Invest Like the Best with Patrick O'Shaughnessy - Renata Quintini and Roseanne Wincek - Investing at the Supercritical Stage - [Invest Like the Best, EP. 240]

Episode Date: August 24, 2021

My guests today are Renata Quintini and Roseanne Wincek, co-founders and managing directors of Renegade Partners. Before launching Renegade, Renata and Roseanne were partners at high-profile VC firms, Lux Capital and IVP.    During our conversation, we explore their careers and what led them to launch Renegade. We cover what it means to invest at the “Supercritical Stage” in venture and dive into a variety of topics around this theme. We then discuss their investing philosophies more broadly, covering what best-in-class talent pipelines look like, what quality revenue means to them, and what worries them most in search of businesses with outsized potential returns. I think this episode highlights that even as competition in venture has intensified - the best VC partners can offer more than just capital.  I hope you enjoy my conversation with Renata and Roseanne.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   ------   This episode is brought to you by Tegus. Tegus has built the most extensive primary information platform available for investors.   With Tegus, you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Affirm, Teladoc, Roblox, or almost any company of interest. All you have to do is log in. Visit tegus.co/patrick to learn more.   ------   This episode is brought to you by Hall Capital Partners. Hall Capital is always looking for exceptional investment talent at any stage and size, so if you are raising capital or looking for a career change in the San Francisco or New York areas, you should check them out at hallcapital.com or e-mail at [e-mail].    ------   Invest Like the Best is a property of Colossus, Inc. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.    Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @patrick_oshag | @JoinColossus   Show Notes [00:03:57] - [First question] - What the process of starting a new investment firm was like [00:05:22] - Why the world needs another venture firm [00:06:48] - The biggest takeaway from Renata's experience at a start-up Venture firm [00:07:51] - The inspiration for Renegade [00:11:48] - The most common mistakes made in the early stages of a company [00:15:14] - Key items to look into first when evaluating companies  [00:18:04] - Internal superpowers: helping a founder use their strengths [00:23:46] - Superforecasting: The Art and Science of Prediction [00:24:04] - What makes a good customer call [00:25:44] - How more than one Operating Partner changes the conversation and reveals more [00:27:59] - How businesses have changed in the past few years [00:30:31] - What companies that have good talent pipelines do to set themselves apart [00:35:36] - Lessons learned from working with Coda and its CEO, Shishir Mehrotra  [00:38:12] - Lessons learned from working with MasterClass [00:41:21] - Differentiating between high and low-quality revenue when evaluating a company [00:47:39] - What scares them about investing in outliers [00:51:07] - Improvements made as investors and catalysts for those changes [00:53:48] - Building an organization that will disrupt itself [00:56:43] - The kindest thing anyone has ever done for them  

This episode of Invest Like the Best is brought to you by Teegas. I started hearing about Teegas when several of my close professional investor friends sent me passages or ideas they'd found on the Teegas platform. Conducting effective primary research shouldn't take weeks. It should take hours. Searching for answers shouldn't be lengthy, cumbersome process. It should be easy and nearly immediate. Expert calls should not cost $1,000. Teaguez solves these problems and makes primary research faster and better for professional investors. Tecis has built the most extensive primary information platform available for all investors. With TIGIS, you can learn everything you'd want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to

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Capital Partners. Hall Capital manages more. than $40 billion in global multi-asset class portfolios on behalf of endowments, foundations, and high net worth families, with investments managed by distinguished investors, many of whom have been guests on this podcast. Hall Capital is always looking for exceptional investment talent at any stage and size, with particular focus on diverse teams, which they believe better drive decisions and outcomes. If you're raising capital or considering doing so, their team is seeking more great investors with which to partner across asset classes. Alternatively, if you're a passionate investor considering a career change, please reach out

to Hall Capital to inquire about joining their teams in San Francisco and New York. To learn more, visit hallcapital.com or email Invest at Hall Capital.com. That's Invest at Hall Capital.com. Hello and welcome, everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest like the best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at join

colossus.com. Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaunsi asset management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Shaughnessy asset management may maintain positions in the securities discussed in this podcast. My guests today are Renata Quintini and Roseanne Wincheck, co-founders and managing directors of Renegade partners. Before launching Renata and Roseanne were partners at high-profile VC firms, Lux Capital, and IVP.

During our conversation, we explore their careers in what led them to launch Renegade. We cover what it means to invest at the super critical stage in venture and dive into a variety of topics around this theme. We then discussed their investing philosophies more broadly, covering what best in class talent pipelines look like, what quality revenue means to them, and what worries them most in search of businesses with outsized potential returns. I think this episode highlights that even as competition in venture has intensified, the best VC partners can offer more than just capital. I hope you enjoy my conversation with Renata and Roseanne. So Roseanne and Renata, right before we hit go here, we were talking about this notion of starting a new investment firm, both of you came from storied careers and really well-known, well-respected investment firms, but you chose to opt into sort of a blank slate to create an investment

firm from scratch, which must be a really interesting thought exercise because you get to choose all the variables. I'd love to hear from you both what that process was like. And in going through that thought exercise, what was brought with you from your prior firms and what, based on the conditions and your team, are new and different on top of that blank slate? So I actually started my venture career investing venture funds for the Stanford Endowment in a weird period of time. It was 2007. On one hand, we were preparing a $2 billion sale of illiquid assets because it was like global financial crisis happening over exposed to privates,

liquidity, all that stuff that we read in the news. On one hand, then on the other hand, there was this trend of like these micro VCs or angel investors that were actually going institutional, knocking on the door. And here, there's something changing in venture. And Stanford, one of the, if not the best venture portfolio in the world is a brand that gets to see all that. And I was managing the venture portfolio for Stanford back then. And it was, okay, you had the Andreissons, the founders funds, the Felices, floodgates, etc, knocking on the door and saying there's something new here, we're raising a fund.

And that question of, okay, why does the world need another venture firm, especially for a, venture portfolio that was so built out like Stanford was like very salient. And the big aha back then is like you actually need to look at what's changed for founders. And product market fit became a completely different game overnight when you had the collusion of, okay, less cost to start because of AWS. You have global distribution channels with Facebook, Google, et cetera. And you also have the rise of mobile computing. So all those things meant you could now be in business with 500K, a million bucks, etc.

But that meant you had so much less time and more competition to figure out, am I building something that people want to buy? And if you actually kind of go back to the early days of the Andreessen's, the first round, etc., it was really like, okay, either builders or people who knew how to sell or people who really kind of met founders in that really new need for them, which is like, can I build something the world needs? So that spoke a lot higher than just money and the old established brands. And it was actually a really important inspiration for us to start renegade.

