This Week in Startups - E1071 Ask Jason: Black Lives Matter, Post-COVID tech hubs, Founder/VC disputes, bringing manufacturing back to the US, pre-selling SaaS products & more

Episode Date: June 5, 2020

Jason on CNBC: https://youtu.be/V6oqvDnuAgI 0:01 Jason intros today's questions 1:51 Aaron: Thoughts on Black Lives Matter? 9:06 Joe: How can startups play a role in bringing manufacturing back to the US? 14:46 Alex: Any tips on pre-selling a SaaS product? 17:38 Arthur: How should I prepare to be a great Syndicate member in the future? In a perfect world, what does the Syndicate become? 21:13 Matthew: You often talk about founders needing to be in SV in order to be close to the action. Post-COVID, how does this change? Do places like Sydney, Vancouver, or Beijing become "big-game" cities? 28:37 Charlie: Love when you mention on your blog post a pressing need with “Someone should build this!” What’s your latest “someone should build this?” right now? 30:04 Sergey: In "Angel", you suggest to invest about $5000 per deal to minimize the risk in the beginning. Will founders care to spend an hour to pitch such a small investor? 31:26 Ruud: How common are founder/VC disputes? Is there a ranking of VCs by how founder-friendly they are? Curious if this has gotten better or worse over time? 34:48 Alex: Is it advisable to look up competitors' investors and avoid them to prevent someone at the firm from sharing critical info with your competitor? Has that happened before, or is that too paranoid? 36:35 Kirk: What is your succession plan with Launch/TWiST and why? Also, what other syndicates do you admire and why?

Hey everybody, hey everybody. It's another Ask Jason. You guys are asking me a ton of questions in our new super secret Slack room. Don't tell anybody. But if you go to this week at startups.com slash Slack, you can join me and tens of thousands of other founders talking about building companies and investing in them every day. It is an awesome time. And we have an Ask Jason chat room there where people ask me questions all day. And we take the best questions and we put them right here on this week in startups. Today, I give my perspective on Black Lives Matter if Sydney and Vancouver and other cities could become as big as Silicon Valley post COVID-19. I talk a little bit about why I think revenue sharing

in an Instagram competitor needs to be built right now. And also, we chime in on founder and VC disputes and how sometimes that's a healthy thing and much, much more. It's a great episode, and I appreciate you all taking the time to listen to this podcast I hope everybody's safe and I hope we get some justice out there in the world. And yeah, I just love you guys so much for tuning into the podcast.

And I mean that from the bottom of my heart. So stick with us. This weekend startups is brought to you by Squarespace. Turn your idea into a new website. Go to Squarespace.com for a free trial. When you're ready to launch, use offer code Twist to save 10% off your first purchase of a website or domain. domain. And Miro. Working remotely doesn't mean you need to feel disconnected from your team. Mero is an online whiteboard that brings teams together. Anytime, anywhere. Go to Mero.com slash

twist to sign up for a free account with unlimited team members. Okay, we have another question. This one comes from Aaron, and he asks, are you considering making a statement for your organization regarding the current events around Black Lives Matter in the U.S. If so, what would you say? And also, how are you handing this within your team? A great question. I have been speaking about this issue forever on Twitter and on this podcast, right? And anytime I have an African American founder or investor on, I do bring it up.

And I would bring it up fairly frequently with female investors, although we've seen a lot more change in that regard, many more female investors right now. Still, people of color, not enough investors. There's a lot more work to do there. So I've tried to, in this program, bring up this topic every time and just keep bringing it up and having a real talk about it. Now, Twitter is the worst place to probably have these discussions because you have 280 characters, but I have been talking about it.

And you may have seen my CNBC hit recently, which we'll put in the show notes, where I said, listen, I think we have to vote with our attention and we need to stop using Instagram as an example and Facebook, and I'm really trying to find a group of black founders to build an Instagram and maybe even get some of the highest profile Instagram users, because black culture is culture, and they built Instagram, whether it's Cardi B or Beyonce or Jay-Z or LeBron James. If you look at culture, it is on these platforms, and it has been always the case, even other platforms before mobile and apps and the internet built off black culture, whether it's music or movies or comedy or Oprah and talk shows.

