This Week in Startups - E1121: Mark Suster on investing in human-computer interfaces & sustainability, what he looks for in founders, SPACs impact on early-stage investing & more

Episode Date: October 9, 2020

Check out Mark's Blog: https://bothsidesofthetable.com FOLLOW Mark: https://twitter.com/msuster FOLLOW Jason: https://linktr.ee/calacanis

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Twist listeners get three months free at gusto.com slash twist. And Clavio is the e-commerce marketing platform that helps brands build relationships with memorable email and SMS messages. Today, more than 50,000 brands like LivingProof, Hint, and Chubbies choose Clavio to help them grow. Learn more and get started with a free trial at Clavio. slash twist. That's K-L-A-V-I-O dot com slash twist. Hey, everybody. Hey, everybody. Welcome to another episode of this week in startups. I'm really excited today to have one of my great friends, colleagues, uh, and co-conspirators on the podcast. He's been on now, if my memory serves really correctly, four times in 10 years. And this is the

fifth. He's on every two or three years, uh, episode 25, episode 279, episode 4, 29, in 2014, episode 674 and 2016. And you know what? Four years between appearances is way too long for a gap with getting Mark Suster on the podcast. My mistake, the problem is we're on a board of density together and we get to see each other all the time. And I forgot the point of this pod is for you to get to listen in to me having conversations with the smartest, most driven entrepreneurs, capitalist thinkers in the space. And one of those is my good friend, Mark Suster. Welcome back to the pod for a fifth time. Thank you, Jason. You know, I should say also, we used to produce a show together called

This Week and Venture Capital, which was fun to do. It was fun to do, but you were too busy being a venture capital as to do it consistently. But I've been doing this now. Gosh, it's so crazy. You were on the 25th. Can you believe now over a thousand episodes since you've been on? Amazing. It really has something to do with consistency when it comes to content creation. But it's great to have you back on the pod. You and I now have really really. started to work together on a lot of deals and investing in companies together. And right off the bat, one of them is density, which is a great company. They launched at the launch festival. We made a small angel investment. And then you came in and did the Series A and really anointed the company.

What attracted you to density and how has density changed from the moment you met them to today? So let me first talk about the category. Then I'll talk about density. So the category for me, I've been very interested in computer vision and particularly in a field called HCI, human computer interfaces, and a belief that the way we think about interfaces being a keyboard and a mouse is going to change over time. The interesting thing is that computing devices are much better at interpreting the physical world than human beings are. And so taking all of that as input and also having some of that as output for me was an important investment theme. And because I'm going to talk about density, let me do that last, but I'll just briefly say, our investment in ring was based on

that. We did the seed round, A round, B round, C round, D round, E round of ring. And the idea was not- You did all five rounds there as this explicit strategy of just doubling down, tripling down, quadrupling down, and just continuing, I don't know what five-poppling-old. Yeah, because we have a C-day fund and we have three growth funds. And our growth funds lean in to winner. So we were thrilled to write an additional $20 million into their growth rounds. So we can put $3 million to get started, but we can back up the truck and write a $65 million check, you know, over time. And so the idea that Jamie had was not just a video camera, but tied to a computer. Could you know more about who's in front of your house?

Could you know that it's your wife or your son or your husband or your dog? Could you know that it's the mailman? or could you know that it's somebody who's been in your neighborhood and stolen packages before, right? So the idea of computers interpreting the physical world. So that was a great outcome north of a billion dollars sold to Amazon. But other examples. Was that the best outcome in the history of upfront? And I forgot that it. What was the name of upfront before? A GRP. GRP, which is now up front. So that wasn't. But that was, is it top five in terms of returns? Probably top five. Not in terms of returns, but in terms of aggregate exit value. Got it.

So, I mean, we've had, I think, 16 companies be worth more than a billion dollars in our... Congratulations. I mean, you have to realize, you know, we've been around for 24 years. Right. So we're not... People don't know that, yeah. Because you had the name change, people might think this a younger firm than it actually is. Exactly.

But let me give you some other examples of HCI and Computer Vision. We invested in a baby monitor company called Nanit, an IT. But what the idea is, think about when you take your young child to a pediatrician, you go four times a year, what do they want to do? They want to look at height. They want to look at weight. They want to look at head circumference. They want to look at alertness. They get four data points. And the doctor, the pediatrician, judges them on a specific moment in time. What we get is continuous evaluation of the health and well-being and child development. And we get that every single day. So we now have, we believe, the largest corpus of data on child, infant, toddler,

growth and development in the United States. And that's more than doubling every year because we're doing tens of millions of revenue now. And we tie that like we think about all of these as hardware plus software. So we have to sell a hardware unit in order to get this subscription product in order to get the data that feeds in, not just to doctors, but into pharmaceuticals. So we're now doing clinical trials. I don't know if I can announce them, but we're doing things like infant eczema where we can actually do clinical trials and they don't have to actually go in person to people's homes. So that's another example where we actually can predict disease, very young in children, based on clinical readouts of how they're doing, in ways that even

pediatricians can't. If you think about senior care, we believe that you can predict Alzheimer's, you can predict Parkinson's by looking at the gate and even listening to the vocal pattern of somebody who's developed something that a doctor can't yet see. Interesting. And you don't have that product in market yet, but you're looking for a company to do that one? I want to fund that. And I have looked at several players in the category we haven't gotten there yet. We've looked a lot at fall detection in seniors. That's a no, bread. I mean, the interesting thing about what you're talking about is this could be done actually in an app. If you had somebody do a FaceTime with somebody and then you looked at the deltas, the changes in them reading the same thing.

You know, if you just had them read, you know, part of a book or sing a song or whatever it is, you could provide that as a service. You may not even need the hardware as a service. Certainly that would be nice, but you could embed that somehow in a hardware device that has some other purpose, right? Because that's sort of what you're saying, the monitor from the company NANT, N-A-N-I-T, for people who want to Google it and buy it now, the reason for that product that parents might buy it, ostensibly is, hey, I want a crib cam so I can just check it on my baby

if they're tossing and turning. But the reality is the value might come from, hey, over time, we know how your baby is growing, or maybe we even see some breathing anomaly and can say, hey, maybe you need to take them to the doctor. Yeah, so we already do respiration, right? So we can already tell you how your child is breathing. We can already set off an alarm for SIDS risk. So we know if a child is on their tummy, we know their increased SIDS risk.

So we already do all of that. But we also have really fun products. So we, because your child develops, they speak, they learn their hands working together when you're not watching. They do it in the crib. And so all of those photos, all of those videos you're not capturing, but we capture them for you. And so we're building moments.

Think of your album like you do the building blocks, the three month to six month to 12-month, but we can do it automatically for you and capture their best moments. The amazing thing about that is science may not have had access to this data set before. So there might be learnings that occur in aggregate that we just didn't even know as a species. I'm going to tell you that. I can't claim this medically, but we have enough data now to prove that we can show autism as young as six months old. Wow.

and the children then get diagnosed at two and a half. And there's really simple stuff, Jason, which is children who are autistic, not everyone, and I'm not a doctor, but we know enough about the clinical data to know. Oftentimes are waking up in the middle of the night and not crying. And the reason they don't cry is crying is a form of talking and communicating. I'm hungry. I'm gassy. I'm scared. I can't fall back to sleep. So you cry, you get your parents involved. That's how you communicate. But we know that one of the problems that exist in autism is an inability to communicate and express yourself. So there are parents who believe they had a perfect child because they were never woken up between six months, you know, six months and nine months. And what we see, what the

parent doesn't, is that the child was up 13 times last night and couldn't fall back to sleep for 45 minutes. And we see the distress when the parents don't. Wow. And so density coming around the horn here you have the ring doorbell you have nan it um actually i want to stop and pause for a second on the on the startup that you want to fund which is for seniors and maybe figuring out the state of their Alzheimer's or um just their Parkinson's and their general well-being what would it take for you to invest in a company what would you need to see as a minimum bar a minimum viable product and a minimum team since we're going to get a bunch of emails and people are going to build it now which is just one of the great natures of having a podcast at scale.

So let's go ahead and define what would get somebody a meeting. If they emailed you and they showed you something, what would be a minimum to get a meeting, minimum to get a check? You have to have knowledge and belief system of how to solve the problem because other people have tried to solve it and solve it in a unique way. There are interesting challenges when you deal with seniors. Number one, they tend to be less technical. Yep.