What is that founders need that it's beyond money. From there, actually joined Felicia. It was three of us investing. and what was a startup venture capital firm. It was almost like the beginning of a bad joke as a Turkish, a Brazilian, and Indian didn't enter a bar. It was the three of us starting back then. And it was a very privileged experience

because we had institutional LPs that had been in the best VCs. So we were a startup, yes, but we had the oversight of the best possible board, the best possible standards. So we had to graduate and grow up really fast. And I was there for seven years, raised four funds. And the biggest takeaway that I had from my career there, my experience there was there were so many people that had that, really fixed model of ownership or fixed model of, I only do 500,000 checks or 750, whatever,

like those adages or heuristics. And what we took the big step back is like, no, we're looking for number one, outliers. And number two, if you actually think that you can be a cash on cash, big outlier winner, expand the definition of early stage, go chase companies that can really drive that outlier power law return, don't get so caught up in the semantics of it. And that was amazing operating system building for me as an investor and a lot of the stuff that we do here at Renegate. And then from Felice's I went to Lux. I've known the Lux team since the Stanford days. And it's a really, really unique place because I wanted to see how company building is in Frontier.

Because markets are obvious. They're deep. They're large. And it's not the question of adoption. It's the question of can you build it? And can you build a company around the technology that you built? And it's a completely different ballgame than execution in traditional markets that we already know. And it was while at Lux that the inspiration or the crispness for what we wanted to build a renegade really came.

Even in edge markets, we saw a lot of velocity in customer adoption. We saw a lot of velocity. And once you have something that the market wants to buy revenue scaling, we saw a lot of capital chasing opportunities earlier and earlier. But then when you look under the hood, what do these companies look like from a team perspective? from a organization perspective, they were very raw compared to where their revenues were. And we saw that time and time again. And then the investor argument in us says, like, okay, there's something here.

Let's kind of spend time thinking about that. Can I just make sure I understand the cool opportunity or new area of potential focus? I think you call this a super critical stage. I'd like to define that in a lot of detail. But this twin concept of it's easier to get started because of AWS and global distribution and mobile compute and all these other things. And therefore, it's probably easier to get to X million of revenue or something. But the problem that that creates is growth hurts and growth is painful.

And you can get ahead of your skis in terms of the business scale, but not with the support structure to be able to go to the next level. Am I understanding that you said meet founders where they are and that's something uniquely new about this landscape that we're in? I mean, the thing is, is that today tech outcomes can be bigger than ever. We have four trillion-dollar-plus companies, right? They're all tech companies. We see $10 billion plus IPOs as a pretty new normal. And that's exciting. That's this amazing opportunity. But frankly, because it's also easier to get started and also the way the public markets are

structured today, like you need to be bigger than ever to be really successful. And the truth of the matter is, is in order to be that amazing $10 billion CEO, you've got to build a big company too. One of the things that we would see with repeat entrepreneurs, for instance, the things that they were really getting right was about that team. And what we were also seeing, especially me, like I was a growth investor at the time, seeing these amazing companies, incredible financials, products people love, like flying off the shelves. And to Renata's point, the organizations would be really raw. And the conversation was always like, oh, we're going to hire our chief people officer, and we're going to figure all that out. And it would just take a really long time to hire that person.

And there would just be mistakes made along the way in your typical growth company. And kind of the conversation that we started having around our company's support model was really around, how do you help companies lay that foundation early on so that they can go and raise those giant rounds today and really deploy and scale. And frankly, like, since we've had this idea and now been running with it, frankly, that issue is becoming even more cute because today there's so much capital in the system. And we see this too. It used to be that the number one in the market would at least have like a capital raising advantage because everybody wanted to be in the best company. But now you see that like the number ones, two, and three are all able to raise these giant rounds of capital.

And so now capital is even more commoditized. Everybody has access to so much money. That puts the onus even further on execution. And so for us, it was around we saw that there's this new shit. We call it a new shade of grade at the early stage, like this idea of super critical, which is there's a product and market, kind of that early revenue, early customer. A lot of things are starting to work. But like, it's not that repeatable, scalable, go poor growth dollars in. It would be like it was hard to do, really hard to do as a growth investor, but not that like pure play series A or pure play seed.

And we saw that because the outcomes are so much bigger and because the lifetime of these companies is being stretched out, now there was this new phase. And to Renata's point about the rise of seed 10, 15 years ago, that created a new set of problems. And that was a giant opportunity for new firms. We believe the same thing is happening. Now that outcomes can be so large, that's this incredible opportunity for all of us, the tam of technology. it's bigger and bigger every day. But because of that, there's a bunch of new challenges. And frankly, like, I think it was a new firm where uniquely, we've kind of had this laying slate opportunity to go after them and to really, like, help companies navigate this.

What are the most common mistakes that you see in this super critical stage? So you mentioned just hire ahead of people and assume that will solve the problem. That kind of gives you a bit of the lens into what's going on. But what sort of itemized, what are the biggest errors that you see companies make that had they just been a little smarter about it, they'd be better set up for the future. I think one of the most common ones, and that seems like not a big deal, but then can really kind of compound itself, is just around titling, especially in the early days. Like, titles are free. Everybody can be the head of something. Then you can make those heads of more narrow. But then, like, when you really do want to, like, grow up and bring in those very experienced executives, it just creates

a lot of friction. Because if I was recruited with a VP title, then I go and I hire somebody who's really a VP, that person feels strange coming in and seeing their peer being not at their level. And then are you going to take that VP title away from me? And I might be a great member of the team, a culture carrier, like driving awesome results, but maybe I'm not a VP. I was given that title because it was a way to attract me and entice me to join something early without a ton of compensation. There's like little kind of things like that around how do you get tight on titling and roles early on so that you can kind of set up to scale rather than trying to blow everything up and start over. And also, you know, things around like our firm rights a lot about things like fair pay

and compensation. How do you actually install those things early so that you don't have to, you're not doing these pay equity audits that frankly are very time consuming and nobody likes them. They're not happy. And you end up having to go back and change a lot of people's compensation. And that just really is not a good motivator. Anything you'd add to that or not of the common mistakes that you see kind of in this stage? The big paradigm shift is the role of human resources in a company. I think very few leaders treat their people as the same way they would treat a product, meaning with the right care, with the right iteration, putting the right systems and processes

in place. And I don't mean applicant tracking systems or things like that, but really thinking about, okay, what are my business objectives? What kind of skill sets do I have today, my org? What are the skillsets do I need to bring in? What's the timeline for that? What is the experience level? And what does that mean in terms of the cash I'm going to need to hire them, the equity pool I'm going to need to hire them?

