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### Human: Thanks for listening to Phil Liben's Ask Me Anything. If you'd like to participate in weekly AMAs and discuss all aspects of startup life with Jason and our community of 25,000 founders, join us at thisweekinstartups.com slash slack. Thanks again to LinkedIn, Salesforce, and Pitney Bowes for making this possible.### Assistant: Hey, everyone. I am Phil Libin. I am the CEO and co-founder of AllTurtles. Before that, I've done a bunch of other things. Programmer by background, started a few companies, probably the most notable was as a co-founder and CEO of Evernote. I was a VC and now I'm back in the startup world, so glad to be here. Okay, let's get into questions from the Slack channel. Nick says, in your state machine model, how early should companies prioritize looking into resurrection? lines five and nine of inactive users into low and high value users. That's a really good question. I wonder how many people know what Nick is talking about. I gave a talk about the state machine that answers all startup growth questions. I'm sure it's online somewhere. I'll probably put a link to it. Yeah, good question, Nick. I think basically, you should focus on this as early as you actually have inactive users. So the idea is most companies think about getting new users from people who have never tried their product before. So they do a lot of sales and marketing outreach that way. But over time, you build up this large group of people who had tried your product, they just don't use it anymore. They're inactive. In the beginning, there's not very many people in there, and so it's easy to ignore them. But over time, that builds up into a bigger and bigger pool, and it may actually be a lot more efficient, a lot cheaper to try to resurrect those people, to try to reengage them. You should start taking that seriously, I think, as soon as you have a big enough pool of people that are inactive. One way to think about it is you look at how many new users you're getting, new customers you're getting every month. And if the number of new customers you're getting every month is like maybe 10% of the total number of people in that inactive bucket, then you can probably start actually getting as many people or close to as many people from reactivations as from new people. And it's usually cheaper to reactivate than get new people. So I would think about it like that. Look at the percentage and decide when it makes the most sense. David Fox asks, thoughts on Notion. I've been an Evernote user since 08. Me too. Thank you. 07 for me. But Notion seems to be winning over Evernote fans. So I think Notion is pretty good. We use Notion at AllTurtles. We mostly use it as a Kind of as a good internal wiki and project tracker, which isn't something that I think we ever made Evernote to be particularly great at. I still use Evernote every day for kind of all of my personal stuff. But yeah, I am a Notion fan. I think they're doing a good job. Tom Preet, three questions. Question the first, as CEO, what brings you the most joy as a CEO? Any examples? Wow. One thing to point out is people often ask me if I'm having fun at my job. And I pretty much always say no, because it's not actually that much fun. To be honest with you, I don't know any good CEOs that are really having fun. It's actually not a job that most people enjoy doing. Some people do, psychopaths. Uh, but I think most people I know who are actually pretty decent CEOs don't enjoy it. They don't do it because they enjoy it. So it's not necessarily optimized for fun. It's very fulfilling. Um, but, uh, joy is kind of a, kind of a, an interesting word. Uh, but yeah, yeah. Sometimes, uh, things, things do bring me joy as a CEO. Um, The small picture, like the very tactical version of that is like my favorite thing to do in the past year or so has been to get in Figma and just see what all of our designers are working on kind of in real time. Just see like the whole ant colony and see where people are swarming and be able to zoom in and take a look at stuff. So I kind of just get joy like pretending to do real work as a CEO in Figma and I can like comment on things and talk to people. So I think Figma has, uh, is, is kind of my favorite small joy, you know, guilty CEO pleasure on the bigger and kind of more scalable side of things. Uh, you know, like my favorite thing in the world is when I see that someone did something professionally, like at my company or companies and, uh, and it came out really great. And I didn't know about it beforehand. That's the best. Oh my God. I love that feeling. The greatest feeling as a CEO is when your employees like do something and it comes out amazingly well and you didn't even know about it beforehand. You know, I think the more frequently that happens, the more you can say you're succeeding as a CEO. So that when that happens and I'm really lucky enough where it actually happens quite a lot. It's great. It's when I am happiest. Question the second, as a software engineer, what was one of the most difficult things you had to overcome? I don't know. Everything is difficult. I mean, I'm a giant nerd. I've always been kind of socially awkward. I'm shy. I'm introverted. This is difficult. Doing this is painful. I'm not even like talking to anyone. We're just looking into a camera and like just this is like hard. None of it comes naturally, but there's lots of people with lots of worse problems than I have, and I just try to focus on what I'm trying to accomplish and just do it, get reasonably good at what I'm doing. There was a lot of bad habits that I had that I think I've broken a little bit. So I've been trying really hard to establish healthy habits, both in terms of actual health, but also in terms of management style, and work, and being in companies. So there's a lot of things that I don't know if overcome is the right word, but they're like habits that I've broken that have to do with hiring people, and delegating, and leadership, and communications. the current thing that I'm struggling with the most that I think I'm making progress on. But I've actually, it's been very easy for me to neglect regular communication with my co workers. In the past, I tended to make many decisions based on very quick casual conversations with people who were physically near me. So at Evernote and before that and after that, a lot of strategy, a lot of big decisions are just made by me walking down the hall or walking for coffee with someone, making a decision. And that's kind of sucks for remote people. But that's just like the way it's been. And I've been aware of that as a shortcoming in my management style. And of course, now with the lockdown, everyone's remote. I don't get to like go walk for coffee with anyone. So I really had to like force myself to communicate and over communicate. And I'm communicating much more now than I've ever had before. And it's hard. But it feels like actually we're a lot more productive. So I think I am better because of it. Tom's question the third, what's one thing early founders don't think is important What's one thing early founders don't think is as important as it really is besides culture? Because I think I've probably given talks where I've said that culture is the most important thing. Yeah, I mean everything, right? Founders, I think, discount everything other than the thing they're great at. The way most startups work is the founders have superpowers and something, something pretty narrow and they're great at that and they think that's the only important thing and everything else is not important. And it actually turns out that no, most of the other stuff is really important too. You just happen to suck at it. And you're not really going to scale very far if you continue with that. One example, for example, is price. So at Evernote, the night before we launched it, we were freemium at Evernote. So we had a free version and a paid version. And the night before we launched it, I realized at 3 a.m. that, oh, crap, we forgot to decide what the price is going to be. And so I just randomly picked it. I'm like, five bucks a month, random selection, because, you know, $4 is too cheap. $6 is too expensive. $5 sounds right. So we picked that price at random, and then we didn't change it for six years. So for six years, Evernote cost five bucks a month. And I knew it was the wrong price. For six years, I knew it was the wrong price, because I remembered that I picked it at random, and I thought, well, the odds of me picking the right price at random are pretty low. Um, but I didn't know anything about pricing and cause like, and startups, you know, people who understand pricing don't usually hang out at startups. Uh, and so for six years we optimized everything else. We did massive testing and every feature and everything, but the price was always five bucks. And then finally, like six years later, we're already a unicorn. We already had hundreds of millions of users. We hired somebody who understood pricing and they explained pricing theory to me. And I thought it'd be boring, but it's actually endlessly fascinating. And then we started doing pricing experiments and we like doubled our revenue within like, I think a year or something or 18 months without changing the product mix, basically from just being better at pricing. So that's a good example, right? Pricing is something that like most startups don't understand and therefore think is not important. But actually, it's really important. Rule of thumb on this is whenever you go from not doing something to doing something half-assed, that's like an easy doubling. So if there's like something that you're not doing in your startup, like just going from nothing to like kind of okay, Like not thinking about pricing to being like just barely competent with pricing, easy double. And there's ample opportunities for that. Graham G asks, Hi Phil, your talk at scale was among the highlights of my trip. Thank you. I don't know which one