Number two is you have privacy concerns. I can put a camera on a six-month-old. I can't put a camera on a 75. year old. And so it has to be solved with either camera solutions, which are very purpose-built and only in certain rooms in your house or with other mechanisms that are installed. It has to be done with the consent often of the child, usually at someone my age. So I'm 52 and my father had Parkinson's, which is why I know a bit about the disease. My father-in-law had Alzheimer's, which is why I know a bit about the disease. and it has to be done in coordination and consent with children who are trying to work with,

you know, elderly aging parents. But here's why it's such a big opportunity. Jason, everyone in our age bracket and demo are living through sandwich years. We have children that we're trying to care for, but we're trying to figure out how are we going to care for our parents as they age? How are we going to deal with, you know, the aging issues? Look at COVID and look at where all the initial deaths came out of, you know, the senior care facilities. So there's going to be, increase scrutiny of them. There's going to be a need to manage both access to them, cleanliness of them, how well they're run. And so companies like density will benefit from that because people want to track ingress and egress. Okay. So when we get back from this quick break, I want to announce that

I'm going to give $100,000 to somebody who builds a prototype because I know if they build the prototype, I get a mark on the hook because I got a direct line to him. So I want to get my slice of the pie first. but when we get back from the quick break, I want to talk about density and what you saw there and the progress they've made. And maybe we'll talk a little bit about, you know, board best practices and how you and I worked on,

you know, with Andrew, you know, getting this company to the big round they just did. And then I want to talk about SPACs and what you think the impact that will be for early stage, you know,

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You're going to love it. Go check it out. And let's get back to this amazing episode. All right, everybody, we got Mark Suster back on the program, my pal. We've invested in a bunch of companies together. We know each other from the L.A. scene when I did my 10-year tour of duty there. Programming note, Jamie Siminoff, friend of the pod from DoorBot, which became Ring. We'll be on the pod soon to talk about his flying drone security system, which I am enamored with.

And Andrew from Density's coming on the podcast. He hasn't been on the pod in a long time as well. So now that the pod is never going to end, I have to circle back around with guests and get them on every three or four years and just book the same people if they're still getting it done. What did you think of Jamie's flying drone? The Amazon ring fly around your home drone, you're going to get one? I saw it in person. You saw it in person. It's legit, right?

It's the real deal. I was at Jamie's house this weekend. Oh, really? Yeah. A little name drop there. Is it work? This is the thing. Like, you know, L.A.'s.

become a really big tech scene and kind of like in San Francisco where you bump into people at coffee shops and around. Yep. Like these are all my neighbors, right? Yeah, it's great. Jamie lives, I don't know, I think 1.7 miles down the road for me. Yeah. Yeah, it's a very cool thing. I love what an innovator Jamie is. You know, the idea, and I'm not sure, I think this is more or less public, but you basically walk it around your house with your hand and it learns the kind of footprint of your house. And the idea is it can fly around your house and keep security while you're not home. And I think it's just a really brilliant, clever idea. It is literally what everybody wants. And the price point was like three or four hundred bucks or something. It was ridiculously cheap. It's like an air rumba or something.

It's like an air rumba. It's basically like having your own personal drone, like a military drone. I mean, it doesn't have any armaments on it to neutralize an invader. But it does have the ability to do what you want to do when you're not home, which is, hey, do. a quick sorty of the house and give me a looped video of that you went around the house to make sure nobody's throwing a party there or that it hasn't been broken into. I think that's brilliant. I looked at one called Sunflower Labs back in the day that was doing it around people's houses, but it was, you know, thousands and thousands of dollars. And I thought that one's going to be coming soon, which is people put this on the roof or next to the garage and it just does the perimeter.

And there will be, there's sensors with the Sunflower Labs one where if somebody crosses your front yard, the drone can go up and go get their picture and do, you know, I'm sure we're Jamie will do, which is facial recognition of those. Let's talk about density. This is something you and I have been working on for years now, and by working on, I mean, investing in and being on the board of. What attracted you to density in terms of, we know what your thesis was in terms of computer vision, but in terms of the founder and where the company was at, and then take us into the journey to get them where they are now, which is, Kleiner Perkins just did it. It's very public, a big round of over $50 million. The company,

has major customers, they've been very public about that. Take us through that journey of working with a founder with, you know, I think when you got involved, it was low single-digit employees to now. Yeah. So as I mentioned, we're interested in the idea of how compute power interprets the physical world. There has to be a software service attached to that. Most people think cameras. I think cameras are a small part of how compute power works. So we think about microphones, sensors, infrared, laser, radar, all the ways of interpreting the physical world. I was introduced through Jonathan Trees.

Yep. From Ludlow Ventures. He's a fantastic investor. Out of Detroit. Out of Detroit. Everybody loves working with him. And interestingly, he was, I mean, talk about a mensch. he would when he was just had his venture firm he would just sponsor the launch festival when I was trying

to get it off the ground after I broke up with tech crunch and Mike and he just was like hey listen I'll just I'll give you 10 15 grand just to sponsor and I was like what do you get out of that he's like supporting you I was just like oh man that's so nice he he is the classic definition of the word minge and he's been a real pleasure to work with and when someone like jonathan says to me mark you have to meet this founder yeah you know I always talk about introduction and and all these things and why they're so important and why they're matter. Like, Jason, if you called me and said, Mark, you have to meet this founder. I'm going to drop things and meet the founder. And Jonathan did that, you know, and he knew that I was interested in the category. And I met Andrew

very early, incredibly impressive, also a menshe person. And he had a theory for what he thought was going to be a privacy-compliant way of tracking people moving around office buildings and spaces. And I bought into the thesis. And we look at what's happened with the Uyghurs in China and using cameras to track, you know, Uyghurs moving around for nefarious purposes. And you look at the pushback that I think modern society will have against camera invasion of public spaces and work spaces. I think non-camera solutions are going to do incredibly well. So he had an idea for how to do. to solve that. I met some of the team he was attracting. I always say there's two things I look for, Jason, in a company really early. Cadence of shipping product. Can you ship? And the second is

cadence and quality of attracting team members. And those are the two biggest tells for me. And so when you get guys like Garrett Bastable, who was out of Apple, who worked on the Apple Watch, who had a ton of experience and how to source and design and build products at scale, cross-border and that person wants to then join Andrew in his mission, that's a really big tell. When you look at the founding team, Grazioli and a bunch of the people who work at density and how they had followed Andrew for five years on this mission and they really, he attracts and retains incredibly talented people. Both those things were important to me, Jason. Yeah, the cadence is amazing of both of those things. And that's, I think, for founders,

something they think they can talk you into an investment, right? So it's just a talked a little bit from the founder side here since it's come up. And you don't want to talk an investor into investing in your company, do you? You want to show them that you're a person who takes action. You have a bias towards action is the term. I think Michael Moritz used from Sequoia over and over again, or Doug Leone might have been the one who coined that one. But I know it came out of Sequoia because they kept saying, it's why we invested in you. You have a bias towards action. That is a critical, critical tell when you're making an investment. Somebody who talks about doing stuff or somebody who just is doing stuff on the regular. Yeah, I, you know, I just had this

conversation at our partner meeting this week. I was talking about a company called Levels, Levels Health, where we're not a big investor in the company. We're a tiny investor in the company. But I love the company what they're doing. They're building value out on top of continuous glucose monitors. So again, which I'm wearing right now. Oh, you are. Okay. It's not the Levels one. It's another company, but I'm looking deeply at the space and I have to say this has changed my life, continuous glucose monitoring. Is the product the Abbott Laboratories or the Dexcom product? It's the Abert Laboratories, which is the cheaper one that is not Bluetooth.

I would not pay for the Abbott one, which is, I believe, the Continuous Glucos one is like a thousand a month or something crazy. It's extremely expensive. It's cheaper than that, but it is expensive. But the nice thing about the Dexcom version is with the Abert Laboratories version, you have to scan your arm. Yes, which I do twice a day now. With the Dexcom, you don't have to scan.

Yeah. I guess it's even for me, I'm just thinking like the extra 300 a month. I'm like, yeah, I'll scan my arm twice a day. But I'm going to try them. But I do, it is a game changer, isn't it? So I did it for 30 days. And it taught me a lot about, you know, looking at my blood glucose levels and what causes it to spike. And it was unpredictable things for me. I don't spike when I eat ice cream. But I do spike. That's a godsend. Wow. Right. But you should try it because a lot of people don't. And the reason is you not just you have the sugar, but you have a lot of fat that goes with it and they counteract each other. Whereas if I have a bowl of cereal or even a tiny bowl of pasta

with olive oil, I'm screwed. It's so interesting. I literally got an alert because the one I'm using it comes with a nutritionist. I won't say which one it is. And the nutritionist was like, what happened last night? I saw you had brisket and a glass of red wine. And then we saw the spike at 1 a.m. I was like, at midnight, I had a bowl of cereal with a banana. My, my, my blood sugar spiked. It's the biggest peak I've had. Banana's the worst. It's the worst. Bananas are the worst and cereal's the worst. And then milk, whole milk, cow milk, not very good either. So I just got keto, some keto catolina crunch cereal that a friend of mine was eating. And then I started using oat milk or soy milk. And then it definitely

put it down by two thirds. But you're right. I had ice cream. The other thing I did yesterday is I had a cheese, you know, you can run these tests when you're doing your glucose. I had a five guys double cheeseburger, 1,000 calories, and the small fries. So I had like 1,400 calories. But I walked a mile and a half to, two miles to get it, and I walked two miles back. So I did two 45-minute walks or 40-minute walks. My blood sugar was like totally flatlined. It had no impact on me.

