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

Episode Date: September 12, 2020

E1106 featuring Desktop Metal's Ric Fulop: https://rb.gy/1bfq08 E1107 featuring Caffeine's Ben Keighran: https://rb.gy/serf7m E1108 featuring SurveyMonkey's Zander Lurie: https://rb.gy/giyqg3 Follow Jason: https://linktr.ee/calacanis

3D printing. What does J-Cal know about 3D printing? I know nothing. All I know is that Rick Full-Up is one of the great human beings I've met in my life as a human being, as a technologist, and as a leader of companies. And I am so delighted to have my good friend Rick Full-Up on the program to talk about desktop metal because Rick just spacked desktop metal. When did people start approaching you about the SPAC, when did you, and then how did you make the decision to pick a SPAC and explain to people, just generally what is a SPAC? Like, just like you explain the first two processes. So, the SPAC is a special purpose acquisition company, and it's a model where somebody, they call it a promoter or, you know, a manager of a SPAC, yeah, will go out and raise capital.

and build a, build a strategy around that and go and find a company that they can go and acquire after the stack is a public holistic company. So you raise capital, you put it in a trust, you pay, you know, some, you know, small interest return to those investors. And then that manager will go out and search for a period of a year or two years or whatever period is, he'll go search for a company. And so there's approximately $30 billion worth of SPAC capital in the market right now. Incredible.

Yeah. An increase from last year, an increase from the year before. And it's been a while since this has existed. In the past, the people that did us back or raised us back were, you know, also known as a blank check company, there were quite rare and you didn't see, you didn't see high quality folks attached to them. What's really changed is since Jamath got involved, he has raised the quality of the people that are doing it. And you have people now that are very high quality managers executing these strategies. You've got people like Mark Stad, a dragonier, who's extremely high quality person.

You have a whole... What, Bill Ackerman? Is that his name? Bill Ackman is very successful. Yeah. You've got... So there's a range of very successful folks that are put together these, you know, Roger Frayden, who is the vice chairman of Honeywell, has got a SPAC and there's a whole range.

Actually, we can pull up a chart right now. I'll show you. We actually have a chart of this. The number of SPACs created now is we had a big dip, obviously, after the financial crisis, but now we're at a peak. Nick, is that 81 there? 81 SPACs this year have been created, and we're only half a lot. through the year, so I'm going to assume that's going to double.

I don't know. Is that 20? What year is that there, Nick? Is that 2018? That's 2020 with 81. So this thing's going to get more momentum. It probably ends the year over 120. I'm going to guess.

Right now there's 110 specs looking for deals. Wow. The reality is that, you know, they're specific to a segment and you've got to find somebody that is, there's like a matchmaking process. So you get a board member with it. In our case, we're really lucky to have partnered with Leo Hendry.

He was the fellow that... Leo Hendry, he did land systems back in the day. Actually, he did TCI and AT&T broadband and Liberty Media. Oh, that Leo Hendry, yes, yes, sorry. I was thinking about another one, Leo Spiegel. Anyway, there's a lot of Leo's going around this industry. So that's fantastic. So you find a high-quality manager.

He says, I want to be involved. and he brings how much cash in the spec? Whatever is in the trust. And so now it's not like an IPO. The trust, the cash has to stick in the trust. The people that are investors in the spec have to like the deal. You know, they can have a proxy boat right before the mergers close. And then in order to backstop the deal in case there's redemptions, you raise what's

called a pipe, which is private investment in public entity. Equity. Equity. Yeah. Equity. Yeah. So that is where you get the. the mutual funds and the long-only investors who participate in the deal.

So you have the capital that was raised in the SPAC at once, plus the capital that comes from the pipe, and together they form the full deal that gets announced. And the pipe allows you to have a much higher quality group of investors that add to the value of the total offering. And you get to select them. So that is like the original IPO process, it's sort of like skimming the cream of door number one. You get to say, hey, I want Fidelity, I want Goldman, I want this

bank for whatever reason. Our board was the allocation committee. We literally were super oversubscribed and we sat down and said, this guy and this guy and this gal and this fund and that fund. Wow. And those are the folks

that, and you can actually give him a meaningful position so that they can build a longer term position in the company. And that's a unique feature of this of this approach. That's yet another benefit. Our guest today spent five years at Apple and 150 days in World Warcraft.

I kid you not if you add up all the mittens. It may even be more now. We'll find out. And he worked in visual design at Apple, worked a little bit on the M&A team and led the design for Apple TV, actually. So we hear a little bit about that. And his company is caffeine. TV.

He's a lifelong hacker from Down Under. welcome to the podcast, Ben Kieran. Thank you, Jason. I'm really excited to chat with you today. Really appreciate it. What did you learn inside of Apple? What makes that company, when you look back on your five years there, because I know you were there for four years and they actually gave you credit for that year

of when you started CHomp, which I thought was interesting. To make it to the five-year mark is pretty special to give you that nice certificate signed by Steve Jobs. Or I don't know if you could get it by Steve Jobs because I think it would have passed on at that time. Yeah. He had passed, unfortunately. So yeah, mine's from Tim.

