Unicorns: now and then with Aileen Lee | E1887

28:57But the thing I'm seeing over and over now is the companies on your list, many of them are having more employees outside the US than inside the US. We did a little bit like in the new list, we know I think at least 22 of the companies of the 532 actually have a completely distributed company and no physical office headquarters. That did not exist 10 years ago. And a lot of them are multi-hub. So I think that is completely. I mean, kind of to your early question about like, why did this happen? It was a combination of like interest rates were super low. We had cloud and mobile and security and AI and all these exciting things that were basically giving lots of entrepreneurs ideas and opportunities.

29:39And like you said, it was easier to develop software. It's easier to adopt software than ever. So it kind of made the adoption curve a lot easier. And then we had COVID, right? Where people could work in lots of different places. We were surrounded by technology all day and all night, like we were basically running our work and our personal lives through these new delivery services through zoom and things like that. So it kind of created this perfect storm. But I think it also planted lots of seeds for people to start companies in different places, which is exciting. What do you think about public markets and the stagnation we have there?

30:07What happens to all these companies if they can't get public? What's happening to them now with the paper corns? So let's get back to paper corns. So not indigestion going on in the system. Totally. So another big change in the past 10 years is going from 66 % kind of exited to 93 % of this list being private still. So only 7 % of the companies have had exits. And I think it's only 3 % that have gone public and 4 % were bought. So 4 % were bought. So it's a really tiny percentage. And so 93 % of these companies and 60 % of them are what we call zerbicorns. I was talking to someone this morning, Samir Khadji, he called them, some of them are COVIDicorns.

30:45In other words, that would mean they got very big artificially and then came back down to reality. They raised money when interest rates were really low and public tech companies were flying high and trading at incredible multiples. And there was so much money in the private markets that so much more money had gone into venture capital funds. And they were looking to deploy because they looked at public companies and they're like, wow, tech is a great place to invest. You make so much money. These companies can trade at 50 times revenues. And founders were like, well, this company's trading at 50 times revenues.

31:13I should be valued at 50 times revenues. So a company, well, even more, a company doing$1 million in revenue was raising money at at least a 50 pre during those times. But it was really that time when interest rates were quite low. So 2021 in particular. And so 60 % of the companies on our list basically got their unicorn crowning or valuation during that period of time. Listen, I got a lot on my plate. I got a couple of podcasts I do, you know, all in this week in startups. I run Founder University. Man, we had over 2 ,000 people apply. We got 250 teams in there right now. The list, it goes on and on.

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32:55Coda.io slash twist to get started for free. You can't beat that price. Not only is it free, they're going to give you a grand. That's 10 hundies. All right. I love the Coda team. They're constantly giving me new features to make my business more efficient. Thank you to the team at Coda. If you had to guess what percentage of 500 and change would, or raw number, will maintain their unicorn status here? So our prediction, we basically triangulated it a couple different ways. We looked at how are people trading in the secondary markets. So for the companies that we have data on, 40 % of them are trading below a billion dollars in the secondary markets.

33:28Oh, wow. So they're already took the haircuts. Yeah. So that would, well, people who are like, let's say someone who worked at the company who's trying to sell their shares or they're willing to take at least half the valuation. And then the other thing that kind of happened is that the distribution of valuation skewed downwards. So I think 20 % of our list was valued at just a billion dollars. Right. And 40%, I think, is trading at two or below. So if you kind of take those companies and say, well, they probably raised at at least double the valuation that they would have today in today's market.