How do I actually build an org product that scales without hiccups? And this is what we're seeing. It's a lot of hiccups because you're just being reactive. A lot of firms equate HR to hire or HR to Don't Get Me Sued. It's paperwork compliance rather than the super strategic function that helps you achieve your business objective. Because if you look at, especially in the earlier stages, where does the capital, you raise goes is people in marketing or acquisition or some stuff like that and some R&D, but it goes every time. And now that the way people work has changed, what people expect from

their jobs has changed. If you look at any compensation survey or work survey, salary is not the number one. People want to look at career progression. People want to look at learning. People want to look at building. The average tenure of an engineer at a startup now is 14 months. So how does that I mean, for equity grants, for how do I train these people that are going to have a shorter longevity in my company? Or how do you really build those assets and enable them to help you continue to grow? You mentioned this idea that kind of zoned in on a specific sort of help that Renegade might bring to a new company.

It begs the question, when you're first approaching a new business, and you mentioned you like to see revenue, but maybe sometimes they'll go down to see, like, what are the key things that you are looking into first to evaluate whether or not, not just that it's a good business, but that it might be a good business for you and in terms of what you bring to the table. One thing that's been really fun and exciting about all of this is Renata and I started working on this kind of around this time in 2018 on ourselves and what we would do and had all these hypotheses and some of them have changed and some of them haven't. But now that we like get to talk to and invest in founders, the most fun part has just been when we do talk about our idea

of the super critical stage and how this phase of life is different and why we focus on a phase of life, not a specific ground of capital and kind of this like hair on fire issues. And frankly, the companies that are doing the best are struggling with this the most. It's like a very fun problem set to go after in that way because it's not like you're trying to fix companies where things are working. Helping companies that things are working so well that their hair is on fire. We see a lot of frankly like CEO self-selection. There's a lot of folks we talk to and their eyes get wide and get super excited and that is me. Or like even we get random like cold emails from very legitimate founders or introduction saying like, oh, I saw this and like this resonated so much. So kind of how

we define the supercritical stage is about a million dollars a month to about a million dollars a year, generally 20 to 100 employees raising rounds that are between 15 and 50 million dollars. And what's interesting is we've done a bunch of deals and they're kind of evenly distributed between A's, B's and Cs. Because like the letter just tells you about the financing history, not about like where the company actually is and what the upside potential looks like. So when we think about that sandbox. We like to see some like early revenue, some early data, but frankly, like when we're digging into these companies and what we really think is the most important is like seeing that customer love. I know we love doing customer calls. Like we're doing our internal superpowers

exercise right now, which is something we can also talk about on the company's support side, but talking to people who love and use their products. And frankly, that's a much better proxy than trying to figure out what magic number is right now or sales efficiency or available ramp time is. These companies are still really early and they're still just a ton of noise. in the data. Knowing companies that are going to be excited about the work product, really, it's, we have this amazing operating partner when we really start to get into companies. We involve her in the process and let the CEO or founders spend time with her. And it's a very good indicator. Like the folks who lean in are really excited about that

conversation and really take a lot out of it or try to hire her from us are generally like good. It's generally like a good leading indicator that they're excited to like work on these things. And there are great companies where founders don't want very hands-off investors. But frankly, like in our years of investing, it's the ones that are open to influence and collaboration and talking to other execs and expertise that really do the best. And so, frankly, that's kind of built into our process. I have to ask both about the internal superpowers thing and also about the difference in conversation that your operating partner would have with a CEO than the one that you would

have. We'll go in that order. Suss out this idea of internal superpowers. What's that? So our operating partner has been working on this thing that she calls founder role design. And it's all about finding your flow and your play. And right, there's all this soft data. There's a kind of research that like you're more productive, you're more efficient, you're more creative when you're in flow or you're doing things that you really enjoy. And we also

think it's like not only looking for flow, but also like, what are your superpowers? What are you really, really good at? And I actually think doing this work at this stage of company is so powerful because if you can help the founder kind of figure out their role and how it changes, because every day these people are waking up and they're running the biggest company they've ever run. And in the very beginning, you're blocking and tackling and you're setting up the bank accounts and you're doing every job. And then as the company grows, you start to focus more and more. I think at this stage, it's a really great time to step back and say, like, hey, what do I like to do? And what am I really good at? Because then you can design the executive team around that founding team to support that.

Because, I mean, we have a founder who was running a CRO search and it was not moving super fast. And Susan, our operating partners spent some time with him. And one of the things that came out of that conversation was that he was like, oh, I actually love closing. I'm not looking for a CRO because I don't want to go to those final meetings. Like they sold a big, big enterprise. To there was a lot of CEO sales because you're a young company, right, to go sell to a big established company. Often the CEO has to show up. But he actually loved that. He loved getting to interact with customers. And he loved sharing the product. And so really that actually changes the type of CRO that you want because you don't need a closer. The company already had a great

closer. Instead, it's about he needed somebody who could really build in that scalable, repeatable organization and who had done that piece before, but not the closing piece. And so it's really so important about like how you identify your own superpowers, like what you really are great at and love to do so that you can complement the things you're not good at. And so we're having an offsite next week. And we're doing this for ourselves around our own process. What do we like to do? And like, what do we hate? And frankly, that will also tell us about like how we need to build our team. What do you like to do? Like for each of you, what is that? What's the flow state? I grew up, I fought karate, and I play music.

And a lot of those two things is observing what's around you, what's changing and using momentum and building on. So I love looking at trends, reading the tea leaves, kind of thinking big ideas and connecting the dots of problems that need solution or companies that are being built. But like what are business engines that work out and what's gaining momentum, what's not? I just love that. that combination of just listening and deep thinking and observing of trends. Roseanne, what's yours? Before we got work married, we hired a coach and we did a bunch of like jokingly called marriage counseling, but spent a bunch of time thinking about who we are, what our values are,

how we complement each other. And it came out in that work that I was like the little bulldozer. I like put my mind to something and it's like nothing stands in my way, whereas we're not as much more of like a search called Ninja. She's like observing and waiting for her mark and like counting, whereas I'm just full speed head. Actually, our coach showed us, it's like, oh, that's fine. Just like, remember sometimes you're a big of bulldozer, like, Renata and your little scooper and just like, bring her along with you. I also love selling and the kind of hunt and the deal. I think we're very lucky too.

