StoneAlgo’s Devin Jones on “Zillow for diamonds” + Mar Hershenson on the art of picking | E1766

0:00It was actually through finding out about launch from All-in. and then through looking you guys up on Crunchbase and seeing how active you were in this stage of investment and make my own spreadsheets, obviously, to kind of like qualify who are the VCs that were going to be interesting to us and who is the likeliest to be interested in us. And I cold introed myself through your website. So anybody that's looking for funding, cold intros can work for sure. It worked for us at least. This Week in Startups is brought to you by iConnections is a platform to connect and meet with elite capital allocators through their online platform and bespoke events.

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1:29All right, everybody. Welcome back to This Week in Startups. One of the things I'm trying to do here is tell you how I make my investment decisions. Now, why is that important? Well, there's a lot of angel investors and venture capitalists and seed funds and accelerators who listen to This Week in Startups. Why do they listen to This Week in Startups? Well, five days a week, six days a week, we talk about startup companies, and sometimes their startups are on the pod or a venture capitalist or a technologist that they appreciate is on the pod, so they tune in. Some people listen every day, some people hunt and pack episodes.

2:02But what's really important, I think, when you're an investor is to share the companies that you're placing bets on. Why is that important? Well, if I'm placing a bet, it means I have super high conviction. Just to give you a little background on our fund, it's called Launch. I've had three, and I'm now on my fourth venture fund. The first fund was$10 million, second was$11 million, third was$44 million, and we're currently raising launch fund for. You want to read my strategy. I share my strategy publicly. Launch.co slash memo. Launch.co slash memo. You can literally read how I think about early stage investment.

2:41Why would I do this? Why would I share all of my secrets and my strategy? Pretty simple. In the early stage, none of us are in competition with each other. We're not in competition. I'm not in competition with Y Combinator. They're not in competition with us. Pair VC, Trust Fund, Sophia Amorosa's new fund, none of us are in competition. We're all collaborating. Most early stage startups are going to do three, four, five rounds, including and up to their series A. If they do five rounds up to and including their series A, they're going to probably have somewhere between five and 25 investors in each round.

3:13There'll be some duplication there, but there's probably 40, 50 people on the cap table by the time you complete your series A. If that's the one of those 40 or 50 people, well, then my reputation is garbage and I need to quit and not be an investor. That's just personally how I feel. So therefore, I share everything we do. I share our thinking. I share how we come to decisions. One of the ways we come to decisions on investing in companies is that we look for builder founders and we also love marketplaces. We have a big five category. It used to be called the big four. What's the big four in our world?

3:51marketplace is fintech b2b subscription aka sas companies and then consumer either subscription or ad based we added ai as our fifth focus topic so we have a big five internally our big five our fifth used to be climate we did that for 14 months no offense to the climate community couldn't find great deals there most of the deals were overpriced the traction was low they had low gross margins so i'm absolutely thrilled to be an lp and chris saka's fund and some of the other ones but in talking to him and other folks uh in the space they confirmed that it's really hard to be a climate investor so that's how we make our decisions we look for builder founders we look for early traction and we never underestimate anyone when i saw our founder's company gone through maybe two meetings with our firm maybe even three i said this is a brilliant idea what's the brilliant idea it's called stone algo s-t-o-n-e-a-l-g-o stone algo is a marketplace essentially of diamonds you're looking for a diamond you are scared that you're going to get ripped off you need some source of truth it's a major considered purchase and you know you you have a lot of different people selling them so you you want to aggregate them in one place well that's exactly what devin jones and his co-founder did with stone algo so welcome to the program and i am an investor i'm very proud to say now in stone algo welcome to the program devin thank you jason thanks for having me uh so a little long intro there um because i'm trying to educate people on why we're talking about our portfolio companies because i really want to explain why we make our decisions tell me about how you came up with the idea for stone algo and how you built it and what the traction has been like in the early days.

5:44Yeah. So you gave a good description of the company. We view ourselves as being like Zillow for diamonds. So we're not only an aggregator, but we're also building tools that layer on top of that information that help people make a more informed purchase. So in the same way that Zillow built a Zestimate, our kind of core feature in the early days was our fair price estimate for diamonds. And so while we aggregate 2 million diamonds a day, and we get live daily price updates from the jewelers we work with, we're also turning that information into useful insights. So we use it to predict the price of any diamond, even diamonds that we haven't seen before.

