Finding Mastery with Dr. Michael Gervais - The Process: 
Getting Company Culture Right (Ep.6)

Episode Date: November 23, 2018

On the 6th episode of "The Process," Alex shares how Mike's interview on the last episode shaped their investment decision and why creating the right culture at a company is vital to its longterm success.Alex and Mike also discuss Kairos' upcoming K50 event and what to look for when assessing if an entrepreneur has the right mindset to go the distance._________________Subscribe to our Youtube Channel for more powerful conversations at the intersection of high performance, leadership, and meaning: https://www.youtube.com/c/FindingMasteryGet exclusive discounts and support our amazing sponsors! Go to: https://findingmastery.com/sponsors/Subscribe to the Finding Mastery newsletter for weekly high performance insights: https://www.findingmastery.com/newsletter Download Dr. Mike's Morning Mindset Routine! https://www.findingmastery.com/morningmindsetFollow us on Instagram, LinkedIn, and X.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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stay present and engaged with my thinking and writing. If you wanna slow down, if you wanna work smarter, I highly encourage you to check them out. Visit remarkable.com to learn more and grab your paper pro today. All right, welcome to the process. Alex, how are you? Mike, how are you, man? Yeah, good. It's been a couple months since we last synced. And I'm super looking forward to learning what you've been up to and, you know, kind of some of the decisions you've been making and where you are heading into really the scouting combine of, you know, next generation

entrepreneurs, your Kairos 50. So I'd really like to catch up where you've been. Yeah, I don't know about you, but it's certainly been the busiest time of the year for us. It's really been crazy. Last time we spoke, we were starting to talk to Michael from HomeVest. So we were looking at the broader issue of how do you create a more affordable pathway for renters to start owning a home, right? So we talked to Michael from HomeVest and... That was a great, like, I really enjoyed that conversation. I don't know what it was like for you, but, you know, what was your experience in that conversation? Because it felt like I was getting in there and I was asking hard questions and he was thoughtful and really paying attention to how he was going to shape his responses,

but they were authentic and it felt like he was being true to himself. So I know you're up to many more things, but I can't wait to hear your response with that as well. Yeah. I mean, let's get into that. I think, again, zooming out, the broader problem that we're looking at solving is people are kind of locked out of owning a home for a confluence of reasons, but one is they just can't afford a down payment. So Michael was focused on creating a cleaner bridge between renting and owning by helping people afford the cost of the down payment. And look, I loved just listening to that combo. I thought it was fascinating. I think at the time, we were evaluating kind of building this company out, right? Path two was, you know, we really support him and his vision, but just come in as an investor. And path three was, you know, we do nothing, right? And where we actually landed was path two. So, you know, we love Michael,

we love the vision, we backed him. I think when it came to, you know, how his style of building a company and solving this problem meshed with our style operationally, we thought the culture fit wasn't aligned. But by no means an indictment of Michael. We love Michael and we ended up backing him. But I thought that the conversation kind of guided us all in that direction. And Michael certainly was on the same page with us as well. So, so from a, from a business perspective, I mean, we, it was extremely insightful and, and also I just, I just loved kind of hearing you drill into the founder psyche. Yeah, that was good. So am I hearing this correctly that I just saved both you millions of dollars? Is that what you just did? And somehow this isn't going to kind of

reap its rewards back into my financial statements. Yeah. What I would describe it is that we both are using our time more effectively because of you. I can't probably, you know, we now have to win as a company. HomeVest has to win. But I think it was good to just be very, very thoughtful upfront, which is rare in entrepreneurship about whether your work styles align under a five to 10 year vision. And that's what's so interesting about entrepreneurship. It's like, you always want to get to the next step. So you're willing to make short term trade offs. But the one area where you really shouldn't be doing that is people you're starting your business with because you're

setting a culture for the company. And, you know, I think what you revealed and, you know, was really fun to kind of hear play out live is, you know, Michael is very methodical and conscientious and careful about the way he wants to build this business. And, and, you know, I agreed with your takeaway, which is he's a great founder for this problem, right? I think his personality wouldn't match for every type of problem. But he was great for this very nuanced, very complicated solution in the housing market. And when you think about your model, your high performance model for selection and for backing, and if the company vision is in the center and then surrounding that vision is strategy, is founder, psychological makeup, it's culture, it's resources, financial and otherwise. You know, there's probably a couple other variables that I'm not thinking of clearly right now. But how big of a piece is culture for you when you're thinking about if this company can