And I was like, whoa, okay, this is the unlock. From now on, I am taking a walk 100% of the time, if I have anything that's, you know, carbby. Yeah. So to come full circle, so two things. One is bias towards action. What I was going to mention about levels is I just amazed that they're biased towards action and ability to get stuff done. And, you know, there's a lot of people competing in the category.

I actually like some of the other players competing in the category. I don't have a dog in the fight right now or dog in the hunt or whatever the whatever the politically correct statement is. Gladiator in the arena. There you go. Thank you. But I do want to. I do want to make a bet in the category.

So maybe we have the bet. I'm making a bet. I'm going to send it to you. Let's talk offline because I've actually met three of them and I kind of have a sense. And I've been body hacking myself. But, but. And you look great, by the way. Thank you.

What was your peak? Let's do it right now. Yeah. What was your peak weight? 222. All right. When we get back from this break, I want to know where you're at right now. We'll get back on this week in startups.

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All right, Mark Suster is back on the pod for his fifth appearance, and we are cooking with oil. We're talking about continuous glucose monitoring, losing weight, which is a really important. I mean, if you look at this COVID, people really don't want to say this, but it kills fat people. And you and I were fat. There's a high correlation. High correlation. High correlation. My correlation. You and I were fat. You and I suffered for 10 years. We talked about it. You and

our friends. I hit 213. You hit 221. 22. I think we're both. What'd you do? What'd you hit? 22. 22. You're 511? I wish. I'm 5.9. Okay, I'm 5.8 and a half on a good day. I was just saying a windy day. I'm 510. Perfect. So you and I are almost the same. You topped out just eight, nine pounds more than me. What are you now? 154. 154? Yeah. And that took a year of fasting and just being cognizant.

Unbelievable more. Unbelievable. Wow. And you have muscles now, too. So just, I mean, everybody wants to know about this because 40 or 50% of Americans are overweight right now. What, in your estimation, having lost 70 pounds over what, like 15 months? 15 months.

Okay, this is extraordinary. that's like five pounds a month. It's a pound a week for 15 months. Incredible discipline. What in your estimation are the top three things that contributed to you being obese? And you were obese. That is the definition. Obes.

Number one, I appreciate you pointing that out. I'm only doing it to give myself motivation because I'm still obese. I'm, I'm, I'm teasing. Number one was eating portion control. So what I didn't realize is all the hidden calories from eating three cups of rice rather than one cup of rice or equivalent of three portions of cereal rather than one portion of cereal. So portion control is a really big problem. If you can eat two pieces of pizza rather than five pieces of pizza, you're going to have better outcomes. Number two was just measuring everything.

Everything I do is quantified. So I hold myself accountable to between 1,800 to 1900 net calories a day. Okay. Net calories input output. So if I work out 600 calories, I can eat 600 calories more. I try to only eat half the calories I work out. So if I burn a thousand calories in a workout and I'm trying to, you know, nail 1,800, I might eat 2,300 calories that day. And you said it, which was discipline. I've been very consistent for 15 months. I cheat. I eat ice cream, pizza, cereal, problem, but in portions. Would you say that stress was an food was an outlet for stress that comes from modern day life for you? Or were you a foodie or a gourmand? Were there other reasons for

that? You're being overweight? All of the above. So as you know, it's mind and emotion if you really want to control weight. That's the single most important thing you need to get into check. Mind and emotion, explain. Look, anyone knows the formula to lose 10 pounds, right? Like you just eat less carbs and you exercise a little bit more and you eat smaller portions. That's not hard. The question is, how do you do it consistently for 15 months? So when you get stressed, when you travel, when you're not sleeping well, if you're like on an emotional low for some reason, food is a comfort. And if you don't mentally break the cycle of the bad choices that you're making, it'll just, you'll yo-yo.

It comes back. I mean, I've lost 15 pounds. I don't know, 20 times. I had the same experience. I was like the 12 pound, perfect at losing 12 pounds, but never got past then. And now I feel like I'm, you know, really been doing well with the glucose and then just understanding it. I think that these glucose monitors should be free. Insurance should just pay for them in a mass way for everybody who's obese because. But Jason, I love glucose monitors. And I think it's an important part of the equation, but it's like number five or six down the

list. The very, very simple thing is, if you can eat less, you will have a significant impact on your weight more than anything else. I eat carbs. I just thought like when I would go and to carve, like get rid of carbs from my life, I have a great six weeks and then I cheat. If I allow myself to have a bagel, what I do now is I have half a bagel, not two bagels. And I eat a half a bagel with three eggs, right? So I get protein, half a bagel, and I'm done. And that's my breakfast for the day. But I used to have two bagels with cream cheese and locks. And then maybe I'd have a little side. And, you know? And all of a sudden, it's a disaster. Maybe you hit a cookie afterwards because you're at the bagel store and maybe you have a big chocolate chip cookie. Now you're a disaster.

So importantly, I would just say, like from the weight side, it's controlling what you eat more than anything else, and then movement, like body movement, getting out, even just walking matters. You've said it yourself. If you walk and eat less, you will lose weight. But density, I want to talk about density. So density, what impressed me about the team was, as you said, a bias towards action and ability to accomplish both shipping product and attracting team. And I just want to work with people who have a true north. And Andrew's true north was privacy. first. I'm going to solve this problem without cameras and other people are going to try to use cameras and it's going to be invasive and it's also going to be very expensive to process.

And what he used was lasers. And lasers do something called depth perception. And using lasers, we can see an object and probabilistically determine is that a man or a woman, a child or an adult, is that a dog or a shopping cart, and the probabilistic determination of that is very accurate. It's anonymous and lower costs. Now, we were already growing and doing incredible pre-COVID, and we were doing incredible for things like security. So there's a term, as you know, called tailgating, where someone swipes and two people go in. Now, if you have a solution like density, you tailgate, we know that two people went on,

and we can set off an alarm in a central control system. We were doing really well in hospitality. So if you're Delta Airlines, if you're Marriott, and you want to know in your VIP lounge, do you have it appropriately staffed? We do really well. We do really well for insurance purposes. If you have a gym or if you have a room where you shouldn't have too many people in there and you violate your insurance policy, we were doing really well.

We were doing really well on office spaces and helping people figure out how to better use meeting rooms. We were doing really well with commissaries. So, you know, your Facebook, your LinkedIn, all clients, Salesforce, all clients, and you want to control when should my staff go down and get a meal? Well, if your staff can go and look and say the cue is 35 minutes long, I think I want to wait 45 minutes until it's only 15 minutes long. Now my most valuable resources, my staff can wait less time.

And then we can do line busting. So we could do line busting at, let's say, we initially did it at Kava, grill where I could say, I need to staff more between 1130 a.m. and 2.30 or I'm losing customers. Like all that was going really well, and then COVID happened. And it was like boom up into the right. We grew bookings 550% quarter over quarter. Why? Because it's not just how do you return to the office, but it's, let's say you had an apparel company. And you could think, well, I'm not impacted by COVID. I sell shirts, right? Yeah. But if your warehouse can't ship them, because warehouse workers can't go in there.

We are mission critical. So getting into warehouses, third-party logistics, getting into meatpacking facilities, getting into universities. And then they did something clever again on shipping product is they launched a radar-based solution. And the radar-based solution, I think, is being announced in the next week or so. So hopefully by the time this airs, I'm not blowing anyone's news. But basically what it does is it tells you proximity of people.

so we can tell you our people more than six feet apart. So you want to return to office, you not only need to know how many people come in, but you need to know proximity. And that's why the company is growing so much. I know a location in D.C. It happens to be a white house. It's a white house. And they could use this proximity sensor for obvious reasons.

I mean, it is crazy the time we're living in. How should founders deal with this constant noise of politics? that they're hearing, which it is taking over the workplace. And we saw Brian Armstrong's memo of, hey, like, let's leave politics at home. For the eight hours you're here, let's focus on work. No more political talk. Are you in favor of Brian's position? Are you against it?