6:24The idea started as a solution to my own problem. So when I was purchasing my wife's engagement ring, I was looking for a product like this. I was trying to find some semblance of confidence in what the fair price of my diamond purchase should be. And there wasn't anything out there. And so I ended up patching it together myself in the early days by just going to various jewelers' websites, looking at their pricing, and getting a gut feel for what pricing should be, which obviously is in a scientific method. But I was fortunate enough to be working with my co-founder today, Jason Modica. And Jay is the tech whiz.

7:04He's the CTO. And together, we developed a pricing algorithm, originally in Microsoft Excel. This is back in 2016. And then we taught ourselves Python. And that was how we made the jump from a couple of finance guys who were used to working in Excel sheets to a couple of internet guys who were able to publish something that could be updated in real time and accessible to tens of thousands of people every month and this is one of the key things we look for builder founders uh y combinators known for having developer founders they like to have developers we like builder founders where our aperture might be a little bit wider uh than paul graham's uh thesis he likes to have two developers three developers i'm okay with like a growth hacker product manager ux designer and developer i'll put all those into the the builder category writ large um but you built the product yourself which means you didn't outsource it you you got in there and you figured out how to how to make this happen now tell me a bit about the business model here we understand you're aggregating all this information then you're trying to normalize it and then create tools on top of it so people can make an informed decision okay great so you're trying to build that trust but this takes work this takes people you got to figure out a way to make money from this so if it's a marketplace most people would think okay uh people either pay to list themselves on the marketplace or you take a percentage of the sale tell us how you think about monetization here uh and keeping that monetization in the best interest of everybody on the marketplace yeah so the the business models evolved over time.

8:48And I think we were smart in the way that we started in the early days. When you don't have traffic and you don't have much to offer to the partners that are listing on your site, you have to wear a risk. You have to do some sort of a performance-based system to give them confidence that it's worth their time to list their product on your site. So day one, we were doing basically affiliate marketing. We agreed to do performance-based affiliate marketing, which for your audience, it means that we would send traffic from our site to an online jeweler's website. If that person was properly tracked by cookies that were stored in their browser by a third-party system known as an affiliate marketing website, and that person converted into a sale for the jeweler that we sent that traffic to, we might be eligible for a commission on that sale.

9:39And that's how we got the ball rolling. But from a cashflow standpoint, that's a terrible business model. We were constantly collecting like T plus 75, which meant that scaling was difficult. We couldn't pay to play. We couldn't pay to drive at - Explain what that means, collecting T plus 75. Sure. So sorry. Like I said, finance guy. So 75 days in arrears, right? So we're sending traffic to an online jeweler and somebody buys a diamond on January 1st, then we're not going to collect until March 15th is when we get paid. Best case. So for example, if we paid on Google Ads to drive that click, we are bearing the cost of that click for two and a half months.

10:25And it's brutal. And so it made scaling really, really difficult. Ultimately, we were able to drive a lot of growth. We were forced to drive a lot of growth organically. And the way that we did that was by building products that were useful, that were differentiated in the marketplace, and that ranked high in Google organically for keywords that people were already searching for. So we recognize that people were looking for things like diamond price calculators in the same way that Zillow and Trulia recognized that people were looking for mortgage rate calculators. Right? And there just wasn't a product out there.

11:00Tools. And I think that this is an important point for anybody who's super early stage that's trying to go from zero to one, especially with LLMs, large language models, with AI, we're already seeing if you're in Google's test flight of their product, Google Labs, you get this AI description written at the top of Google search results. And this is specifically for answerable questions. Who's the queen of England, who was the queen of England in X year, right? That's a known thing. That's factual information. It can be answered by an AI. That used to be something that bloggers were competing for to get to the first rank in Google.

11:43Now they're kind of stuffed underneath this LLM. And so it's going to be very difficult to drive content-related traffic through undifferentiated or commoditized information, right? But if you develop a product that is unique in the market that leverages the information that you have that's unique to you. So if you have unique datasets, or if you can combine two datasets that are separate, they may even be publicly available and combine them in some unique or novel way that nobody's thought about yet and build a product around that, that people actually search for, that a large language model is not just going to give a text answer to.

