This Week in Startups - Best of This Week in Startups: Week of December 7th, 2020

Episode Date: December 12, 2020

E1149 featuring Brad Feld: https://rb.gy/serfel E1150 featuring Pitch's Christian Reber: https://rb.gy/fz5gq8 E1151 featuring Alex Wilhelm & Beth Kindig on tech stocks: https://rb.gy/rtbayg FOLLOW Jason: https://linktr.ee/calacanis

On episode 1149, Brad Feld describes how he reconciles the ups and downs of being an early stage investor. I don't know that I've reconciled this as a profession. I probably refer people to a couple of things. One is, you mentioned him earlier, Jerry Colon, and I've had Jerry on the show a few times. Sure. Jerry is one of my closest friends. And we now live a mile from each other just on the edge of Boulder. And, you know, just the amount that I've learned from him and not just in terms of listening to him,

but reflecting back and forth between the two of us has been incredibly powerful. One of the key points for me, and it happened probably about three or four years ago, And it tracks back almost seven years ago now. In 2013, I had a very deep depressive episode again for about six months. And this one was really triggered physiologically. I ran a 50-mile race in 2012, which was too much run. I'm a big runner, but that was too much training and too much running in the context of all the traveling I was doing. And I won't sing the country music song of all the things that happened for the next six or nine months.

in general my life They do call it Brad by the way an ultra marathon for a reason It's like two marathons It's not three marathons but it's two No I'm I love running marathons But 50 mile it was too much But you know I had a near death experience

My dog died I ended up with a kidney stone I had surgery like a bunch of shit happened And along this period of time A couple of people In the entrepreneurial world committed suicide And there was this

if you sort of track back and look around in 2013, there was sort of a flurry of articles suddenly about mental health and entrepreneurship. And Jerry and I were in a bunch of them because I was very open about my depressive episode. And as I was open about it, many entrepreneurs reached out to me. Less investors, but many entrepreneurs, lots of ones whose names you'd recognize. And in a lot of cases, I was the first person that they'd reached out to or they'd say, you're the first person other than my therapist or other than my wife or my husband or I haven't talked to anybody about it. I'm afraid to talk to anyone about it. And through these conversations,

what I realized was a couple of things. One was the stigma associated with mental health was really pernicious and was a real problem in our industry. And for anyone that wants a quick hit sort of experience with this, not in our industry, but in a powerful way, should watch the HBO documentary, the weight of gold, which getting Brett Rapkin did. I got connected to it by Jeremy, who's CEO of Integrate, which were investors in Jeremy, was Olympic skier. Michael Phelps is the narrator. And it talks about the stigma of mental health in professional sports. But the parallels with entrepreneurship are profound. And so I started thinking about this a lot going back six or seven years ago and had as my own sort of one of my own internal things to help eliminate the stigma associated

with mental health. But that led to another thing, and that's the answer to your question, which is, Jerry had been a Buddhist for many years, and I was always interested in Buddhism intellectually, not as a religion, and there's interesting debate about whether Buddhism is actually a religion or not, but not really as a spiritual practice, more as a philosophy. And it's about three years ago, I started to really dig deeper into that and learn and understand it. And one of the powerful things that comes out of that philosophy is sort of the essence of suffering and the notion of attachments. And I had been talking about the idea of non-attachment for a number of years. The therapist that I go to is professionally trained, but, you know, he's a professionally trained,

but also a Buddhist. And I didn't really realize that, you know, by using that phrase non-attachment, I was linking to a very powerful construct. And the construct is this. And it goes back to your question. Like, when you have failure, you want less of it. Right? You want to get away from the failure.

You want to have success. When you have success, though, you want then to have more of it. The success only lasts for a little while. And then you want more of it. You become attached. and the negative reaction that many of us have, especially in the Western world, is detachment. I don't give a shit, or I'm not going to let that bother me,

or you sort of push away from it. And the pushing away from it is the similar behavior to the attachment. And the real trick is this non-attachment. It's not whatever it's going to happen is going to happen, but you accept that it's going to happen. And instead of seeking more. good or pushing away from the bad, you focus on trying to do whatever you want to do and can do sort of in the moment and in the context of all of it. Now, I'm not trying to be a Buddhist philosopher

here. I'm sure I'm butchering the essence of it. Buddhist capitalist. For anybody who's listening, I'm sure I'm butchering the essence of it. But sort of in that for me, over the last six or seven years, a lot of what I have tried to learn and understand and adopt and become of is this notion of non-attachment. Do I enjoy things that are successful, of course? Do I dislike things that are not successful? Of course. But I try not to be attached to those experiences, but rather exist in this experience I'm having. And I'll just end with having just clicked over to 55, right? Right. You know, at 55, you still might be able to make the argument that you're not quite at midlife yet, that you might live to be 101. When you're 50 down,

yeah, when you're 55, it's pretty hard to say you're not at solidly at midlife. Right. And all of a sudden, you're like, holy shit, like, you know, this is a finite phenomenon. And, you know, especially in the year of COVID, I mean, I've had a few friends. die, you know, there's plenty of health issues in and around my direct world, several people who are really close to me, who are in their 80s, one died this year, one is very ill, you know, on and on, right? So you start to have this recognition of, yeah, this thing's pretty finite. And all of a sudden, this notion of striving, which again comes back to this Buddhist essence, like striving for what?

