Finding Mastery with Dr. Michael Gervais - The Process: The Finale (Ep. 7)

Episode Date: March 15, 2019

On the final episode of Season 1 of The Process, Alex and Mike reflect on what they've learned over the course of the past year and discuss which skills will be necessary to succeed in a world where automation could soon be the norm._________________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? Good. Mike, how are you doing? It's been a year since our first episode in The Process. Crazy. It's been great to see you grow.

It's the one-year anniversary. This right now. I know. So give me a quick update on some of the things that have been happening for you in your life and then you and your business as you've been growing this fund? Yeah. Look, companies are growing. It is definitely cool to be able to look back in a year and just see how much has already changed. I mean, we've definitely made many mistakes along the way, but I think the first company we were really coming out of the gates talking about was Rhino, right? Which like I said, you know, could give a renter their entire security deposit back in a time when millennials have historically low savings.

Give us an update on that. How's the company going? Well, we've now returned over $20 million in deposits to New Yorkers, right? We have gotten legislation, not drafted, but on the assembly floor in New York that would mandate that landlords at least offer a choice, an alternative to a cash deposit. And we probably most importantly have gotten approval for a nationwide rollout. So we're now in 12 states doing pilots. We are ready to take the country. Yeah, that sounds like growth. It sounds like change. It's definitely growth. I mean, it is hard to get this into the actual leasing docs of buildings all over the country.

There's a lot of blocking and tackling. It's a lot of dirty work. But people are starting to actually choose Rhino and get their deposit back. And we're starting to see the material impact. And that impact is tied to the growth of the business, the growth of my company. How do you spell it? R-H? Rhino.

Like the... Rhino. Yeah. Okay. Wild animal. Okay. So as a startup, how thin is the runway? How do you manage that? And I want to challenge an idea that I've been struggling with. So there's two parts in here. One is how thin is the runway? And I'm just trying to understand startups in that way. But then the other is that you hear runways die because they're not funded. I think that in modern times, it's changing

that startups die because they eat too much, but they're not eating the right foods, right? So it's like they're gorged with all of the things that they could do and they spend their energy in non-productive ways as opposed to running out of money, let's say? Yeah, I think it's a fair question. It depends on the nature of the startup. So with Rhino, it's very different than a consumer business. A consumer-facing business, you are spending money on marketing. And I mentioned this to you last time, there are a lot of startups that are raising tens of millions of dollars and the bulk of that is going straight to marketing, which on one hand means it's a lot of venture dollars. On the other hand, it means you could be competing

with the biggest CPG companies overnight. So it's an exciting time and it's a risky time. What's a CPG? Like, let's say you were a startup building a gum company. You could be competing with a CPG company like Procter & Gamble. What does it, do you know what this stands for? Consumer product? Consumer package goods. Okay. Yeah, yeah, yeah. Sorry. Okay. Yeah. Okay. Yeah. Good. So on one hand it's, you know, you can go from kind of zero to one quicker than

ever. On the other hand, if consumers don't like you, wow, there went a bunch of venture dollars. So I think the traditional school of thought is do some testing, right? See if the consumer appetite is there, raise more money, more money, more money. In the case of Rhino, you know, they can run pretty lean in terms of the business itself. And it's really more about making sure they have the time to nail the integrations so that when you're signing your lease, you know, it's just on page two. It's already there. It's not a whole new thing you have to sign up for or get marketed to. That said, what Rhino could use venture dollars for is to put someone on the ground in 15 states across the country and use that as a way to expand quicker. To answer your question, I do think that there are a lot of companies that are raising a lot more money than usual

to experiment, which can give them that indigestion that you're describing. Right. But, you know, there have also been some crazy breakout hits. I mean, there was a company called HIMSS that essentially came out of nowhere and went head to head with Viagra. But they're, you know, advertising during the NBA finals. And they started, you know, 18 months ago. So the VCs are just sitting there saying, hey, let's give them a war chest and let's just go head to head because millennials like this product more than they like the old one. And that's what's happening as I think millennials are really getting a lot of the spending and buying power of the economy. Okay, cool. And then, okay, let's get a couple more updates on a couple more of your businesses. Yeah. So, uh, there's one cool example that kind of ties to what you said. We

have our home care business, Sarah, which essentially brings care into the home for the aging population. They're based in the UK. Um, so there's some companies in the U S that have raised a ton of venture dollars and their theory was let's spend money to convince patients and care workers that our platform is the best. In the UK, with Sarah, there are 8,000 just local mom and pop small home care agencies just in London. spending money to acquire patients and care workers, we could actually start buying and acquiring these smaller agencies, putting them on the platform, which gives an exit opportunity for these kind of older small family businesses and can immediately improve the efficiency and lower the cost for the patient because of the technology we've built. So that's been a really cool example because, you know, that's actually moving more into kind of private equity, growing through buying.