exactly, but great. During the early days pre-product market fit, do you think that more metrics are always better for founders or would you recommend focusing on those North Star metrics that can keep founders focused on the most important business levers? Thanks. This is a good question. I've got a chart that I used to draw about this. And it kind of looks like this. So imagine at the beginning is a timeline in the x-axis. And the y-axis is all the way on top is 100% instinct, 100% like intuition gut feel. And at the bottom is like 100% data driven, metrics driven. And the chart is like what percentage of your decisions as a company over time are like, how much are they just like gut driven, like instinct driven? vision and how much of it is metrics based. And what happens at most startups, most successful startups is they start out like all the way on top. So in the beginning, you're basically doing things based on your gut feel, your founders understanding and intuition of the customer. That's what it takes. There's really no data. Before you do anything, you do a whole bunch of analysis that rarely leads to anything really good. I really believe that in most of the things that I'm involved in or successful things that I've been a part of or invested in, in the beginning, it's just vision. It's all gut. And then over time, like people like, oh, you know, we're not really listening to the customer, we're not making decisions based on enough data, let's institute more metrics, let's make the state machine. And then over time, it kind of goes down, down, down, down, down until like, all of the decisions are data driven. And then you start hearing complaints the other way, oh, it's not, you know, it's not as cool anymore, we don't have like the same innovation, we're just like micro optimizing things, and then it starts to creep back up. And then it goes down, and then it like oscillates. So Over enough time, a mature product, a mature startup will oscillate between making important decisions based on somebody saying, I think we're going to do this because that is my founder level, designer level intuition versus here's how we slice the metrics. I think at an early stage, pre-product, my guess is actually don't overanalyze because you're just better off having a strong opinion about this is the right way to do it and then you do that. And then as you get more metrics, you get more metrics. And the state machine that we've talked about a lot, I think is a good way to know whether you've got meaningful metrics and decide what to optimize for. But in the beginning, I think it's instinct as well, as long as you understand that that's going to get you into trouble in the long term. So in the long term, you have to go to data, but then that's going to get you into trouble. So then you have to adjust and get back into it. Craig says, how have setbacks or failures in the past changed the way you approach problems or roadblocks? What changes will you make after COVID? I mean, setbacks or failures is like, I mean, man, that's a lot, right? There's a lot of setbacks and failures in life. I guess it's interesting to maybe define what a failure is ahead of time and what's not a failure. I think a failure is if I wasted my time, if I did something and in hindsight, I shouldn't have done it. I should have made a different decision. It isn't necessarily whether or not the product succeeded or something like that. It's like, did I do something that in hindsight, I'm like, well, that was stupid. And I've been lucky that hasn't happened to me that much. I mean, once in a while, maybe more in my personal life than my business life, but once in a while. But for the most part, like even things that haven't worked out financially, I've kind of said, yeah, like if I had to do it all over again, would I do it the same way? Yeah, I probably would. But setbacks are like constant, right? Like there's all sorts of stories about how at Evernote, we almost ran out of money and were bailed out at 3am by an investor, you know, phone call and lots and lots and lots of setbacks constantly. The biggest mistakes, the biggest setbacks, the biggest errors are always people related. It's always – I mean, usually it comes down to not firing someone quickly enough, right? Usually, if I had to boil everything down to its essence, if I had to boil it all down to the number one most essential frequent problem, it's not separating from somebody quickly enough professionally. Like you kind of know that it's a bad fit, but for whatever reason, it drags on and on. That's the most common thing. I have a thing, like a principle around this that I think I've drawn as a graph. I call it the tip of the fuckberg. It basically means that when you actually get around to firing someone, the reasons, you know, for poor performance, the reasons like after you fire them, the problems that you thought they were making are like teeny, teeny, teeny little tiny portion of like the actual things that you're going to find out are the problems after you've gotten rid of that person, because they're not there anymore to cover things up. And you're just going to discover all this stuff. This is universally true. This is like the truest thing I've ever said. Every like CEO that I ever know that I say tip of the fork work to is like, Oh my God, yes, that has happened to me so many times. So that's usually comes down to that. It's like the unwillingness to part ways with you know, someone that it's obviously not working out with. And it's hard stuff to do. I'm still not particularly necessarily great at it, although I've tried to get better. In terms of what changes I'll make after COVID. That's a really good question. We're taking that very seriously. I mean, I think I said this a couple of weeks ago. I had this realization right a few weeks ago where it finally sank in how I'm non-essential. because obviously through a lot of repetition, I'm not essential. That was a weird feeling because I'm used to thinking myself as vaguely important in some unspecified way. Here I am, obviously non-essential. It's odd. What does that mean? I decided the way to think about that is to say, okay, well, yeah, I'm not essential right now to the current management of the problem. How do I become essential to the rebuilding? How do I become essential to gluing the world back together? How do we, because most people I know are also non-essential to the actual short-term crisis, How do we become essential to the recovery? How do we make the post-COVID world better than the pre-COVID world? What is the new essential? So all the projects that I'm involved with, that I'm either running or investing in or involved in, we have moved all of them into thinking, how do we become essential to gluing the world back together through the repair? And we're working on products around that, lots of things in healthcare, lots of things in productivity. I'll come back and demo some stuff hopefully soon. I think it's going to be tons of changes. In terms of actual work changes, yeah, I don't know when we're going to go back to work physically. I just announced today that in all hands that we're definitely not going back to any kind of physical location until September at the earliest. I don't know what's going to happen in September, but certainly between now and September, we're not going to go back into an office space. And I just did that because I wanted people to have like the – a few months if they're trying to figure out where to spend the next few months or something, they know they're not going to get called back in. But we'll see how it goes after that. asks, how would you compare Notion versus Roam Research versus Evernote? What are strong and weak sides of each platform? I haven't used Roam stuff very much. I've seen it. It looks kind of interesting. It looks kind of involved. We I made Evernote for me and I'm kind of lazy and disorganized. This is like a common misconception is like people think I'm like well-organized because I was like, you know, co-founder of Evernote. Nope, not well-organized at all. I kind of – the system that we made, we made because I'm like poorly organized and I wanted to be just as productive as organized people without actually having to do the work of organization. So I kind of like the, just dump everything into it and it figures it out. But I haven't used Rome, but I've heard good things about it. It's probably not for my kind of mentality. In terms of notion, yeah, I just talked about that. I think it's actually pretty good that we use it more as like a publishing, like a wiki project manager type of thing and Evernote for actually like remembering everything, keeping track of stuff. But I'm not an expert in, honestly, by now I'm not an expert in any of it. I haven't been involved in it with Evernote for What, four years now? Something like that? That's a long time. But still a big fan, still use the product every day, and still have lots of friends there. Chef says, have you completed your goal of one pull-up? Last I saw, you banged out a chin-up in 2017." Yeah, where did I say this? Maybe it was like a – I forget. Somewhere I said that like my goal, maybe it was like a Tim Ferriss podcast or something, I don't know. But I said that my goal in life is to be able to do a pull-up because I've never done a pull-up, never, never been able to. I've never been able to do a chin-up. Remember back in from like elementary school being constantly tormented because I just couldn't do a pull-up or a chin-up. abnormally weak, T-Rex arms, I guess, I don't know. And then I was really overweight for a very long time actually, kind of morbidly obese for a long time. And so, yes, I've been working on it and I did do a chin-up and I'm actually up to five now. I can do five chin-ups, which is great. And yeah, I can do one pull-up. just one. But yeah, I have. I have met my goal. I can do one pull up. I'm not even going to try for more. I'll do more chin-ups, but I'm happy with one pull up. And yeah, I can