12:22That's a great way to drive organic traffic to your site. And people will scroll past the LLM's response to that, or the LLM may not even try to give a response because Google is training its algorithms to identify situations where the LLM is not the preferred mode of communication with the user. And so that's how we got the site rolling was by developing these products that people found useful, leveraging the information we were getting from the affiliate agreements that we had. And we were able to drive enough traffic that we had leverage in our conversations with our with our partners and then we were able to convert them over to our own business model which is a cost per click model and it looks very much like google ads so super simple they understand it simple yep you know pay a couple of bucks every time you send somebody over you know this is quality traffic because the only way for them to get to your site is they would have had to done a search and when they land on your site you're going to have some information about them unless they're using like a vpn and the brave browser or something you're going to get some And that's like, whatever, less than 5 % of people.

13:28So you're going to get some good data on that person and know their providence. And you can just figure it out, right? You can figure out the value of it. If it works, it works. If it doesn't, it doesn't. The average diamond purchase is what in America? Yeah. In America today, it is probably around$6 ,500 is like the average engagement ring price. And so the diamond is going to make up the majority of that purchase value. probably about 5500 to 6 000 of that purchase value feeling pretty good about my three carat asher cut that i got my wife on blue nile that was like 20k put me 10k in debt that was that was a that was a tough decision back in that time i was literally had no money and i just went like it was 15k in debt at the time three cut asher pretty good pretty good pull for uh somebody with no cash in the bank that's pretty good i i think by any standard that would be considered a pretty large diamond and a pretty good pull pretty good pull i think listen when you're a fund manager like me trying to raise money for your fund uh it's it's not an easy task let's face it well there is a new way for you to find elite institutional lps and it's i connections and this platform uh which is an app online in person it allows you to meet the most elite capital allocators.

14:47I won't tell you the names, but I was able to get in touch with and meet with three of the major funds that I was looking to meet with all on iConnections. These are the biggest LPs in the world, endowments, foundations, sovereign wealth funds, fund of funds, etc. iConnections is specifically built to connect the global network of capital allocators, LPs, with a diverse range of fund managers, GPs, general partners like me. And they do this two ways. They got the iConnections platform, and then they do the bespoke events. The events are amazing. And you have an LP meeting schedule inside the app.

15:21You can share documents, you get a database of all of these contacts, and you get access to these world-class events, which have exclusive content, like me. I am over the moon with iConnections. I love it. And this is like the product I was always looking for. And if you're a fund manager of any kind, you can sign up for iConnections at iConnections.io slash twist. That's right, iConnections.io slash twist. First 25 funds that sign up for iConnections Miami in 2024. In January of next year, we'll receive a 20 % discount. This is the largest capital allocator intro event in the world with trillions in LP money represented.

15:52Sign up at iConnections.io slash twist. And thanks again to my friends at iConnections. So you haven't raised a ton of money for this company. You kind of bootstrapped it mostly? Sweat equity? Yeah, definitely. I mean, early days for the first couple of years, It was Jay and I just working our butts off on side gigs during the day to keep the lights on at home and then hacking away at night as late as it would take. Teaching ourselves to code, building the products. I mean, it's come a long way since then. But yeah, we bootstrapped it for years and raised a very small amount of money from a couple trusted advisors over the past five years.

16:37and now we're fortunate enough to have have you coming on board which is just that's a huge pull for us oh yeah uh well you know we like to find diamond in the roughs so to speak um we find founders who built a business a real business cash generating business that you know some other investors might think huh not sexy or maybe it's obvious a lot of times you know obvious things um don't exist in the world and they just need to be executed at an absurdly um high level and so when i when i looked and i'll just be candid with you i looked at and said that's got to exist and then i did my research i had my team do the research and was like nope this doesn't exist it really and it doesn't exist at the level of fidelity clarity if you will you know that you built it and so when we see product excellence and i think this is important for every investor out there especially angels and seed stage investors don't underestimate anyone and and don't underestimate a category.