Culture has been driven by black culture in America and we underappreciate it. But I think they should have ownership in that. And I think if the top 50 or 50 of the top 200 African American influencers on Instagram left and started their own, boy, would that be a C change. So I'm reticent as a white male to sit here and pontificate too much on matters. I'm not an expert on. I like to listen in terms of those things. But I am an expert on startups and investing. That's two things I can actually say I'm an expert on. And I think that we need to change the ratio in terms of who owns these platforms and representation there. And obviously,

we have really tried hard with Founder University, which is our program for founders who are, you know, just before our investment window to meet more of them. We want to meet more founders. And so we did one founder university. We've done many founder universities, I think 14 in total. And probably a third of them have been for women. And a third of them have been for self-reported underrepresented founders, which some people could be trans. It could be women.

It could be people of color. It could be Latinx. And so we've been really working on that. And I'm glad to say we're seeing many more female founders and investing in many more. We're investing in more founders of color. African-American and Latinx, but it's still not enough. And so a lot of people like to talk, a lot of people like to scream and fight on Twitter. I'm trying to make less noise and do more action.

And I'm not saying that in some way to virtue signal. You know, I have three daughters. I'm in a mixed-race relationship. My kids are mixed-race. They're Korean and Irish-Greek. And, you know, the racism towards Asians is also. very real in the world, and I see it now up close. And I've had a lot of evolution on these issues, you know, having seen a lot of racism and bigotry directed towards my wife, and I'm assuming

my kids will have to do with that. Now, it may be a fraction here in America of what a black person just deals with every day and the danger, but it's still real. And so I'm tuned into it, and I'm trying to just make change and do work, which is always my inclination is. How do we solve a problem? What's a creative solution? I haven't been thinking about creative solutions around that. I started researching reparations as a concept. And that's a very polarizing discussion, obviously, and I'm no expert on it.

But certainly it seems like America needs to make up for the horrible treatment for hundreds of years. of our black brothers and sisters in this country. And, you know, policing is another issue. But just on an economic and an opportunity basis, I really believe we need to look at reparations in terms of, and it's hard to execute. And I've been looking into that, how do you execute it on it?

And I think education and small business loans are two no-brainers to make up for the horrible track record this country has and how we've treated of one specific group of people, black Americans. And it's abhorrent that we haven't done anything yet. and I know I'm not trying to sound woke or, you know, like I'm for reparations and I want to get a cookie for it. I actually think it makes sense because the country ripping itself apart over this issue and not being able to resolve the race issue, I believe in part, and I hear this from a lot of my black friends and from a lot of people who feel marginalized, just feel the opportunity is not there for them. And that, to me, is where we need to solve this problem.

You know, we really need to. Obviously, policing has to be solved. Again, I'm not an expert on that. But I am an expert on startups and how people become founders and how wealth is generated in the world. And that, to me, could be a huge unlock. If we're going to send all these bailouts to big companies and why don't we give small business loans to people of color that are 30-year forgivable loans to start businesses? Why don't we have more college available for free to people who have been mistreated for hundreds of years and who are Americans as much as anybody else, right?

And that's the other thing that's heartbreaking for me in all of this. And I don't want to go on a whole tirade here. But you ask the question, and I always feel with the audience, I need to be honest with you all. We need to make the system feel and actually be more fair. And that's the thing that's been a blind spot for me because I see every day people rising above. I don't see the people getting blocked. But I see people rising above and succeeding. So I know it can be done.

But I don't see up close and personal people, you know, getting knocked out of the competition unfairly. And that's the thing we have to really figure out. And that's why I started founding university with Jackie, who works with us and is the managing director of the accelerator. And so actions speak louder than words. I don't want to be one of these people on Twitter. you know, who just virtual signals. And I also don't want to be the person who's asking for a cookie and a high five. And look at me.

I'm doing so much. I actually just want to see the change happen. And I know my lane. I know my area of expertise. And I think the most effective thing for all of us is to take the area where we are most effective and affect the most change. Thank you for your question, Aaron. Okay.