But we just looked at the business and said, this is a smarter, more capital efficient way to grow. And there's a win-win that we're creating for these agencies that have been in the game for 30, 40 years and just want to get some liquidity, but to keep taking care of their families. We're the UK's highest rated home care agency. So no one's sacrificing quality. And getting a piece of that market is obviously smart, right? As people are getting older. Yeah. Yeah. So, okay. All right, cool. Yeah. So we complete, yeah, we completed our first two acquisitions with that one in the last three months. So we started to prove that model. You know, we have other companies. I told you, we really started narrowing the scope of what problems we're looking at. And, you know, housing has been really interesting because, you know, technology is finally starting to enter it.

But it's at every life stage. It's helping people find better ways to rent, cheaper ways to rent, helping people find easier ways to buy paths to ownership, also helping people sell or get out of their home. So we have a company called Easy Knock where if a financial emergency comes up, specifically targeted at the boomers, we can buy your home. You can then rent it. You can become the renter. And then you have a kind of two to three year window to buy it back if you want, but it can immediately free up liquidity targeted at people with lower credit scores who were traditionally getting preyed on with kind of, you know, the, the reverse mortgages that sprung up after the housing crash.

And this is a way for you to stay in your home. So tell me how, how are you doing? So companies, those three companies seem like they're doing well. Like, how are you doing so company those three companies seem like they're doing well like how are you doing because when we first started like you were just kind of getting going like you had lots of momentum and you're just getting rolling here and now it feels like you're in the adolescent phase yeah sure puberty not yet yeah right so i'm definitely uh i'm happy with where we are it's cool to be able to talk to you and tell you specific things that are happening. You know, we've helped a hundred people stay in the house. I want to know how you're doing. I know.

I will get there. I promise. Yeah. The first thing that's crazy is even though this is progress, we aren't even close to out of the woods, you know, actually achieving big scope of impact, generating investor returns. Like it takes time. So people will ask like, you know, so have any of your startups sold? And I would say that is literally, that would be synonymous with failure right now because a successful exit right

now is taking about 8.2 years, like a big meaningful exit. Yeah, yeah. This takes time. So I'm sitting here saying, wow, you know, we've made so much progress, but. What does a tech company turn for? What is the average turn on a tech company? I think if you are subscription revenue and it's recurring, you can sell for 10 times revenue. If it's something more like... 10 times net or is that 10 gross? No. So look, I don't know a ton about this we're

starting to learn as we get further along but what i what i can say is when it's kind of a platform or or subscription service that's recurring you could actually do uh gross wow yeah but then when you're let's say um a new type of protein bar right That's going to be more like EBITDA or maybe 2 to 3x gross. And granted, there's all sorts of crazy acquisitions that happen because someone's saying, hey, your brand can speak to millennials or Gen Z and I just want to be able to do that. So I'm going to buy you for way more than you're worth. But what we've started to learn is that that's an outlier. So what is keeping you up at night? What are the things that are stressing you out? Personally, right? And do you have anxiety? Like as you're doing this, like you're betting on other people's money, you're betting on reputation, you're using your

team and your intellect to make decisions and there's no real roadmap for what you're doing, which is all fascinating. I feel comfortable with the risk part, right? Like we are doing what we said we were going to do, right? And we're continuing to do that. I think it's just the machine is getting bigger. So things that, you know, you're not thinking about the beginning, like how do you actually build and manage a team

in a sustainable way? Those things are just starting to come up for us. If you add in the Kairos 50 fund, so as you recall, we added another fund last year that'll enable us to put $50,000 into each of the Kairos 50 fund, so as you recall, we added another fund last year that'll enable us to put $50,000 into each of the Kairos 50, which is our annual showcase of the 50 most promising really early pre-seed stage companies going after the problems in our areas. So we added that fund. So technically, we're making 60, 65 investments a year right which is amazing because we have so many more stories to tell and we're able to support so many more decisions to make yeah so you got to

make more accurate faster decisions but this is you know it's it's really a company so that is actually what pressure is right which is the thought that i need to act or think faster than i think i can act or think. Yeah. Right. That's what that, that's my understanding, insider understanding about pressure. And so do you feel it? Because maybe you're like, no, I I'm creating the timelines and I feel like I get to decide when and how. Personally, I actually feel like I'm at my worst when I have too much time to think.