And the bulldoves are in the ninja. Exactly. Like how we actually like compliment each other. And actually, frankly, like how we celebrate that. The we work. I know it was Annie Duke who introduced us. Like, we work really closely with Annie. And it's funny because Annie loves to do pre-work or, you know, we send her kind of like anonymized answers ahead of time. And she like always. knows who is who because like I'm like the aggressive pessimistic one and renada is the more conservative optimistic one and she's like it's great because I mean that's actually like ideal if we were both really aggressive or both really optimistic like that would be bad and said we're very good foils to each other but frankly like you have to recognize that and celebrate that as a positive not a

negative because like sometimes I'm in bulldoze mode and like renada's the voice of reason and it is very annoying because I just want to keep going and she's pumping my brakes for me and in the moment, that's frustrating, but like in the grand scheme of things, like, thank fucking God. Why are we doing these superpowers work? Going back to Blank Slate, we wanted to build the Golden State Warriors adventure. We all have our own strengths and our own skills. We're here to serve founders. We really believe that this idea of like, what are the things that we can do to bring leverage to them?

And we saw this people function as like a big first area of big leverage for them. And then how do we bring out the best in each other? So that is a lot around understanding our styles or principles. personalities, what our strengths are professionally and personally, all of those things. That also implies what are the incentives we bring at our firm so that we're always preserving the outside view. So that we're always putting the process and the decision and that first, kind of checking our egos at the door as much as possible. So it doesn't matter who scores the point as long as the point gets scored or the ball gets blocked, that piece of it. So we have spent a lot of time thinking,

okay, equality on the GP side, making sure that we have executives that our companies would kill to have, but that they also have a voice and they also have a responsibility inside our company. And they can actually not only do their work with the portfolio companies, but also feel like they're helping us build, renegade, which they absolutely are. How can we use technology and data to better learn about our decisions? So we have somebody who's a head data engineer that is doing a lot of stuff, not just on sourcing, but also in our decision processes. We do a lot of premortem on deals.

We do a lot of scorecarding. We do a lot of, okay, let's understand how much do we know the market and how are we good or not as super forecasting things. The super forecaster book is actually on the welcome renegade kit, along with other books. All of these things, they matter a lot to who we are and how we're going to continue to deliver

consistent returns to our investors. Kind of putting process and quantification around the decision-making process. You mentioned customer calls a few times, are inherently qualitative. There's kind of a feel to them. Say a bit more about what you've learned about making those effective and useful, especially in the more structured framework decision-making process. Like, what is a good customer call? How do you get better at doing those calls? Because those seem really important. They are very qualitative. And frankly, like the best ones are even kind of like the most qualitative because you get off script. But what Renato was kind of mentioning about

scorecarding, we do really try to standardize a lot of our reactions and decisions, even though if it's reactions to a meeting with a CEO or a meeting with a customer for a couple of reasons. A, so they're comparable against one another. And then also B for like information discovery. It makes it actually like much faster and efficient to pull out the nuggets. And so it's about like, how do you actually structure them so that there is repeatability? And then also how do you kind of think about what are everybody's incentives here? And especially when I think about like customer calls, thinking about like who is this person and like what's the role in the org and how does this tool or product change that? And especially like one thing that I love and that you see is we've invested

companies over time, both on the consumer and enterprise side that are like, help make people excellent, especially when you see like things that help people be excellent at their jobs. If you can find a piece of technology and bring it into your organization and that helps you become a hero, that is so compelling. I feel like when products can figure that out, it's kind of like liquid gold. You get the internal champion. Often if that person moves to organizations, they'll bring your product with you. They can't imagine living without it. And I think it's all about like, how do you kind of tease that out about the people that you're talking to? Is this something that is fine or is kind of better than the status quo?

Or is this something that you're really excited about and makes you a hero? And so we always try to tease those pieces out. One other similar question on the, you mentioned earlier, the operating partner conversation with the CEO, how is that or not a distinct from conversations you'll have? Like, why have that as back to the process? Like, why have that as part of the process at all? It serves two purposes. One is it gives the CEO an opportunity to actually see how it's like to work with

Susan and make it a very specific, what is top of mind for your conversation. So, for example, there was one company that is in our pipeline that we were talking to, that the conversations with me were all around scaling the business and opening up new geographies and talking about revenues and marketing and margins. But when Susan came into the conversation, the CEO went and said, okay, I'm going to be now national, but I'm really thinking about how do I treat customer service? Do I have it on the HQ level or do I have hyper-local ones? And how should I think about it and how should I think about knowledge sharing and how should I think about compensation, et cetera, et cetera. And then the CEO started opening up around, oh, yeah, you know, most of our

returns is because things don't show up in time versus this or that. So I really need somebody on the ground that can actually go and fix the redelivery problem in a day. So stuff that is like details of the way the company operates that bubble up, but it's really not for discovery on our side, but for the CEO to just spar. And then Susan, you know, she was the first gym of Uber's in San Francisco. She launched a business here from 0,200 million revenue in two years. Then she went to Zoom Pizza, started as an operator finance, and then went to talent and culture from 30 people to 600. So she's seen a lot. And she's grown a lot of types of disparate teams. Because if you think about those two businesses, it's fast scale, national coverage, a lot of fast learning, playbooking,

and repeatability across markets that are different. You also have all the way from people that cut and deliver food to people that are building robots and computer vision. So a lot of complex work relationships that are really, really valuable to our CEOs. So they get a taste for what it would be like to work with us. So like Roseanne said in the beginning, it's like a great self-selection tool for us. What on that note are the most largest differences between companies that you might have invested in sort of at this similar stage through the first couple stops in your careers versus today. Like, how are companies themselves the most different in this environment, given some of the changes in backdrops and tooling and competitive labor marketplaces? All these

things have been changing. So how would you define what makes current companies distinct relative to the past? I had the master class board meeting yesterday. And when I was in there, I was thinking it was 2017. It was a series C. And like how different a series C company is today from that. It just seems like our ecosystem has matured so much. One of the things that you see is also like a lot of standardization across companies around like tooling. Everybody's on Slack. Everybody's on Zoom. Everybody's using the same stack. I think that your average startup employee today is much more sophisticated about what it's to join a startup, like a tech company and frankly like ask better questions. I remember before I was a VC, I was like a startup person. And I remember when I became a VC

and explaining to so many of my friends about like number of shares don't mean anything. It's a made up number. And the questions that you need to ask, nobody knew that back then, like 10 years ago. I also remember when I first started as a VC and like people would be like, what was the post of your last round? And people would tell us. And I was like, oh, my God, didn't that used to be like a secret coming from like the other side. Like you never knew what companies were really valued at.

And now employees do. You see just so much more sophistication there. And frankly, I think it's for the better because people understand what they're walking. into. I remember I had a friend who was at a, like, very early at a company that ended up, like, was a big high flyer and then struggled and they ended up raising a lot of debt. And like, nobody on the employee side knew that like that sat on top of everybody's equity. They didn't understand the capital structure. And I think people are just a lot more sophisticated about that today. And frankly, that's better. And also I think cultures have grown up too.