17:36Google was the 15th search engine. You know, Tesla was the 10th electric vehicle. There's a lot of times it's the 10th or 20th person who tries to solve a problem, who actually unlocks the door, Facebook being perhaps the best example we've ever seen. You know, he just basically copied Friendster, LinkedIn, and MySpace and said, how could I make this simpler and keep the servers up and running? because at the time friends there in myspace couldn't keep their servers up and facebook ran away with it just by being steve jobs in the ipod even steve jobs in the ipod that was you know far from the first mp3 player but he just had a level of execution that was so much higher than everybody else and he was he was in the details and they were doing the hardware and the software and yeah i i agree with you completely i think that's what we're trying to do as well just go as deep as we can on this on this topic yeah i had so many of those early uh mp3 players like there i guess it was creative labs had a really good one yeah it was a yeah the rio i had the rio that was a really amazing one you could put like 30 songs well the zune yeah that had their own and even before mp3s sony had the mini disc which was essentially because it had drm on it it was kind of difference um but yeah compact came up with uh compact had a mini computer like a handheld computer it was called the ipac i think um that was part mp3 player part like control your home it was really really uh interesting let's talk about diamonds for a second the diamond market you say diamonds people got a lot of things that come to mind blood diamonds fair trade diamonds fake diamonds and synthetic diamonds so many different you know kind of things get triggered in people but let's start with something very basic what is the diamond supply chain 2023 i understand you know we find these in certain geographies more than others and there's some concerns about geopolitics around those and human rights and then i think they all go to if i'm correct india or pakistan and they just have the best centers in the world for polishing them or cleaning them up i don't know if that's true and then somehow i know growing up in new york they wind up on 47th street in the diamond district i believe it's 47th you correct me if i'm wrong that's correct so that's my understanding of the trip of diamonds where am i correct where am i wrong no you're i mean you you are mostly correct so the the supply chain for let's distinguish between the two types of diamonds really there's natural and then there's now lab grown and then you also have synthetics, which would be non-diamond.

20:17So that would be like a CZ, cubic zirconia, which is not a diamond. It's a different material. A diamond is a, it's, it's a, it's compressed carbon, right? It's a, it's a, it's a type of mineral. So natural diamonds go through a supply chain of first being mined from the earth. Like you said, in specific countries around the world that have rich diamond deposits, they are then cut and polished, typically in india um and they are then happen how did india become the place where diamonds get polished as opposed to like at the source or on 47th street that's a great question i'm not 100 sure for the diamond trade exactly at what point it made that jump but there's been a rich history of of gemstones in that area for a very long time whether it's uh rubies or other types of gemstones and so the cutting and polishing techniques over there probably were ready for the diamond market when it came to pass um but uh you brought up proximity too because am i wrong it's like africa and russia major diamond sources and india i think it's kind of like in between those two places like triangulating between those two yeah i'm just taking a guess here like is there some geographical reason that that i mean obviously um having affordable labor um right and you know uh a labor force that is hard working and detail oriented um and that's affordable and that can work long hours doing something that's very precision based i think that's kind of but russia botswana congo not sure where else diamonds come from but yeah those seem to be there's some even in canada um oh yeah i didn't know that i didn't know yeah it's you know but but um but you nailed the big ones and in the u.s after they've been cut and polished uh about 90 percent of the diamonds that enter this country come in through 47th street and 47 yeah and as you know as in new york it's hilarious i'm also based in new york as you know so we're we're not far from 47th street right now um 47th street isn't like it's not 47th street running the width of manhattan that we're talking about it's two blocks it's between six and madison or is it just go six to five it's really fifth to six yeah it's really one block and it is like another world like it is like no other part of new york truly um if you've seen uncut gems you can get a really interesting peek into it um it's it's a cdm of cdc jews run most of it i think um i knew this because i lived in brooklyn and there were i remember when i worked in uh rockefeller center area i'd see all these buses uh like school buses and 30 hasidic guys would get on and off the buses every day what's going on here i was like oh yeah they're working the diamond district and they're going back to brooklyn i was like can i get a ride i'm going back to brooklyn too i gotta take this subway it's uh it's an interesting place and it's come a long way like uh the diamond the diamond companies uh the lab-grown companies out of india are setting up shop there in the u.s for distribution purposes and and uh business purposes the gia uh is in a beautiful new building in the middle of the block that is like reminds me of when i worked at bank of america at one bryant park it's it's very impressive um gia does the grading is that the grading organization Correct.