34:00maybe even four or five times. So you kind of pull those people out of the list. So we basically triangulated a bunch of different ways and said, okay, this list of 532 is probably going to shrink, let's say to 350. But there's a lot of, I mean, 350 is still almost 10X growth from 39. So it's still a huge change. And I think all the things like the moving to enterprise, the number of enterprise companies, the numbers of sectors, the democratization of the founder backgrounds and 10Xing in 10 years is still quite impressive. And the capital efficiency is something I don't think we've talked that much about, but that was the other thing that really fell quite a bit in 10 years that i think is something we have to be pretty careful about yeah and just to look at sectors when we get to capital efficiency i was just ripping through the deck and i said wow oh my god two dozen crypto companies and like coinbase was able to go public but my lord i mean talk about a sector that you know i mean essentially the whole sector has gotten wiped out except for bitcoin solana and maybe coinbase one or a couple of players so you know we silicon valley doesn't always get it right we are capital inefficient in venture and that's part of the magic isn't it uh and i think this is well the risk taking may be the way to say it you know we're so risk taking that i think people who don't understand the job like why would you bet on these companies well because they don't understand the power law yeah there are plenty of companies i think amazon's probably the best example of companies that know that they're losing money and are willing to lose money for a long time because the pot of gold at the end of the rainbow is very big.

35:30And they have a strategy to basically be willing to lose money on categories for up to 10 years because once they get dominant market share, they can start to creep up prices and figure out and work on profitability and margins. And they've washed out the competition. So I think Amazon has been masterful at that. If you look at their history of how much they raised. And I mean, they went public very quickly and they raised a lot of money because that was the only way they could actually access capital. And then they raised a lot of money as a wildly unprofitable company for many years. So this is not saying that every company has to be like Viva, where they got profitable on$4 million and then went on to be worth billions of dollars.

36:11But that is a really great way to build a company that has sustainable value is that you know you're not spending too much on marketing. You know that you're being really efficient with your people. You know you're building and shipping a product that customers like because you have very low churn. You have high margins and a very healthy P &L. So that is, I mean, a really nice, sustainable way to build value. And here's the chart for average capital efficiency. Valuation divided by the equity raise, 2013 versus 2023. Maybe walk us through what we're seeing here with the two bar charts. Yeah. Yeah.

36:43So you can see on the right-hand two bar charts is 2023. and you can see that enterprise companies basically went from 26x to 7x. So basically being worth, let's say if you raised$100 million and you're worth$700 million, that is a big decrease. And enterprise and consumer being the same is kind of very surprising. Because when you look at what's going on in the public markets, I think, didn't Microsoft just pass$3 billion or something crazy? They just dipped above it. Yeah, you're correct. And the Dow hit a high. I mean, to make 7x in 10 years, in many cases, you would have been better off picking a basket of public stocks, which are liquid and freely tradable.

37:23And you can decide every day whether you want to hold or sell versus locking your money up in a private company where you cannot sell freely. So with three decades of experience doing this, having watched three cycles, you come to the conclusion that the industry got too big. There was just too much money chasing too few high quality deals. and so then efficiency goes down. Is that the reasonable conclusion? I wouldn't say, I think quality is so, I mean, there are a lot of quality companies that I think are gonna get screwed up or quality ideas that when you raise too much money and then you can't grow into your valuation, you put yourself in a big zone of risk.

37:59And they might've been quality opportunities that kind of got screwed up by the fact that they raised too much at a high valuation. We lost discipline around valuation because we had like a, I guess, yeah, it was too much demand. There was too much money in the venture ecosystem. in a way it's a boutique business isn't it and well it's not anymore yeah well so then should it be you know or can it be a scale business like you know because it seems like we try to scale this business um or at least the the private equity folks dipping down thinking oh well this is easy i just look at what sequoia and andreason and whoever kleiner have invested in and we just double it and we give the founder more money and we're the next round so we don't have to due diligence.

38:41We don't have to have a board seat. We'll just double or triple their valuation and give them, you know, a hundred million bucks. And that's it. We punched our ticket. That doesn't work. It's, it's funny. Aaron Griffith in the New York Times just published something today about how like everyone always says there's like many times in the history of the tech and venture industry where people are like, there's too much money. It's a bubble. It's going to pop. And like, it just never does. And I have to agree with her. Like I don't, the genie is not going to go back in the bottle. Like we have delivered fantastic returns in the past.

39:08You and I are both very excited and bullish about the power of software. And I think believers of how many more great software companies are yet to be built. And that will deliver great returns for people. And there's still so much money out there that doesn't have venture exposure. There's sovereign wealth funds, there's pensions. I think this is going to be a great time because the next couple, I think people are going to have learned a lot of hard, painful lessons. They're going to be more disciplined in the next five years. Valuations are going to be lower. People are going to raise less and be more disciplined with how they use their money.