You obviously still hear like stories of bad stuff happening, but like it's not the Wild West in the way it used to be. And I think that's a lot better because I was a female product manager, a long time ago. And that was not a fun place to be in the world. And I think like those experiences are pretty different. You mentioned earlier the sort of people function and the human capital function. You mentioned it's just there again. What do best in class companies share in common here? Because it feels to me like we're in this market where everyone's biggest challenge is hiring. It's an incredibly tight labor market for technology companies, really for any fast growing company. Like it just seems incredibly difficult, almost like you need as much of an edge.

as you do in product or in distribution to be successful. What's going on there? Like, what does best in class look like in your opinions for companies that build good talent pipelines that have good head of people? Like, what's the gold standard? It first starts with a really crisp understanding, okay, what is the talent that I'll need and when? And they actually do a 12, 18 month plan type of thing. They think about, okay, how do I get leverage in my job? Where do I put the right buffers in the org. And they're really crisp, too, about, okay, what is the exact job that I want that person to perform, not just a title. They kind of know the play way in advance and they will start recruiting. You know, okay, this role usually takes six months to recruit, so I'll start in the

right amount of time. I know exactly what I'm looking for in terms of skills. I know what that person will do, all of that. They're really crisp on the actual recruiting process. You'd be surprised at how many companies fumble or in terms of like not being aligned the questions that are asking or what are the skills that they are actually probing for, giving the employee not like a great recruiting experience. Like you're selling your company to them. You need to be able at every checkpoint to be consistent, be aligned, show the right vision, also understanding of the job.

It's really frustrating for an employee when they go from one interview to the next. And it's like, okay, didn't that other person just, I gave all that information already. What are you talking about? That stuff, you'd be surprised it still happens a lot. I have a friend who is going through. recruiting process and literally the COO and CEO of a company told him completely opposite things when it came to location of the job who it reports to and what the responsibilities are. Yeah, blocking and tackling stuff, simple stuff. And then once the person is hired,

the onboarding and what is success? The 36-90 plan, what are the resources that person will need to be successful? I mean, some company, you'll be surprised. They talk about onboarding, oh yeah, they'll have the laptop when they start. It's a lot more than that. What's the information that they need to know, who are they going to report into, what needs to happen in that short period of time. And then also, the best companies, they have an amazing way of being transparent and overcommunicate frequently about what's the company's vision, what are the business objectives, what are the goals, and how each function or how each cog ties into that constantly. Because you're making decisions of where you're spending your time or where you're going to work all the time,

and you much rather spend your time in things that move the most important boulders forward than not. So communication, especially when you have now more remote workforces, more asynchronous type of work, and companies that continue to scale extremely fast, it takes a lot of communication and alignment and processes around that. Everyone in your company should be able to know, okay, what's the top three goals? It seems like low-hanging fruit to make a company a lot better, but also in some ways like eating your vegetables versus like working on product feels like eating a cookie or something. Like it's really enjoyable. It's tangible. The customer sees it. And working on your internal people and systems just seems boring is the wrong word. But it seems

like work, like necessary, but work that you put off. And I'm sure you see that all the time. I also think like one thing I've just been reflecting on the past couple days of just seeing companies that have like very good, the gold standard is like offer acceptance rate. How many people do you ask to join actually join? Oh, interesting. Yeah, interesting metric. And frankly, I think the companies that I've kind of just noticing, this anecdotally, but I think that there's something there. I think of Masterclass. I think of Koda. I think of this company that we just invested in that hasn't been announced yet. They're very clear and upfront about their culture in the process. And I think that A, attracts people who are

excited about that type of culture. And B, by the time that somebody has actually gone through the process, it's very clear to them, like what working at the company is like. And that I think really drives acceptance, right? Coda, I think is very good at this, right? Like, Masterclass, I think is very good at this. And to your point of the stuff is kind of like vegetables, defining your culture is squishy. And again, like, you also want to be thoughtful about diversity and bringing people in with different styles and backgrounds and experiences so that you get access to, like, all of that brilliance. But how do you also communicate at the same time, like, kind of who you are as an organization and what your working style is like and how warm and friendly or workman like your culture is.

And I think the companies that, like, are very good at describing that, it pays for itself. Because it weeds out people who, like, don't want that. We see a lot going on right now with companies coming out and saying, like, we don't talk about politics. And that's, for some people, it's not for others. But frankly, by just saying that out loud can help a lot of people say, like, oh, that's not for me. So basically, like, reasons to opt in or opt out, even if they're controversial, can be productive. Correct. Yeah, helping people know what it's going to be like. That's what success is. You mentioned a few companies that I know, maybe we'll start with Kodas, since I've had Shishir on the podcast before and I'm a big fan of his incredible ability to structure

narratives and process inside of a company. Like, it's kind of unmatched, actually. And the game I'd love to play is to go through some of the companies that you've invested in and have some experience with and just hear what you've learned about business in general or about an industry or segment in which they operate. And maybe we'll start with CODA, since it's one I know a little bit better than some of your other portfolio companies. What have you learned from CODA, the business, Shishir as a leader, and having spent time with that company? One of the things that I really love, about the way that he operates. They're now all remote company. They've always been distributed, but they do their board meetings with the entire company can join because they're on video.

And they've always done that. And then they use all the CODA tools around the Dory and the chat and everything around like this discussion. And as an investor, it's super fun to see because you actually get to see all of like the inside jokes and the conversations going on inside of it. They also do a ton of like hackathons, which I feel like back when I were like, worked in companies that were like you saw them all the time and maybe I'm just further removed, but basically getting to see inside like how they iterate and how like they eat their own dog food around the CODA product, like how much they use it themselves and then how much of like their own kind of company and culture tooling that they put out for the world has been just

awesome. Tying to the customer conversations because we talked a little bit about that. One thing that was extremely impressive about CODA was not just the level of usage of their product, but the most important data, like businesses were really running their most important stuff on Kota. It takes system of record. Everybody talks about a system of record. It takes that to a whole new level because you think about, okay, you're seeing other options for people to kind of use their data or share their data, how valuable or how critical this is. But when you talk to customers, the most important data that are the livelihood of their business units or for

their company are being run on that platform, there's gold there. It's actually what we're building Colossus on top of. We did so because of having Shishir on and just getting curious about it. But as like a kind of almost like no or low code operating system for a business, it's kind of insane, what you can do on there. I remember Masterclass uses Koda and they use it for their kind of like soup to nuts course design for everything from, you know, instructor kind of ideas and sourcing to course design to shooting to marketing. And if you think about that, like that's what makes Masterclass, masterclass. That's a special piece. And like, you can't buy an off-the-shelf. piece of software for like what makes you competitively differentiate it. And so I just think that there's

something that's so needy and juicy there by allowing, frankly, like, business people who manage those processes that make the company unique to also like build the tooling that actually runs it. Do you think Masterclass portends more similar companies in the future that are almost of that sort of Netflix model of fixed cost content and subscription and ever deeper niches, obviously focused on education or how to in their case. Same question I had on Coda. I have on MasterClass. What about it has taught you more about business or the way things are changing? So both MasterClass and Coda, they're really similar in that they were like big, audacious product investments up front with the long-term view of kind of customer behavior.