23:50There's a few grading organizations, the GIA being the largest and the most well-known. They've done natural diamonds forever. They've started to do lab-grown diamonds as well now. And I think from the consumer standpoint, that's really where the confidence comes in. You have an organization that has credibility, that's verifying that these are authentic, that these are a real natural diamond, a real lab diamond. they'll laser inscribe them with a unique certificate identification number along the girdle which is like the the part of the diamond that separates the top and the bottom it's like a flat edge along the side of the diamond and you can actually you can look at it with a magnifying glass and verify that your diamond matches the certificate that you you believe it to be and then there's a number of other checks in the diamond that you can like a license plate number or your street address.

24:43How many diamonds have that? Is that like, would you ever buy a diamond that didn't have it now? I personally wouldn't, just because there's not really a reason to to not buy a diamond that doesn't have that inscription. And it's a, you know, on our website, we actually can accept that identification number, query the GIA via their API. And then even if, so like all the technology we built for the consumer, we've also built it so that people like you or or or me people who own a diamond aren't even shopping we can actually verify like you could go on our site right now and check what's your diamond worth today uh that'd be amazing to do i wonder if does it look bigger smaller than it weighs i wonder if diamonds 20 years ago had them would blue niles diamonds i bought it on blue nile what a great experience that was blue niles would all have those from 15 20 years ago that's My guess is that 15, 20 years ago, they were probably exclusively selling GIA and maybe AGS.

25:43But we have connections to many grading agencies. And we pull a ton of information. We use that information to generate our cut score, which for round diamonds predicts how sparkly they'll be. We use it to pull in information about imperfections in the diamond that might concern people, might be a reason not to buy. And then we also use it to pull in the information necessary to produce a very accurate price estimate for the diamond. We all know the one thing that separates great startups from the good ones is product velocity. What does it mean, product velocity? Fancy term, right? You've got your product and you've got velocity.

26:20Speed. The speed in which your product improves. So can you ship updates? Can you release new features? Can you do bug fixes? Can you iterate on the interface? Can you solve problems for your customers? And can you do it quickly? Because you're not alone. You have competitors and your customers have choices. They may solve their problems by writing their own custom code, or they might use your solution. This is what startups are about. How fast can you get that product velocity going? And so, you know, how do you supercharge it? Everybody says, okay, yeah, we want to go faster, but you got to go faster intelligently.

26:54And Crowdbotics is going to help you do that. They're your CTO as a service. Basically, they provide you with the most optimal architecture to get your product to market as fast as possible. You'll have access to an on-demand product manager and developer talent, and they will help get your app into production 10 times faster than conventional development. Crowdbotics can work with your in-house dev team, or you can just have them work independently. And you own all the IP. You own all the source code. Let the folks at Crowdbotics supercharge your product velocity today. No more waiting. Get a free build plan at crowdbotics.com slash twist.

27:26That's a$4.99 value just for the Twist listeners. You get that for free. That's C-R-O-W-D-B-O-T-I-C-S.com slash twist for a free build plan. One of the things I love about talking to you, and this is one of the reasons we wanted to make the investment, you have such a deep knowledge of the space that you've gained over the years of doing this. And you have a unique take on where this is all going. and a lot of times people who are in the industry um have accumulated a bunch of biases along with their knowledge and so they don't see the opportunities they think oh this will never work or that can't work or this is how the industry works therefore you know uber and lyft or doordash and postmates that'll never work i've been in the delivery business for 20 years i've been in the livery business for 20 years i've been in the diamond business for 20 years you're going to fail you have a deep knowledge but also you're coming with fresh eyes to a certain extent and that was another thing that attracted us to investment in stone algos so thanks so much for coming on the program continued success and let's catch up in a year or two come back on the program uh after you've tripled revenue so now i've set a goal for you whatever revenue is right now triple revenue and come back uh got it and uh i'm really excited to start this relationship and And I'm absolutely certain you'll take the investment and deploy it in a capital efficient manner.