be successful? That's a little bit of a loaded question because every company has a culture. So it's not like good culture, bad culture. Every company has a culture. It's alignment of culture. Yeah, I think it's a great question. I think it's one of those that gets – I think people like to create a false narrative around how a culture, really in any company, whether we're, you know, involved in co-founding it on the ground floor or funding it at the seed stage, you know, the culture is, is in very, very early stages and it's not there yet. Right. And I think, you know, a ton of it is going to be shaped by the personalities of the founding team and what they value and how they interact with each other. And what you see a lot of times is companies will create these like our values statements

that have like 20 things on them and mean nothing. We talked a little bit about this with Tim actually a few episodes ago, right? I think what we try to do is look for, you know, what's being revealed in the personality of this founder and the founding team and how does this play out down the road and we can help them you know try to be self-aware about you know what their true core values are that they need to hire around right um you know i i guess if i were to really zoom out i think culture is really really critical to be mindful of when you start to make your first wave of hires and definitely your second and your third. But I do think people like to pretend like they had everything figured out from the beginning and it's more about reading the founder and thinking about how it will play out down the road. Yeah, what I love about the decision that you're sharing with me is that you appreciate him.

You like the strategy. You like the vision. You saw the need for it and you said, yeah, but it's not, we're going to back you, but we're not going to mesh our cultures because your culture is zigging and he's zagging. And you, it sounds like you both agreed, or at least you guys on your side, were clear that that's, we don't want to be in that business working with him. We're just going to screw it up. Yeah, exactly. I think if, you know, to be more specific too about our culture, you know, we're very much about, you know, being aggressive and consumer and media facing. And, you know, I think, you know, brand is critical to everything that we do. And if you look at something like Rhino, right, which is the company that, you know, essentially

replaced security deposits, you know, that's been a dream for our culture because we've been able to shout from the rooftops and government offices, you know, and investors offices, media offices, you know, security deposits are a thing of the past. We're putting thousands of dollars back in consumers' pockets and Rhino is solving this problem, right? In the case of a home vest, you know, we're not ready to go super aggressive, you know, shouting from the rooftops about home vests. We really need to take time and move, move conscientiously or else that that type of business could accidentally turn predatory, right? If you just, you know, there's this like, there's this like move fast and break stuff mindset and startups that doesn't always apply for every type of business. So that's the specific answer, right?

It's like we just – the way that we like to work doesn't align with the way that you need to get product market fit for that company. Okay. So here's something that I – I mean I think about culture a lot because it really is powerful in both directions to slow people down and to speed things up as well. But culture is not established. It's organic. It's growing. But there are artifacts of culture. There's leave behind. And the leave behind are the quality of relationships.

So culture happens through relationships. It's not words on walls. It's not the value statements that the founders or executive team makes. It happens in hallways. It happens in difficult conversations. And it happens when things are going well, likewise. But it's the artifact of the way that people relate with each other. So I think what I'm hearing you say is that I just didn't want to be in that business. I want to support it, but I don't want to be in it because the cultures don't work. I'll tell you, I don't know. I'm sure that VC firms do that type of work on a regular basis or that type of decision processing, but I loved drilling in with you guys on that. And do you know what his experience was like?

Do I know what his experience was like? Yeah. Oh, I mean, yeah, yeah. We've been texting since. I mean, I think that it was, he certainly said he loved it. I mean, I think it's rare to take a step back and really be that introspective, especially in the state of a startup that they're in where, you know, he's really in sell mode. So what's interesting is like, you know, on the backend, he has to make sure that the financial model works. And again, you know, never, ever crosses the edge to being predatory to consumers, right? Really needs to help them and save the money. At the same time, he needs to constantly be selling to potential hires, investors, lenders, home buyers. It's a lot of selling.