Okay. You know, I like when there's an event or we're fundraising or there's something else going on where I'm moving quicker. Because personally, I think I do make decisions well under pressure. So you like to make fast decisions? You enjoy that? Yeah, I prefer to. But if given the chance, I will really think things through and lay it out. And there's value in having time to do that maybe once a quarter, but not every day. Right. So as your company is growing and it's right in that place where you had your arms around it, you could see it and feel it and it felt intimate

and now it's expanding and growing. Yeah. How are you managing that? And I'm, I'm asking as somebody that wants to understand that because I'm wanting to do the same in my businesses as well. And I'm actually – I feel like I'm at that place in a lot of ways. Yeah. No. We're bursting at the seams. I think it's very – mostly positive. I can appreciate it.

What are the hard things? Yeah. The hard things are – Because I'm looking at Trevor right now. Our mutual friend. Trevor runs the podcast right now. What's up, Trevor? And i'm looking at trevor right now our our mutual friend trevor runs the podcast right now what's up trevor and i'm looking at him right now and like he and i are like holy moly like what has happened to this podcast like it's just happened and it's like we're running downhill and i feel like at any given moment we could stumble

and like skid on our chins and knees and whatever but it's like we're running downhill yeah yeah okay so we can unpack this in a few ways. So I think I told you, we talked about this last time a little bit, that I think philosophically, there's some non-negotiable things about our business that can't slip. Like we have to be supporting the companies we've backed and helping them grow. We have to be constantly looking for new things. Then we were able to run this kind of controlled experiment to start this new Kairos 50 fund.

We have a great person on our team, Karim, who kind of stepped up to run it. We really, you know, if you're listening, Karim, I'm sorry, we threw you to the wolves. But he stepped up, you know, if it failed, you know, it would have sucked, but the business would have gone on and we would have been able to continue to operate the core. But it was successful. And now we're doing it again. He already has the second one up and running. And it's amazing, but that just adds a... So Kairos 50 is up again. Kairos 50, the second Kairos 50 is up and running. So folks that are listening can, if they've got an MVP, a minimal viable product, and so they've already got their prototype done and they've got a little bit of business running

and they need a little cash infusion and some intelligence on building yep you guys offer both yep and and but they got to be selected you have to be selected and then within a the general theme of of building solutions that make life more affordable okay okay i want to go back to you yeah okay so i'm happy to talk about the things that keep me up at night no no i understand i understand i i think that uh with the nature of our business it's you know you never think that that like management and building a team is part of it you think you're just going to be getting your hands dirty working with entrepreneurs you know building companies maybe sitting on boards so i'm just trying to figure out exactly where to orient my time to maximize my personal

strengths. Right. And like look in the mirror and say, where am I replaceable? And where could we be grooming other people on the team to step up into the things that I'm managing? Do you have redundancies in your business, healthy redundancies where if someone gets hit by a bus or you're still in that kind of lean phase? I could mostly get hit by a bus right now. We have, but let me, the better way to describe this is like, I remember I'm 19, I'm sitting in the entrepreneurship class and I'm thinking, wow, everyone is coming in and saying the exact same thing. This is kind of getting redundant. It's like, hey, I really needed to learn to say no and to focus. Hey, I really didn't know what it meant to have a great team until I actually had a great team.

And I'm kind of sitting there saying, wow, every lecture is the same. And on one hand, I'm bored. On the other hand, I'm thinking maybe I'm different or I already know what they're talking about. And then you feel it. Yeah, right. And you're like, okay, this is what it's like to have a great team. Yeah. Right. Right. And this is what it's like to fail to say no and to take on too many things that don't matter. Right. That's that famine thing. The feast versus what'd you call it? Indigestion. Indigestion. Yeah. That's that

thing I'm focused on. Yeah. Yeah. So like we right now, you know, the next phase of the business, like we've, we've had fun doing this with you. I think people generally like hearing our story. Yeah. I've learned a lot actually. No, I'm happy. It's been fun to do. Actually, like I've learned a lot. And look, we have Zoe from our team trying to figure out, okay, what's a better kind of way to build a content engine around Kairos and tell our stories so that we can do that in a way that inspires people and helps our companies. Right. We're not just doing this for ourselves. Like we really, it needs to help the business grow, but we also want to widen our reach so that it doesn't just require high touch events.