28:48That's another thing we look for in founders. We love capital efficiency. So when we start your business, we're like, wow, you've really accomplished a lot with a small amount of money. And that frugality is absolutely essential in startups. Now, at some point, you'll start cooking with oil and you'll be tripling, quadrupling revenue. Somebody's going to give you some bucket load of cash and some giant series A or series B. And you got to keep that with you. don't lose that frugality devin please i've seen a lot of founders when they get that big check then they start working about the duck work in their new offices the front desk they start arguing over which chairs they're going to buy with their co-founder who gets the corner office and you know spending some ungodly amount of money on a goddamn off-site meeting or a board meeting and then they just do stupid stuff with the money every dollar has got to go into your team or the product yeah i think that's the the key so yeah all right i completely agree yeah continued success very excited to make the investment thanks for including us and uh triple that revenue all right that's this is uh brass tacks here startups are meant to grow and uh when you take investment that's uh the expectation so communicate well with the investors and you know let's just keep growing the company in a reasonable fashion we're not looking for you know growth should be sustainable is like what i'll say uh for the investors who are listening in and for the founders sustainable growth always best no uh unnatural acts to grow the top line and screw up the bottom line but you know that because you were a finance guy yeah exactly yep now we're on we're on the same page 100 all right let's wrap any questions for me no i think uh this this was amazing thanks for having me on um and thanks for investing as well oh yeah well it's my pleasure i mean i think i was literally had a phone call today with a prospective employee and i said we are in a service-based business and we have to match the effort of our founders and we pick founders based on their effort so the great paradox of what we do is we look for the hardest working most dogged investors i'm sorry founders which then makes us have to be the most dogged and hardest working investors.

31:03And if we're not, the founders are going to call us out on it. Hey, we're working really hard over here and you're skiing 40 days a year. And then I go, oh, I'm skiing for 90 minutes, 40 days a year. So just to be clear, I'm available to you anytime and you can come skiing with me as well. Still 40 days. Still 40 days to be clear. I mean, that was two years ago, my record. Last year was only 36, but I'm 52 and I made my money already. I'm just trying to get, you ski or no? Yeah, I did. I did a lot more before I became a founder. Okay. All right. Well, listen, I'm going to get back to it in the future.

31:36Well, I'm doing a, it's interesting you say that I'm picking some of my CEOs and founders. We're going to do a founder ski trip at my, my incredible house. And then you guys can come see my incredible ski house. I don't know if you're in, are you independently wealthy coming into the startup? No, not independently wealthy. No, no trust fund here. So that's what I'm doing. I'm bringing, I'm going to bring like 10 of my founders to my, uh, incredible ski house and uh show you what you're working towards took me 50 years to get it so yeah sounds good come skiing with us uh this season look forward to having a fire lit under my butt by the by by the uh by the house that you invite us to so exactly it's pretty spectacular i have to say i'm pretty proud of it uh listen continued success all kidding aside it's it's great to have just found you randomly how did you find uh did you ping us or do we hunt you yeah actually remember So it's funny.

32:26I didn't have a strong network in terms of VCs and investors coming into this, but I did have a friend who's a CEO who was actually a direct competitor of ours and was super well-funded, had one of the biggest VCs in the country as his lead investor. And we were going head-to-head and we sat down and broke bread. And he was like, look, this isn't working for us. You guys are scrappy and small. You're not going to die. We can't keep on this path at the burn rate we have. Would you consider coming over or running the diamond operation for us? And I was like, look, we're doing this this way. I put all my eggs in this basket.

33:11This is my thing. I'm doing it my way. And we ended up just becoming great friends. And he was advising me through this process and connected me with some really big VCs and gave the warm intros. And those got us far. But it was actually through finding out about launch from All In. And then through looking you guys up on Crunchbase and seeing how active you were in this stage of investment. And making my own spreadsheets, obviously. to kind of like qualify who are the VCs that were going to be interesting to us and who is the likeliest to be interested in us. And I cold introed myself through your website.