39:38So the next vintage is a venture, I think should be much better than the past three years, like the past ventures. So it's going to be a great perspective for people to actually get into venture because we're going to be better. Yeah, this would be the best time to do it. The valuations I'm seeing are the same valuations I saw back when I did Uber and Vemtac and Com and companies with products in markets that are valued in the seed round between five and 15 million, as opposed to 15 and 100 million before they even have products launched. So where do you think the opportunity is? If you were to look at it in venture, you're in seed, I'm in seed and pre-seed.

40:13Then there's Series A, seems super competitive. Series B and C seem to be a commodity. Where is the opportunity in venture today? I think there's opportunity across the board. Okay. I mean, I think at every round there's opportunity. I am a little worried. I've heard from some multi-stage firms that they're just... One guy at a multi-stage firm recently told me he's just doing seed and B, and the fund is a$1.5 billion fund. Like that doesn't make any sense to me. I do think founders, we do a lot of seed, right? And we're telling our founders to just be, a lot of the people who could do A's could also do B's and C's.

40:50And so they've gotten pretty conservative to look at the A and be like, this is kind of promising, but it's not perfectly de-risked. I'll wait for the B and be willing to pay a higher price and invest in a bigger round because I have a really big fund and I'd rather wait and see more cards turned over. And so I think it's creating a little bit of a gap in A. So I think, and A's are, you know, when you're a board member for Series A, you're carrying the water for a long time, you have to be willing to sign up to really be committed to this company for 10 years. We've added a lot of people to the venture business in the past five years, but not that many people who have training to be great board members.

41:23So I'm a little worried about that. But I think there's opportunity across the board. Cowboy, we're very excited to make some new investments this year. I think the founders know that it can be potentially a marathon. And it's not a get rich quick scheme. and they the people who are down for it and they're like i don't care i just really want to help build something substantial that stands the test of time the next three to five years we're going to see tons of great founders like that see this i think is so important we talk about venture tourists there were a lot of people who are trying on being a venture capitalist you really have to have a certain personality for it my friend uh david friedberg got incredibly frustrated running the production board and he's been very public about this i wouldn't speak about it publicly if he hadn't but he's been on a bunch of pockets talking about how frustrated he was trying to get founders to do what he wanted he wasn't and then now he's ceo of his own company again and so and he's much happier because he can come in and make that change the people who you did also have founder tourists people who might have been a great i don't know cto cmo vp of sales whatever it is they would have been a great number three four five on a team and then they were put in the slot and it's not for everybody right and and i think now we're starting to see people who are built for it when i hear your description of the grit tenacity and what people are signing up for that to me is like yeah people who are built for war and let's just face it you know these these companies we've seen it up close and personal they're always on the verge of flipping over going off a cliff even the public ones are you know always uh have somebody looking to disrupt them.

43:02So you need to have a certain amount of grit that maybe we didn't see in the peak era, did we? Another combo is, I mean, there was just a lot more budget five years ago. And then there was so much money that these new venture-backed high-growth companies had in their bank accounts, and they could buy one of everything. And so as we've seen as the recycle investors also, that economies tend to move and go in cycles and enterprise budgets also kind of do. So I think I've seen, you've probably seen this too. It's like you, people used to, there used to be the saying, you never get fired for buying IBM, right?

43:38There were like certain vendors that everyone was like, yeah, it's not the best, but like it's safe. And so people had bought software and they had a rep who had a relationship, but they would buy software from the same vendors over and over again. It was very tight. And then something changes. there's some new technical innovation or something that the incumbents are a little slow to grasp. And some new software companies are like, I've got best of breed for this problem that you're trying to solve. And I've got the new thing that IBM doesn't have, like buy this new package. And then you kind of move into this best of breed cycle where you wind up having a bunch of kind of point solutions or smaller software vendors who solve very acute problems, but then you wind up having a lot of vendors.