Or do you believe it's up to each founder to choose or something else? Well, first of all, it is up to each founder to choose, of course. Okay. And of course, there's a continuum of how people are going to react and respond and what issues they care about and don't care. about. I think in 2020 and going forward, though, if you don't have a policy that understands that your employees are human and are impacted, I think it's tone deaf. And the reality is, like, we're already in a world where we're trying to be more inclusive. And if you're going to be more inclusive,

how can you not care about women's rights? How can you not care about how women think about how their bodies are going to be treated and voted on? And you can't pretend it's not happening around you. How are you going to think about health care and the impact of health care on your employees? Because you might be a founder who's sitting on hundreds of millions of dollars or tens of millions of dollars worth of stock, but you're hiring people that don't have that kind of wealth opportunity. In fairness to Brian, his character would be, I'm not saying you can't have those opinions. I just don't want you vocalizing them at work and creating an uncomfortable environment for people who don't want to talk about these issues. What would your response to that be?

Well, let me just push Brian to the side for a minute, and I'll tell you what I believe. But if you want to have people of color and if we have done a bad job of protecting African Americans or protecting even Latinos who don't get talked about a lot right now, you know, from issues affecting them and their family, I don't think you can put your finger in your ear and say things like homeless that don't matter or black rights don't matter. Because those people are turning up every day and they feel attacked and they feel marginalized and they're dealing with family members and their family members are dying at higher rates, not just from police. They're dying from higher rates because they don't have access to health care. They don't have access.

They can't go on these experimental drugs that Trump is going on because they don't have access. And so they're dying at higher rates. So I believe that if you want to run a modern company, what I like about Brian's piece is stay super focused on your business, right? Like don't get super distracted. but part of staying focus on your current business is making sure your employees feel safe and protected and that they can stay focused. And for them to stay focus, it matters how their family and their livelihoods are treated.

And I don't think you can put your head in the sand and pretend it isn't going on around you. So you need to provide a forum for them to feel safe. See, I think that last part of what you said, the forum to feel safe is the key piece to this. And I think the iteration Brian and the entire industry should make is what is the appropriate forum to discuss these things. And I can tell you what is not the appropriate forum, Slack and email, because anybody who's got Slack instances, and they have a random channel by default, and the random channel is HR's nightmare, because that's where people post jokes that are inappropriate, that might make somebody feel unsafe. And then if you start a discussion about the latest

shooting, a police shooting, as an example, on either side. I mean, a, I'm a, a, A police officer being shot and people saying, ha, ha, look, you know, it's, you know, police are getting their comments. Or a black person being murdered and somebody kneeling on their neck for nine minutes and murdering them. Like, this is, if you post that at work, how could any human not be distracted? And it's in an online forum. So when a lurk comes up in random, George Floyd's been murdered. Rihanna Taylor, police have been not convicted.

This is so incredibly frustrating. It's going to draw the entire company into it. So I think the rules should be no electronic communications of these issues. We will have forums. Anybody can set up a lunch forum or a 4 p.m. forum on Fridays or a 3 p.m. forum on Fridays. And we can discuss this.

People can opt into going into there and we'll discuss anything on a Friday all hands, whatever it is. But putting it into a real world situation where people don't get misinterpreted. And at 10 a.m. on Tuesday. What you're doing is displaying leadership. And leadership for me is about saying, I need to proactively provide a forum for people who want to be able to discuss and debate issues and then saying to them, this is the way that you should do it and this is the way you shouldn't do it.

And every company gets to choose that. But you can't put your head in the sand and pretend that, you know, an African-American person is not going to be distracted when another George Floyd issue happens or when Donald Trump, you know, issues his latest racial epitat. You know, like, you know, my family, I think you know, is Jewish. And, you know, when I see people attacking a synagogue or when I see people marching in Charlottesville and the president, you know, saying that both sides are bad, you know, those issues are going to distract me at work. And for other people to pretend we aren't affected by it is wrong. So what I try to do it up front is keep our discussion at partner meetings about political. issues to a minimum. It's the banter before the meeting starts, but then leave it at the door. But we get involved in advocacy issues outside the office during the evening. I'll give you examples. You know, we did a screening of a film to talk about gender bias. Five or six years ago, we rented out of cinema here in L.A. We invited 300 leaders. We invited speakers to come talk about it. I didn't know that sexual abuse was as bad as it is. As a white male, I guess,

you know, I didn't have the same exposure to it that I should have, and I'm glad that I do now. But I knew that bias in hiring and executive and boards was a problem, and we wanted people to face that issue. So we invited everybody to an evening event and screened a film. So like, that's an appropriate response. We knew that penal reform was important to us, so we got involved with Defy Ventures and we started taking people to prisons and we raised money publicly at the upfront summit for them. Yeah, I remember amazing. Yeah. And we care. And we want, you know, people to understand because it's largely African Americans and Latinos that are in jail. We want them to know that we care. Okay. When we get back from this break,

I want to talk a little bit about governance. And we just had a law in California, you'll publicly traded companies are going to need to have diversity on their boards. I think it's a good thing to check in on. And then I want to circle back around on the impact of SPACs on our industry when we get back on this week. I'm sorry. I was Mark Sustin. If you're growing an e-commerce business, you need a platform that is focused on growth, just like you are. This is like D to C. Maybe you're building a physical product like my eight sleep bed, which I love. If you are building a physical product and you're selling it to people and you're in an e-commerce business, Clavio is critically important for you to know about. They are the ultimate e-commerce marketing platform for online brands of all kinds and sizes.

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text messages, and other ways that you communicate with your customers. Okay, thanks, Clavio, for supporting independent media like this week in startups. Let's get back to the show. Hey, we're back with Mark Suster. You can follow him, M. Suster. And what's your blog? I forgot.

Both sides of the table. Both sides of the table. Thank you. And you've been doing the blog for a decade. I think how you really built your brand was just consistently blogging. It had a big impact in the early days when you were starting. And let's face it, people didn't know who Mark Suster was. Yep.

Huge impact of making yourself available. Let's talk a little bit about one of your theme, sustainability. what does sustainability mean in the lens of investing specifically in companies? What is a sustainable company? What does that mean that they use paper cups and paper straws? Or does it mean they have a product that is creating paper cups and straws in the industry? Explain. The hard thing about being an investor is we have to invest in where we think the market is going to be five to seven years from now. If we invest in things that are going to be big 15 years from now, it doesn't matter if we're right. being too early is the same as being wrong.

So we have to be in a five to seven year cycle. Usually if I'm talking about something to my investors, my LPs, I say to them, if my idea is obvious to you and you're nodding your head, I probably miss the idea. So I want to make you slightly uncomfortable because I want to be investing in things that you don't buy into today. And then the other hard thing is you not only have to be right about the category, you have to pick the right team.

So I was very early in text messaging and free text messaging being a service. And I had a thesis because I lived in Europe when Skype grew. And I backed a team that was incredibly talented. They just weren't WhatsApp. So we had, you know, tens of millions of users very early on. It was called Text Plus. They had, you know, built and sold an IPO to company before. We just didn't end up being the winner.

Now, sustainability. In 2013, my partner, Eve Sisterone, and I started saying we need to invest in companies that are solving our long-term water crisis. We need to solve our long-term water crisis means we need to solve agriculture because there's way more water wasted in agriculture than is wasted in your toilet or your shower. And so we took three bets in the category. One, all of them were like half a million dollar bets and then we followed them. One of them was appeal sciences. And what they did is they took the waste products of fruit and vegetable, and they create an organic compound that seals in moisture and prevents oxidation without herbicides and pesticides. And if you want to have an impact on water, you have to solve agriculture. About 45% of all agriculture in the United States is spoiled before it's eaten. About 70% in the developing world. And so really, we wanted to impact how long your... or fruit and veg last. And so the ability to take avocados and have avocados last 30 days longer

is massive. And what the impact has been is avocado wastage before it's sold in retail has gone from about 10% down to about 2% in the retailers that use us. In citrus products, wastage has gone from 6 to 7% to less than 1% before it's sold. And then once it gets to the consumer's house, a lot less is getting thrown in the garbage bin and is getting eaten by people. So that saves money and is increasing revenue because if you go to a grocer to buy avocados and you only buy two or three, now suddenly you can buy five or six. So we saw sales go up more than 40 percent in the grocers that we're using appeal. So we're now being rolled out across the largest grocer in Germany called Edica,

the largest grocer in the United States, which is Kroger. And it's an invisible plant-based seal, just to be clear, it's not plastic. This is a plant-based seal that goes on an avocado, just makes it last longer. 100% organic FDA approved. I'll give you another example, cucumbers. So you notice sometimes you go to the grocery store, they have plastic on them. But that's to preserve it because otherwise it doesn't last very long. So Walmart, sorry, Walmart.