Let's take a question from Joe. Hey, Jason. My name is Joe Selvick, and I am a co-founder of fixturefab.com. We provide PCBA test fixture solutions that makes testing hardware easier. My question for you is based on the reshoring of manufacturing to the United States. And I would like to know where you see the greatest opportunity for startups to have a role in this. Okay, this is a great question. We have some concerns here in America after coronavirus that certain things in the supply

chain, we were unable to get and that we don't make them here in America anymore. Typically, on the short list, PPE and drugs, like pharmaceutical drugs, and those are all made in China. And we have a dependency there, right? And so we found out, oh, wow, when there's a pandemic, we might not have the stuff that we need. So we could stockpile or we could start making stuff here. And there's a bigger issue, which is, do we want to have our country be dependent on an authoritarian communist country, i.e. China or any of the countries that we've been dependent on that are authoritarian. We had the same issue with oil previously with Saudi Arabia and in the Middle East. And when we became energy independent and when solar and natural gas and fracking

and all this technology came out, boy, did that change our relationship with the Middle East. And most people would argue for the better. We're no longer dependent. They don't have the upper hand with us. But when it comes to the relationship with China, they do have the upper hand. Now, the rub here is that a startup trying to address this, it's an opportunity, but you're at risk of if this trend actually emerges where more people build stuff in the United States. So I think you're going to have to study which things are going to be made here in the United States. And you're going to have to just meet with those people and, you know, take it month by month, quarter by quarter, because there is a chance that coronavirus passes. People forget

that this is an issue and we go right back to being dependent on China. And it's not a xenophobic thing. This is a supply chain issue. If we become really good at supply chain, which we did, we will have just a very small amount of inventory. Now, in a way, that's super efficient. It's a great thing because you don't have wasted inventory. You don't have to throw things away. You make things just in time. and actually Tim Cook and Apple was really good at managing that supply chain. But when things go wrong, oh boy, you don't want to be in a position where all the prescription drugs that you need or some large percentage of them are only made in China. Or when we need masks and ventilators, we're unable to build that stuff.

Now, you saw over, let's call it, three to six months, we've been able to ramp up that production. But I think it's a bright future. I would think about it in a very holistically, holistic way. And I would be part of that movement of manufacturing the United States. States, one way for you to be part of that change is to start a podcast or a blog and a social media account or all three of those things around this topic and trying to build some consensus around who's doing this. So if you make the content, you start interviewing people on your podcast or you write blog posts about it or you just tweet about it all day long

and engage people and make lists of people who are in manufacturing the United States, you can become the center of attention for that discussion, which is what I did for startups, right? When I had my magazines, when I have this podcast itself that you're listening to right now, when I host events like Launch Festival or Found University, I've become a center, right? A super router, we would call it in the industry, which means I get to not have to do the research of what great companies are coming. They basically come to us, right? And that's what you could be. If you become that center hub of the content and the discussion, well, people might come to you with the opportunity. So good luck with it. I think it's important work.

Hey, do you have a great idea? Do you want to turn it into a beautiful website? This way, you can reach out to your customers and partners and basically change the world. Well, I just was thinking the other day, wow, you know, we're doing so much remote now. And there's all these demo days that can't occur in person. What if we had a remote demo day? And I checked to see if the domain was available and remote demo day.com was available. And then I said, hey, let's put up a square space site. And my team rallied in a couple of hours. We wrote all the copy. We got a video made, and we had a beautiful website up and running at RemoteDemoday.com. This is what you can do with Squarespace.

You can basically come up with an idea and start building your website, whether you want a blog or publish content, maybe you want to sell a product or you have a service, maybe you want to promote a physical or online business, or maybe you want to announce an event or a special project like I did with Remote Demo Day. Well, Squarespace is the answer because you build it once and it's beautiful and it's customizable and it's so powerful with this e-hommer's functionality built in. analytics built in, and you can choose between over 200 extensions. You'll get great analytics, search engine optimization, free and secure hosting, and 24-7

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amazing, amazing software and amazing platform and having just that incredible wherewithal to just release feature after feature. Great job over there at Squarespace. Okay, let's get back to this amazing episode. Okay, let's take another question. This one's from Alex. Hi, Jason. My name is Alex, and my company is called Lucra, and we're automating the market research and financial analysis stage for real estate investors. And my question is, do you have any tips or suggestions on how to pre-sell a SaaS product. I'm used to the kickstaters of the world, but they don't seem the best for software.