So you don't really get time and space to think about yourself very often, unfortunately, when you're playing the founder game. Okay. So what are some of the challenges you guys are going through right now as you're building your showcase, Premiere Kairos 50? Yeah. What goes into that and i'll tell you why i'm asking that specific question is because you've got a lot of decisions you got to make but you're hosting hundreds maybe thousands of people rooftop you know on on the world trade center like that's rad and the reason i'm asking about

that is because we're thinking about creating a conference as well. And, you know, I'd love to know some of the mechanics that are going into it and what is occupying bandwidth during that process as well for you. So that's more in the weeds about you guys building your business too. Yeah, yeah. I'll go over a few of it, these things. So in terms of what the Kairos 50 is, it's our annual showcase of 50 top up-and-coming companies. We call it the pre-seed stage. The terminology keeps changing as the startup world grows, but what we define that as is you have a product or prototype built, but you're in your early, early infancy of funding. So in terms of what it is, for us, it's a way to really showcase 50 great companies

that are aligned with our mission of making life better and more affordable for consumers. So everyone is addressing the overall theme of affordability. And it's a way to start getting to know people and to create a positive impression on them at the beginning. Right. And, you know, when I say positive impression, you know, we're, we have a fund that's investing, you know, 50 K into each of them. Right. We're also showcasing all of them at the top of the world trade center in front of a really, you know, unique curated audience. Right. It's not just investors, but it's media executives. It's, it's corporate executives. It's even people from the government world. Um, and it's corporate executives, it's even people from the government world. And if nothing bigger ever comes from it, if we never end up writing a bigger check

out of our core fund or anything, that's okay. Maybe there will be a business relationship in five years or ten years. But I think if you're asking about the business side of the event, I think you really kind of have to make a choice of who your customer is. And in this case, our customer is the Kairos 50. We just want them to have an incredible experience. So we don't charge anyone, right? The attendees who are coming are there because we think they'll make a positive impact on the K50.

We have sponsors who are generously covering it. And again, the K50 don't pay. But I wouldn't call that an event business, really. I would call this a showcase that supports a core part of our company, but isn't in itself a business unit. But I think every event and conference, we've been forced with a bunch of decisions of, do we turn this event into a business? And over and over again, we've been saying no, because we don't want to create any negative incentive structures to get the best people in the room. That being said, you know, I think there are a lot of great events when people come to learn and they're explicitly saying, I'm here to learn about this or I'm here to meet X types of people.

And that's more of a business, right? And we've looked, you know, we just haven't had the capacity to do that. I do think there's a business there. But from a capacity perspective, we've tabled that. Okay. And I know we started this conversation day one of the process that we're doing here, where I was fired up on this idea that somebody from the Finding Mastery community would have a prototype and they're right at the cusp of kind of breaking something out and they would submit. And then, like the fantasy is all 50 would be from Finding Mastery. It didn't happen that way though, did it?

We didn't quite get there yet, did we? No, we're not there yet. But I mean, look, I'll say this. The good news is that the Kairos 50 is now evolving from an event into something that we do year round. So now that we created this kind of separate vehicle to provide, you know, early funding to all of the K50, um, we're going to actually be, you know, scouting all year. Right. So what's funny is, you know, right after this event ends, um, we're going to start recruitment for the next Kairos 50 class. But if you know, if you zoom out, right, you ask me why we've been so busy. I mean, you know, Karim Osman on our team, who's been the lead on the Kairos 50, he's reviewed over 4,500 companies. Right. And, you know, we've technically made over 50 investments in the last three months. I mean it's been crazy. You want to talk about quick decision making?

I mean this is the fire hose. What are some of the ranges that you're funding? Like what's the lowest amount that you funded? And I know that it's not as clean as dollar amount, because some of the resources will be time spent executive resources from your team in the infused in the business. But like, what are the ranges just financially that we're talking about? Yeah, look, we will, we really have two vehicles, right? So we have this vehicle that enables us to put $50,000 into each of the K 50. Right. So that's a separate vehicle. And those are all 50 K checks everyone you know gets the same value and then we have you know our core fund which is much more around getting involved operationally in companies right and that ranges from anywhere from 125 000 to upwards of a million

um and that you know that is as you said a combination of our operational involvement and just alignment with our thesis um and our confidence in the problem they're solving. So in the case of HomeVest, we're not involved operationally, but we love the problem they're solving. In the case of something like Rhino, we've been very operationally involved and co-founded the company and we'll put more behind that one. Okay. And then, so now I want to just go one level deeper, more practical. Let's say a company's netting. So after expenses and all that good stuff, netting somewhere between one and 10 million, like $5 million. In revenue? Building a team, growing, reinvesting back in the company, and it's, let's say, $5 million. And they want to go big. They're like, okay, we've got our core base product.