do it. And I did it about a year ago, maybe a year and a half ago, still at one pull up. So small wins. Thanks for that question, Jeff. That wasn't embarrassing at all. Sina B or Sina B, I don't know, says, Hi, Phil. As you said, many companies focus on just one market and build up from there, but you guys invest in a global presence early on in the process and try to have users from specific regions in the early days. How did you guys manage to do that? Was it only marketing campaigns? Did you guys have strategic partners in that region? I guess I'm not sure who you guys are, if you mean Evernote or you mean any of my other companies or Alternals, but in general, most of the things I do, I'm just more interested in things that are global. I don't know, there's more fun to work on. And certainly at Evernote, we were global from the beginning and the vast majority of our users were global, were outside the US. And we did it organically, but we were just software. So there wasn't like heavy logistics or infrastructure. We learned a lot. And there's a lot of nonsense. There's a lot of like bad advice that comes along with this. The biggest thing was a lot of people told us that Oh, man, you could never be successful in Japan because Japanese consumers have totally different tastes. Japanese software users have totally different tastes. It's very hard for an American product to succeed in Japan. Oh, my God, you can never succeed in China because Chinese users have totally different expectations. We actually heard advice like, Chinese users don't like a UI that's too nice. They want things to be cluttered and messy. Really? That sounds like extreme bullshit, but got a lot of that from consultants and advisors. Yeah, it turns out that all of that is wrong. I like to think of it like this, like General Motors makes a lot of cars globally. When I'm in China, I realized that, hey, there's a lot of GM cars and roads here. The GM cars in China are actually different. They're like different names, different brands. They look different from the GM cars in Europe. The GM cars in Europe are different from the GM cars in Brazil. And the GM cars in Brazil are different from the GM cars in the US. So General Motors spends a lot of time trying to figure out what is the exact market dynamics and what is the local taste? How do we make a car that's going to do the best in each market? Obviously spend a ton of resources on that. But BMW sells more or less the same car everywhere. And iPhone sells more or less, I mean, Apple sells more or less the same iPhone everywhere. And Tesla sells the same thing everywhere. And World of Warcraft. is the same everywhere and has global players. So what I kind of realized is regional differences in taste matter for the mediocre. So if you're making kind of an average car, then yeah, you can optimize, you can sell slightly more of them by really finally trying to understand the alleged differences between Brazilians and Japanese. Or you can just use those same resources to just make a product that's so good that it transcends local differences in taste. And everyone wants it. And so that's what we try to do at Evernote. That's kind of what we try to do in our other products when that's appropriate. And the way to do that is to just, yeah, just really have a high bar for quality. And the other thing we did at Evernote is we had teams all over the world. And we built Evernote all over the world. We designed it and built it, not just... We weren't designed in California and made in China. We were designed in California, and Japan, and China, and Zurich, and Brazil, and everywhere else. So we tried to get the best people and the best ideas from everywhere. But our team in China wasn't trying to make Evernote for the Chinese market. It was trying to make Evernote for everyone, but using those influences and those ideas. We try to do that for everything now at Old Turtles. It doesn't make sense for everything because some of our products are have logistics aspects, they only make sense in a certain country. But when possible, I prefer to do it globally. And actually, no, we spent very little money on marketing. Although we did take a lot of the localization very seriously. We had very high quality trying to understand the local culture and speak in the language correctly. Tatiana says, hello, Phil. I was really touched by your post on LinkedIn about being essential to helping overcome the crisis. Thank you. We just talked about that. Do you consider in this matter taking some mentoring as real address help? If so, I would like the opportunity to apply for your mentoring if possible. What's the best way to do it?" That's very kind of you. Yeah. Look, I'm always happy to talk to people. One of my biggest phobias in life is I am afraid of disappointing people. It's really difficult for me. I am very reluctant to set expectations for what someone would get from mentoring relationship or whatever with me. Having said that, I am also totally – I need to drink coffee every day and I'm happy to drink coffee and have interesting discussions with people. I am definitely happy to get together with anyone who's interested over a virtual coffee. I'll work with the folks at this AMA to get my contact info. And yeah, if anyone wants to meet up for a Zoom coffee, or hopefully at some point a real coffee, I am always pleased to do that. Just don't expect that to be a world-changing experience for either of us. Luke Lightning says, question, hey, Phil, which products being developed at Alternals are you most excited about? Is that like asking who my favorite child is? I'm just joking. I don't have any children. I don't particularly like them. But I'm really excited about everything we're doing or else we wouldn't be doing them. Literally, the best thing about the way – Look, many things about the way that I've set up my life are not ideal. I work a lot. I'm not necessarily the happiest person all the time. But there's one thing that I've managed to do, which I'm actually really proud of, which is I've managed to structure my life so there's very little bullshit in it. Almost none, once in a while, but almost none. I have this allergic reaction to like boredom, to bullshit, and I've managed to structure my life so that I have very few meetings where someone is just saying some random nonsense that I don't care about, or that I'm just dealing with stuff that I don't care about. So literally, like, if I'm not excited about something, I'm not going to work on it. And it's not just me. The team that we have is this kind of amazing team and we really try to have this ethos where we try to care about important things and we try to be excited about it. I guess the flip side to that is that there is no project at All Turtles that I'm not excited about or else we wouldn't have started and I wouldn't be working on it. Now, it doesn't mean that I'm excited about all of them the same. There are some that I think are more timely or something like that. We have a couple of projects around really reinventing what health is, like how to think about personal health and wellness that I'm super excited about. One of our companies is called TELUS. They do precision radar for elder care, which is like nuts. They're just doing really well. It's this little magical device that you plug into a wall and it automatically figures out the health status of everyone in your room. It sees your heart beating, it sees your breathing, it sees how you're sleeping or walking and changes in behavior and it can be used to help elderly people stay at home longer. It's amazing, kind of world changing. has passed all sorts of tests and trials, and they're actually selling the product. So that one is pretty amazing. One of our projects called Spot, it's an AI for workplace harassment and discrimination reporting, and really reporting and training about any kind of sensitive issues. It just won the Fast Company's Ideas that Changed the World 2020 Award. So I'm really excited about that. I think in this concept of what are the new essentials, what are going to be essential to the reopening of the world? Well, one of them is going to be How do you continue to have cultures where there's as little discrimination and harassment and bullying as possible? This is a big part of it. Carrot, one of our portfolio companies is doing fertility care and they just launched a new product. because of the COVID pandemic, which is now they're helping employers help their employees who are pregnant because it's very stressful to be pregnant right now during the coronavirus crisis. So a bunch of things that I think are the new essentials that I'm really excited about. And there's a secret project that we're hacking on right now, which is a very germane Jackson to COVID and to working remotely and to productivity. That's just like a super lot of fun. And I hope to be at a point where I can actually demo that in a couple of weeks, but that's still secret for now. Presh says, hey, Phil, big fan of your work. Thank you. What's the framework for deciding which products problems you'd like to focus on at all turtles? We actually published this whole framework of this whole taxonomy. We've classified problems into five different types and we gave them funny names like there's the flying shoe and the costner and things like that. I think it's on our podcast and a few things. I'll find a link. It's actually a really cool framework that Jessica, one of my co-founders and I recorded how we think about it pretty rigorously. That's been really fun. I'm not going to repeat all of it here, but you should check out the podcast. But the short version is the word problems is important. So I think there's like two – There's basically like – Think of like two families of approaches to innovation. There's like things that are just meant to be like – That are like artistic, like inspirational, that aren't necessarily solving problems. They're just creating something new. And then there's problem solving. And we're