So I would love any other ideas you have on pre-selling a product that doesn't exist yet. Thanks. Okay, this is a fantastic question, Alex. One of the great tools in any founder's toolkit is pre-selling the product. And the way you do this is you go to the people who might buy the product.

You say, Acme Corporation, Delta Corporation, I'm planning on building this product to solve your problems. I was wondering if I could give you a demo of the product or show you some mockups and get your feedback on it because I could really use your input and will, of course, give you first access to the tool, which will give you a competitive advantage versus your competitors. And everybody's looking for a competitive advantage. Everybody's looking for an edge. So that's the way you sell it.

You sell it based on giving them an edge. And you say, listen, I'm bootstrapping my startup. I want to build this tool. Once you get consensus that they really like the tool and their eyes bug out of their head and they say, oh, yeah, I want this. You say, I will give you a six-month exclusive to use it where I'm giving our first five customers six months to use it exclusively. And that group is going to help me build it.

It's $75,000 a year, but I'll give it to you for $25,000 if you buy two years right now. And then you collect from five people, 50K each, right? So that's the way you frame it. You want to frame it as competitive. They're getting it. their competitors aren't or a small group of people who are getting it. It's not going to be widely available. And there'll be one of five slots.

And you never know. Somebody might say, you know what? I want this for all 2,000 of my real estate investors on my team. You say, okay, great. We'll give it to you for year one exclusively for 250K or whatever you need. So I love the idea of you doing this. In fact, I did it for my first magazine Silicon Island Reporter. I went to Fred Wilson.

I went to Razor Fish, a number of people. And I said, hey, will you buy four ads for me for $250 each and give me $1,000 right now? And literally people gave me a $1,000 check. They pulled out their check books while I was in their office and wrote the check. And I used that money to them print the magazine. So it's a hustler technique. It's a bootstrap technique.

And I love it. And I love you for pursuing it. It means that you really care about this idea and you care about that cap table and preserving as much equity as you can. And what if they say no? Well, then you get saved them. What do you, what would you pay for? Is there some other problem you have?

So you're brave. You're talking to them. And you got hootspa because. you're asking them to pay in advance. So that's just great signaling for you down the road when you're talking to investors. Great question and great approach. Okay, another question from Arthur. How should I prepare to be a great syndicate member in the future?

In a perfect world, what does the syndicate become? What a great question, Arthur, and thank you for that. So syndicates for people who don't know are groups of investors who put in a small amount of money each and then write a big check to a founder. We have the largest syndicate in the world at the syndicate.com. 4,000 members of them, 2,000 have made an investment. Our first deal was com.com. I think the average check size on the com.com deal was 4K,

and we put in $328,000 from our accelerator. When you, I'm sorry, from our syndicate, when you invest like this, each individual investor can take less risk. Instead of having to hit the minimum of 25 or 50K, they can just put in 6K. That's our average check size in a syndicate. But when you put 100 people together for 6K,

which is our average, you get 600,000. So you guys understand why this is a really innovative tool for funding. And all credit goes to my friend Naval Ravikon, who created Angelist and who taught me about this and a Shore fund management, my friend Jeremy over there, who also taught me all about this and we're investors in Jeremy's company and I'm an advisor to Angelist, full disclosure. And so when you put all this together, your question to me is how do you become a great syndicate member in the future? Number one, You don't want to be annoying to founders. You want to be supportive.

Founders have a very hard job. And their likelihood of success is 20% maybe. So you're essentially sending this team off on a mission where there's an 80% chance of failure. And imagine if you were doing that in another situation like a war or, you know, special ops. You would take a lot of care to, you know, and you would have a lot of respect for those people. Now, this isn't life and death. But for the founders, I can tell you, it certainly feels like life and death to them when their companies fail.

I mean, I've seen founders get seriously depressed. I've seen two or three suicides in the industry over the last decade of founders whose businesses were failing and they just made this horrible final decision to kill themselves over it. And so founders need support. They need encouragement. They need a warm ear. Maybe you crack open a bottle of wine and buy them dinner. maybe you give them a phone call, give them an add-a-boy, out-a-girl, give them a pat on the back,

and be there for them, and then support them. But you don't want to be annoying, you don't want to be frustrating. You don't want to be like some screaming maniac, which I've seen, where people get all bent out of shape. And you can calibrate your reaction to bad news and good news just based on the size of the check. If you put in $6,000 and it turns, it goes to $100x or $200X, like an investment incom. would probably wind up being a two or 300 X, maybe even more.