We know that if we double down, triple down on internal resources and external marketing and storytelling, we got some. Let's go. Is that the type of business that you would say would be smart to take on VC? Or would you say, no, no, no. If it's, listen, figure it out. You got a surplus of four plus in the bank, five plus in the bank, and you're cracking it. Like, just be smart about your resources.

Or like, how do you think about that type of business strategy? Yeah, I think the question that should be asked a little bit more often is, you know, I think people will look at this like, would venture dollars be good for my company? I think that what's overlooked is, is my type of business aligned with the business model of venture? Right? So once you take venture money, you are essentially starting the clock. Structurally, a venture fund is usually a 10-year vehicle, right? Which first of all means that they need liquidity on each investment within 10 years, right? Second of all, if you just look at the math, right? You know, 90% of startups are failing, you know, roughly, right? So, you know, to even return the capital of a fund, you know, one out of 10 needs to 10x. And at that point, you're just breaking even, right? So, you know, one out of 10 needs to 10x. And at that point, you're just breaking even, right? So, you know, the timeline of liquidity, which is, you know, 10 years or less, plus the expectation of return, you know, really truly need to be aligned with the founder's

expectations for how they want to build the company. And then you start to tie that into culture, right? You know, you really need a fast moving, you know, high growth oriented culture. You know, I don't want to say always, but generally to be aligned with venture. Really cool. Okay. Yeah.

So to answer your question, I, you know, I think a startup should look for venture funding when, you know, they, like right now, I feel like there's a lot of venture money that's being raised to like experiment with marketing. And, you know's a lot of venture money that's being raised to experiment with marketing. And a lot of it is, especially in direct-to-consumer products, it's just kind of being burnt on AdWords, things like that.

I believe venture money should be used when you kind of have... Let's say you're... I'll use an example that's close to home. Rhino is working really well in New York. We could either wait for organic revenue growth to hire sales teams in other states, or we can raise more venture capital and put sales teams on the ground in each region now. That's a good use of venture money. Okay, I get that. Because the time it would take to generate the profits from the revenue in our launch market, that works against us in a business where we need to move quickly to really become a nationwide product as opposed to just one or two states. Okay. I want to go forward on one question but back first. Yeah, go. What was the ad word, like the raise around ad words? That sounds like social media marketing. which is a company that spun out of Kairos a while back. But there was just a company called HIMS, for example,

that was addressing baldness and erectile dysfunction, and it's bringing supplements straight to your home. And they've raised just a crazy amount of money recently. And on one hand, it's interesting because out of nowhere in 2018, what you used to only associate as, let's say, Rog know, out of nowhere, you know, in 2018, you know, what you used to only associate as, let's say Rogaine or Viagra can all of a sudden become HIMS, you know, owning that space in consumers' minds. But what's interesting is, you know, the venture money that they're raising is going significantly into Facebook ads, Google ads, you know, even TV ads.

They, you know, I don't know the numbers behind the scenes, right? But I can tell you that we're seeing, you know, a Casper for everything. And the venture money is almost entirely going to marketing. And they just can't all win. And they can't all beat Amazon. And it feels like gambling. Got it. And Facebook, you know,, it's not 2015 anymore.

Facebook ads are more expensive than they were. And obviously, there will always be new platforms. But I'm just telling you that we see a trend of a lot of people just raising venture money to burn it on marketing. Cool. You can catch your first moat of customers, but, you know, the next ones might be harder to reach or more expensive. What social platform are you bullish on? I think it's, you got to look at that demographically, right?

I think what's fascinating, we've been doing a lot of work with it, with products that are addressing the aging population, right? And, you know, the boomers are extremely, extremely active on Facebook, right? Whereas, you know, Gen Z and, you know, the millennial generation, you know, obviously heavily on Instagram. But, you know, my peers, I don't think anyone is, you know, using Snapchat too heavily, but teens are still using Snapchat. And, you know, I think you kind of have to look at it generationally. And, you know, in terms of how we look at the world, you know, in terms of our specific focus now on these, you know, life stages and affordability is, you know, you have kind of the boomers retiring,