Yeah. Ah, were you there when he passed? Or right after? Just right after. Yeah. Yeah. Did you remember where you were when you heard the news? I do, actually.

I was, so Chomp was operating out of it. It was almost a garage. It wasn't a garage, but almost a garage in San Francisco, just down the road from where Twitter is today. And I got the news and I actually bursted to tears. I was physically, you know, I was really upset about it. as I'm sure many, many, many people were. Yeah.

What was it that for you as a kid from Australia who got into coding? What did he mean to you? Like, what did his life's work mean to you? I think that he was somebody that really stood for building something really, really, really, really great that he and the team believed in. Like, you know, we're not going to just sort of copy or do the status. quo, but like really just hyper passionate and hyper believed that they were going to do something just beyond what we've seen in the past. And there's, you know, guys like Walt Disney, there's,

there's like a few people like that that are real heroes to me for sure. And, and I, you know, I love that. I find it super inspiring and there's just a lot to learn. And yeah, that's kind of what meant to me. Yeah, the conviction level and the extreme pursuit of excellence, you know, like we're going to paint the back of the fence, you know, kind of that they talked about, like the inside that you don't see is going to be as good as the outside. It was a level of determination for excellence that you just don't see, right? Everybody's trying to compromise. He was just a non-compromising individual. You never got to meet him in person, I take it. No, I didn't. Yeah. Yeah. Super intense. Like, when you were in,

his aura, you know, like he just walked up to me at a conference, the de-conference from one point, and he just looked at me and he saw my badge and he goes, I read Engadgett every day. It's my favorite blog. And it was just like, he had a certain intensity to him. And then one time I said to him, you know, Steve, I have a question for you. Why, why doesn't the iPad play, the iPod play like short videos? Like you could put like the Chappelle show or like SNL videos on it. And he looked me directly in the eyes. And he said, Jason, nobody wants to look at a postage, I stamp video. And I said, you know, Steve, I kind of would, like if it was just like a short skit of like an S&L thing, I think people would watch a music video. And he's like, Jason, nobody wants to watch a postage I sent video. And I just said, you know what? You're right. You know what happened two months later? You launched a video iPod. It's just like, it's not the guy you want to play poker with because I was so convinced I was an idiot at that moment. I was so young. And I just said to myself, my God, I'm an idiot. I just said something stupid to Steve Jobs.

He's going to think I'm an idiot. And like, I'm a confident guy, but he kind of like made me question my own North Star. And then I started to come out and I was like, oh, I get it. He wanted to keep that so close to the vest. But you got to work on Apple TV and you got to watch Eddie Q do his work. And they even had you like run a design team. So what's the magic at Apple around a. design, like what did you, as somebody who was good at design already, did they make you a better

designer? And if so, how? And what is it about their philosophy that results in such extraordinary products, products that you instantly know are Apple products? Yeah. So I think that, you know, there's a very, very strong culture there of everybody wanting to be in the details and everybody wanting to make it simple and everybody wanting to make it clear and everybody wanting to make it understandable and very human and ultimately something just really special for customers. And so when you've got like a whole culture and company and everybody's kind of in that mindset and turning up, whatever they're working on, the design team plays a really special role in all of that. They're the ones that are actually showing the pixels that

are working on the pixels that are really getting into that user experience. And the expectation is that everybody's going to talk and discuss and be involved at such fidelity and such a level that I've never seen it like that anywhere else. It was phenomenal. It was absolutely phenomenal. How do they keep things underwrapped so well? What is the conversation they have with you of like, hey, secrecy is important because it seems like everybody buys into it. And when I was adding gadget, we would get leaks from Motorola or just basically every company. was like leak central and apple was like fort knox like you just nobody gave it up the only way anything ever came out was like somebody in the supply chain would give us something once in a while

like a leak but how do they maintain that culture do you think well i i think that um the the the way in which apple tv was done and i can't speak for all of the different products there but not everybody knows about everything that's going on uh they silo them And so the teams that have ownership over particular aspects of it, they really want to keep it close. It's a secret and they're excited about it and they can't wait to tell you. In fact, one of the things that I believe somebody at Apple said to me early on when joining the company was that when Apple ships a new product, it's like Christmas. People are so excited to open the surprise and then somebody looked at it as just like, so you don't want to ruin Christmas, do you? Ha ha.

So you want a real Christmas for everybody. It's so great. It's so great. That makes sense. Yeah. And so when everybody's thinking that way, you know, they're just super excited to keep things a secret and enjoy the process of ultimately figure out what is the absolute coolest, most amazing thing we could do for a customer.