Striving for more? And Jerry has this magnificent book. I'm sure I think the podcast you did with him around the book was powerful. I don't know if you talked about this in the book, but he has a section where we're sitting outside one day just talking a couple of years ago while he was working on the book. And I said to him, I think I'm just fucking done striving. Yeah.

Like, I'm just done. Like, yes, sure, I'm sure some more things will happen that are good. I'm sure there will be more things that happen that fail. But whatever. On episode 1150, Pitch CEO Christian Reber describes his focus on design and working with Meta Labs Andrew Wilkinson. It's a great question. I honestly have no idea why design became such an important thing in my career. But I always felt like I'm a design-driven founder.

And we have designed everything in-house, both at Wonderless. and at pitch. That said, we've recently actually partnered with a great firm called Meta Lab from Vancouver to help us a little bit.

But generally, I think the Germans are just really good at crafting premium products. Oh, so you hired Meta Lab. They're the ones who did Slack, right? Famously.

Exactly. That was one of their most famous projects they've worked on. They did Uber as well. Maybe it was Uber E. think they did. Uber, Coinbase, I think, yeah. It's a great firm. Andrew and I, the founder, uh, became friends doing Wondelist days. Actually, we had, he had a competitor product.

Forgot what, what is flow, I think it was called. Um, get, getflow.com. Pretty cool, uh, task management app and what is it, what is it, what does it cost ballpark, not specifically for that company, uh, Andrew's company, but for a company of that design level, what are they charged to design an app like a SaaS app? Is that like a half million $1, quarter million dollars. Where do you think that costs for a year? Yeah, I think quarter million dollars is nearly where you land on. It really depends on the complexity and like what kind of product you want to build.

Is it multi-platform, just a mobile app? Is it like 10 screens you need or 100 screens you need? I think we didn't even outsource our design. Like we had a pretty good design team, but what I kind of tried to accomplish there was to challenge our own product design with one of the best. product design firms out there to increase the quality. So like a hybrid system. So you would say to your team, make your best effort, then you go to Andrew Wilkinson,

who seems to be a really brilliant guy, and say, hey, punch this up, tell us how to make it better and tell us why you did that and then you bring your team back. And instead of them feeling admonished, they feel like they just got coached or somebody just gave them notes, right? Yeah, yeah, yeah. Yeah, I think honestly, like I'm such an in strict-driven. person that I rarely like research the kind of products that I want to build. For me, the opportunity bridge was crissly clear, like build the next generation web-based presentation

platform that works a little bit like Figma and all these modern design tools, but purely made for presentation creators. And I thought like, okay, now we raise some venture funding and it might be a good idea to validate your ideas. And MetaLab has really built a very good process around that. And they interviewed hundreds of presentation creators, Google Slides users, PowerPoint users, keynote users, and try to figure out, like, are they actually looking for a better solution or not? And if so, which features are they missing?

And that was a really good learning process for me. And yeah, it's a great company. to partner with. On episode 1151, Alex Wilhelm and Beth Kindig discuss Zoom's immense pricing power. Yeah, it kind of reminds me of the Netflix question, which was like, I remember when it was like five bucks

and then it was 10 bucks and now it's 15. And I think when you have this kind of traction and this level of product market fit, that when the time is right, I don't think the time is right right now, but I think that they could increase their prices. But I really like what Zoom's doing too, is Pinterest is starting to integrate with Zoom

for creative hobbyist demonstration. So, you know, if you're on Pinterest and your fashion designer or something, you would integrate with Zoom and they're going to hold fashion classes or fashion presentations. So I think Zoom actually has that developer flywheel where like, what is everyone else going to do with Zoom and their apps? You know, and that's something that I'm really keen on. The API. Yeah, to the API, yeah.

All right. So if they did double it, let's just say they went crazy and they decide to double it. in January 1st, they double the price. You know, in three weeks, they double the price. What percentage of users do you think they lose? I think they'd keep the majority of them. I don't think people are going to leave Zoom. Exactly.

Yeah, that's where I'm at. Like, I took the long way, but that's what I, yeah. What do you think, Alex? 15%. 15%. Yeah, I would agree. Think about this way. Like, we all use some streaming music service.

I'm a Spotify user and have been for a million years. They charge me something stupid, like $10 a month. You don't know, do you? Well, no. See? I mean, this is how cheap these services are. When you don't even remember, I have the family plan for Spotify, which is I did 15 bucks a month.