you have millennials becoming parents and homeowners, right? You have Gen Z entering the workforce and becoming renters or, you know, taking out the student loans. So it's just an interesting time where there's this shift happening generationally. And I think they each use their own different platforms. I don't know, not to dodge your question, but I think, you know, it goes into what's your segment. Yeah, I appreciate it. Yeah, no, I appreciate it. And okay, so now I was saying like zoom forward on another question in at what point now this is me being an entrepreneur myself, right? And not with finding mastery. This is this, the other business with compete to create with coach Carol. I, I want things. I value excellence. I value precision. I'm not talking about perfectionism, but I value like the authentic

expression of the nuance. And that just takes a certain sensitivity to getting the angles just right. Whether it's the angles and words or the angles and whatever, like just to get that right. It's, it's not easy. And it'd be so much easier to have this other approach about just hacking it and take, you know, skim the top 30%, drop the 70 and just keep going. Like, but I, I, I don't find it appealing. I don't feel any vibrance in it. Like it's not what I want to do. So my question to you in the, as a, uh, as an entrepreneur, how much should I attend to that precision versus the importance of meeting the timeliness of public facing information or product or service or marketing? So I feel like I'm a little bit on a treadmill right now and pushing, that's not the right word, sharing insights. And I'm starting to get

waterlogged, right? With the ability to articulate properly what is authentic. And so I'd just like to hear from you how you would guide me on that. Yeah, it's an interesting question. I think some of this is culture, right? Like there are some founders and entrepreneurs who are more comfortable with that, like move fast and break things mentality and, and also brand, right? There's some brands that are more nimble and some brands that are very focused on credibility, prestige, and things that are very nuanced, right? So, you know, I think that like to attempt to answer your question, it seems like there are parts of your business where they just kind of need to grow slowly because you can't hire people quickly without training them on and that takes time and training to really manage

your brand, right? Which it sounds like what you're really saying is your brand is one that is extremely nuanced and big on credibility. I guess separately, what I think works really well is, you know, you try to have a person or two people, you know, managing a part of your business, it's always running some experiments and you just make sure that those experiments, if gone wrong, don't corrupt the brand at large, right? You know, we run experiments all the time, right? And, you know, even for example, this Kairos 50 fund that we put together was an experiment. And, you know, if funding all of the K50 didn't work well, you know, we would still have, you know, the core of our business, which is building and funding companies around these problems and also, you know, the Kairos Fellowship Network

of Young Entrepreneurs, right? So, you know, I think it's helpful to kind of draw that distinction. It's like, what are the non-negotiables of your business? And like, make sure you don't hand those off to people who you don't fully trust, because I've made that mistake. You know, I've like handed off the Kairos Fellowship to people who don't necessarily have the exact same handle on nuances of the brand and it's never worked well. Right now, we really focus heavily on that and our team is killing it. But then also to have that kind of science lab going on at your company. I love it.

Just to make sure it doesn't corrupt the golden goose. Yeah, that's okay. That's a massive, wonderfully massive gift you just gave me. So thank you. It's not like I didn't know what you just said, but I was like, yeah, yeah, yeah. You're speaking right into me right now. Okay, that's rad. All right.

So how about this? This is my last question, right? I feel like I could go on because I really appreciate how you work. So the last question is, I know that there's people listening in our community that have done a hundred X, what they ever really thought that they were going to earn in a lifetime. And they have really cracked that financial independent wealth thing. And they want to give. They want to make a difference. They want to help.

And they want to be part of exactly what you're doing. So if they wanted to invest in your general fund, is it open? Is it closed? Are you dating people? How does that work? Yeah, that's a great, good question. So we will open up the next Kairos 50 fund. So that's structured as an index fund technically, and it's a 50K check into

each of the K50. I like that one a lot as just an entry point into this world, especially if you're new to tech investing. And I think it's like if the overall mission and thesis of companies, making life more affordable, that resonates and you like the idea of coming in early, I think that's a great product, right? For our core fund, you know, we're not fundraising now. I think with that one, it's much more about making sure everyone who invests in it is also a strategic resource for the companies. You know, I think that, you know, what we believe is that, you know, the funding world is getting crowded, right? So, you know, we feel like it's in many senses our obligation to the founders we're backing to, you know, have our capital be strategic to not just to our team,