better at problem solving. We're not as good as the, like, hey, let's come up with a crazy thing that doesn't solve a problem necessarily, that would not a problem that people know about. And if they don't know about it, it's probably not a real problem. But just like make something that no one knew they needed, but it's actually this cool or beautiful thing for the world. To me, that's art. And there's definitely many really cool products and companies that are created that way. I don't know that Instagram was solving a problem that people could have articulated beforehand. and yet it did a thing. I've never been good at that approach. And that's not all turtles game. We solve problems. So the first thing is to whatever it is that we're going to work on, you have to articulate it as a problem. You have to say, what's the problem? Which means you have to point to actual living human beings that have this problem right now. Not a hypothetical future problem. No like blockchain nonsense. Actual human beings have a problem. that are live right now, quantify what the problem is, quantify its impact, and then decide like, is this a problem worth solving? In fact, we have a framework that we call problems worth solving. We think about like, well, what's worth doing and what's not, but we consider it like that. So it really starts with stating it specifically as a problem, stating who does this problem Do we think that helping those people is possible and a good use of time? And once we have that, then a bunch of other factors come into place. But the primary thing is, what's the actual problem? And again, that's not the only way to make startups. You can do the other thing. You can do the just kind of artistic approach. And that's great. I just don't have that kind of talent. So we do problem solving. Catherine McIntosh says, changing how you eat or don't eat. Oh, I guess she's quoting me. Quote, this is easily the top three most important things in my life that I've ever done. It's absolutely transformative. What are the other two things? It's good. Yeah, it's a good question. I do know what the other two things are, but I don't know that I can necessarily talk about them. Basically, one of the most important things in my life that Catherine's been talking about is when I When I started fasting and taking it seriously and kind of working on my health, it has been totally transformative. It's just like ridiculously important. Another one of those things is partially related, but a few years ago, I don't know if you guys remember, but a few years ago, it was legally required for every investor or CEO in San Francisco to get into meditation and mindfulness. It was like some kind of a state ordinance or something. People were being imprisoned if they were insufficiently mindful. So, like everyone else, I followed the law and I got into meditation and mindfulness. And that's been also transformatively important and very useful, which I know isn't the point. In fact, I know that if you say that you're doing Buddhism because it's useful, you're not. That's a fundamental misunderstanding of what Zen is for. It's not a productivity hack. But it kind of is, and it's kind of been great. And I could talk about that for hours. And it's really opened up my way of thinking about everything. And then the third one, I guess, actually just happened recently. I just spent two weeks in the Amazon with an indigenous tribe, just like in the middle of the Amazon. And it was great, amazing, amazing, total brain rewired, change of perspective. understanding what a system is, what complexity is, what balance is, what power is, all sorts of things to talk about. So yeah, maybe those are three good things. I'm sure there's a couple of other ones as well. But thanks for calling me out and just randomly picking the number three. Jason. Hey, Jason. Calacanis says, thanks for doing this, Phil. Thanks for having me. Are you kidding? This is great. My question, can you talk about your massive weight loss and how that didn't impact you as a founder leader? Do you think you were perceived differently based on your weight as a founder leader? Sorry, this question feels too personal, but I'm coming into someone who struggles with weight and thanks for your advice over the years. Yeah, no, it's not too personal at all. I went back actually, I asked my mom to send me like old photos of myself because I was interested. Like when did I get fat? because I didn't remember. Because I remember like as a kid, I was skinny. And so, she sent me a bunch of old photos like me at age 5, age 7, age 10. And I was pretty skinny. I was a skinny, skinny kid at 5, at 10, at 12, at 15, at 17. And then there was a photo of me at 19 and I'm fat. And I'm like, huh, I don't remember this. But something around the very end of high school or the beginning of college, somewhere around my 18th birthday, I like just became overweight. And then it just like went from there. And a few years ago when I was kind of at the height, I think I was like 260 or 265 pounds. And my BMI was like north of like 35, which is kind of in the morbidly obese range. And it just happened. And then I said, all right, I got to take this seriously. And I tried a few things off and on, but I thought, okay, I started reading a lot about fasting. Actually, Loic Lemer told me about it and sounded stupid. I'm like, Loic, this is stupid. This is another thing that you're just into, but it's dumb. But I looked into it because I basically wanted to prove to him how fasting is super dangerous and stupid. So I read about it. And as I started reading about it, I'm like, this actually makes sense. The metabolic pathways here make sense to me. Maybe I should try it. And so I tried it. I decided, okay, fine. If he can do it, I can do it. So I'm just going to not eat anything for three days. So I decided just to try. First day, I was like, oh my God, this is so hard. I'm hungry. I'm going to die. But whatever, I'm just trying it. If Louie can do it, I can do it. Second day, hardest thing in the universe. I feel miserable. I feel like crap. This can't possibly be good for me. Woke up in the morning of the third day, best I've ever felt in my life. Just like morning of the third day, it was like things are clear. I feel great. And then I read more, started doing it more and yeah, it's been transformational. So I lost like about 90 pounds. I've kept it off for about three years. I kind of go up and down a little bit. I'm about 10 pounds higher than my normal weight now because of the just much less motion and much more eating during the lockdown. But I can control it. I actually haven't eaten in three days. I'm going to have a good meal. right now in about two hours, my first meal in three days. It feels great. I have not positioned myself as an expert on this. I don't give medical advice, but I know what kind of works for me and I've done a ton of research. I'm very quantified, talked to a lot of doctors, a lot of researchers. I have been incorporating that into a few of the products that we're working on. Not necessarily fasting, but just some of these core principles that that are fascinating. That's actually a whole topic that I would love to talk about with more time about just what we've learned about health and the kind of bullshit that most people just do incorrectly. And yeah, it's totally affected me, Jason. Thanks for the question. It's totally affected me, I think, and how people perceive me. I don't see how it couldn't and that's not fair, but it has. I definitely feel a lot better. Well, first thing, I feel better, right? And so, I feel better and I look better, not great, but better. And that makes me more confident and that obviously projects and makes a big impact, right? Like how you feel about yourself has a massive impact on how other people perceive you, so just that. But also, yeah, I think the country and the society, you know, unfortunately is quite quite sensitive to weight and to age. And I think I look and feel younger. So yeah, I think I have been perceived differently. And with employees, with investors, how often I get on TV, all that kind of stuff. Not necessarily in Japan. I think they liked me better when I was fat in Japan. Oh my. It's kind of a different culture. There's different norms. I remember being in Japan a few times and people would, in business meetings, They would like rub my stomach and laugh because I was so fat. And they're like, that was okay. And I had to be like, wait, what? This is a thing we do here? Yeah, I guess it is kind of funny. So not in the US, but yeah, I do feel a lot better. And I'm not recommending it for anyone. Although I do think that thinking through, like I think we have enormous amount of really bad ideas about health and weight and exercise and eating that are just wrong in this country. and sadly, most of the world. And I think it's interesting to talk through them and to see things differently. So I'm glad that that's been okay for me. Alex asks, we're building a real time platform called Answerable. It's a good name. And we're wondering what critical tipping point a platform has enough data to really derive good insights. Yeah, I mean, so I talked about this at the beginning, right? Like in the beginning, at the start, it's probably not a lot of data. It's probably your intuition. And then you start getting data and then you decide when you have good data. There's two things here. So one is a platform. The word platform is interesting. Are you really a platform? That's an interesting thing to ask yourself. I remember when I first met Bill Gates, I met him at some fancy thing when I was CEO or whatever. I met Bill Gates and I was introduced to him and CEO of Evernote. And this was pretty early days of Evernote. And he had kind of heard of us, but not really. And so he said, oh yeah, what do you guys do again? Can you remind me? And I said, yeah, we're a platform for memories or something like that. But I used the word platform. And he's like, you're not a