44:18And then you might have a security breach or your company misses a couple quarters and you need to get back on financial plan. And where we are right now is because of the refocus on margins and profitability. And because public market multiples are compressed, everyone's cutting, people are cutting budgets, cutting vendors, also their security risks. So the CIO, the CTO, the chief security officer, the CFO, they're all like, hey, we spent way too much. this whole like byo a like bring your own app just like you know sure you can start using dropbox or slack or whatever just expense it like no more right we need too many vendors we need to cut back and so that's a there's a lot of headwinds right now selling to the enterprise big time and so i think to your point about like everyone thought they could be a founder like you have to be a founder who has an idea that actually can break through the headwinds of today's enterprise market yeah the the benchmark is much higher for what people would say you know what we have this built into our office suite over here or we're getting this from google docs or you know notion and coda have this built in you know and i had this happen somebody wanted to introduce a certain project management software that they had and i was like so we got to train 21 people in our venture firm how to use this and we've got to pay per seat and in notion and coda which we're already paying for there's a template for project management and we only have four projects that really need project management right so what are we doing here yeah like just even the idea of stopping everybody's day to have them log into a new piece of software learn it you know forget about the ten thousand dollars just that part to me is what i'm worried about and then you know so let's keep everybody in notion and coda and whatever and that's what we wound up doing and i i see it in my portfolio of enterprise software companies where they're saying yeah we lost this customer why did we lose it oh they loved it the people who are using it loved it but you know the cfl and the cto cio all conspired to say we're going to get rid of we have to get from 20 vendors down to 15 and we were one of five that got cut so the benchmark's higher one of the great things i want you to talk about talent here in the valley um the bay area is just unbelievably magical in terms of the density here i mean people ask me if i could change anything in my life what would i do i might have had a great run in new york city but i might have just come here in the 90s uh that might have been like a better thing for my career to get here a decade earlier or something i think you're doing okay i think i did okay and the kid from brooklyn did okay but um shout out to dara and uber hitting another 52 week high that's like the crazy thing about investing is like i talk to investors like they hit some home run you hit some great company and then they sell their shares and i'm like my thesis about uber has not changed since i made the first bet and i keep getting rewarded for not selling shares just by hanging around and i was talking to somebody who had google shares and another person of facebook shares at a dinner and they both sold their positions and they were just sitting there lamenting like why did i ever sell my positions i know but there's so many counter examples to that yeah people who held on to peloton people who you know just i i love that product so i don't mean to trash talk them i think it's no product is incredible but yeah the valuation did get wonky i do think selling half is like where i've come to i'm very i feel very good about selling half and then putting it somewhere else for safety yeah and putting or putting it on a regular program like every quarter you sell a certain percentage regardless of where the price is yeah and then you could just you have some downside uh protection seems to make sense but the thing i want to talk about was talent here in the valley uh things are much more diverse we have founders coming from anywhere but i do see a correlation between people who come here kind of wanting it more or maybe they're more serious or maybe they're able to deal with more pain or maybe it's a self-fulfilling prophecy you're here and then people projecting to you that you're more seriously and then they invest in you and then you know the flywheel just gets going your top of mind i don't know what it is about this place that's so magical i think it's a super magical place too i will note in our analysis so in our first analysis the bay area silicon valley and san francisco were the hands down winner for being unicorn central right like 70 of the companies were here and all the other geos i think new york had three unicorns and that was like the number two so it's a huge gap between San Francisco and New York, and then everyone else had none, or maybe one.

48:37So that changed a lot. San Francisco lost a lot of ground. We went from 70 % to 45%. Now, the list is a lot bigger. So there's a lot more unicorns in San Francisco, but we lost a lot of ground. And New York jumped to 19%. Wow. It's almost half FinTech, and you showed the crypto slot, crypto on Web3. So we'll have to see how it plays out. And then Denver, Austin, Southern California, Boston, all now more than 10 unicorns. And so I think the Bay Area, I mean, I love it. So I hope we get it. It's an expensive place to live. Public schools are not consistently excellent. Living in San Francisco, my sister lives in San Francisco.