but through the actual investors. So it's not to close the door, but I think that's just much more of a personal conversation about, you know, the companies we're building and how they could get involved. Whereas the Carriage 50 Fund is much more about just making that whole batch of companies accessible to angel investors. Roger that. Does that make sense? Yeah. And I said last question. I know that when I say that, I never completely own that that's going to be the last question. Yeah. And I said last question. I know that when I say that I never completely own

that that's going to be the last question. So, okay. So here's kind of the last one I just have for you is that you said the VC space is crowded. Does that mean that the current climate is that there's lots of money out there wanting to reinvest back into businesses? Yeah. Look, I think there's a few different aspects of this. One is, you know, you compare to when we started this 10 years ago. I mean, now entrepreneurship is trendy, right? So you have a massive supply of people who want to be entrepreneurs, right? Yeah. What also happened was, you know, you started to see the kind of public visibility of investors, you know, increase, right? You know, even the movie, The Social Network, you know, the VCs are, you know, movie stars now.

So I think that career became high profile, almost like I, you know, I was young, but I imagine, you know, the way they talk about, you know, the big short, you know short banking in the Wolf of Wall Street era, right? You just start to see kind of the glamour of the field pickup. And also, I think at a macro level, technology is entering all of these different industries. So even sovereign wealth funds that predominantly used to focus you know, focus on oil, you know, all, everyone wants a piece of tech. So what that's created is a massive supply of investor capital that wants to get in the game and is doing that. Some are doing it through direct investing. So they're kind of creating their own, you know, venture arm. And some are doing this by investing in funds. I think the problem is when some of this is boosted by trend, which is something similar happening, I think,

in the crypto and blockchain world. I think it's an incredibly powerful technology innovation, but a lot of people enter the game more because of sentiment and trend, right? So when something is, when, you know, there's wind in the sails from the trend, you just have a lot of people that are entering it and they probably won't be in this business in five years or 10 years. How crazy is that? Is that blockchain business where people are like, I'm watching a couple of people I know that are, I don't know, buying 20 supercomputers. This is a person I know that bought these 20 supercomputers i got a you know an engineer that programmed them just right to scrape the internet for coins like not

coins but to make coins and i'm like what like it's amazing and they're i don't know it's like small dollars every day but it's adding up and i'm like what what is that i mean we had a major crash yesterday though i mean you know i saw that it's a look, I think it's, it's one of the biggest technology breakthroughs, you know, maybe ever, you know, certainly possibly could be right. Decentralizing everything. But, you know, you, you have these, these insiders who I think truly understand it and want to build things using the technology. And then you have a lot of people who are speculating on it. And I wasn't in business during the dot-com era, but this certainly was a mini bubble, but it just moved so quickly. It

was crazy. I mean, in December, we had friends who quit their jobs to day trade cryptocurrencies and thought they may never have to go back to the workforce again and like you know they were serious and like you know i admit that it's fun to get swept up in the hype but um you know i i think a lot of people said this is my career um when it started to pop but i guarantee you most of them won't still care about this in a year and and the one but the ones who stick around are probably going to be the big winners. Yeah. There were so many people that thought the internet was a sham in the nineties. Right. And there's all these amazing blog posts of people talking about its potential and people hating on it. Um, but you know, it's a 20 year

game. Yeah. Very cool. at companies. It's pushing valuations up at the early stage, which, you know, it seems good for the founders, but it's also creating unrealistic expectations because let's say you pull off your first fundraise and your valuation is 15 million. Well, all your early investors aren't going to be happy if your next one is at 16, right? Or 10. So, you know, it's the same thing we've been talking about this whole episode. People aren't looking down the road because they're just trying to get in business and I get it. These VC funds are trying to get in business. We went through this raising our first fund, but we did it on the heels of something we've been at for 10 years.

Awesome. You know, just for the record, I was part of an early startup founder stock ballooned up to, I think it was like, I don't know, 75 valuation. And then we had a downturn. And so I basically priced out, wiped out to nothing. And some people came in and swooped up some extra stock. And I was such a rook. I got burned big time. Yeah, look, it happens. I mean, there's so many people right now warning about an economic downturn. And I think a lot of that has shaped our investment thesis.