You want to sit there and just be so humble and proud and thankful that you made a bet that returned 100 times your money or 200 times your money. And then in the other eight that failed or the other 16 or 24 that fell in your portfolio, just take the failure, take the loss and understand that, you know, you're part of hitting a big winner and having an outlier in angel investing is having a big win. So you've got to really manage your own psychology and you've got to be great to those founders. and it really is about time and don't be annoying. Just like you probably don't want to have annoying people in your life.

The founders don't want annoying people in their life. And if you are supportive, well, you want supportive people in your life too, don't you? So be that supportive, warm, caring person is my best advice to you, Arthur, and I appreciate your question. All right, let's take another question. This one's from Matthew. You often talk about founders needing to be in Silicon Valley in order to be close to the action. Sort of like needing to be in Vegas or L.A. to get into the big poker games.

post-COVID, how does this change to places like Sydney, Vancouver, Beijing become game-change cities? Great question, Matthew. So I always advised, you know, I would say up until maybe three or four years ago, if you're going to start a company, come to Silicon Valley, deal with the high rents, and be close to the power, the energy, the check riders. And I think that was the best practice three or four years ago. And then something happened over the last three or four years where it became insanely

expensive to live here. and if we invested in a company, their money would go very quick if they were here. But they would be near a lot of money and they would get more money and it would work out, I think, to still be here. But taking the money from San Francisco, let's say you raised a million dollars, and then you bring it back to Canada or you bring it to Florida

or Austin or some other place and you run a remote company, well, you can see the efficiency. And so we didn't have the sense back then that more than five or ten, companies would be remote first. And the ones that were remote first, it often felt like they were leaving something on the table, Facebook, Uber, Microsoft, Google, YouTube. I don't think that these companies would have hit scale, true, meaningful venture scale if they were virtual first, or they were work from home first. Now, if everybody chooses to be work from home, that does

change the context. It does change the system we're all operating in. But I still don't know if those companies were to be built. Now, people will point to Envision or WordPress, my friend Matt's company. And the cynical take on that way, well, maybe if Matt Malinweg had a company that was all in one place, maybe their company would be bigger. Maybe it would a $10 billion company. That's a bit of a cynical take. And I don't know that I share it, but I don't also disagree that if everybody's in the room,

things can work better. So I think hybrid is what things will be in the future. and what's going to happen for companies is when they become work from home or hybrid, which will become, I think hybrid becomes the default, they will learn how to, now that they've learned how to manage remote workers, they're going to see which workers overperform and underperform because you don't get to see somebody in the office for 60 hours a week and say that person's killing it because they came in at eight and they left

at eight where they did nine to nine where they were here on the weekend. That was how we judged people previously. Now we're going to judge them on the work and the output. that you see in their reporting and you see in their end of the day report and end of week report and in Slack. So things have changed. And if you can hire people anywhere, that means you're going to hire people, I believe, for $30,000, $50,000 less than you will in San Francisco. And then eventually people get so good at this, they might be good at managing people in other countries and maybe people who maybe English is a second language if you're an American company

or Japanese as a second language if you're a Japanese company, etc. So I think this does take the Silicon Valley operating system and spread it a little bit further. I think companies will be more nimble. They'll have a lower cost basis. They'll get rid of their office space and they'll be able to hire quicker and people will stay with companies longer. For certain people, the flexibility of working from home is great. For other people, it's maddening. For me, it's maddening to be at home every day. I want to get out of the house. I want to meet people. But my job is very interactive. For other people, you know, if you're a writer or if you're a developer, maybe you don't want to be around other people. Maybe you just want to concentrate. And maybe introverts want to work from home.