Walmart has announced that they're going to standardize on appeal for all cucumbers and get rid of all plastic. So that's one example. I want to give you a second, Jason, if you don't mind. I know it's a little bit long-winded. We've invested in a company that nobody on the skulls heard of. Okay. It's called insect. Okay.

Insect. Yeah. Starts with a why not an eye. Okay. What they do is they figured out how to grow industrial scale worms. and what they do is they grow in vertical farms. It uses 97% less carbon than you would if you grew it in a horizontal manner. It actually has a negative carbon footprint.

And we use robots to grow them. So we stack containers. The robot goes in, lifts it up, feeds the worm, drops it, goes in, feeds the next worm, drop it. Now, why does any of this matter? what happened was we were depleting the world's stock of fish. We were pulling sardines and anchovies out of the population and feeding them as part of fish mail to other fish. And that was causing a problem in terms of sustainability of fish stock. So what fish growers did is they started feeding them carbohydrates. But it turns out a lot of fish can't digest carbohydrates. So fish mortality went

up. So they started using antibiotics and amino acids in fish, which is not good for the unpopulation. We were starting to do to fish what we've done to cows and chickens for, you know, generations. So what we are now able to do is use insect worms as an input to the fish. Now, in the wild, fish already ingest 15% of all their ingestion is already insects. So all we're doing is returning them to the protein that they already use. So this company went from having zero revenue to north of 100 million in bookings overnight. Wow. And they basically make little pellets that you can feed to fish because fish eat crickets already. So we, today we only grow worms. We are going to increase. But worms turned out like we tested a whole bunch of insect types, including things like crickets. The problem is when you grow them in close quarters, they become cannibals. So you actually can't scale them. And what we do is we take the manure and we use the manure as an organic fertilizer. At maturation, we crush the worm.

We take the liquid products and we sell it to the pet food industry to make kibbles more water soluble. And we take the dry cake powder as an input into fish meal. Amazing. It really is amazing when you think about sustainability in the planet right now. I just had zero mass water on the podcast. They create panels that go on your roof. You put two of them on your roof. You get a case of water every day.

And basically, you know, it's just a matter of time before these things are $200 instead of $2,000 or whatever it is right now. And when that happens, we'll just pull water out of the air. And the idea that we'll have to pay for water or that water will be some precious commodity, it'll just go away. The same way, people with solar on their houses and a power wall now and who drive a Tesla are just like, energy's not a problem. And we kind of live in two worlds right now. Some people are living in the future and they see it clearly. And then other people are determined to live in the past and maintain clean coal or coal. What I would encourage your viewers.

F-150 trucks. I would encourage your viewers and podcast listeners to read a book called Disunited Nations by Peter Zahan. And he's written three brilliant books that are all worth reading. The first was called the accidental superpower. And it talks about why the United States became so successful. And then he did the absent superpower in which he predicted well before Donald Trump that the U.S. was going to withdraw from the Middle East and withdraw from global alliances.

and disunited nations is post-Trump, and it talks about how world order will be in the future as countries no longer collaborate at the same levels. And when you do that, we're going to have to focus on food security, water security, energy security, a cyber security, and countries are going to be more reliant on technology, not less reliant. It feels to me like we're about to go through a generational shift. You're Gen X, not a boomer. I'm Gen X. I'm 52. Yeah, and I'm 49. It'll be 50 in November. I can't believe my birthday's November what? 20th. Wow. I forgot my birthday. I'm going to be 50 in a couple of weeks. I really just forgot. We were going to do this whole celebration. I was going to rent in a Mon

hotel and bring like, you know, some friends to and stay at the, you know, Mongiri or something. And we're just like, well, let's just celebrate it next year because of the pandemic. So anybody, the 50th birthday party will be a combination 50-50 first. Do not do a surprise Zoom for me. me, that's dystopic and I don't want it. Let's just pretend I'm 49 for two years and that I'm 50 in 2021. That would be more to my liking. And I want to have like a five city 50th birthday. I'm just going to hit each city where I have friends. I'll do San Francisco, L.A., New York, and then somewhere crazy. But it is interesting when you think generationally, our generation cares deeply about this. Millennials are, it is, they're obsessed with it. And then when you think

about generation C, because you have millennial kids. My kids are one generation behind millennials. Okay, so they're Gen C or whatever they call that, Gen Z, Gen C, whatever it is. And that group, it's not even they're obsessed with it. It is in their operating system, right? Your kids look at sustainability, they look at protecting the planet, global warming, as a default priority. They have no choice.

I mean, you know, 30 years from now, the world's going to be very different than it is today. And 30 years from now, unfortunately, I'll be 82 and I'll be starting to think about, you know, my kids' generations more than, you know, my own existence. But, you know, my kids are 14 and 17, like 30 years from now, they'll be in the prime of their life. They have to care and we have to care. Are you optimistic, pessimistic, or somewhere in between? Probably somewhere in between. I'm optimistic about technology's ability to help us solve a lot of these problems. I'm optimistic that when generations of people start with a premise that we need to conserve the world's resources and planets that it leads to better outcomes. Another book I would recommend is called Collapsed. If you haven't read it,

it's Jerry, of course. Yeah. Guns, German Steel fan. Yeah. And wonderful, wonderful book talking about why societies collapse. And throughout human history, societies have always collapsed by over-exploitation of resources and he goes through historical societies and why they collapse. So I'm optimistic for those reasons, but his most recent book is about governance and how countries govern themselves. And there I'm a little bit less optimistic. And I think it's not that anything is wrong with Donald Trump or Boris Johnson or, you know, whoever, Vladimir Putin.

But right now, our ability to go direct to constituents with social. media means that there's more potential for leaders, you know, basically to use disinformation to control masses of people to take negative actions for their personal benefit. And we've got to figure a way to combat it. It's probably the greatest challenge of our time, more great a challenge than climate. Yeah, you know, I think this pandemic in a way, if there is a silver lining to it and every crisis does have some silver lining and some educational impact. And I think what this has taught us is we actually have a direct impact on the environment

because we saw just how amazing the air quality got in certain countries when we were all sheltered in place. I had no idea, even in the Bay Area with some of the best air quality and the highest penetration of EVVs, the difference in the night sky, the difference in the air quality was just absolutely stunning during the pandemic. And then when you think about how gas consumption, everything just plummeted, it showed us another way of being, right? And showed us we could work from home. If I could, I just want to take a minute to tell you when you sit across as you do, but we sit across, you know, 110 plus portfolio companies, what the pandemic has taught us.

And what it's taught us is you had kind of a linear process of technology adoption. So there was a predictable rate at which e-commerce was growing or, of telemedicine was growing or use of agricultural production was growing. And what COVID did was it brought three years into the present. Like we fast forwarded technology adoption. And I don't just mean suddenly your e-commerce vendors got a lot more sales. Social change has been accelerated. I'll give you an example. In my pursuit of athletics, I've been running and biking more. As a result, I've been in the urgent care twice in the last 60 days. Okay. One you can see right here, which was, and I was a bike wipeout. But what you can't see is I ran into a steel beam when I was running and I cut an artery in my leg. Whoa. And so I went to urgent care and they put in stitches and they said, we may need to take you in for surgery tomorrow. We need to see if the bleeding stops internally. And imagine my ability to sleep that night. Like they said to me, like if these things happen to your leg, make sure you come in.

And so I'm laying in bed like shitting myself, not literally, but figuratively. Pretty close. And my wife said to me, well, you know, I think our provider has a telemedicine option. I'm like, I wouldn't even know how to use it. So she looked it up for me. I'm not exaggerating when I tell you this. 15 minutes later, I had a doctor on this device pointing a thing at my leg. And he said to me, push down.

And I pushed down. And he said, are your toes numb? My toes aren't numb. Are they cold? No, they're not cold. He said, Mark, go to bed tonight. you're not going to have surgery tomorrow. I said, how can you know that over the phone? And he said, look, if you had internal bleeding, because your accident was already 12 hours ago, if you had internal

bleeding, you wouldn't see your skin pushing back as much as it's pushing back. You're fine. You don't have big internal bleeding. You're going to be fine. And I went to sleep. I won't say like a baby that night because babies wake up all the time, but I slept like a log, let's say. Or I slept like a teenager. How about that? And but listen to this. Like, not only would I not have done that before, But doctors wouldn't have done that before. Doctors can only earn what they can do in person. And now doctors are going to become knowledge workers. They're going to make way more money, ability to bill way more out.

So you look at, you know, I talked about Nanette earlier, like the ability for a pediatrician to just do a 15-minute check of you rather than having to have you sit and wait in their waiting room for an hour and a half or however long you have to wait, like it's going to be game changing. And that's happening across every industry. Yeah, what used to be one or two percent of people trying some new technology a month, all of a sudden became 80 percent in six months. Well, Instacart. Like, I love the idea of Insicart, but I never really used it that much.