We're really focusing on things that make life more affordable. Because if people are already broke and it's a bull market, what's going to happen in a downturn? But the downturn is going to affect so many aspects of this industry, including the fundraising climate. So it'll be interesting. It's a rabbit hole that maybe we save for another time, but it'll definitely be interesting. I wanted to wrap with just a few questions for you. I guess to set the table again, to reiterate, we have 50 companies, all young, hungry founders, all solving interesting problems in one room, top of the world trade center in New York City, November 28th. We've evaluated all of the problems that they're solving. We've had good initial calls with the founders. They all have real products or prototypes that we've tested.

So it's very real. But what I want to really share with my team from this is, what are the few questions or just things we should be screening for to really understand these founders and to get a sense of, you know, what their companies and their cultures will look like in five years. Because, you know, more and more from doing this with you, you know, that's just reinforced how critical that is. And, you know, the better we can kind of get a glimpse at the future by understanding these founders' personalities today, I think the better this will work out

for everybody, including these founders. So I could give you specific questions, which I don't think you'll appreciate because it'll be too thinly sliced and you won't know what to do with it. So let me go up a level and give you a principle and that I think is really important. And then you can shape a strategy and maybe we could do it together. But the principle is that people are on their best behavior and they're already slightly nervous. And you and your team are working to discern what is their media track? What is their highlight reel? You know, what is their prepared statements? What is the way that they want to come off? Discern that and know that there's truth in it, right? For most people, most people are not trying to be something they're exactly opposite. They're aspirational

working to present the best version of themselves. Okay. Now your job is to discern, well, how much is actually behind this highlight reel? Okay. Yes. They're saying, let's go back to your model that they're all about innovation, make it break it, fix it, you know, onto the next, whatever, whatever. And they're saying that, and they're talking about some core values and their approach and everybody says they work hard and everyone says they're passionate and everyone says easy example is a little bit like an orange. So an orange that has a thin skin, if you drop that, it cracks and you lose the juice. Okay. An orange that has some sturdiness behind it. It's got a lot of thickness in that skin and it's got that white tissue. I don't know exactly what it's called. Right underneath the rind of the orange. And you drop that, it'll absorb it. It'll bounce. It'll roll.

It'll work with it. It won't dent and damage. And so you're looking for the weight or the sustenance or the durability slash flexibility, nimbleness of a person. So how do you do that? So if you think about a scale one to 10, this is all principle stuff, right? You think about scale one to 10, 10 on this internal activation scale is like the kid or the adult, I should say in this case, is about ready to throw up in their mouth and they're sweating and they're shaking and it's hard for them to think clearly. That's an important indicator that they don't have the internal resources to even manage themselves. They haven't mastered their inner domain well enough

to articulately present their best self, okay? Or even present ideas that are wonderfully stimulating and potentially world-changing. Okay. So now let's break that scale one to 10 up into three zones, seven, eight, nine, 10, four, five, and six, and one, two, and three. Nobody's going to be at the one, two, and three. Everyone's going to be switched on. Some are going to hit that sweet spot. That four, five, six is going to be like, yeah, okay. This man, this woman is in her groove and it's on. And wow, look at the charisma, look at the authenticity, look at the clarity, look at, and you're going to feel that. So that tells you that they have a command of their inner domain.

That's really important because this environment that you're creating already is stimulating. Can they manage that external stimulation with their already existing internal stimulation? You get those two together. This is why pressure is so wonderful. You're creating this artificial pressure environment to see if they have an internal skill. If they're up in the 7, 8, 9 environment, pay attention and see if you can press on it to feel where is the chink. You know, dig in somewhere like and even ask the hard question like, okay, it seems like you're really nervous. Where's that coming from?

And then just watch. See where they take it. Did they get real or did they cover it up? If they cover it up, you got problems. If they get real and they're like, I am, you're like, oh, good. Look at that. Okay. So they're making some choices about being authentic.