platform. Like, okay, really? He's like, yeah, platform means that you have made something that you create more external value, you create more value to the people that build things on top of your platform, then you capture yourself. So he said, like Microsoft, like Windows is a platform, because the amount of value that is created by everyone building on top of Windows is much more than the value that Microsoft will end up getting from Windows. He said, Facebook's not a platform. Because if you add up all the apps that run on top of Facebook, they're not equal or greater to what Facebook is worth. And he said, Evernote's not a platform. Yeah, you've got people that are building things in Evernote, but most of that value is going to you. And I was like, man, that's kind of a dickish thing to say. But yeah, you're totally right. He was right about that. And it really motivated me to think more about, as I'm building platforms, I think old hurdles is a platform, but the definition for me is that there's more value created on top of it than we're capturing. I don't know if that applies to you or not, but it's fun to think through. Not fun, the opposite thing, kind of unpleasant and obnoxious, but true. In terms of how much data you have, yeah. I mean, look, just Google how to do statistical significance and probability and those relatively well-established, right? It's not a question of – I can't tell you how many data points you need because that depends on what is your null hypothesis. What are you trying to prove or disprove? But it's relatively well-established and it's surprising to me how very few investors and founders actually remember their basic statistics. So yeah, just Google. S-tests and P-tests and statistical significance. It's pretty straightforward. In the beginning, just use your instinct. Alex asks, what would you suggest for a very regulated company, SEC, where user testimonials with referrals are either straight up not allowed or require superfine inspection with regards to disclosures to avoid being sued? I don't know. I mean, I think if your primary concern in your company is to avoid being sued, I think you should have a serious think about whether or not you're doing the right thing. Do you want to be spending? I wouldn't want to be spending my days if that was my primary concern. If I'm like, shit, the thing I'm worried most about is how not to get sued and how to cover my ass. I would just be like, eyes, because that just sounds stressful. Now, maybe you're doing something super important for the world and you've decided to bear that stress. Maybe this is a healthcare thing or something where it's like, yeah, that's just part of the game. In which case, yeah, you made an explicit decision that dealing with lawsuit bullshit is just something that you have to do because it's so important and try to have clarity around that. But again, without more context, it'd be hard to say. But I would have a hard time working on something like that unless it was really, really, really super worthwhile for the world. And I don't mean worthwhile in terms of making money. I mean like I would consider the price of worrying about this to be a really heavy price, and I would ask whether I really am ready to pay it. Juan Juan, it's a great name, says, I remember when Twist first started and Jason had you on the show. Huh, better memory than I do. I remember that it happened, but I can't remember what we discussed. I remember your story when you were planning to close down Evernote and an angel came to your rescue and gave a check at the runway to success. How did that happen? What were you feeling at the time? Yeah, this is totally right. I came within 10 minutes of having to shut down the company. I decided that I was going to shut it down the next morning. It was 3 a.m. I decided, okay, that's it. We're out of cash. I need to go to sleep, wake up, come to the office the next day, tell everyone that they are laid off. This was during the 2008 financial meltdown, the previous managing through crisis. This is the third one of these things that I've tried to manage through. Right before going to bed, I got an email and I said, I'll read one more email and it was from this random Swedish guy who said, hi, I'm a random Swedish guy and I just want you to know that I love Evernote. I love using it. It's changed my life. I was like, oh, that's nice because it made me feel better because they say if you help one random Swedish guy, it's worth it. So that made me feel a little bit better. And then he just went on to write, so I'm just writing to see if you need any investment. And I was like, why yes, we would like some investment. And then I stayed up instead of going to sleep. And 20 minutes later, I was on a Skype call with him. And two weeks later, he wired us half a million dollars and we stayed alive. And then that was just enough to get us through the crisis. And then after that, we raised like $300 million more, not all at once. over the next few years. So yeah, that actually happened. That is a true story and that's what it was. I mean, I guess the moral of the story for me is always reply to emails from Swedish people. Vitaly says, how do you estimate tech risks while investing or building an ML product? I guess machine learning maybe. I have an MS in data science and was working in the industry for five years. I saw many companies fail to ship because they didn't make an algorithm to work. Building a product is hard and ML in most cases makes it even harder. Yeah, definitely. I think this is true of AI in general. I think you got to ask like – so, We don't invest in or build AI companies or products, right? We solve problems and we're looking for the most direct solution to the problem. And if that solution, if the most direct solution requires machine learning, great. But it's not like we don't start with what's a cool, like how do we use machine learning? We start with how do we solve this problem? And it happens that there's a large class of problems. In fact, this is kind of the old turtles, you know, a big part of the old turtle framework. Someone asked previously is, um, you have to solve a real problem and, you know, we have to have experts as founders who really understand it. And it has to be, you know, self-sustaining. And, uh, the last one is kind of important. we have to be able to solve this problem for real within 12 to 18 months. So we only give ourselves a 12 to 18 month window to get an initial product to market in a way that would have been impossible two to three years ago. So what technology has changed to make a problem solvable today, for real, not like in a science project, Whereas like three years ago, it would have been crazy to think about. And a lot of times today, the answer to what's changed is, well, we have better ML tools, we have better AI, we have better networking. So a lot of times that answer is technology. Not always, sometimes it's societal. There's probably a whole lot of problems that are solvable now because of how people are relating to COVID that were probably crazy to attempt to do a few years ago. So if you start that way and you say, what's the solution? Then the risk takes care of itself, right? Because you haven't tried to stuff ML into some kind of a product. You've said, this is how I'm going to solve this problem. And it requires this exact particular step. And I'm an expert at it, or I have experts at it. So I think a lot of the companies that I've seen that have failed to do this, they're not clear exactly. It feels like they were sort of tech first. They were like fetishizing the buzzword, the technology, not the problem. Having said that, you can always fail, right? Failure is always an option. And one advantage of having the problem-solving mentality is we're looking for founders who understand the problem completely, whose life work has been to put a dent in this problem, who are in love with the problem and indifferent about the solution. They might have a hypothesis about the solution, but they're hopefully willing to iterate through many possible solutions to see which one solves the problem best. So if solution number one is do something, something with machine learning and that doesn't solve the problem, great. What's solution number two? What's solution number three? And again, the founders are problem focused, not ML focused. So it's more scalable. Tammy asks, will remote work actually be permanent? A lot of folks I know can't wait to get back to an office. Others are happier campers than they've ever been before. I don't know. I mean, I like working at home. It's fun. I avoid most people. I compulsively do math. Yeah, it's kind of I'm kind of living my best life. This is kind of cool. But I also know that I'm lucky because I don't have a real job. Most people can't do this. So I think I think remote work is going to be An aspect of being remote is going to be present forever now. For example, I think that most meetings, even when offices reopen, I think most meetings will have some remote participants. Even if some people are there in person, they'll always have some remote participants. I think we'll have very rarely things that are all in person in one space. I think even after the pandemic is done, certainly while the pandemic is going on, which may still be for another year or two, there will be a remote component, even if it's not all remote. And I think that changes a lot of things. So we're working on a few things about that. And in terms of my, in terms of all turtles, or some of the other companies that I'm involved with, Yeah, a lot of them have been remote forever, I mean, for a while. And I don't think any of them are like necessarily itching to immediately get back to a physical location. So I think it'll be – I think remote stuff – I think all remote will last for a while longer. And then even after it lifts, it'll be some remote and that'll probably be permanent. And I think that's generally a good thing. Again, for people who can do their