49:15Her car has been stolen and broken into like three times. And we got to clean up our act if we want to be as compelling a place in the future as we were in the past. Yeah, it's definitely the safety, security in the city is an issue. And yeah, the doom loop is very real and yeah the areas around it still doing great but there's not a lot of space here and we're so nimby and anti yeah building housing it's just unbelievable if somebody was like expensive place for if you want to be a teacher or it's like we have a lot of things to fix and so i'm hopeful that maybe people who are paying attention will look at the number and be like we had 70 and now we have 45 we better get on our game yeah i you know watching the people who are very passionate about san francisco the city and because we we live in the wider bay area we say here like there's a bay area and then san francisco is part of it seven by seven mile part of it you know michael moritz and gary tan and his brother and just any number of people in the city who are really committed to changing the political landscape there to maybe have more will to keep up with this change and if not you just you lose the companies to new york which is a dope place to live and Austin, which is also a dope place to live.

50:28And you got a lot more room to move around. And Utah is amazing. Totally. Some of our most valuable companies were not based in the Bay Area and also founders that didn't work in traditional tech. So we love when you're asking about where the opportunity is. I mean, we at Cowboy, we invest a lot pre-product. So founders need the money to actually build the product. We are a great place to call. And also founders who don't come out of central casting. I mean, we invest in both, obviously, and we've got lots of people who are experienced CTOs or came out of Coinbase or Google, but we've had a lot of success investing in people who just have a great idea and have a ridiculous amount of hustle and intelligence and learning mentality, but maybe never worked in tech before.

51:09I was about to ask you what you look for pre-product because you don't have the product to play with. And obviously, if the product doesn't exist, you don't have metrics. So, you know, people who are doing Series A, Series B, they're going to be looking at some early metrics, talking to some customers, seed. You might have product, you might not. You can kind of talk about the product, but pre-product, pre-seed, kind of, what do you look for at that stage? It's a conversation. And I think that's one of the good things about things slowing down a little bit, right? In the boom-boom time when there was so much money, everyone was like, nice to meet you.

51:39Can you tell me this afternoon if you will give me$5 million? Like, that's not, I think, a good way to build a relationship. No. You want to meet over the course of meetings for both sides. It's harder to get someone off your cap table than to get divorced, as they say. Yeah. And so for founders, if you're going to have choices, which hopefully you will, meet your investor a couple different times, ask them questions, do references on them, and see how they handle things. But also for us, we want to see how you process information. We want to understand how you learn. When you are hit with both, what do you figure out when you have very little resources?

52:14How ingenious can you be? Or when you get thrown a curveball, how do you take in the information? How do you respond? Because I think one of the things that we found is we use this term learning animal, the people who we've backed to have actually survived and thrived and scaled also because I think what was really impressive was of the companies that have had exits or, you know, gone public or been bought in the most recent set, similar to the old set, the prior set, it takes about seven years to get to an exit. whether you get bought or go public, but 70 % to 75 % of those founders scaled from being the person with no money and just an idea to being a public company CEO or a multi-billion dollar company leader.

52:49You have to live through so many different phases from basically being an infant to being an adult in all the stages of development over those seven years. It's really impressive. So you're trying to look for both, is the idea innovative enough? Is it going to deliver really significant measurable user or customer value and time and a quick time to value is you know how big is the market uh and then you know the founding dna and kind of the hustle and ingenuity of of the founders are the things that we're looking for you use that term learning machines i think learning animal yeah learning yeah i love it uh because we have one internally because we do also do precede pre-product or while they're in this mvp stage and we say we just we like this product velocity and then people say what's product velocity i'm like yeah well you know when you meet with them last week and then you meet with them this week and they shipped a new product and you saw the app was updated in the app store or you looked at their corporate blog and they had a new blog post up and then this other company was outsourcing you know their tech to some place you know halfway around the world and you know they ship every six months like people who i have some people in the portfolio i've watched them ship you know every couple of days and man the the learning that's right that you become learning animals when you ship because you then hit the customer you yeah you make contact with the ball there's nothing like getting punched in the face or making contact with the ball to to sort of drive learning yeah yeah totally i'm just fascinated by you know people in the early stage and how they try to figure these things out and i too have seen now the funding cycle feels like we're we're back to you know for seed stage you know six 12 weeks of running a process and man is that so much better than six hours or six days it was so weird to for people to say like get off a zoom call and be like are you in and i'm like in what interested i'm interested yeah yeah let's have another call and then i just took the same approach because i i am old school i think like you and they would say like well i have to know today i'd say okay well then obviously the answer is no um but would still love to meet next week can keep hearing about the product and i would just keep the meeting on the books a lot of times i've been watching people are not clearing market so i i i've taken to this um rolol kind of taught me about this not yet kind of thing which is like i like everything you're doing it's a not yet for us yeah and i've been training my team like let's explain to them what we would need to see that's right for the next meeting uh kirsten green told me uh at forerunner they they basically are have COVID taught them to become more transparent with, I think she wouldn't mind me telling you this, with founders about the reasons for not yet.