33:57So to anybody that's looking for funding, cold intros can work for sure. It worked for us at least. To my team, clip this. Number one, shout out to my partners on All In for helping raise awareness for our early stage investments. Great job. and then our crunch base profile we ignored it for a couple years and then i told somebody i we got to get this data correct we have so many investments and we're like ranked way down please make sure all the data is correct on a regular basis and i hope we're doing that but um you know we love people reaching out to us launch.co slash apply launch.co slash apply and you will get a response from us in under 48 hours and in all likelihood you'll probably half the people who apply if they're it's not just an idea and if it's an idea we send you to founder university but we'll probably get on the phone if you've got a reasonable venture scale business to look at and we try to do it i told my team i i want to reply to founders within 48 hours and i want them to get a link to a group calendly and i want them on the phone with somebody in our firm in under a week hopefully in a couple of days what was our response time like do you remember it was fat it was fast and and your process was good um you know from the first call with jigny all the way to the last call with you yeah you know it was it was very quick um yeah couldn't couldn't speak more highly about it this is something i've worked the last year on with mike savino from our company the president on how can we be the fastest response time of any early stage venture firm i think speed matters because i think if we have a sense of urgency the founders will pick up on our sense of urgency and um you know because i know you're moving fast and if we're slow and meandering now we want to make a thoughtful decision that doesn't mean we're going to be like oh here's here's the money i mean we'll we'll do proper diligence and what we want to do three or four meetings you probably met with at least three or probably did at least three or four meetings with us and so at least yeah at least so we want to be as thoughtful as a series a investment even though we're putting in a seed stage check of typically 250 to a million dollars so you know and a lot of times the constraint is how much the founder wants to raise so anyway listen great to get to know you i'm so excited that we're starting this relationship i think this business is going to be a unicorn i'll say it right now i think you're going to get to 100 million in revenue and i think you're going to do it with two rounds of funding i don't think you're going to need a lot of funding and when i i know scrappy when i see it now you might choose to take a third or fourth round of funding, pull some secondary shares off and buy the apartment.

36:34No, you know, in Manhattan, no ski houses. Okay. One house, secondary, one house with secondary. If secondary gets too big and it's two houses, that's too, too many. One, one nice apartment in Manhattan. We got it. That's the goal for, uh, that's the goal for the secondary. Anyway, listen, I could talk to you for hours. Uh, congratulations on the great success. And I'm just thrilled that you let us join the cap table and we're going to work hard for you. do not be bashful you got my cell phone number you got mike's cell phone number you got jignees you got everybody's personal phone number you got a problem we will help you find a solution you call us anytime 24 7 we're here for you thanks jason all right we'll talk soon cheers now if you're a sass or services company that stores customer data in the cloud then you need to be uh sock to compliant you knew that from a third party and you need that third party to close big deals.

37:25And if you want to get compliant easier and faster, you need to use Vanta. V-A-N-T-A. Vanta makes it so easy for you to get and renew your SOC 2. On average, Vanta customers are SOC 2 compliant in just two to four weeks. Compare that to three to five months without Vanta. And Vanta can save you hundreds of hours of manual work and up to 85 % of compliance costs. This is a total no-brainer. And Vanta does more than just SOC 2 compliance. They also automate up to 90 % compliance for GDPR, HIPAA, and more. You can't afford to lose out on major customers. We all know that. Listen, it's a hard year.

37:59Last year was hard. You can't lose those major customers because you don't have your compliance dialed in. Just work with Vanta. Get your compliance automated and tight and tight is right. Lock down those big deals. Here's the best part. Vanta is going to give you$1 ,000 off. That's 10 hundies. Get$1 ,000 off at vanta.com slash twist. That's vanta.com slash twist for$1 ,000 off your sock too. Oh my lord, what a great interview. I'm so excited about all these investments we're making. We're trying to do one or two investments a week. We want to be the most active early stage investor in Silicon Valley, right behind Y Combinator and ahead of everybody else.

38:31so uh next up on the program one of the great early stage venture firms that we work with a lot pair vc mar hershenson is just a great speaker she's candid she's no bs she's hard working like us that's why our two firms collaborate on a lot of startups and she did a great presentation at my angel summit this is a yearly event for a hundred capital allocators it grew to 120 this time got a little too big and she did this presentation on the art of picking and she breaks down what goes into spotting talent not only in startups but the music industry and she really talks about joining the scene and figuring out where the heat is she's an amazing investor and uh stick with us you're going to want to pen and paper take notes on this one if you put this on 2x speed you're going to want to slow it down to 1x speed and take notes with mar if you're a founder or a capital allocator probably watch this with your team and have a discussion about it because she's that smart.

39:28All right? She's that smart and insightful. And we'll see you all next time on This Week in Startups. Mara's going to talk about the art of picking, which is certainly something we all have to do when we place these bets. So please welcome Mara. Well, thank you, Jason, for inviting me again. I'm going to talk to you about the art of picking. And before I get started, just a brief slide on Pear. We're generalists. We invest across sectors, consumer, B2B, healthcare. We're very fortunate to have partnered with founders in companies like DoorDash, Gusto, Viz, etc. Okay, so I think you're all here angel investors.