Cote operator in itself for what, the first three years. By the time they like publicly launched in 2019, right, the product had been so deep and so powerful, which is very dissimilar from a lot of kind of that valley startup of like building in public and just getting that MEP out and iterating really quickly. And Masterclass kind of the same way in a world of like all the free YouTube content you could ever watch, investing very heavily and deeply into like ultra high quality cinematic content that's going to be more immersive and more impactful. And so both of those founders kind of had that same, took that same bet that if you do something much better when you really like invest in quality that will differentiate you. I think what we're seeing in Masterclass, I think,

with the grade on bundling, we're going to see more streaming services. But what I love about masterclass is that so much kind of like ed tech up to that point was like taking regular structures, like college classes, degrees, grades, and putting them on the internet. And if you think about that, like colleges and degrees and grades and all that, they were like technologies that were built to scale education. Because if you go like way back when you think about like Plato and Aristotle, you are a great master, you spend a lifetime amassing this body of work. You pass that work on to a couple of people, an apprentice or children. And it's kind of very, like, deep one-on-one.

Like, I think that is a very human idea. And in order to scale that, where it became universities where you got people together, and then you could copy universities all over the world and we can standardize by having degrees. Those are all just technologies to take that same kind of idea of, like, taking the work of a master and passing it down, that scale it all over the world. And I think I didn't really, I like, I always said I hated ed tech when I made that investment, but because, like, it was just kind of taking those technologies and putting them online and

I don't think it was that compelling. But what I love about what David did is he kind of went back to that first principle. And it's like, how do people really want to learn? You don't want to learn from like a professor that's been in a lab their entire lives. You want to learn from the person who's like done this. Like that is so much more powerful. Actually like understanding that path and understanding how they've changed their craft and actually they've done something that nobody's ever done before.

And how do you actually create that personalized experience using the internet? How do you make it feel one-on-one? And so I think like we're going to see a bunch of streaming services. but I think one of the things the masterclasses showed us is that like we've kind of been thinking about education all wrong. We love to learn. We're always like constantly learning. And if you make that like beautiful and cinematic and immersive, that's an incredible experience. And I think you see it today in the class mix like what counts is education. Chris Foss in negotiation, these real skills you can actually like use in your life, not just kind of things that we think of as academics.

We're not back to the ninja here. As you think about kind of the evaluation of the trends that you're seeing today and capital is abundant. In many cases, you mentioned revenue is growing faster than ever. What does quality revenue mean to you? So even for something like a masterclass versus something else or any portfolio company, when you're digging into an impressive revenue growth story, what differentiates high from low quality revenue as you're evaluating a business? It's a combination of stickiness and what is that customer doing with that product? Because you can get one million in revenue or two million in revenues in so many different ways. So one is kind of going deeper and understanding how core is that product on your process,

especially in companies that don't have a lot of data on churn, actually understanding the usability and the use cases of that, like does that really change the way you do? Like similar to what I've said with CODA, the businesses run on CODA. So they didn't have a lot of churn data when we invested, but we had really high confidence in renewal. The other question that we also ask a lot about and we want to look at is pricing. We actually spend a lot of time understanding is the value that somebody's paying for that product. Are you supposed to over-deliver to continue to earn that number or you have a lot of room to grow?

Does it feel cheap for customers or not based on what they're getting? And we tied that back to product roadmap. We tied that back to stores. Like so many companies will say, oh, we're going to use X as a wedge, but we're going to expend. and you need to believe that our revenue will go from, I know, 10 bucks to 50 bucks because we're going to do X, Y, and Z. So those are very different in terms of quality and sustainability. And actually, on the customer calls, especially if we ask a lot about wish lists from customers, like what do you wish the product could do today that it doesn't? Is it in the roadmap? Is it

not on the roadmap? Is the customer feeling like the product is okay, but kind of clunky, or are they feeling that they having like this huge bargain? So you always want to have that bit of a margin there. The other piece too is thinking about, is your revenue associated with something that generates revenue to the customer or is it a cost saver? Because like what is going to allow you to continue to extract value as you go? And we always wanted to be associated or in businesses that the revenue is closer to things that generate more revenue. Because if you have to keep explaining the ROI on the cost saving, that is a lot more complicated to sustain. That's another piece. And also, okay, like, is the person who is using the product different than the person

that cuts the checks? What's the priority of the person that cuts the checks? Like what was said, it's all about incentives. So all of a sudden, we see board level conversations change around trends, or people sort of talking about, oh, hacking, the whole Equifax thing happened. Like, all of a sudden, the whole security became board level conversation. And that absolutely became a priority for the SISOs or the technology officers at companies that maybe they weren't buying before and then they were. So then when you're kind of seeing these pickups of waves like that, what is the trend? Is it here to stay? Or is it just like a point in time where the market will pull back from you? And then pipeline will kind of retract. So understanding what's the

incentive of the buyer? Like what you're trying to look for is things that the use case, it is business routine. It is something that they already do. But once you kind of bring that product, you unlock superpower, like it's 10x. Like you don't have to change a lot. I have one founder that says, you've got to be one degree of weird. Like you change one thing that unlocks a lot, but everything else kind of stays the same, that you're running their business on that product. And then you kind of build as you go. Those are the best revenues.

Roseanne, do you have another example? Like, I think Coda is a perfect example of we pick Cota. I would argue way too little. Hopefully she shares not listening. Way too little for what they unlock in a business. And as we grow, they unlock more and more. It helps us scale. and we get an unfair portion of that upside or something based on what they enable.