So she's off running the experiment, right? Cause we finally have time to actually devote a person, a great person and resources to it. Cool. Right. What's that going to look like? Do you know? We don't know. All I know is what wasn't working was kind of half-assed saying yes to a lot of things, right? Like I did this with you and I've really done nothing else in the last year. That's all you've done for like- We've done our own events, but we haven't- Events, fake events actually. Yeah. We, you know, there are a couple of years where I was speaking at a conference once or twice a month and we were just kind of getting on the road, evangelizing our story, but we'd have no

idea what came of it. You just got back from the Middle East? We did our first international event with the government, which was cool. The government of? The government of Dubai. So they specifically are very focused on investing in the future, right? They will really, really go out of their way to try to figure out how to make sure that they are a major power player in terms of driving innovation and technology 10, 20, 30 years down the road. Right.

Most people will come to you with like a 2020 vision. They're doing a, you know, 2071 vision. Right. So it was fun to work with them. What are some of the themes that you're seeing emerge? Well, I think, you know, I mean, they have a minister of AI who is incredible, right? And his job is just build us towards the future, right? So just the fact that that role even exists and that, you know, I believe he's 29 years old, right?

Goodness, that's really cool. You know, he's proof that they're serious about this, right? About AI in particular. And just investing in the future. You know, they have a minister of youth, but I think specifically what they did was they said, hey, we're really interested in this intersection of kind of big problems in technology. And we want to bring in industry leaders to help us figure out where the private sector can solve problems that we can't, right? So on one side of Kairos, you'll see a bunch of, you know, young, new ideas

coming to us saying, hey, you know, here's the problem I believe I'm solving. But what we also try to leverage is, you know, I think pre-commitment, it's really powerful. So we try to bring together industry leaders. In this case, they flew all the way to Dubai. And we did workshops, brainstorming, you know, within the spaces of housing, education, debt, the future of work, healthcare, where the private sector could build new solutions that governments have been unable to solve. Nothing immediately comes out of that event after two days, but we are an engine where we can say,

hey, a month later, two months later, we found solutions. And then we already know who actually cares about these things. And for the government side of this, you know, they were already hosting this big event called the World Government Summit. You know, they were tired of, you know, just events like Davos, where people talk and amazing people come together, but there's no way to really trace output. Right. So the point of the event wasn't the event itself. It's that we're all working towards an outcome where six to 12 months down the road, some of the people who came are directly working with a startup that's growing with a very specific impact on the world. That's really cool. Sounds like a good place to be.

It was cool. Yeah. They gave us a lot to experiment with. Yeah. But for us, being able to start to take this internationally was really interesting because all the stats I can recite if you just push a button and let me start talking are all US stats. This was the first time where we actually really had to look and say, how is the economic divide looking around the world? How are some of these issues that we've been looking at in the US actually affecting people in Asia, in Africa, in Europe? We even, even we even looked at Southeast Asia, Australia.

So it was interesting. Kind of terrifying because we clearly can't do everything at once, but it was exciting to start to widen the frontier. What are some of the things that you, okay, I'll start with myself, but I want to ask some of the things that you've learned, you know, during the year that we've spent together. Yeah. But for me, what I've learned is just by watching you is just how switched on you are thinking deeply about challenges for the next generation and solutions that make sense from a business standpoint, how nimble you are and how quickly you think. And all of that ability to take complex ideas,

distill them down and act on them and to have a framework that backs it up and an engine to support it. It's like, I'm watching going, I get it. I see why that, that a VC firm should be able to make change, you know? And so that's the big thing. It's not so much the folks that you've introduced me to. Um, so I thought that that's what it was going to be, that I was going to learn from these young startup guys and that you were interested in, but it ended up being you. And so I'm super stoked. I don't, yeah, I don't know how the VC world works and I don't know if I'll ever need to know that, but it's a, obviously it's a big engine. And so you've introduced it to me in a way that I can digest it. So that that's been kind of

the gift and the nobility of what you're doing seems really cool, you know, to help solve some really big problems. No, I appreciate it. I mean, look, some of the people who came on, I mean, let's recap, right? You talked to Tim Wang from Fiscal Note. They're growing. I think they've done three acquisitions, including a subdivision of The Economist. He's 26, managing 400 people. I think I just needed you to know that people like that exist, right? It's really cool.