Extroverts want to work in the office. It could be, you know, as simple as that. And it will be a big change. I do believe we're going to get through the COVID thing relatively quickly. I think we're going to solve it. I think this time next year, let's call it third, quarter of 2021, we will be making jokes about coronavirus and saying, you know, why too corona? And, oh, wasn't that hilarious? We all thought we were going to die. And it was, you know, we solved it. And look, the world's amazing. And we know better for the future. So hopefully, we do figure this one out and everything goes back to normal. And then we learn a couple of new skills in our skill set. But one of the great things that's happening in San Francisco right now is I

heard rents are down 10 to 20% in the middle of this crisis because people just left, people who are on month-to-month leases left. And then I heard conversely in some places like Tahoe or other places, maybe rents went up because people were looking to go other places. That means a younger generation or people who maybe were priced out of the city who were taking long commutes, they can now live in the city or live closer to work. And I believe that is going to make, you know, maybe San Francisco will feel like it did after the last two bust, after the dot-com bust and after 2008 and that bust, where people felt a little more affordable. And that's not a bad thing.

Boom bus cycles are a good thing. But I think cities are still going to win the day. Maybe that's a contrarian position, but I think cities win the day. Working remotely doesn't mean you need to feel disconnected from your team. No, with Miro, you can get your work done together and collaborate. wherever you are. Mero is an online whiteboard that brings together teams anytime, anywhere. And this is super important right now when we're all working from home. Their infinite canvas is perfect for brainstorming, making mock-ups, organizing files, and managing complex projects.

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Our studio director Charles shows how we built Signal Flow from our launch scale 2019 event when we did the AV. and there were thousands of attendees, and we did this incredible map and overview of it using Miro. And it allowed him to easily map out the entire venue, cables, monitors, stages, all of that. So the event would go down flawlessly. And there's nothing more collaborative than running a live event. Trust me, I've done them the whole life. And the AV is always this really dicey situation, and it went down flawlessly. I attribute it to Miro, making it clear for everybody what they needed to do and how they needed to do it.

and how the whole overall system works. So start collaborating for free when you sign up for an account at Miro.com slash twist. MIRO.com slash twist. That's MIRO.com slash twist to sign up for a free account with unlimited team members and go ahead and make something for your startup and share it with jason at tallacanus.com and maybe I'll pop in there and give you some feedback on your startup and your plans. Okay. Let's get back to this amazing episode. Okay, let's take another question. This one is from Charlie. Love when you mention on your blog post, a pressing need with someone should build this. What's your latest someone should build this right now? It's really, I think somebody's got to build an Instagram competitor that shares money with creators. So take the YouTube creator model

and then add it to Instagram. That would be magical. And that's something I've really been pushing hard for. I was on CNBC talking about. I've been tweeting about it. And I'm in touch with a number of developers, a number of X Facebook and Instagram developers have contacted me and product managers. So I really hope somebody just makes a head-to-head competitor with Instagram with a new business model that shares revenue. I think that's the easiest way. You could do it with cryptocurrency. It's a little more complicated, but it's the same idea. In other words, if I get 100,000 people watching my live stream, I get 80% of that advertising or 70% like the app store or 55%, which is what YouTube gives. Something like that, I think, could really challenge Instagram. Now, that doesn't mean you're going

to displace it, but it might mean you find a find yourself a 20%, 30% market share compared to them. And that would be a huge victory. Instagram is worth $250 billion right now, $500 billion. And I think it's the future of Facebook, which is a declining product, Facebook.com. So I would love to see somebody build a co-exister for Instagram. It's so, so necessary. Okay, here's a question from Sergei. An Angel, you suggest to invest 5,000 per deal to minimize the risk in the beginning. Well, founders care to spend an hour to pitch such a small investor. It's my understanding that typical angel deals are 50 to 100K. That's correct.

So most of the time, the minimum is 25K. I mean, you talk to a founder. If you say, I want to put in 5 or 10, they might not want to do it. But if they think you're going to add value, they would make an exception. I think using syndicates as a way to put in even 2K or 5K into a deal is another. the way to do this. So you can look at the seed invest, Republic, angel list, the syndicate.com mine, probably see three or four hundred deals a year and pick 20 of them to put 2K in each. And now you got 20 logos on your angel list page, 20 logos in CrunchBase.

You have 20 founders you can talk to and you can start to learn how to play the game. The analogy I use in the book and I use all the time is, would you go play if you were learning blackjack or you're learning poker, would you go play in the World Series of poker for $10,000 with, you know, all the great players in the world, or would you play in a home game for, you know, a $10 buy-in or a $20 buy-in while you're learning? Would you play $1,000 a hand blackjack? Or if you could play $2 a hand blackjack, which would you play when you're learning? The answer is obvious.