work remotely, which I think is probably like a third of all the possible jobs. Vince says, question, after scaling Evernote and then working as a VC, I'd assume you'd advise many companies not to go the VC funding route. Why would you assume that? Did you raise money for AT or did you bootstrap and when would you advise in either direction? I'm asking because impact-oriented businesses may not have aligned short midterm goals with a typical investor and the investor could pressure product team without having any knowledge of the market or problem space. Yeah, I mean, look, I had a lot of VCs at Evernote. Sequoia was our biggest investor, and we had Morgenthaler, which is now called Canvas, and Meritech, and Kotu, and a few others. And in general, my experiences there were good, were very good. Not easy, but good and useful. At Old Turtles, we have great investors. We have VCs, we have General Catalyst, we have Salesforce Ventures. We have a bunch of just friends and contacts of mine that I've known from Evernote days or before. I put more money than I probably should have into it myself personally. I guess, when should you bootstrap versus raise VC money? Well, I guess the first thing is, can you bootstrap? Yeah, if you've got a few million dollars laying around or have easy access to it, then sure, why not? That's not very common, right? Most people don't have that. So I think for the vast majority of people, you kind of need outside capital. So then the question is, where are you going to get that capital from? Where are you going to get that money? And money comes from three different sources, debt, or equity investment, or revenue. Most startups don't have easy access to debt unless you're running a restaurant or something, in which case, yeah, debt is maybe fine. Plus, I'm an immigrant and I guess immigrants don't really like or understand debt. My brain doesn't really work with debt very well. I try to avoid that when possible, although we have some now. It could be very useful. Then really, it's a question of investment or revenue. Both of those are expensive. One is not better than the other. They both have a cost, right? The cost of investment is you give up some ownership of your company and you have to deal with investors, which is your right. They sometimes are very annoying, but sometimes not. The cost of revenue is you have to deal with customers who are always very annoying. So you have to decide which of those is better. But honestly, usually, you don't have a choice, right? I have not met many businesses other than those that have been started by third time entrepreneurs that just have a lot of access to money that have much of a choice. Usually, if you have access to VC money, you're going to take VC money. If you have the kind of product or maybe you're a consulting company where you have services where you can bootstrap with revenue, maybe you can do that. It's rarely that you have access to all of these things that you can choose. It's usually like you do the thing that your business calls for. I guess I'm currently in a phase of my life where I'm very much enjoying running a self-sustaining company. All turtles is we're self-sustaining. We're no longer living off of investor dollars. We're more or less profitable, some months more than others. That feels great. I've been a CEO for 23 years. Of those 23 years, my first two were profitable because my first company, we didn't know that investors existed. We didn't know there was such a thing. So we were just profitable for the first day. But then starting in about 2000, starting my second company, I learned all about VCs and investors and then pretty much was never profitable since then. I think Evernote was profitable for one month when I was there. We basically got it to profitability and then raised a ton of money and like hired and grew a lot. It's profitable now but that took 10 years, 11 years or whatever. So in the last 20 years of being a VC, up until two months ago, I was profitable for one month. And now that AT is profitable, I think I've tripled that. So like, I think I've had two profitable months at AT, give or take. So I have increased my experience as a CEO threefold in the past two months. And it feels pretty good. It feels nice to run a profitable business. I like it. I don't know exactly how long I want to keep doing that. Maybe at some point, we want to raise a bunch more money and expand again. Maybe not. But at this point, we're able to be profitable. So why not? So I think it kind of comes down to that. It's what do you need for the business? Would you be doing it anyway? And then what would you have access to? Sir Charles asks, the first browser plugin ever installed was Evernote. Me too. Thank you. It made me nervous. Me too. Was there friction for others? I don't know. I mean, do you mean like for what? Like privacy, that kind of stuff? Like we built it really correctly. So I wasn't nervous about that. And I really liked, like, I liked it a lot. It was super popular. I think we were the most popular browser for a while. Maybe, maybe still are. I don't know. Well, sorry. No, the most popular browser was always like ad blockers. We were the most popular non-ad blocker browser. And yeah, for a long time, it was the only browser plugin I had. I think it's still the only browser plugin I have. I think maybe now I have Zoom as well. For a while, the only other browser, the only browser plugin that I found to be as delightful as the Evernote browser plugin was, I forget what it was even called, but there was a plugin that basically just changed every instance of the word literally to figuratively. Whenever you were reading anything and it said literally, it would just change it to figuratively. That's it. It changed my life. It improved the internet immeasurably. It was figuratively mind-blowing and life-changing. All right. Let's do one more because I really do have to bail. So sorry, I'm just doing this in order. We'd love to answer more questions maybe if we had more time. Steph asks, hi Phil. In the aftermath of the current sanitary crisis – I thought I had a green screen. You can't see my apartment. I wonder what is going to become the norm. Companies looking to exclusively hire local folks to create stronger bonds and minimize carbon footprints or distributed companies with employees all across the country world. What's your take? Well, both obviously. I think companies that can function distributed and remotely will do so. That's just the superpower now and will be forever. If you're building the kind of product that is good at being done remotely, I think you will do that and companies who are good at that and who are able to do that will have massive advantages. I think distributed and remote working has just gone through a step function where it has become much more important than it ever was and it's going to stay super, super, super, super important. Having said that, there's lots of things that you can't do remotely. And for those, yeah, I think we need much more resilient local ties and bonds and businesses and minimizing corporate footprint and travel and all of that stuff. And I think that'll be long lasting as well. So I think for things that can be remote, they will be. And yeah, I don't expect that to change. And we're betting on that. We're working on a few things.

### Human: So I think that's what most are.### Assistant: Cherry is in the analytics space. For an urban tech, it's real estate analytics. Data provider is what they do. Tissue analytics and health. So it's across health, urban tech, and secure tech is where we've focused for the last few years. But lots of companies, we've had about 350 companies go through. Health is the oldest of the verticals, about 130 companies have gone through. So there's a lot of companies at different stages of their growth. So we're going for companies that have products in market. So you're not an incubator. You're not incubating idea. Somebody comes in says I have a business plan. I have a mock up a prototype I made over the weekend. You're not doing that stage of company, correct? We're not doing that stage. We started there. But it's like, you know, we're not, we're not interested in sitting there and explain to a founder, what's a cap table? How do you incorporate it's just it's not as value added. And it's not as interesting for us. And we think, there's more founders, we can help once they get past that to really accelerate, really build and grow the company once they've gotten just a little bit of like, the smoke is coming out of a little TP of wood. And then we want to really help. Isn't it also a bit of a cow if they can't even get a basic product and one customer to use it? I mean, in today's day and age, you could do that with sweat equity with two or three people and whatever, maybe 10 weeks of work. So if you can't do that, don't you disqualify yourself from kind of even being in the startup game? Absolutely, absolutely. And you know, we'll go a little bit early if we see something that is exceptional, the founders exceptional, what they're doing is exceptional, it's really unique. And we we know our verticals so well. But I'm probably like you, yeah, there's so many founders we talked to, and they're pitching us. And we know so much more about the vertical than they do. But if we see something exceptional, we'll go a little bit earlier. Maybe they don't have revenue, they just have a couple of unpaid trials. Like you said, they're not think you've talked about They're not customers, they're free users, they're freeloaders. Maybe they have that, but you're starting to see the way that people are reacting to it. Once in a while, we'll go a little bit earlier if we see something that really catches our eye. But yeah, we're looking for that little bit of early traction. And you said there were three verticals. Explain those verticals again and why. Sure. Yeah, the three verticals that we focus on health tech, which is really focused on digital health, medical