55:36And so we've been doing the same thing of kind of being like, here's where I'm stuck. And these are the questions I have. Almost like, let us show you what's in our memo. Yeah. And let's work through it together. And through that process, you start to get a feeling of what it would be like to work together and how they think. Ah, this is because you want to have a great relationship. And if the person can handle, hey we're not convinced yet yeah it's a sign of maturity of it and if how they respond to it like you know what you're right we we do need to have a customer that's not a friend of ours we do need to earn a customer through a cold call right that's what i always tell them like i like the two customers you have right now how did you get them and they're like i worked at that company and that's my brother's company yeah i'm like i've seen this trick before you know like with yc companies replicable yeah yc companies had this great trick and one of them explained it to me i said where'd you get these 12 customers like oh it's great you go on to bookface you say that what your company is and then you trade customers so i buy your product you probably might i'm like and they literally explained to me yes that this was like a process that people were and i'm the i'm not i don't want to get into it with the yc founders i don't i'm not saying everybody did this but it was like build your roster of customers through the yc you know ecosystem and it's if you even double click just on but two customers before an investment you'll find this out where did you source this customer and you know look at their link page how many employees so i think some of it is the transparency it's like if the founder tells you right away like look i have these 12 and i did kind of like bootstrap in this way but i learned a lot through the process and i had to start somewhere so here's how i'm thinking about when i cold call someone that i don't have a warm intro to here's how i'm going to do it like that is a great conversation to have but if you pretend like no these you know that then you are starting to be like well this person isn't honest with me about this what else they're not going to be honest with me about exactly and this is where sometimes founders make a mistake the opportunity for us to invest at the early stage is that it's not perfect is that you are figuring it out if you had figured it out you would be raising a series b that's right and we'd be having a totally different comp you know we'd be doing comps versus public market whatever uh let's end on this you know you've been at it for a little bit um and i you know i well listen i i'm saying it out of respect because every time i talk to you i learn something i'm like writing stuff down as you talk it's one of the great things about having a podcast as i get to learn um what and i was i was talking to brian singerman about this like um from founders fund what do you think now that you've watched a couple of different archetypes over three cycles succeed adventure and you're part of the bill gurley analyst mindset i would say right you were an analyst okay well you part you were an analyst right um not like bill girly kind um but i was a financial analyst yes i was an m a analyst okay so yes that requires like creating mental models and architectures and really you know thinking strategically and then of course we have people who are operators and growth hackers and there's relationship people What archetypes really work in venture in your experience that just create massive value for founders and for LPs?

58:50Yeah. I mean, I guess the beautiful thing is I don't think there's one archetype. I did actually, when I was at Kleiner, we were really small. There were eight GPs and three associates. That was the whole firm. And what was really cool about that is we had one partner meeting for everything, whether it was chips or medical diagnostics or routers or consumer internet. So I got exposed to a ton, but all the GPs had a lot of operating experience. And so that was, we had a belief that you kind of had to have walked in the shoes of the operator or the founder. So actually, when I was at Kleiner, I was a partner.