Start with small stakes and then raise the stakes as you get better. That's the discipline I want you to have, Sergey. Great question. Okay, Rudd asks, how common are founder VC disputes? Is there a rank of VCs by how founder-friendly they are? Curious if this has gotten better or have. over time. Great. So there isn't a list of like, here's a bunch of VCs who fight with founders. And one thing to understand is sometimes the founders are wrong. It's a two-way street here.

And as many times as I've seen a VC, you know, on the margins, you know, let's call it less than 5% of the time be difficult. I've seen founders be difficult 10% of the time, let's say. So you're dealing with highly driven, highly opinionated people if you're doing this right. So you should expect that people will not always see eye to eye. What you want to do is see if they're classy even in that. So I've had run-ins with founders who I disagree with what they were doing. Maybe they were doing something I thought was unethical. Maybe they were doing something that I thought was selfish or not fair to their team

or just something I wasn't morally or ethically copacetic with. And I would just say to them very simply, listen, I don't want to have a cantankerous relationship with you. Do you want to buy my shares? Or maybe I'll sell you about half my shares. the other half ride and you just take them off your page and you don't have to have me on the investor page anymore. So that's what I try to do because this is a high stakes game.

You can't expect everybody to get along all the time. And most people would argue that it is the scales tipped over the last decade to being very, very founder friendly. In fact, most people would say founders have too much power. Voting shares control of their companies. It didn't used to be the standard. it used to be VCs controlled the company, could fire the founders at any time.

Now the founders can just run amok like the founder of WeWork did, and there is no way to control them, right? So we've seen both sides of this. Zuckerberg answers to nobody. And do we see the ramification of that? He's got a bunch of yes men and women on his board, a bunch of yes men and women in his company. And for better or worse, you know,

maybe for the better of the stock price, he can act unilaterally. But not having a check and balance in that case could lead to the company imploding, right? And I think that's the existential risk when any one party has too much power, the VC, or the founder. And I wish we had some balance here in equilibrium. And you typically see that balance come when a company races, you know, their C or D rounds. Usually the boards become kind of balance. So it's a great question.

I wouldn't worry about this all that much if you're a founder. What I would do is I would just talk to other founders, the investor, has a lot of invested in and just say, hey, I'm thinking about going to Jason's accelerator. You went to Jason's accelerator. What was it like? If you send that email to 10 people, if none of them get back to you, that means they don't have anything nice to say and they don't want to say something. If your phone rings immediately and somebody says, oh, my God, it was the greatest experience of my life. Or they respond quickly and say, sure, anytime, here's my phone number. Or if they call you quickly and say, oh, that was a disaster. You know, I got nothing out of it. That's what you're going to

find out real quick. But you got to send five or ten of those emails to get a really good representative sample size. So great question. And just like the VC is going to research you and diligence you, you got to diligence your VCs. And I don't see founders do it enough. Great question. Alex asks, when fundraising is it advisable to look up competitors, investors, and avoid those to prevent someone at the firm from sharing critical info with your competitor? Has this happened before? Or is it being too paranoid? Generally speaking, too paranoid. Generally speaking, too paranoid, but only the paranoid survive. And it does happen from time to time that an evil VC, a bad actor, would share information

with a portfolio company. So you should do your diligence, of course. You should be doing that on investors anyway. And then good VCs will tell you if there's a conflict. So if somebody were contact me and they were like, hey, we're making a robotic coffee machine. I'd say, well, did you know that we are investors in CafeX? like the only other one out there or one of three, where I think one of the other ones went in business,

so they're one of two. Or if somebody said, hey, I'm doing modular houses like blockable. Like, okay, well, I'm on the board of blockable.

I can't be on the board of your module housing company. So hopefully the VCs are up front about that. I try. And VCs like to use this as a way to sort through deal flow. Somebody sends them something. They immediately say, you know what? I deleted it.