You know, Miagula in Colombia. You just saw SoftBank announce a multi-billion dollar fund for Latin America. And these guys, you guys, three years ago, there's no money for venture funding in Colombia. We were really one of the first US funds looking in the region. And now you see really the biggest investor in the world just started a multi-billion dollar fund there. So we're excited. We have 10 investments in Latin America, but the Miagla guys were really one of the torchbearers. And's cool. And they just started their shuttle product. So in addition to cars to move people around Colombia, if you remember, it's workforce

transportation. That's right. They added shuttles. So slowly they're adding more vehicles of transportation and they're moving thousands of people around. But I think that SoftBank announcement was really a kind of Latin America's arrived sign. Cool. Which I thought was cool for you to

get to talk to them. And then Michael from HomeVest, you know, he was so early, you know, he's out there working on proofs of concept and it's going to be hard, but he's at it. Yeah, it's really cool. So what are some of the things that you've picked up? I think that, you know, as we've gotten older, as we were saying, worked our way through puberty, we have learned about the realities of what it takes to really be successful on the pure business side, which is just returning capital to our investors. We need to prove that the companies we work with can materially improve lives and make meaningful returns, right? So, you know, I think I asked you a lot of questions that we were wrestling with, which were more around, how do you really figure out whether a person,

you know, really cares about this and is likely to stick with it when things get tough, right? And I think we learned a lot from that. The investors. No, no, no. So how do we as investors get better at evaluating people when the time to make a decision gets quicker and quicker? So traditionally, we were investing in people who we've been able to get to know through Kairos for years. Now that we're moving more into the broader market and people are coming to us, we have to make decisions quicker. So how do you quit in kind of a scouting combine environment? How do you quickly, you know, pressure test people and really say, are you serious? Are

you just dressing up as an entrepreneur? What are some of the ones that popped to mind for you? Okay. Well, let me tell you what we're not good at yet. And I would love some feedback. I think if you really, really look at the numbers, right? Let's just use a hypothetical number. Let's say that a venture fund is a hundred million dollars, right? Let's just use a hypothetical number. Let's say that a venture fund is $100 million, right? And let's say a venture fund owns 10% of a company. That means that, you know, they need at least one company to sell for a billion dollars just to make money back. Right.

And the people running it aren't making any money, you know, like that's just to make money back. So then all of a sudden we realized, you know, if that's the ceiling, we're probably not thinking big enough, right? Like we were sitting there kind of proxying to see, you know, could this be a billion dollar company? It sounds so cheesy and kind of obnoxious, but it's like a billion isn't big enough in terms of the way you need to be thinking. And I'm trying to figure out like, how do you pressure test a founder? See, are they the type of person that really, truly has a vision? If everything went right for how they could change an industry, meaning, you know, multi, multi-billion dollar company.

You know, you need customers to love you. You need the product to work. You need to probably have a vision to build multiple products. How do you ask questions that aren't just obnoxious, you know, think big style questions to figure out if someone is wired that way. It's really hard, you know? And so I think the earlier frames of our questions were the difference between ducks and swans. That's how I was thinking about them. They look similar, you know, but they're very different. And you're looking for some swans. Not that ducks are bad, but you're really looking for something, you know, substantial and beautiful. Okay. Now you're

talking about unicorns versus horses and unicorns are different now. And so if you haven't been around a unicorn, it's really hard to know what they look like, sound like, feel like, talk like, it's really tricky. And so underneath what is a thing that makes the unicorn a unicorn i'm not talking about the business i'm talking about the human yeah right i know we both are there is they are so different that you want them to be disruptive well guess what they're going to be disruptive if you find the right ones that doesn't mean disruptive only in the positive direction right that means they're just fundamentally so different that it's hard to be around them sometimes. Brilliant, exciting,

shiny, and at the same time, they thrash. And so being able to, if you really want unicorns, people that are, and if you think about some of the folks that we would think about today, like, I don't know, how about Elon Musk? How about, you know, the former Steve Jobs? Like, is that what you're talking about? Yeah. Well, it's crazy. There's people who can come in and do it multiple times in different industries. I mean, Elon is the extreme. That's right. You're talking about, you know, building tunnels, building building rockets building payment solutions and going on podcasts getting high like there's like there's like all different types of you know disruptive ways that come with that human and i'm i think he's incredible i i one day i can't i don't know

him i'd love to meet him but the idea that i articulating, I hope is that you'll know it when you see it because they're a little mad and the ones that can dress it up really well are important, but underneath is where you need to figure it out. You know, like a person that walks in mad, well, that's a whole different ball of wax, you know, and you can spot those easily. It doesn't mean that they're not going to be great. It's just you're seeing it differently. Some of the most difficult people are the ones that subvert their true nature. The ones that know their nature and can subvert it a bit, that's really interesting to me. But the ones that don't know their true nature, the essence of who they really are and what they really want in life above all else, those are the ones when they don't know it, I wouldn't bet. Yeah. But the ones that know it and either can subvert it, keep it in for a little bit, you know, that's okay. But the ones that dress that way and talk that way and walk that way, that's cool. But the ones that don't know it, I wouldn't bet.