Now I use it for every delivery. If you look at Chow Now, an L.A.-based company, Chownau's revenue went from like, ish. I don't want to give exact figures, but ish, like 20 million of revenue to 80 million overnight. And they'll cross 100 million very soon because- They're coming on the pod. I literally have been booking them. They basically allow restaurants to run their own delivery services. Yes, sir. So if you don't want to pay the 30% commission to postmates, door to dash, or breads,

you don't have to. But the thing is that for restaurants, about 10 to 15% of their business was take out or delivery, right? So they just didn't invest in the software to optimize their business. And now it is, right? Like new things are a priority. So we accelerated demand. We have another company you probably know Ethan Anderson at my time.

Yeah, of course. Yeah, so we've been doing. I'm an investment. Awesome. So by the way, they're doing incredible. That's good to know. He doesn't send me updates. So tell him to work on that one, yearly update for investors.

But I will tell you, we, even if you're listening. We already were doing incredible. But with COVID, a number of places are now trying to book appointments so you can schedule employees to come. So people who took us for granted, and I won't name names because I don't know if they're public. but a number of like anything from hair. We do marriage licenses.

We're now doing government services. We're doing universities. And all these people who knew they needed to automate their businesses just never prioritized it. And now they are. It is amazing when you, when you, when you, I don't know if you've had this experience now, cities which, you know, like they, you know, government, you know, workers, no, no offense, but they just, they, they, they never met a decision.

They couldn't kick down the road a couple of years. And now it's like, oh, these restaurants. are going to go out of business. Okay, we're going to let them have, you know, tables out front. Now, every community I know has this incredible thoroughfare that's like the promenade in San Francisco in Santa Monica. It's complicated, Jason, and I'm going to stick up for government workers, which will probably be unpopular with your constituency. But let me point this out, okay, I spent a lot of time with the city of Santa Monica about Bird. So the city of Santa Monica and the city of L.A. are very progressive about next-end transportation. Talk about sustainability, like

bird is electric vehicles and helping people get to the future of reducing urban congestion. But here's the problem. The people who vote are old, right? We live in a gerryocracy. So what the city council people would tell me is, yeah, okay, there's a lot of young people who want to be on scooters, none of which vote. And I have these old people yelling at me saying, why are scooters on my lawn? Exactly. And so, like, they have to be somewhat responsive to their constituents to their loudest constituents. So if young people would vote, we'd have more of the future accelerated than if old people vote, but that young people don't vote. We know that. So like, you know, I actually believe like the beauty of Uber, the beauty of Airbnb, the beauty

of bird is they push the boundaries of legislation, get consumers adopting their technology, and then force legislation to keep up. But I do have some sympathy for government workers, they have to work within the confines of the rules of the society they serve. How do you advise founders? Let's leave company names out of it to protect the innocence. But when they say, hey, maybe interpret the law or interpret the rules in the way you want society to go. I had a friend who did this with a cab company and maybe push some people's buttons or interpreted laws and regulations in an aggressive fashion to move society forward. how do you mentor folks in terms of when to bend but not break regulations and manage this

relationship? Because if you ask for permission, it's never going to happen. Let's be honest. Yeah, I mean, I've even written about this on both sides of the table. You know, my motto, which is it's better to beg for forgiveness than ask for permission. So you know where I stand. Listen, regulation for the most part is set up to protect incumbents. It's set up to protect the existing industries and the waste thing are, and that gets reinforced by how much money goes into politics to protect the incumbents. And so if you are a taxi lobby in Washington, D.C., and you're trying to protect the medallion system in New York or London or somewhere else, you're going to not want innovation. And so what, to me, the beauty of Travis and what he

solved at Uber was he went directly and said to consumers, your government is shutting down this product that people in San Francisco actually love and enjoy. So the more conflict that came, the more people that downloaded the app, the more people that downloaded the app, the more they pressured their government to keep up. And incumbents who want to block innovation because they want to protect their existing markets are never going to be in favor of it. So conflict and revolution as a growth hack. You have to. It's such a no-brainer if you want to move society forward. You have to do it ethically. You have to do it ethically. Well, you have to do it ethical. Yes, don't put people in harm.

Yeah. And don't do it in a selfish way. Like, if you're cheating, like, it did seem that there were some people who took the Uber or Airbnb example of, hey, let's beg for forgiveness rather than ask permission. Some people did things that would be considered in their own self-interest. If you're Theranos, my t-shirt I'm wearing today, Theranos. I forgot that I'm wearing my Theranos T-shirt today. If you're Theranos and you're cheating and you didn't actually build the technology, that's different. You're not, that's not bending the rules. That is cheating. There's a difference when

it comes to fraud. Like if you're falsifying information, you should not do so because you will find yourself in jail. How many, out of 100 startups that are pitching you, how many are frauds or, you know, whatever? How many times do you come across something to find fraudulent behavior in due diligence? I mean, the definition of fraud, pretty broad, like broad scale totally corrupt. My guess is like one in a thousand. Okay. How about, about diligence that when you find out about it leads to, we can't be in business with this person. How often does that happen for a VC, you know, in the... Five percent? Interesting. One in 20 times. I would agree with that. Sometimes I just see people

do things where I'm like, you told me you had a contract. Somebody told me they had a contract with like these two big players. There's Google and Facebook. And then in diligence, I asked them for, you know, or one of my people who were working on intelligence, asked for the contracts to look over them. And they said it was a verbal agreement. And we said, said with who and they said, well, we talked to the head of, you know, this facility's person at Google and he agreed that he wanted to run a trial. And I was like, that is not a contract. That's a conversation. That's known as a lie. That's known as a lie. And that just decues you. Why bend the truth? We don't fund liars. Yeah, no. Hey, you must be watching. Oh, you know,

one of a question I went to ask you about Bird. And I am in love with Micromo. mobility. But is there a business there? Is that a sustainable business? And what does it, because that's the only critique I hear about it. Obviously, everybody loves the product. Everybody wants to see it succeed. They've made incredible hardware that is unique to that company. But we've seen so much carnage in the micromobility space. Is there a sustainable, profitable business there? It's a good question. So if you ask journalists, if you ask the market at large, if you ask everyone who has an opinion, they'll tell you no. If you ask, if you ask, any shareholder or a bird, we just had our board meeting last week, who has the,

who has the actual financial information, they will tell you yes. And there's a reason. We have, and I don't want to get in trouble with the company, we have very positive contribution margin on every ride we do. Fantastic. I mean, and listen, the board, from what I understand, is my friend David Sachs, my other friend Antonio Gracius, and my other friend Roloff. So, and more You, it's like four of, I don't know how many board members there are, but four of them are close personal friends of mine. And I hear, hey, this is going to work. And so, journalists, why are journalists so anti-tech? Yeah. What's happened? Because you know, 20 years ago, it wasn't like this. 20 years ago, people love technology. Now, they just want to write how horrible capitalism is,

how horrible Jeff Bezos is for making money, and how horrible tech is. Why? You know, look, again, even with journalists, I understand the shoes. that they walk in, and I tend not to be in the school of overly attacking them, but for the reason I will tell you, which is, imagine it's your job to be bullshit at, you know, 24 hours a day where 80% of the people approaching you are exaggerating the truth or lying, and you're so tired of all the bullshit. And I would say that they erred on the side of being cheerleaders for too long. And so now you have some that want to be investigative reporters, and to do so,

they got to push the boundaries of negative news. And I think the tech industry doesn't like that, but it's probably a healthy pendulum swing. Do I love it? No, I don't love it. But I value the job they play in society. And sometimes that means pushing back even against us. But when you get coverage of your companies, nine out of ten times when a journalist is calling you, it's for bad news. That's the thing I object to. I just tell them like, listen, on a percentage basis, like, you're going to call me with every bad news story about the companies I invest in, whether it's Robin Hood, or Uber, like just every tragedy you want my comment on. And then I tell you about five companies doing great things.

And I can't get one positive story about, I don't know, blockable doing something great or, you know, a com doing something great or a FitBod. And I'm like, hey, do you want to meet a great company that's delighting customers? You're like, no, don't have time for that. Again, to be fair, though, if you go look at, let's just take TechCrunch on an average day, on an average day, 80% of their stories have a relatively positive bent. I'm talking about the New York Times, BuzzFeed, Vox. It's just, it feels anti-capitalist and anti-capitalist anti-capitalist anti-tech.