59:23I think I was a GP, but maybe not yet a senior partner. And I had always felt like I was, I had operating experience from working at Gap after business school and before moving to Kleiner, but not like in tech. And so I actually went and ran one of our portfolio companies for two years. It was in between Series A and I actually raised Series B. And it was actually a really interesting time to do it because it was between 07 and 09. Things were really good. I learned a lot because it was enterprise software. I became a sales animal with two twin one-year-olds. I basically lived on a plane. And then we did well enough to raise a$20 million Series B in 2007, which was really big back then.

1:00:01And then 08 hit and I had to lay off half the company. um but we kind of because we had done a kind of financing strategy we had basically conserved all the cash we had a lot of cash in the bank and we lowered our burn significantly and then we wound up acquiring our two closest competitors and then ironically that company went after i left and replaced myself that company went public in spec um but uh but i would say like that's just it's not the same as being uh like a true i had a job at kleiner still so it was a little different than the average uh founder but i mean you see people like martin casado right who was a very successful enterprise infrastructure structure, technical founder, ran a company, now a partner at Andreessen.

1:00:38So I think you've got lots of former operators and former CEOs, and you've got people who basically have been brought up in venture their whole lives. And Michael Moretz, who you mentioned earlier, was a journalist before he became a venture investor. Same path as me. Right? Yeah, exactly. Yeah. So I think all kinds of people can be successful in venture. I don't think there's one answer. The ability to be a learning machine uh seems to be part of it when you look at journalists and what we do or what i used to do like rebecca kate and at union square as an example she was a journalist we have to ask questions and what i what i was trained was you're going to ask these questions you got to look them in the eye and figure out if they're bsing you or not or what the spin is and what the actual truth is and then you got to find other people who you can ask the same questions to and get the same recounting of events yeah and then triangulate the truth and then now you do that i talk to competitors.

1:01:29I talk to customers. You kind of triangulate the truth. That's right. Yeah, totally. So I feel like we're very lucky to be in this job. And I guess we can end with, I think with privilege comes responsibility. So I think we have a lot of opportunity as people with privilege in the tech ecosystem to watch out for its future and to make sure that we do more good than harm. How do you think we need to do better or what should we focus on in that regard? I think we still have a lot of bias. There's still not a lot of diversity. So I think we can do a lot better there. The people who control the big funds and manage most of the money in the industry is still pretty much the same and tend to look for themselves and their successors.

1:02:14But I also think when it comes to obviously AI, I mean, when we look at the impact that social media has had on society, I think we probably could have done a lot better than we did. Absolutely. Yeah. And so for the stuff that's coming down the pike next, I hope we will learn those lessons. Yeah, it's been pretty great to see some change in regards to diversity. I often joke, like when I go to my poker game now, I'm part of like the last white guys at the poker table. We were seeing a lot more diversity. But is it all guys still? And that is part of the challenge. But yeah, at the poker table, yes.

1:02:51You guys have access to great deal flow, lots of insights. When you're trading information or you've got a company that's doing really well and you want to invite people to take a look, just think about who you're inviting and broaden your networks. Yeah. We're on this pendulum now. I don't know if you saw the fearless founders. They got sued. And I was just like, huh, that's interesting. Alice has been sued by the same group. there's this group that basically has a war chest that is going to try and sue the people who are actually trying to make things a little bit better right some past wrongs yeah it's very f***ed up it's very screwed up i'm sorry if uh no it's okay i can just bleep it out put a beep but no it's it's i i thought it was kind of strange to pick like the one tiny you know seed fund that was like you know what there's not enough black women who are funded and they're like you know what we should do we should sue that fund it's like yeah that's why they that is why they did it yes yeah and they want to scare the shit out of people and they should know it is not going to scare us yeah oh and if people want to learn more about that all raise is this incredible organization always.org just check it out i mean if you're a woman who and you want to learn about venture capital you can come to one of these all raise events and hang out with 50 women who have the job already and are supporting the heck out of each other and just telling you how to, you know, basically hack the system or get into it without, you know.