And that's kind of in the, you know, there's a lot that goes into making that happen, a lot of things that have to happen and come together to deliver on that, to really execute it. But that's the culture. It's really in the DNA there. It's crazy times right now. And I wanted to focus in an episode here of This Week in Startups as we're all going through this to take one of the people who I've gotten to know over my career as someone who's a calming force, super insightful, and exceptional at running organizations. And that man is Zandallori and he is the CEO of Survey A Monkey. You've been a big proponent before anybody else, I think, of diversity and inclusion on a corporate level. You famously got Serena Williams to join the board and have really championed

trying to get more women and people of color involved in leadership positions. What have you learned on that multi-year journey and leadership position you've had in the industry in this regard in terms of best practices of how to make people feel included and how to draw that talent to your company because a lot of people say, and the cynical thing I hear is, hey, listen, there is a very small population of people, you know, available for some of these job roles. And now we're all competing for them because we all want our statistics to change overnight. But we hear this pipeline problem. And I'm using that in quotes. Is there a pipeline problem? Is that BS? And then how do you actually create the environment that draws people in and wants a diverse workforce to actually

show up as opposed to trying to convince them to show up? Well, thanks for the question and thanks for the good words. So first off, there is fundamentally not a pipeline problem. Okay. Why do people say there is? Why is that like the first thing you hear? And people won't say publicly, but we hear it constantly. I didn't get any applications for my CTO position from a black female or my director of

sales. I can't find any more Latino, you know, executives who have five years in SaaS or whatever. Easy answer. It's an easy answer. That's why people say it. Because white executives have networks that, lack diversity. Right. And so you host a party and all of a sudden you have 90 white people to party and one black person. And then when you go to recruit a black engineer, you're like,

God, I can't find a black engineer. Well, no shit. You don't have the network. So it's not a pipeline issue. It's your challenge and my challenge. And that is on us to recognize that the reason we have that challenge is there is systemic racism. The reason venture capital and private equity and technology companies are dominated by white men is because there is systemic racism in the system. It's not an accident that the fifth generation kid from Yale got the job. It's not that he is just way more talented than the black woman from Alabama. It's just that he's been given every advantage in life and there's some real truth to born on third base. So it's on especially the white allies who are in positions of power with networks as big as yours or capital bases

or companies to find what are the things that I can do personally. Where do I have power? Where do I have a voice, products, capital influence to change the game? Because opportunity is not equally distributed. Talent is. And we know this. So my challenge and one of the things we did early was to say, hey, let's make our board of directors one where when you look at their faces on the screen, you're proud to say

you work at that company. You're proud to say our CEO gives a shit about providing an environment that is diverse, where there is equity and inclusivity is a top priority. And, you know, what I have found is that employees want this. I wanted this when I wasn't, you know, a C-suite executive. I wanted a place that where people were treated fairly, where, you know, the company was decidedly anti-racist. And we have a long way to go. I am not, you know, taken a victory lap by any stretch. We are not diverse enough. We do not have enough black and brown people in positions of power. But we're taking every step we can with our pay and promotion practices, how we're hiring, how much, you know, I spend as much time and money on this as I do on our evaluating our products

or hitting our sales goals. And I, you know, my message out to every, every CEO out there is like, you're a CEO, you have influence with your board. If not, they're going to bounce you from the job. So take this opportunity to say, I want our board of directors. to be diverse. I don't want five white male venture capitalists on our board. And today, kudos to our friend Brad Gersner and Sykinderson Cassidy for launching the board challenge, 42 companies, including SurveyMonkey, committed to putting at least one black member on the board of directors. And I think issues like this and issues like that today, he was literally the day we're taping. He was on CNBC all morning talking about it. Explain what that project is one more time, so we all

know it. Yeah, it's simple. Brad is a, you know, very celebrated investor. He's got billions of dollars in our management. His 12-year-old, you know, after George Floyd was murdered, said, Dad, what are you doing about this? And Brad's got a lot of influence on boards like United and others and got Rich Barton from Zillow and me and 40-plus other people to commit to put at least one black person on their board of directors. And if you look, I think in the S&P 500,

I think there's 187 companies where the board is all white. 187 of the Fortune 500. So we're talking 36%, 37%, one in three is all white. Check my math there, but it's an embarrassing percentage. It seems actually reasonably true to me, yeah. It's an absurd percentage, yeah. And if you think about, I mean, you don't even have a pipeline issue here. Like this is really just, if you're a white CEO and you don't have any person of color on your board, you've got to ask yourself, what do I need to do to make this a priority?

Is it important to my employees? Yes, I guarantee you it's important to your employees. and especially your employees who are black and brown. Is it important to our customers? Well, it should be. Is there a shareholder blocking you? There's just no excuse from making this a mandate that you can deliver on. And there is no pipeline challenge.

There are terrific candidates out there. We have Erica James, first black woman to be dean of Ivy League school. She's the new dean of Wharton. And then Serena Williams, who is going to be the all-time winningest athlete. in the world. And they're incredible influencers on our board. You know, they are bringing so much value and diversity and perspective and judgment and insight across a whole number of areas. So we've been a huge beneficiary. I mean, Serena will text recruit the minute I ask her to. Erica is in the world's most interesting board conversations. And there are so many incredible

folks who are available to put on your board who can add a ton of value. It's just, this is one of those challenges that should get a ton of momentum and I'm excited to see what's going to happen.