But let's agree to disagree on that one. And then what do you think about this generation, millennials and Gen C or Gen Z, whatever they want to call themselves, it'll be their decision, I guess, being anti-capitalism. Does that concern you? So I am going to answer that. I just want to tie a bow around bird because what I want to do is say, Our revenue is up massively, like we've recovered very well from COVID. All across Europe, they are painting extra bike lanes. They're blocking off cities, and they're addressing the following sustainability problems.

Number one, they know that they don't want people on subways to the extent possible. Number two, they don't want people on buses to the extent possible. Number three, they don't want cars and congestion in their cities to the extent possible. All of the macro trends favor bird. So they're both promoting European cities are promoting e-bikes and scooters. You know what, bird, we don't define ourselves as a scooter company, a micromobility company. We have a lot of modes of transportation, including we have seated vehicles already. I like the seated vehicle thing.

I think that's the big winning format. Is that one winning? It's doing well. Scooters have much bigger scale. scooters have much better unit economics today. But we think the future will involve both sitting and standing. And we're going to be part of inventing that future. And if you want to get to the future of autonomous vehicles or the future of clean vehicles,

you're going to have long range winners like Tesla. But you're going to also have to solve urban problems. And urban problems are not going to be solved only with cars. And so I love that there are people like Travis who are in a a bird and creating solutions for us. And by the way, the city of Chicago is now rolling out scooters. They weren't doing it before. The city of New York is now saying they're eventually going to embrace micromobility. City of London had banned micromobility and is now encouraging it. Everybody knows due to COVID they've got to solve this problem. Yeah. And it makes sense and you just

think about equity, you know, and fairness. You know, there's a lot of people who are out in the boroughs who maybe don't have the opportunity to get transport where they need to go. And this is why Uber pool or Lyft Line or micromobility is so critical. Like having grown up in those areas in Bay Ridge, Brooklyn, the idea you can only get a car service, which was an illegal car service where you pay cash and probably didn't have insurance for a driver's license, to be totally honest. So, listen, maybe a couple felony charges. I want to answer your question about capitalism.

I'm going to give another book recommendation. A must, must, must read. you, Jason, and for your followers. It's called Americana. Americana, okay. I got the Peter Zehan, accidental superpower. I got that. And disunited nation. It's called Americana. America. Americana is the 400-year history of capitalism in the United States. Yum, yum. And it is written as narrative of all the people who created value in our country. It goes through the corrupt history of our origins around slavery.

and why slavery existed and how much value it created and how it was valued relative to, for example, the gold rush. The value of all slaves in the United States as assets that were owned, which is a terrible part of our history, was more valuable than all the gold discovered during the gold rush, just to tell you how valuable it was and why the South didn't give it up. But it goes through steel, auto industry, canals. Just bought it. Just bought it on audible.

And importantly, capitalism is the single best system that's ever existed in humanity for creating equity and fairness and growth and providing for the masses amount of people. Like Winston Churchill famously said about democracy, it's the worst form of government except for everything else. Right. Capitalism has problems and we need to address the problem with capitalism. But when, and I tried to explain this to my children because when you're young, everyone believes socialism is the answer. The problem with socialism is more people died in China from inability to actually feed its own people under a communist system than died in the world war. Why? Because if you don't have an incentive to produce more products, you don't have the ability actually to feed populations. And so when they switch to a quasi-communist, quasi-capitalist, people had an incentive to produce more,

they were able to feed more people. The second problem with socialism is, I mean, parts of socialism are good, like providing for basic things like health care. But part of it is like a pure socialist or communist, like heart, bleeding heart, I want to provide for everyone. I understand the emotion. But the problem is somebody has to control the structural. of how we make decisions. And if it's not the invisible hand doing that, it ends up being people

who line other people's pockets and help stay in power by distributing resources so you end up with corrupt governments and systems. That is the key problem is you start looking towards the government to solve your problem. And then the government is humans and the government is humans who have entrepreneurial aspirations. And what do they do? They always, always get graft. They always try to get money out of the situation. Let's take Donald Trump, okay? Yeah. So Donald Trump trying to decide where we should build factories, where we should build jobs, you know, who should get contracts, whether or not you say positive things or negative things about them. Like that command and control type of decision making, it exists if you end up

in the far right, which is where Donald Trump is. The exact same way of allocating resources exist in the far left. So capitalism has problems. The way to solve those problems is, is to make sure that we have some amount of government oversight. So Americana goes through how the government even got in the regulation business in the first place, because they didn't used to be in the regulation business. They talk about the world that existed pre-regulation. So when we were direct marketing drugs to consumers who were then consuming drugs and dying on mass because there was no FDA, right? And so you had a government body that was tasked with protecting the lives of our citizens.

So like there's some good that comes out of government as much as like, you know, we could slam that. But the reality is that the left and the right both have the same incentive structure to ultimately end up with correct leadership. But I go back to the problem. The problem is social media and the ability for people to manipulate large amounts of people directly without a filter controlling that voice. because that's what undermines the views of democracy and capitalism is the ability of people to spew out things that emotionally sound good like get foreigners out of our country or get Amazon out of our country, right? Or free college for everybody or forgive all college loans. I mean, this is. Well, but let's let's be clear. We already accept the idea that free high school and free

primary school is good. So the idea of free education is not per se bad or corrupted. We just have to have a discussion about whether us funding that with our tax base is going to improve the overall work and skills of Americans or not, right? Or if it's going to go primarily to unions and union leaders or if it's actually going to have efficacy or it's going to protect bad teachers. I mean, these are all like super important issues, right? Yes. And, and, you know, I tend to be a free market person.

So I worry about the idea that you have unions protecting everything to do with teachers, right? So, you know, I do believe all employees deserve basic protections. And by the way, by the way, the book Americana goes through how unions got created, why they got created, what good they did and what bad they did. So you get the whole history of it. Where do you fall out? When you look at police unions and teachers unions, are these a net benefit for society or are they now working against the common good of humanity, or at least Americans, let's say. They definitely started as a net positive for our society. Where are they now? I'd say, look, they have. good and bad, but I worry about the bad.

Yeah. And I think that's what happens when you over set up institutions that have collective bargaining and over time end up passing things that are populist but aren't effective. Yeah. I mean, competition for schools would be such a wonderful thing. When I talked about starting a micro school, I got targeted by, from what I understand on the back channels, the teachers unions who were really afraid that I was going to do the basic math of public schools spend $15,000 per student, teachers get paid 50, 60, 70K,

for, you know, four, five, six students get together, families, even public school families, kind of equals the same amount of money and you might, a micro school might be a viable option. The idea of saying a microschool might be a viable option is terrorizing to teacher unions, from what I understand. But throughout history, and you can read a lot of this in the book, you know, the warmth of other sons, which talks about the great migration of black. people from the south to the north and Midwest and California, the history of education in our country has been white privileged people diverting dollars and resources away from training

African Americans. And we have to be honest with that and address that. So I believe in competition. We should have teacher competition. But we've got to figure out how we spend more dollars and more resources, really making sure that inner cities and people who don't have access to capital or competition are getting the level of education that they require? I think the framing of the education issue is one of the issues.

When you point out, we already have socialist education. This is true. And we're doing it from K through 12, which is 13 years, I think pre-K in some places, so it's 14 years. If we said we're going to add two years of specifically technical training that was highly correlated with outcomes in high-paying jobs or jobs that were in demand across the globe, you'd be saying we're going to spend 12 or 15 percent. more on education, but those last, that last 12 or 15% is going to result in a tremendous

amount of outcomes in terms of high-skilled jobs for people who maybe are, you know, coming from really challenged backgrounds. Man, that's a perfect framing. There's three realities we need to face. Reality one is that having everybody go in person for university doesn't make economic sense and doesn't make logistical sense. It costs too much money for us all to go to limited-sized classrooms in a world in which technology is available and disrupt.

So we have to figure out how to educate the masses without everyone having to be in person. Number two, it's not appropriate for everybody to go to a four-year general purpose, general skill set university. There are going to be people who benefit from that and benefit from that general discovery, but we've got to get back to the idea of vocational training. coming out of World War II, the appropriate thing was to get more and more people through a four-year generalized university degree. In 2020, it's just not pragmatic. And by the way, some of the skills we should be teaching are, you know, computer-based skills, which may not mean that you're a programmer.