And I just gave it to my brothers, my mom. And I think two of them used it. But I'm like, this is such a ridiculous sale. I used to buy 20 CDs a year for 20 bucks each. And this is $180. My whole family gets all music all the time. Yeah. So if they raised that, if they said now, Alex, it's now $40 a month, I would be like,

well, that sucks. All right. I wouldn't even blink twice about it. That to me is a non-negotiable service. I'm essentially, I will pay anything Spotify asks of me. And I wonder how close Zoom is getting to that point. Because Netflix has become like electricity in a house. You have to have it back to best point.

So like I wonder if Zoom has reached that threshold. And if so, how much defense that'll give them? But I think it's going to be a lot. Pricing power is crazy in that product. When, how long have you been on Amazon Prime, Alex? Oh, I mean, I can't recall not being on it. So, I mean, ages. Year one.

Do you remember what you paid? year one? I don't know what I'm paying now. Introductory price. How much this is how much does it cost? You don't know what you paid originally and you don't know what you pay now. Beth, how long have you been on Amazon file? I love this. I think about four years. I want to say it's 99 a year. Do you remember your first price you paid? I feel like it was 99 a year. Yeah. Okay. The introductory price was 50 to 60 bucks and it's 150 bucks a year now. Okay. And the reason none of us actually even know what we pay for it is because it is such tremendous. does value that we wouldn't I mean who would ever not have two-day delivery it they've boiled the

frog right and it's I you know I I wonder about DoorDash to the to the discussion we're having here is does DoorDash have that same thing where I kind of feel like the pricing on DoorDash and even Uber Eats and some of these things I do hear people who are affluent saying well it's kind of expensive maybe I should go pick it up I mean that was us last night um we were running late for dinner and I didn't want to cook and I had book club with my dad and Liza had a thing and, and, you know, just, I was like, I'm just going to order Indian food. And it was like, so, like, it was like 50 or 60 bucks for us both to eat Indian food in our house. And I was like, okay, but like, maybe we don't need that. Maybe we, I mean, it just felt to me like,

all of a sudden it was like 20% more money than I wanted to spend on dinner because I was going to get at home on the couch in front of the TV where I always am. What about you, Beth? Have you had that like, I mean, listen, we have people on the call right now who are, you know, are not price sensitive for the extra 20 bucks. It costs to have dinner brought to the house. But they've actually kind of charged what the real cost is, right? And the real cost is not de minimis.

Do you even think about the cost now, Beth? I'm kind of in the same boat where even like my OTT connected TV. Like I have so many apps that I'm paying for. I think I'm paying more than I used to for cable, Amazon Prime, Netflix. But when it comes to DoorDash, for some reason, And I always look at that price and I'm like, that doesn't feel right. We actually pick up a lot.

So because of that, it's like, I don't mind tipping the driver and I want the driver to be paid well. But it feels like there's extra junk fees in there that I'd rather not pay $20 for delivery. So yeah, I'm kind of in that camp. I am not price sensitive, but I do look at those numbers sometimes. And I'm like, and you know what I realized? I had somebody on the podcast who, Chow Now, and they provide software, enterprise software to restaurants. and they charge like 500 bucks a month or something. So if you're a restaurant and you want to basically have the software of Uber Eats or DoorDash,

you can have that, but you don't, you have to bring your own delivery service, right? And what I realized when I started doing the back of the envelope math, because I grew up in the restaurant business, do you know who is doing, you know what delivery people were getting paid prior to DoorDash and Uber Eats and

Grubhub? They were getting paid like $20 a shift for a 12-hour shift off the books. They were typically illegal immigrants who were being taken advantage of. They would be given 10 or 20 bucks in cash and then they would get a buck or two of a delivery and they would get whatever tips they had. So they would probably net out to five to 10 bucks an hour off the books or if it was a slow night, they might only go home with 25 bucks. That's kind of how the industry worked. So you had this underground economy that was subsidizing food delivery. And now you have, these companies have to do it by the books. And even doing it by the books with gig workers,

it's really expensive to do. Shows up. I mean, whenever you finish clicking the food items and then the actual bill comes up in like Uber Eats, for example, which is what I use, there's like more lines than I expect. And I feel vaguely annoyed by that, especially because I know there's markup built into the food prices

because I'm ordering from restaurants I used to go to. And I'm like, wait a minute, I'm paying every direction here. And the restaurant isn't doing that well. And the delivery driver isn't really making mint. I feel like instead I'm kind of just helping the company that's doing the least work. They're not driving the car.

They're not making the food. Why is DoorDash worth $60 billion when all the restaurants are closing? And to be clear, the company's arguments about why this is not as bad as I'm making it out to be. But that does, that song plays in my head consistently when I execute these transactions.

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