Have you ever figured out a couple of questions that help screen for that? Yeah. Well, no, I think it's like you get a feel for it. It's not just the mechanical question, but what I'm always interested in is when you ask the questions and you get a sense of what it's like when they think calmly, that's okay, good. That's the benchmark, if you will. And then you've got to create a scenario where they're off access, right? And they're off their game. You're creating a scenario where they have to think or do something faster than they like. And that's how you get to know. So how do you do that? Well, that's kind of the trick of not, there's no tricks, but that's the, that's the essence of

going to dinners versus in-person versus phone meetings versus Skype meetings, you know, having multiple points of view around the person. So you're on it. Just the fact that you're thinking about it, you know, you're moving in that right direction. Yeah. Cause, cause what we've learned is our biggest mistakes have been when we try to convince ourselves that we could help the business get to a direction that is not intuitively pointing towards. Right. And all of a sudden, you know, we, we end up in a situation where we're either operating more than we should be in a sustainable way or just expecting things of the founder that were never true right that's like and that's the worst that's the worst think about it marriages it

doesn't work that way yeah right like as soon as we get married, I'll convince him or I'll convince her to do it this way. It doesn't work that way. Yeah. And so that's a, that I would say to you as a, as it sounds like, you know, as the broader venture question. There's some people who are really, I think, view themselves as, you know, almost like managers to a founder. They're founder-focused, and they are very, very, very good at just finding those people who can completely change an industry. Then there are others who are thesis-driven. And that thesis could be in even something like a technology category. They're going to say the computer vision will fundamentally change the way that the physical world works. Let's just use that example.

And then they'll go hunt and meet every team they can in the space. Usually they won't even care about the price. And they'll just say, I'm going to pick the team that I think can win in this sector. And we're kind of operating maybe somewhere in the middle where we're saying we have these specific problems that we really care about. And we believe there will be some transformative companies created, right? And we build our own opinion internally, which is fun for us to kind of understand, okay, we agree that we're looking for a solution that meets, you know, this kind of criteria. Are you more interested in relationship-based people or outcome-based? We're trying to find the middle ground where we're not just blindly backing people because I think there are just enough funds in the world to do that.

We're really trying to drive incredible people towards specific problems that we think are being overlooked, right? But we run the risk of essentially confirmation bias and say, oh, because you care about this problem that we care about, we should work together without being really, really, really careful that they're the right person for that problem. And we've talked about this a little bit, right? Yeah, that's really good. This was really the conversation we had with Michael and HomeVest, right? Yeah, that's really good. But we're just realizing it's hard because confirmation bias is so powerful because you see someone who you think is so aligned with you, but maybe they aren't ever going to be that crazy entrepreneur.

I think that if there was a book, I've never come across it, but Biases for Dummies, like if there's such a thing, if someone's listening, they should, that's a good book to write, you know, because there are so many biases, shortcuts that we make to try to make sense of the world that actually skew the accuracy of the information that's coming in. Recency bias, primacy bias, confirmation bias, fundamental attribution biases, the way that we think and attribute behaviors and thought patterns of other people. So just as a thought, it'd be good to just go scan, if you can, some of the fundamental biases. I read a book that you should – you'd like. It was called The Little Book of Behavioral Investing. Oh, cool.