You might be a tester. You might be a visual designer. But we need more people teaching vocational skills. Number three is if you really want to have an impact on education, we need to start providing more free education in preschool, right? Because if you really want to have better options, outcomes, we've got to get people when they're two and three and four, because getting word development and getting basic skills when they're young is probably a better predictor of outcome than adding two years at the end. When we look at SPACs, this is exciting. I had one of my company's desktop metals going out by a SPAC. I had Rick Fullop on the pod. And I've got four or five other companies that, you know, I keep having SPAC promoters contact me about and say, hey, do you think

calm or do you think Robin Hood or Thumbtack or whatever? I don't know. Like you got to talk to them. It's really not my place. But, you know, we have half the number of publicly traded companies now. My friend Chamath is piling up the SPACs. My friend Mark Pinkis is piling up the SPACs now apparently. What impact will this have on our business? You and I, early stage investors. Positive and good. Is it bad? Positive and negative. Okay. Walk us through. Like most things in life. Yes. So let's understand a basic fact, which is 20 years ago, successful companies, the best of the best went public in a six to eight year time frame after being founded. And they were raising money when they were smaller and younger. And most of the appreciation,

the gains that came for the company came in the public markets. Okay. So that was a net good for public investors. That was not necessarily a net good for venture capital. Now, the good thing for venture capital, the good thing for founders is we got liquidity earlier. And that's a positive, right? The bad thing is we didn't capture the 10x. So look at Uber. Like your net worth is dramatically increased because it stayed private for longer. If it was forced to hold. Yeah. And you may have chosen to be a public market investor, but being private for longer benefited people. So what happened was in the last 10 years, the best companies were staying private 11 to 13 years or longer. So what happened was money moved from the public markets

into the private markets and funded them on a private basis. So capital availability meant they could stay private. They preferred to stay private because they didn't want to have to deal with the machinations of the public market and the vultures that are out there. Scrutiny. Yeah, the scrutiny and whatnot. And so they stayed private longer. So people like Upfront Ventures benefited because our company stayed private and we were able to raise growth vehicles that could then invest in their private rounds. So all of the value capture happened in the private market. But generally speaking, I think it's a healthy outcome to get more companies public because, you know, as they say, whatever, sunshine cures all wounds or whatever. I don't know what the exact. Sunshine is the best

disaffected. There you go. Thank you. And I believe that. And so it will sunlight. And it will lead to best outcomes when companies have more public scrutiny of how they're operating and how the companies are doing. So I think generally it's good. I think show a bird SPAC coming or no? Listen, we get a- There must be circling, right? The SPAC people must be pinging you and saying, will bird go SPAC? I'd say every late stage company we have is getting circled.

So that's a better way of saying. How would you frame it for a company like that? Would you want them to go public? Would you want them to say private and keep iterating? So for me, it's really more a question of access to capital, right? So if you need three to five hundred million dollars, then you say to yourself, is that more available in the private markets or in the public markets? So in the last five, eight years, it was only available in the private markets. I mean, it was mostly available in the private markets. Now the pendulum has

swung. And there's a lot of money now in the SPAC industry. So a lot more companies are now having the discussion about whether they should use this as a fundraising event to solidify their market leadership position. Yeah, I mean, for me, I think, you know, I have been thinking about how long I'm having to hold some of these positions and I would like to have 20, 30 percent liquidity maybe. But that can be solved and is that is being solved in the private market. Slowly. Slowly, I'm having it happen. Yeah. Yeah. And then you, I mean, just this possibility of, you know, a great founder being able to use that public currency in a really intelligent, way in the way Bezos did or Google did or Facebook did. I mean, they really used their equity in those

cases to buy YouTube, Instagram, et cetera. And the best entrepreneurs will because you have a premium if you do well in the public markets and that premium allows you to acquire companies that don't have the premium. You know, that's the case of Google and YouTube. If Ring was still private in this spacker, they would have spacked, wouldn't they? Probably. Yeah, I don't see why not. I mean, I would have, I would have loved that company to stay private, but I don't fault Jamie because Amazon is a great company and he's partnered with a great company. It worked out for Tony Shea. It's one thing that Bezos really gets, which I think the Google team learned later, which was just leave them independent. If it's working, don't break it. You don't need to break a high functioning founder

and culture at whether it's Zappos or YouTube or whatever it is. Just let it sit over there and operate. Totally agree. So acquire companies that are already great at running themselves. Yes. There you go. What a great idea. Should they break up Facebook? I don't know. Probably not. I probably err on the side against it. I mean, like one of my people I respect the most on the left is Reid Hoffman. I had him at the upfront summit. I asked him directly about the question of breaking up big tech. I thought he had a really strong, intelligent, counterpoint. which is, look, these companies are competing on a global scale. And if they're going to compete against China, if they're going to compete against India, if we're going to compete on a global scale, it's not sufficient to say every U.S. company must be small and every global company then gets to compete on a basis of having a scale advantage. Yeah, we're going to ankle ourselves.

This is the thing people don't realize. We're in a global competition versus a communist country that has millions of people. Let's face it, in concentration camps? I mean, you're Jewish. I don't want to offend you. But I mean, when you look at the Uighur situation as a Jewish person, when I say that feels like a concentration camp to me, I'm not offending you.

That doesn't offend me. I actually think the same thing and I draw the same conclusion. Yeah, I mean, we're sitting here. I mean, I think this is the failure of the Trump presidency when you look at it. You know, there's many failures to look at it. I don't want to make a political show. There's a lot of... This is dangerous.

There's a lot of things I would put on Trump, but I don't think you can put the Uighur problem on Trump. Well, I put Hong Kong on him, which is he said, nothing. And if you empower China to roll over Hong Kong, you know, that basically means you can't even mention the Uyghurs. And then you look at Taiwan. I mean, what's the chances that Xi Jinping goes, you know what? I got Trump in office for three more months. Maybe we make a run at Taiwan. Read this United Nations. It explains to you why it's not so simple and why Taiwan is well protected in the future. And he actually predicts an alliance between Taiwan and Japan.

Makes total sense. I mean, there are two islands that are incredibly spirited cultures. And we need to defend that independence. I think this is why capitalism matters. If we give up capitalism plus democracy, then China wins with capitalism plus authoritarianism. The limitation of venture capital and tech is that we are very myopic and we think the whole world evolves around tech companies. But the real money in the world, the real trade in the world is around resources, right? So energy resources, food resources, minerals, commodities and whatnot. So what he does in the absence superpower is he plots the shipment of oil and why Singapore is so well positioned and how oil gets from Singapore up into Japan, up into mainland China.

up into Taiwan. And he talks about naval supremacy. And the fact that actually the people who are really good at naval warfare are the people who are going to control the distribution of oil. And he predicts something he calls the tanker wars, which is that increasingly we're going to be at low-grade war for delivery of oil across Southeast Asia. And in that world, the single best navy in the region is Japan. Yep. And so he said the Japanese are much better protected than we, you know, kind of myopically think. So, so in tech, we don't think about these things, but if you want to understand where the world's going. What was the name of that book you said, had the alliance between Taiwan and, um, that, that was disunited nations. Disunited nations by Peter Zehan. Got it. I'm, I'm,

same author. There you go. We got to get him on the pod for sure. Uh, okay. I just, uh, I just bought it. Okay. I bought a bunch of books. Uh, what a great appearance. I can connect you with him. He used to be head of research for a geopolitical strategy firm called Strapfor, which is phenomenal. And what he does is he looks at topography and demographics to predict what's going to happen in the world. And if you want to understand what's going to happen in five to seven years, which is the job of a VC, having a view of like geopolitical movements is critical. It is super critical for sure. Does that mean you're bullish on Europe or not bullish on Europe? I'm not bullish on the integration of Europe. I'm very bullish on France. You know, France has a long

history of having advanced sciences and engineers and an intellectual population. France has a very strong agricultural base and very strong energy base like the United States. Pro-nuclear. pro-nuclear. France has very good river structure. So on average, it's, I think, one 17th the cost to transport products via river versus by a land or via rail. The water is providing the electricity. So the history, well, that's an aside electricity. But the history of the United States is that we succeeded because we had two oceans protecting us, which turns out it matters. it's very hard to attack another country if you can't land there. But what happened was we have 21, 22,000 miles of navigable rivers

for which we could trade and transport product much cheaper than anyone else. Because we could manufacture and trade and transport much cheaper than anywhere else, and we didn't have to spend our money on defense, we had a lot of excess capital, and we spent that capital on canals and rail. Because we did canals and rail and deepwater ports, we had an advantage going into the post-industrial age. And all of this came from topography. And his first book, which is the accidental superpower, explains all that. Amazing. Great, great appearance today. If you want an investor on your cap table,

listen, up front isn't Sequoia or benchmark, hasn't been around as long as those firms, maybe. But Mark Sussry is one of the great VCs. I watch him do it. I watch him do the work on boards. I watch his interaction with founders, and he's right up there with the greats. And you really great, great appearance today. Really appreciate the honesty. And let's book it for next year, Nick. Four years. We got to get Marga on yearly.

We need this yearly update, at least on the, I mean, just on the reading list alone. Great, great pot appearance. Yes, Nick? I'll do it with pleasure. Okay. All right. We'll see you all next time on this week in startups.