I have a competitive investment. And so you got to do your job, as you said. And also don't put things in your deck that you send cold or don't say things in the meeting that are your secret weapons. You know, I don't know why people do this, but if you found some secret, you know, well, and every time you went there, you know, there were this incredible delicious water and at the bottom of every glass were three diamonds. Would you tell other people about the secret well with the delicious water? Like you get three diamonds every time you drink from it? No, you just collect the diamonds and shut up. So if you found a place where you can find a bunch of diamonds,

shut up and don't tell anybody. Okay, great question. Okay, let's take a question from Kirk. What is your succession plan with launch twist and why? Good question. Also, what other syndicates do you admire and why? Okay. In terms of other syndicates, yeah, let me think that through. Ed Roman has a great one. A lot of people have turned off the syndicates and started funds, so I don't, know if there are actually that many more syndicates doing individual deals. I think like we're one of the last people standing. My succession plan would launch and twist. I don't worry about that. I don't think about that all too much. I just think about working hard. With this weekend startups, I feel it's my life's work. I have been thinking about getting a co-host to do 10 episodes a year

or maybe do the news roundtables every time because in the all-in podcast, people are like, oh, Chimoth and Jason, we both have a similar Twitter following, a couple hundred thousand followers. So when Chimoth tweets an all-in episode, I tweet an all-in episode, the all-in episode sometimes spike ahead of this week in startup. So if I could land somebody like Kara Swisher to do episodes with me, she's obviously got a scape, Velasin has all of her own shows. I would consider it because if there was somebody with at least as many followers as me or maybe half as many, 100,000, 200,000, and who brought another audience to the table, I would really love that.

Because they'd take a little pressure off me and then move the show up. I'd be willing to pay some really great co-host, a decent amount of cash to do it. It would be a very lucrative gig for them, and it would be great for us because it could increase the audience size. So I'd love to have somebody who's different than me,

a different life experience. A lot of people said, hey, how about a person of color? How about a female? Yes, that would be my thinking as well. I'm in somebody who can bring audience. That's really what I want. Somebody who can bring audience and spread the word about this week in startups. In terms of launch, I have two amazing managing directors and Jackie and Ashley and a team right behind them who are up and coming.

I think I'll work for another two decades until I'm 70. And sure, at that point, maybe I'll hand it over to that team and they run it or maybe I'll work another 10 years and then hand it over to them if I want to retire early. But I try not to think about that. I think it's super narcissistic to think about empire. building. I like to think about today this week, this month, right? I like to think in the short and the near term. I do set some long-term goals like being the greatest investor of all time, being the greatest angel investor of all time. I like to set some goals like that personally for myself. I don't talk about them too much. And I also don't obsess on too much. I just make a plan.

In order to be the greatest investor of all time, I would need to have more unicorn investments worth more money than Bill Gurley or Michael Moritz and Doug Leone or, you know, or, you know, you know, Jim Breyer at Excel, you know, Kostla, just pick the person who's got an incredible career. And so, you know, I would look at that and say, well, how did they do it? Well, they found great companies. Okay. Well, how do you find great companies?

Well, you make an investment. One strategy would be to make 100 investments a year and then double, triple, quadruple down on the top 10, 20 percent of them, which is exactly what I'm doing. If I can invest in 100 investments a year, maybe 200 someday, over a hundred. a decade, I can, you know, have a thousand more investments on top of the 250 I've done if the statistics hold up. Yeah, maybe that means I have more unicorns than anybody's ever invested in, or maybe the top three investors combined wouldn't have as many unicorns. So I'm thinking big, but I also don't obsess about it. And I feel like I've won already. And any reasonable

person, when they've done that, maybe it takes the edge off. So I'm pretty happy with where I am. I don't think too much about legacy, the future. I do think about, gosh, I enjoy going to work every day. If I wake up and I don't want to go to work, that's a terrible feeling, right? And I know what that's like. I've worked for other people and just woke up and dreaded going to the office. So I am just staying away from that feeling and leaning into the feeling I love, which is doing this podcast, hanging out with you all in this week in startups.com slash slack or private Slack room,

doing the accelerator, doing remote demo day.com. When I do those projects where I write a book and I do the episodes of this podcast, man, I feel great. I just, I mean, and I think you all know that because you hear the tone of my voice. Man, this is my dream job. I just pinch myself that a kid from Brooklyn gets to do this every day. All right. Thanks so much for your questions.

And we'll see you all next time on This Week in Startups.