These bias just apply to investing. Okay. There are a couple of funny things. One is – I'm sure you've heard these examples a million times. It's like, if you ask, you know, a hundred people in a room and you say, Hey, who thinks they're a great investor? Or like, who thinks they're great in bed? And like 85% of people will raise their hand. So they just reminded you that everybody thinks they're great. That was the first step of the book. The second step of the book was they showed you the lengths that the smartest investors have gone to to try to eliminate this from their firm including as an example an entire division of the company an entire team whose job was to just come

in at the end and try to kill every deal like they weren't allowed to look at anything until it was at the final stage and So it's a hardening. And then they came in and they were paid to try to kill a deal. For what reason? Just to make sure that someone's incentive structure was around being negative and not confirmatory, which I thought, you know, that's a luxury. You have to be a really big firm to be able to force a team. I can't do that that yeah right but i thought it was interesting and then you know it talks about how imagine having that job though like my job is to find all the things that are broken

i hope you find other things to make you happy on the weekend or something because that sounds very pessimistic yeah it's like you know people make a lot of money shorting things right um i think that the interesting thing it talked about, though, is whether or not you actually can control outcomes. So the fallacy is that you believe you can control outcomes when you can't. But you cannot. But some people, if it's your company, you can control outcomes. So we're trying to find that sweet spot where there's some things that we can do.

Like we helped Rhino get to 200,000 units. No one could ever take that away from us. We absolutely did it. We gave them a huge headstart. But in other cases, we probably think that we have the ability to help influence the business when really we're just an advisor, right? And which is which and when, right? That's like, that is the single hardest thing I'm going through right now. It applies to team and management and everything else. But it's like, when can you control outcomes and how do you double down on that? And when can you not?

And you just need to check your ego and just know that there's some luck involved. What's next for you? I think we just want to triple down on what's working. So what's working is there, that when we bring in the right kind of investors or partners, we can really influence outcomes, right? So things like people who have access to physical space, real estate, who like the idea of being a lab for new innovation, right? People who do different types of financing like credit or even private equity who could potentially work alongside our companies so we're trying to figure out what are the most strategic possible people

we could bring in right um we're still looking a lot at housing and you know kind of elder care um the category we're looking probably most closely at now for new things is, we call it child care, but it's really the reality that 80% of kids now are born to millennials. So it's kind of the modern parent. And the fact that, you know, recent data is indicating that millennials don't want different things than humans have wanted for, you know, millions of years. They're just doing a lot of things later. They want homes, but with trillion plus dollars of student loans, you know, that starter home, you know, doesn't exist. So they're buying homes later. They're having kids later, which is creating interesting implications for fertility. So, you know, I don't think we're

trying to reinvent human behavior. And I think people for a decade were looking at millennials saying, it's this new species. Now it's like, no, there's humans who are completely broke because of really corrupt systems that they grew up under, like student loans and housing, and they're just trying to figure it out. Then the thing that I want to look at next when we create our next fund is really we've been looking at how do you help people save money.

We have some cool companies that are doing that, right? Now it's more like how to help people make more money and how do you help people finance their next careers, right? What does that mean? So a lot of skills are going to be irrelevant in 10 years. And there's been a lot of hysteria around that. And, you know, the buzzword is automation, right? But, you know, it's not like this is the first time it's ever happened. People were worried about this during the printing press, right? It just means that, you know, there's going to need to be new skills and new training. But I think for that to happen at a time when people are historically broke creates an interesting kind of dilemma,

right? Because there's a bigger need than ever for retraining vocational schools. Let's use a simple example, teach you to code, where there's a huge nurse shortage, there's a teacher shortage, right? Right now there are. Right now there's a huge nurse shortage. I didn't know that. And right now, obviously- Actually, I didn't know teacher. Well, teacher is more like if we wanted to achieve universal education, we would need a lot more people or a better way to teach. That's probably the wrong example. Nursing is a much more practical example right now, right?

There's a nurse shortage. I'm sorry, nurse shortage. Or engineering is the clearest way for you to increase your earning power, right? So you're starting to see academies pop up using something called an income share agreement where it'll basically say, hey, we'll pay for your education for a cut of your future income, right? Which if done wrong, could be very predatory. If done right, it's better than a loan when you already have a ton of debt or going out of pocket when you have a generation with historically low savings. So people are going to need to acquire new skills, right?