1:04:15Yep. And if you're a man in venture or in tech and you want to be a great ally or you want to hire new people, meet new people, we are also here for you because I think, you know, it's something when we started All Raise, 75 % of venture firms had not a single woman partner. That's wild. Now, I think hopefully to some of our efforts, we're doing better. So now only 65 % of venture firms have not a single woman. But so if you are a founder and you're going to have choices, you can make choices with who you invite to invest in your company. Make money for people whose values you are aligned with.

1:04:44Yeah, I think that is well said. And just go check out allraise.org. It's a great organization to support. And we'll see you all next time on This Week in Startups. Thank you, Jason. Hey, everybody. I talk to a lot of founders here on This Week in Startups and as an investor. And they tell me the same thing over and over again. They want two things from me, more FaceTime and money. They want me to invest in their companies and they want to spend time together. So we've been working here on a new meetup program. We call it Founder Fridays and Founder Fridays are an event by founders for founders.

1:05:18This is an event that is hosted in cities by people like you. If you're listening to This Week in Startups, you're a founder. So what are you going to do at Founder Fridays? You're going to get together with other founders in your community. It could be four or five of you. It could be maybe up to 30 of you in a location. Pick a cafe, pick a co-working space. I like to go to a great Mexican joint or maybe a dim sum restaurant, you know, where you can do shared food, have a couple of cocktails maybe. You do it on a Friday, you get together, and you host it. Now, why is it important for founders to get together?

1:05:48Shouldn't you be at home just focusing? Shouldn't you be in the office just focusing on your startup? Well, if you get together with other founders, true founders who are in the arena, building like you are, you're going to get a lot of value from that because you can trade notes with that other founder about what's working at your startup and what's not working. The truth is, if you're facing a problem, there are hundreds of founders out there who have probably solved it already. And instead of you banging your head against the wall, when you sit there and you talk to three or four founders, you're having some dim sum, you're splitting a quesadilla, some fajitas, somebody's going to say, oh, you know what?

1:06:20I had that same human resources problem. Oh, I had that same technical problem. Oh, I had that same marketing problem. And they might tell you about a tool or a service that'll solve that problem for you. This happens over and over and over again when I do founder Fridays with our portfolio companies. Now we're going to give you that same experience, but here's what I need you to do. I need you to host this in your city. So you're going to go to thisweekinsartups.com slash meetups. That's it. And you'll see a landing page where you can sign up and you can say, I want to host in my city. Now your city may already be hosting, so you can just join that person.

1:06:52And what if you go to this event and you learn some go-to market strategy that 10x is your growth that might unlock funding or you might be talking to somebody and they say hey i'm a marketplace too i'm not a competitive marketplace your marketplace is for used cars my marketplace is for hairstylists whatever your jam is whatever you're working on but they give you some technique that you didn't know about to increase your supply side or get more demand in your marketplace and you 10x your business i see this happen all the time and founders are like mutants right and i'm like professor x here i'm trying to put on cerebro and find all the founder mutants in the world, and then have you get together and do your own little meetup.

1:07:29And here's what you're not going to have to deal with. You're not going to have to deal with a bunch of service providers trying to sell you software or services. And you're not going to have to sit through a bunch of passive speakers. You can listen to This Week in Startups and get the greatest speakers in the world on your own time. And you're not going to have to pay for a ticket to a conference or get on a plane or fly somewhere. No, this is about having an intimate experience with five, 10, maybe two dozen other founders in your city, please go to thisweekinstartups.com slash meetups if you are a founder.

1:08:00This is for founders by founders only. If you are not a founder, this event is not for you. You can start your own meetup for lawyers, accountants, recruiters. This is for founders by founders. We vet everybody to make sure you're a founder. And if you host it, it's a non-commercial event. Our first Founder Friday will start on February 2nd. So please mark your calendars and we're going to do these on a rolling basis. You can join an existing meetup if it's already occurring in your city, or you and one or two other founders can start your own. We're using a wonderful piece of software that we've invested in called River.

1:08:35You can sign up for a River account just by going to thisweekinstartups.com slash meetups. We've already got hosts and attendees lined up in San Francisco, New York City, Toronto, Los Angeles, Las Vegas, London, and even in India. So this is your chance to connect. And if you didn't hear your city name, you can start your city, go to this week in startups.com slash meetups.