devices and diagnostics. The original thesis, by the way, behind that we started health tech about eight years ago, it's when electronic medical records were coming online. And we thought, wow, if these EMRs and EHRs, you know, if you remember, Jason, when you used to go to the doctor, when you were a little kid, there was no computer, you know, they pulled the paper chart off the wall, and they had a lot of little two letter Yeah, a lot of file cabinets are gone, right? We said, well, if this all gets digitized, and Obama made it mandatory, and there was funding for that, oh, my God, the data that this is going to throw off will be enormous. That's why we started Dreamit Health and Dreamit Health Tech. It was like, this is going to be huge. And luckily, we were right. So health tech is, again, digital health, medical devices. It's really cool. Right now, while we're recording this, in 2020, a lot of those companies, we have over 15 companies that are getting sucked up so quickly because they have COVID-19 frontline solutions. So that's really cool. So that's health tech. Secure tech is three kind of areas. We focus on cybersecurity, physical security, and things like fraud. It's, We love the space because they're really big problems. They're urgent problems. Security and cybersecurity is such a big issue. It's a really big pain point. We have a managing director for health that's Adam Deakin. Mel heads up SecureTech. So those, again, cybersecurity, physical security. So it's not just the digital side, but there's all the, whether it's cameras or detecting. That type of things like fraud, counter-fraud, anti-fraud, any money laundering, they're just big problems. They're interesting, they're very B2B and enterprise, and we're good at that, and we have domain expertise. The last one is urban tech, which focuses on construction tech, real estate tech, prop tech, huge trillion-dollar industry around the world, lots of big things going on, and we find it just a really interesting space. So again, there's like, each vertical is a very big umbrella, and then there's sub within those verticals, and that's what we focus on. What if you have a consumer company that looks really promising and they're making a game or a subscription service for doing, you know, workouts like yoga or something and you just fall in love with the founder and you love their progress, you don't invest and you just pass them on to other folks? I'd say call Jason at launch. I'm not kidding. You're very agnostic for all the right reasons. And I love your thesis. We focus on three things. And I think we do it exceptionally well. And I think we do it better than anyone in the world. And I know you're going to have like 10 different accelerators on. I think there's a handful of venture firms that do acceleration like this, like a pre-investment program or acceleration. I think there's a small handful, single digits around the world that know what they're doing. Yeah, we know what we're doing. And the areas we work in, we're exceptionally good. We don't, you know, it's a consumer app for game. Nope, we won't do it. We won't invest in it. It's just and it also well, in order to pursue your, your tours, when you go on that road trip, and you do a customer sprint. Yeah, if you had 30 different verticals, you'd have to do 30 different sets of correct customers, it wouldn't be possible. Here you have three different verticals and the customers are all going to be in those three. So do you run the classes on a rolling basis or is it one class and is it one theme per class or do you have a mixture of those three in each class and how many people per class? Great question. So we think of them as cohorts. We run two timed cohorts per year, much like a YC. We do a spring and a summer. They call it winter. But we do a spring and a fall cohort, two cohorts per year. All three verticals run at exactly the same time. It gives us Scalability, and by the way, I think of Dreamit a lot of times like a startup, right? We're a business that helps other businesses. It's so funny. By the way, I don't know, you're an entrepreneur at the end of the day also, and like everybody at Dreamit is too. And people be like, well, now you're not a startup, you're not an operator anymore, you're an investor. No, we're still an operator. It's just, I'm innovating. I mean, if you're a VC, you are writing checks and it is different. But when you run an accelerator, you have a customer the startup, and you really have to build a product that appeals to them. Right, and the way I think of it, and I'm sure you do it with launch too, right? I don't know if you're gonna interview yourself for that, because I mean, what you guys are doing is really cool. I'll interview you, we'll flip around. But anyway, no, and we think about it, just to digress for a minute, we think about it with Dreamit, and we think about investors, the number of times, how many of you times have you done this, Jason, as an entrepreneur? You'd meet with an investor, and they say to you, Well, Jason, what makes you unique? What's your moat? What's your defensibility? You know, what's your cost of customer acquisition? How you know, what's your IP and the number of times as an entrepreneur, I'd want to meet with that investor and hold a mirror up to them and say, I have a question. What the fuck is yours? What makes you so special? And so at Dreamit, we almost, we just think about that all the time. We obsess. What makes us unique? What makes us different? What makes us special? How can we get our startups to win? So we think and build Dreamit along those lines, like any other type of company. Sorry for the digression. No, no, it's a great fucking digression. When we get back from this quick break, I want to know what you think is the most important part of what an accelerator can do for a startup. The anointing of them, in other words, saying this is a valuable company worthy of your attention to the downstream investors, the money or the advice when we get back on This Week in Startups. Now more than ever, we need people with the right skills to support our communities, especially the frontline workers who provide resources and care for those most in need. To help, LinkedIn is offering free job posts for healthcare and essential service organizations that need to quickly fill critical roles with the people who help us all. How amazing is that? If you're hiring for one of these organizations, LinkedIn's active community of over 679 million members unbelievable how big it's gotten, can help you find the right people for the frontline fast LinkedIn jobs, screens candidates for the skills and experience you're looking for. 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Plus, if you need to hire for healthcare or essential services, you can post your job for free. That's awesome. LinkedIn, go to linkedin.com slash power for $50 off your first job post. That's right. linkedin.com slash powers because this is the power of accelerator series. Again, linkedin.com slash power terms and conditions of course apply because they're giving you 50 bucks. Okay, let's get back to this amazing episode. Welcome back. It's our special 10 part series, the power of accelerators. First up, Steve Barsh from dream adventures. When we left for the break, I wanted to know what you think is the most important thing that accelerators as a category do for startups, if you had to rank these three first ranked the advice, the money, or the anointing stack rank those for me, which one is the number one, which is number two, which is number three. So I think it depends. I think for Dreamit, it's hard to pick. It's like pick your favorite child, right? Yeah, I think for us, the advice is really important. Again, we have probably like you do at launch, we have so many startups that come in, that are well on their way, they're a few years in, and we just start tearing into them and pressure testing all over the place. And You know, once they come in, we take the gloves off, right? You know, you made it through final round interviews, welcome to dream it. And by the way, I look at it, and again, I think it's like what you do and other people do. I think of dream it like a Harvard or Stanford. How many students have you met that graduated from the universities that you're like, yeah, they're not that smart? They're all brilliant. By the way, they're brilliant. They wouldn't have gotten into Harvard or Stanford if they weren't brilliant. Their job is to make them better. At Dreamit, our job is to attract the best of the best, pick the best of the best, and then make them better. So I think part of it, like those universities, there's a branding component to it. Like, ooh, they're a Dreamit company. And in the verticals we operate, that really means something. If you're health tech, secure tech, urban tech, People say, oh, it's a Dreamit company, I know it's gonna be good, because so few of these companies get in. So that curation is really important. I think though, again, what I was getting to, the advice side, the mentoring, the pressure testing, companies that come out change materially. Like when a Dreamit company talks with another Dreamit company from a previous cohort, they're like, oh my God, you're going through Dreamit. I remember that, that's pretty intense. I think those are the top two, the anointing of advice. So advice is your number one, the mentorship and advice. Then where do you put the money and the anointing factor? I'd put the money probably last. And also, again, like we talked about a little earlier, we don't write an upfront check. We got out of that business. We want an investment right, and we don't want to do some bullshit valuation that's artificial, like we'll give you 120 for 6% of your company. Our companies, every single company, 90% of Dreamit companies, that would be a down round if we did that, if we wrote that check. So it's not the money for us. It's going to be to help them get that round as they go through the investor