And on the other hand, you also have, it's expected that about half of the workforce will be contractors by 2030. Contractors, anything from Uber drivers to things in the on-demand economy, Airbnb housing owners, we don't know exactly what that means. But it just means that people aren't going to be employed in a traditional way. And there's already historic levels of debt and low savings plus automations coming. So what do the jobs of the future look like and how do you help people acquire the skills necessary to have them? Let me play that back. Debt is up. Housing affordability is down. Uh, full-time employment is changing to

contractors and you've got a generation of people that are more interested in purpose and meaning and well-living as opposed to making the dollar and working for the weekend yeah and technology is expanding at a faster rate okay so so what are some of those trends that you're those are the trends but what are some of the responses to those trends that you're hunting towards so there's been there's a really cool company as an example called lambda school and lamb lambda lambda okay believe in part of the Greek alphabet. Lambda School. Lambda School. So they use an income share agreement and they will enable you to essentially learn engineering, right? And they will pay for your course, but they get a cut of your future income,

I believe for two years. And there are people who are figuring out similar versions of it. The concern I have is that I think that's great business, but, you know, at scale, that's not going to save the American workforce. That if anything, you know, if we only do this for engineering, it could possibly increase the wealth gap, right? So you don't want to end up in a world where you either have to be an engineer, you know, and the only programs that will pay for you to learn skills are engineering. And people are trying to figure this out, right? I mean, I use the nursing example, but, you know, if you, if you look at automation on the other side and you say more and more of the traditional hard labor jobs are going to be done by, through robotics, you know, what is, what are the jobs that we can train people for that will still be important in 2028 that are for the true middle

class or the lower middle class, right? So that you don't end up in this just engineering or nothing world. If there's a 16 year old listening or a parent of a 16 year old, what would you suggest some skills that they would level up on or go search into a little bit deeper? I mean, I think the coding part is is obviously a great hedge but even the coding languages are changing quickly too so i think it's more of a way of thinking about how you can actually build and create things using digital technology right so i think everyone should learn at least the principles of coding because that code you know code is eating the world right i don't think that was a hyperbole.

I think Marc Andreessen said it and it's like- What was the quote? He said, software is eating the world. Code is eating the world? Yeah. It's like technology is entering every industry inevitably. I think that what's interesting though, I don't know how we get to this future from a dollars and cents perspective, but, you know, the creative jobs are definitely not going to be automated. There's examples of robots creating, you know, songs and painting and stuff, but I don't think that, you know, humanity will pay a premium for that. Yeah. Emotional intelligence and creativity and critical thinking are the three skills that I go,

well, you know, we're, we're far away away from those three. Yeah. But the, you know, so honing those are really important. So I think there's going to be a ton of entrepreneurial opportunity because you also know that the school systems can't change quickly enough. So, so let's say everybody's sitting in a room in a school district and agrees with you that we need to teach these skills. The time to implement these new curriculum, the world may have changed by the time that that curriculum gets implemented and it could already be obsolete. That is why. It's crazy. Well, yeah, that's one of the reasons that we're building the company Compete to Create to teach mental skills. I think it's great.

Yeah. It's accessible to everybody. A thousand percent. Anyone that's got a mind that wants to condition and train their mind, it is a real skill that's not taught just about anywhere. And so that's why we're so bullish on what if we could? What if we could change the next generation of minds by helping them be more present more often at scale. Yep. Well, parents too, if you think about it, this millennial parenting stat kind of struck me because it's just this whole new wave of purchasing decisions. And so if 80% of kids are

born to millennials, you're basically talking about, you know, the ability to rethink every type of parenting service or things that a parent would buy for their kids. The same way that Casper re-imagined the way, you know, people buy a mattress, right? And now Casper is a physical store. So really they just built a brand that speaks to a new generation. So I think it's really exciting. I mean, parents now, they all grew up playing video games or, you know, video games were a thing. You know, when my generation grows up and, you know, the parents are saying, you know, back in my day, we never, you know, played with a controller before. They played Atari maybe. Like, it's totally normal.

Parents are all, they grew up playing video games and they grew up with the internet. It's just a different world. I don't know what it's going to look like, but I think it's exciting. So I think it's exciting for you because what you do speaks to the values of millennials. Millennials are becoming parents. They're going to want to teach their kids that. Schools can't do it. Let's go. I appreciate you. I've had a blast learning from you and I'm looking forward to following what you're doing, what you're doing next. And then anyone that's listening can apply to the Kairos yeah yeah please

yeah so you know and it what's the website well we have kairoshq.com um there is a tab for the kairos 50 uh my webs i'm sorry my email is my last name fiance it's spelt like fiance at kairoshq.com giving out your email okay i just did it wow Wow. Okay. Trevor, just don't edit it out. Yeah, okay. Edit it later. Awesome. I appreciate you. And I'm rooting for you and you guys are doing meaningful work and it's been a blast learning from you.

We'll come back in a year. Yes. And hopefully I can tell you that it's been $100 million in security deposits returned and that we've made serious progress on a lot of these things. And we'll just keep going. That's what I'm talking about. Get them. All right.

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