very happy to be back and enjoyed it and see you in eight years. Niko said at the start, this is the first time he's spoken publicly about a Jason. I want to say a huge thank you to him for being on the show, for joining me after eight years, and for the incredible friendship we have.

1:04:19I really do appreciate it, Niko, and I'm so excited for the times I have with a Jason. But before we leave each day, this episode is brought to you by Tegas, the go -to research destination for bold investing. TIGA's Curies expert insights, analysis and financial data to give you powerful perspective for your investment decisions. With lightning fast access to over 60 ,000 transcripts across 20 ,000 companies, you'll discover a wealth of unique insights to fuel your fundamental research, gain perspectives, synthesize information, model outcomes and ultimately make better decisions. All on TIGA's.

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