Like a lot more value created than captured. Nice way of putting it. Is there another business that you've invested in, Rosanne, that you find that to be true? That's a good example of focusing on revenue, which means growth or opportunity for the customer versus cost savings. We just invested in a company called Speckett in Denver that does kind of in context training for SaaS tools. So a lot of like sales force and outreach and they can go on top of any tools. But again, it's one of these things that I think they had a bit of a COVID moment of like, if you run sales, officers sales enablement, all of a sudden, you need new ways to make sure that

all of your team has all the right materials, has all the right battle cards, is up to date on any changes in the process or tooling or training. And so COVID kind of shifted that and made everybody like have to think about what am I using. But that was one of where as we dug in, it was one of these things where it was like kind of creating that flywheel, like giving these customers more and more and more because now they had abilities to kind of look at sales performance across apps. And what did people who successfully handled this objection? Like what did they do versus someone else? And so like kind of getting that wedge, but then over time, like what we were seeing in their customers, they were like bringing more and more

and more people on it because having that contextual layer just makes everybody so much more powerful. When you're asking about good revenue and bad revenue, like I think where that actually shows up is not necessarily the revenue, but it shows up in the cost of sales. Because how much you have to require that customer, if the product is better, it sells itself. I mean, and we see that. that in consumer all the time. I invested in Glossier at IVP. And then I saw a ton of D to C. And Glossier was always phenomenal. They had this amazing community. And so like they weren't totally dependent on the social channels to buy their customers. They could get them on their own. And also like when they did do performance marketing, right, like they knew that it was very efficient for their business

because the products were so good. And what you see in a lot of other businesses is that KAC just starts increasing and increasing. And frankly, that's because the product that you're selling isn't as good for those customers as it was for the ones that had cheaper cack. I think it's actually easier to show up on the marketing side because the truth is if you feel like Coda is cheap and you're getting way more value for it, like you're on your podcast talking us about it. You're going to tell your friends who are starting this, right? Like that word of mouth is so valuable and that pushes down their cap. And frankly, like that just gets more revenue. And I think it's that like contribution margin that's the value. Yeah. You're both in the, I like the phrasing of the what could go right

business. The success of your fund and your investors will be based on, in all likelihood, a couple massive winners. And so you have to always be thinking about how big could this be? In the success case, like, could it be even bigger than we dream? When you have that view of making investments, what are the things that scare you most when you see them? Like, what are the things that make you think, okay, that's sort of like what could go right? Incredibly asymmetric outcome really isn't possible here for some reason, negative screens, so to speak. I think one for me is the capital that it will take for the world to agree with us. Because I think it's not just market timing.

It's also like, okay, how much capital is it going to need and what is the syndicate's friend to kind of take it there? Because you need to stay in the game to win. And that is like one that we talk a lot about. Like what are the metrics? And will the market value the metrics the same way a company will? Because sometimes you may be unlocking things, I don't know, technologically or etc. are that are really meaningful, but from an outsider, from a business evolution, it's like,

okay, man, I'm not going to value it the same way. So actually tying the milestones, what's achievable and how much is it going to take to unlock more so that the market will agree, that is one that we think a lot about. And even though we're investing in companies that like have products and market, that you can diligence and have financials that you can look out, like these are still such early businesses and you're still betting on founders. And I mean, the hardest thing is if the founder can't scale. Sometimes the product's amazing. I once invested in a company where we were like definitely the market, like from a product standpoint, we were in the market later and we got smoked by CEOs that were better able to hire high quality talent to build like better executive teams around themselves.

So we kind of talked about the pre-screening at the beginning, right? It's like, what are those clues that this is somebody who can really level up? And like every day they're going to run a bigger and bigger company. And everything was right. Three years from now, you're going to be looking back at the board meeting and being like, oh my God, it was so little and cute and tiny right back then. And so we're looking for those leading indicators. And like that conversation with Susan is often a great one that like how open, how curious and passionate and open to influence are our people. When you see a founder who we can hire and exactly they have no business hiring when they can like hit above their way.

Cat Lake did that in such crazy space. Incredible. Yeah. She's amazing. I mean, she's such an epic operator. But even like, I mean, I remember the first time she came in with Mike and it was just like, how did you get this guy? The Netflix guy too. Yeah.

I mean, right? Like she attracted. these amazing people. And so I think when you see that, Speckett that I mentioned, they got this incredible head of sales. Ripple match, our most recent deal, also got like a much more senior kind of hire for their head of sales role than you would expect of the company at that stage. And then also, I think looking for CEOs who are also very good at like, frankly, relinquishing control and want everybody on the team to be better than them. I know that like those kind of seem trite, but I've also seen it not happen. The example I used of like getting smoked by the competitors,

the CEO is just too held on to get great executives and let them run. Like Robert Refkin, I think is phenomenal at this. I remember when we first invested, he said, like, I want to hire every smart per, or he's like, I want everybody to be smarter than me. I'm like, I just want to like get out of their way. Or I remember when we hired a great CEO at Compass back then and Robert called. And he's like, okay, how do we like break up my job? And his one request was he was like, oh, I want this one person to report to me because

I get so much energy for working with him. That was like the one thing. So when you see these founders who can hire and attract great people who let them run and let them shine, those are the ones that are really going to level up because you can't do it alone. Sometimes at the Series A, the CEO is the best executive. And that's fine. But it's not going to be the truth at the D or the E or the IPO. And so you have to find a person who can navigate that as well.

If you think back to the beginning of your investing career, so think about the first 10 investments or five investments that you made relative to the last five, in what ways do you think each of you individually has improved the most? And what has been the various catalysts for that improvement? Maybe Renato, we can start with you. I thought I needed to know a lot more than I actually did. You're never going to know more than the great founder. You need to know enough to understand the levers, what is important for that business engine or their market or whatnot. And then you let them be the expert and drive the vision and drive all those things. And when I first started, I thought I had to be a lot more in it.

A lot of our job is to kind of suss out, do they understand what the important levers are of their business and actually kind of triangulate things of, okay, for example, you're projecting your kek to decrease 2X in a year. Tell me how and see what is an outlier good or bad. And then you kind of focus the conversation on that because the companies that are really disruptive, they are going to be defying some stuff that you think,

oh, it's not supposed to work on the positive or on the negative. So it's more about, okay, where do you kind of hone in the questions? Where do you spend time and how do you get intelligent enough to call BS? Or it also suspends belief because you want to be surprised. I think that that's conceptually like the biggest thing that's changed for me. I love that one. Roseanne, what about you? Yeah, again, I think it's about like reading people.

I think I'm getting better. And hopefully, like, I have a lot of work to do. I'm like kind of figuring out who are going to be great leaders that really scale. When I think back to like very early in my investing career, I started my career at Canaan. I was an associate and it was awesome because it's a very collaborative, very like apprenticeship culture. And I got to see so many different deals with so many different partners and different styles and things like that. And one that like has always stuck with me was that we looked at this company that had like a famous founder who had started another company that was really successful, really cool tech. And the references were horrible, like terrible.