If somebody is in their strike zone, four, five, and six, what you want to make sure that when they're presenting their best self there, that when you lean in and dig in, that you're trying to bump them up that scale. So you're trying to shift their physiology by increasing their presentation of anxiousness or their actual felt anxiousness. So that's where you got to get in there and ask the difficult questions and you dig and you dig to find. It's almost like a, that's a good example, like a bee trying to find just the right pollen. Is that what they do? Yeah, they're digging into the flower just the right way. So yeah, that's good. Okay. So I've never said that before, but they're digging and trying to find it. And so that is kind of your job is to see what's underneath the polish self-presentation. And if they're smooth, great. I don't mean smooth, like slick. I just mean that they're eloquent,

thoughtful, and they don't break from, you know, like getting pissed or they don't break from like an anxious standpoint where they become so overwhelmed that they can't think clearly. But that's where you start digging. And yeah, you can ask questions like, you know, fill in the blank, anything kind of silly to random to whatever. But knowing the questions that you ask, you're actually looking for two things. You're looking for their response, both verbally as an expression of their thinking patterns and emotionally, right? Their physiology, if you will. So you're always looking for those two and you're trying to see what's underneath the surface. So that's the structure, if you will,

that informs the questions that I ask. That's one of the, you know, handful of structures that I'm always working from. Yeah, that's super helpful. I mean, I think from a tactical perspective, you know, I am curious though, you know, a lot of times what happens, right, in these types of environments is, you know, it favors the extroverts, right? But I think, you know, one thing we've learned is, you know, certain types of businesses are better for more introverted founders. But in either scenario, you know, what we need to know is that this is a CEO that is committed to this business and this problem. So I'm curious if you have a suggestion maybe on one question that can be asked that, you know, kind of fits all types of personalities, but helps us understand their commitment to solving this problem. Because again, we're not trying to just,

you know, I use the scouting combine analogy, but, you know, we don't want this to feel like an evaluation. You know, we really want to help and empower these founders either way. They've already built great things, right? So what I loved about your conversation with Michael, right, is like that was beneficial for everybody, right? So I'd love to strike that balance, right? As opposed to a combine where it's like, please draft me. Like these guys are already in the league. It's just a question of, you know, who they work with. You know, I think that everyone's going to say that they care the most about this. I mean, they're there for a reason. They, you know, like, I think that you've got, you've got a little bit of a challenge there because there's a self presenting in a favorable way that's going to naturally take place. So I would deconstruct

what you mean by commitment. And I think what you mean is their vision is clear. They have a history of demonstrating perseverance for that vision or other visions, you know, but you want to make sure that somebody hasn't had multiple visions in their life, that there's a core theme that they're trying to sort out. They can have multiple businesses, you know, because things failed, they learned that that's not too much of a red flag, but are they staying the course on the main theme in their life? That's the main theme. So it's long-term vision. It is a demonstration of perseverance that they stay with it. And through difficult times, they demonstrate that resiliency

that supports perseverance. And at the same time, they have a noticeable zest and passion to wrestle with the hard questions. And they find it stimulating. And you can see it and feel it when somebody is alive with it. When you ask the deeper parts of the, you can ask like things like, what are you trying to solve? You know, this is your life effort right now. You know, maybe a life effort for the rest of your life, but what is it that you're trying to solve? And watch the animation if they go, oh, I love that question. Because no one has it sorted out, right? I don't know anyone that has it all sorted out. And there's something we're trying to solve, figure out. And you can see it as a puzzle pieces, or you can see it more as a tapestry.

I like the tapestry look. And so just asking that question and what you're looking for to drill down underneath of that is it clarity of vision that did have a history of demonstrating perseverance um and then you know do they live with passion and so with michael you recognize one of the things i was asking about the two culprits of passion so what gets in the way passion is this inner fire what gets in the way of it is, or no, what covers or dampens that inner fire is anxiety and fatigue. And so I think that if I'm going to invest my money and or time and energy in somebody, I want to know that they're going to kick ass, work hard, they care. They really, really care about making a difference. And they're going to have a self care about themselves as well,

because I'm not playing the long game. I understand that to work towards thin herd experiences in life, there's mastery of self and mastery of craft. And you can't get the mastery of craft if you're just burning the end of the candle at both ends and you don't think clearly you're irritable, um, you know, and emotionally erratic. So I hope that answers your question. Yeah. No, I love that. I think, you know, we're going to be creating videos of each of them and there's an opportunity to ask some of these questions in a way that should make them more marketable, but will

force this kind of introspection. So this is super helpful. Well, we are in the weeds and the event is in a week. So I look forward to reporting back. Ah, we are in the weeds and the event is in a week. So I look forward to reporting back. Ah, so good. So good. Have a blast. I can't wait to hear on the other side. I want to learn what you learn. And then thanks for your time. Likewise. Happy holidays. Yeah. Okay. All the best. Take care. See you. All right.

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