And that company went on and the guy did like everything his references said he was. would do. And I feel so lucky to like, I got to make those calls probably a year into my venture career and got to watch a play out in the news. That big lesson that I feel like I picked up on really early was like when people tell you who you are, you believe them. If you have doubts about people going in and if you think that like it's going to be different now, I think like at the core, there's so much like variance and noise and this is all built on trust. It's all about like, how can you find the people that you want to work with that you trust are going to like do the right and the smart things because like nobody knows what the right answer is because these are

unanswered questions. Otherwise, these wouldn't be interesting novel companies. What have we not talked about in our conversation today that you think is really important as a determinant to your success specifically at Renegade, whether that's some unique way that you do things or just more generally speaking? Is there anything we haven't covered that you think is critical to how you think about the world and make your investments? No, I was going to say, like we really build an organization that will disrupt itself. We spend so much time thinking about what is knowable, what is our process, what are the important questions that can be answered today that we can ask a company.

So what are we learning? And also kind of tracking to later go back and say, we're these determinant. Are we asking the right things? Like we really have a crazy curiosity. We really want to win. But we build the culture, the systems, the incentives, you kind of break it all. Like we're experimenting all the time, collecting feedback. on decisions, on how we're working together as a team.

Like we actually quarterly, we do this, how we're working together, exercise. But we say, okay, what is working? What are the things that we're doing that are working? And what are the things that are not serving us? And we change the way we're doing things based on that. Like we treat our decision process, our working process as a product. And we're always iterating. We're always testing.

And we're always learning. What do founders want? So even with Susan, like we first invest, we have a conversation with a what is top of mind, then later six months, we sit back and do a review and plan for the next sprint. Like, we run our companies like a company. We actually meet for sprint meetings every Friday. We do quarterly goals, tie back the sprint to goals, and we have no personal pride in scratching things or say, hey, this didn't work. Or, hey, let's double down on this because this is working. At the end of the day, we're money salesmen. We sell money. Like, it's the ultimate

commodity. And so for our investors, right, the only thing that makes them different, the dollars that we sell versus the dollars that other people sell are the decisions that we made. And that's driven by the culture that we build. And so to that end, like, we wanted to build a firm that looked like a company we want to invest in and we very much think about decisions as a product. How do we instrument them? How do we measure them? How do we make sure that they get better? How do we make sure that we're doing things properly and thinking the right way about this and bringing in experts and learning where we can. And I think, frankly, like, in an industry where there's the mightest touch and the gut, and, like, I just know, I frankly just think we have a big competitive advantage by, like,

believing that that's all bullshit because we know there's been a dozen Nobel prizes about how we make decisions and how we are telling ourselves that we were smarter than we really were. And so much of the reason that we're doing this and so much of the long-term value that I think that we're building is just trying to be, like, as objective and scientific and kind of instrumented as possible so that we can also, like, keep the outside view and, like, not think that we're so great and that we're the smartest people in the room because sometimes we'll be and a lot of times we won't and we just got to do it better than everybody else. The bulldozer and the ninja out there selling money. I love your story. I think the way you're

going about building a new firm is really neat. It's been a pleasure to get to meet you guys and learn about what you're building. I ask everyone the same closing question. I excited to ask it twice. Renano, maybe I'll start with you. What is the kindest thing that anyone's ever done for you? I think like believe in me when it was impossible because it takes. seeing you for who you are and saying you can do it when you think you can't or the world thinks you cannot. And when you think about the ripple effects of that one thing allows me to pay back, 10 million kindnesses back. And I hope to do that. The first thing I went to were like, well, which one do I pick of like somebody who told me like that I could do something that I wanted to

do? I think about that a lot. Like my dad was one of those people who was always like, baby, you can do whatever you want, any job you want. And I was like, duh, of course. But then he knew that like I would grow up and go into the world and the world would tell me otherwise because I was a woman or I am a woman. So yeah, all those people like who kept going like I think about my parents and my thesis advisor and Maha, the first person who hired me in venture. Wonderful. Well, this has been so much fun. I've learned a lot. I really appreciate your time.

Thank you so much for doing this with me. That's great. Thank you for having us. This episode was brought to you by Teague. In this five part miniseries, I sit down with Ben Claremont, a principal portfolio. manager at Cove Street Capital to talk about Cove Street's investing process in how TIGAS differs from other expert networks. In this week's episode, Ben and I discuss how Tegas differs from other expert network businesses and what makes it unique. Can you talk a little bit about

the importance of people, how the different expert networks differ from one another? So obviously, Teegis has probably the most distinct feature set or way of approaching this problem or helping people solve this problem for professional investors. How do you think about it? Like, what does Tegas bring that others don't or the things that others bring, that Teegas can't because of how it's structured. Help us understand the difference between it and everything else. We use AlphaSites as well. It's a good service. It's demonstrably more expensive, for sure.

And nothing gets Alpha sites, but what it's lacking is the platform. And so what I love about Teegis is if I'm looking at a company and I pull up the Teegis website and I see that there have been seven interviews already done on this company, in two hours, I can read through all of those and get a really really. good sense for both the people and the business. Because one thing I think that maybe is underappreciated about Tegas is, from my perspective, at least the companies that I look at is the quality of the investor on the other side. Because you can have as many transcripts as you want, but if the person on the other side

doesn't look at the world the same way you do, you don't value it so much. So my experience with Tegis has been the quality of the investors who are asking these questions is really hot. And they're asking the same questions we would ask. And it's not just about margins and it's not just about returns. It's also about the additional stakeholders. And so that's to me what stands out about Tigis and why we've been loyal to Tigis since 2017. Because there's no one who's been able to combine the strength of the platform, the ability to find really interesting experts,

and have the customer service be as on point, quick and easy to work. work with, having dealt with, I don't know, three or four different platforms, it hasn't even compared. So to get to your point, it's really about having access to those other interviews that people have done. And if you're accessing the platform and you see a bunch of interviews that lead you to believe that the management team is really solid here, it just gives you more ammunition to continue to push forward on the idea. How often do you find yourself just reading something that's in the archive from TIGIS versus doing the calls themselves, yourself? Being a boutique asset manager, it would be amazing to have an unlimited budget for research.

But, you know, we're long-only. We don't live in the two-and-twenty world. And we're value investors, too. So we have to be somewhat judicious and thoughtful in our spend. And so the fact that I can go on the platform and read other people's calls without having to spend, you know, $300 or more on our own call, it's huge. So I would say it's 80-20, 80% of the time I'm reading other people's transcripts and calls and the other 20%, but I will say not to diminish the calls that we do, you might as well have a box within our process that says Teegis, because when we get to a certain point in our process

and the team agrees that this is a suitable candidate, 100% of time, we are reaching out to Teegas to find experts. They have become an absolutely indispensable part of that process. If you enjoy this episode, check out join colossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning. You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations, and more, as well as share the best content we find on the internet every week.