sprint, through that process, and we write a check afterwards. But yeah, I'd say money is last. Yeah, money's last for me. I put the anointing first, but that might be unique to me, and then the advice second. Not that we don't do a lot of advice and not that we don't try to hash through it. Maybe the founders would pick something opposite. I'd be interested also in hearing what our founders say about this in terms of rating our programs. How do you know, since the advice, and you've now mentioned twice, that you really hammer them and you try to be candid with them? Um, most VCs today say there is no downsize, there is no upside to criticizing an entrepreneur when you meet them or giving them any kind of hard medicine or doing anything that is even remotely interpreted as criticism because you might upset the founder and they might not want you to invest or you might get a reputation for being too candid, too blunt. I know I got that early in my angel investing career. So how do you know when to turn that on and not have it be obnoxious or unnecessary, but to have it actually be constructive? When they, you know, when thousands of startups, thousands and thousands of startups apply to dream it every single year, We don't turn that on in a big way until they're in, right? The beating doesn't begin until they're in. When we're doing final round interviews, we'll ask them tough questions. And we've talked about this. There's a bunch of corporations that have talked to us, like, how do you do what you do? How do you, we'll go into corporate accelerators, by the way, and they're like, oh, come in and take a look at our startups. And we'll spend, you know, an hour and talk to eight startups and say, what do you think? Well, who are the winners? And we're like, there's nothing here. You don't know how to triage startups. You just don't understand the questions you should be asking. So when companies go through a final round interview with Dreamit, we want them to walk away and say, you know, because you have a brand, like you're talking about, you have a reputation. And it's that joke definition of diplomacy, right? What's the definition of diplomacy? You know, being able to tell someone to go to hell and they enjoy the ride. We need somebody to go through a final round interview with Dreamit. And if they're not gonna get in, they say, you know what? Those questions were tough, but they were fair. But we won't give a lot of advice. We're just gonna ask a lot of hard questions, which is what our job is, and we always do. Once they come in, and they are a Dreamit company, in the first week they do something, we do something with them called deep dives, where we go back through with them, because Dreamit is not pre-programmed for every startup. It's customized because every startup comes in at a different stage, different funding, different market. We do a deep dive with them. It's like a diagnostic to understand where are they strong, where are they weak, and where do we want to focus on with them for the next 14 weeks. During that deep dive process, the gloves come off, the true thoughts come out, and I'd say 90% of the startups go, oh my God, this is crazy, I love this, can we do this some more? It's like, we're gonna get along really, really well if you think that, so that's how it goes. Yeah, I mean, the truth is, if you are really trying to win, any criticism you're gonna look at as a gift, a way to get better. Right. What are the questions you like to ask during those interviews and why? Okay, great question. So what are the questions I'd like to ask? The first thing we'd like to hear about is what problem are you solving, right? It's kind of standard stuff, but I'll just tell you why. To me, Jason, I think about, again, a lot of what we do, it's triaging, high-speed triage. And I wanna understand, we wanna understand what problem are you solving? Is it a big and urgent problem? And what's your unique insight around that problem? The reason why is, just to use a medical analogy, If a patient gets wheeled into the ED, by the way, we've learned that in health tech, you can't call it an ER, it's not an emergency room because it's not the cardiology room and it's an emergency department. So if a patient gets wheeled in from an ambulance into the ED and I put their fingers on their pulse and there's nothing there and their body is cold, I don't need to do a CT scan, an X-ray and pull lab work, we're done. If a startup comes into Dreamit and starts pitching us and we don't believe the problem, you know the fact, right? 50%, over 50% of startups fail because they're not solving a big and urgent need. First thing, what big problem are you solving? We're going to put our fingers on the pulse and see if we agree with that. What evidence do you have that the problem exists? Then we want to start understanding, What tell us about your solution? What's unique about your solution? What's your unique insight? The solution doesn't just need to be a technical solution. We do a lot of series called the dream at dose. And we talked about this there. How can you be clever on more than one axis is are you being clever in the product in your go to market strategy in the way you're acquiring customers? How do you think about all that? So we look at problem, we look at solution. We do look at total addressable market. We want to understand that and how they're thinking about it. Competition and competitive differentiation. We have a great dream at DOS on that on competition. We always talk about no magic quadrants. Don't want to see your bullshit magic quadrant. Want to see a well thought out competition. And when most startups are pitching us, they're going to not do well on these, but we can ask enough questions to figure out if we like it or not. and then understand the team, that type of thing. So kind of the usual things, what's your go-to-market strategy? It's another, if I want to pull the rug out from under a startup, I could say, tell me about your pricing, where'd it come from, and tell me about your go-to-market strategy. Usually they'll fall down on that. We can fix that at Dreamit. We can really help them fine tune that. But problem, solution, how big's the market, and what traction do you have? What evidence do you have that people care about this greatly? Which one of those questions at the stage you're investing, do people struggle the most with? on competition and go-to-market strategy. They just don't even understand. What's your go-to-market strategy? Direct sales. That's not a go-to-market strategy. That's a sales strategy. I find they struggle with that a lot. So explain that to me. What does go-to-market mean for Dreamit and for you? Sure. And there's another Dreamit dose on this, go-to-market strategy. So the way I think about it is, particularly for early on, and we just had Jeffrey Moore on from crossing the chasm, And I remember, that's where I learned this from originally, right? You know, he's talking about what's the definition of market. We want to understand who is your first target customer. And most of our companies are B2B kind of enterprise-y type companies. What's the targeting criteria and why? What type of customers are you looking for? Like, I love to go fishing, so we make lots of fishing analogies. You're going fishing for what type of fish? And I'm not worried if you're going for flounder or tuna or bluefish. I'm worried about the criteria, like, What are your best criteria? What are your best target customers you want to go after? And why? So for that go to market strategy, we really want to understand what market are you going after? What type of customers? Why? And then how does that evolve over time as you grow, your solution grows, and your brand grows? And I find 95% of startups, you just pull the rug out from under them. They're just all over the place and random. Give me a great example of a company that really defined that and dialed that in if you can. Let me think of a company that defined that and dialed that in. I don't know, most of us, I can't think of one off the top of my head. Most of them, we make pretty big adjustments. I'll give you an example, by the way. We do a lot of health tech companies, and they're all chasing what are called AMCs, academic medical centers. And we'll say, why are you chasing an academic medical center? Everybody's chasing them. It's like on I live on the East Coast, United States, right? So if you want to go fishing, you go over to New Jersey, it's like tuna fishing, you're trying to catch something, it's 80 to 100 miles offshore, it's nearly impossible to catch. If you catch one, you're eating and you're doing well, if you don't, your boat runs out of gas, and you're going to die of starvation. And we see a lot of startups. So we try to adjust them to think about how do you start getting fish in the boat? Like, let's start making money here. Let's start getting traction. Let's start getting out there. So a lot of them, we adjust their thinking around that or go to market strategy. How do you mess with pricing? How do you do almost like a price guarantee where you as the startup, if you believe so strongly in your product, how about you take risk and say to the company B2B, look, if it doesn't work, you don't owe us anything. So we also play around with their business model in that sense. I think understanding your ideal customer profile, who you're going to go after first, that tip of the spear, the wedge strategy. Some people haven't even given that much thought, huh? Nope. Very poor thought. It's just kind of random. And look, they're young companies, and they're being opportunistic, and I understand that. It's a little bit like, I don't know, if you know lawyers when they graduate from college, there's a joke. What kind of law do you practice? Door law. What's that? Whatever walks in the door that day, that's the law I'm practicing. So they're a little bit like door startups, like, look, these are customers that happen to be local. But then once you get going, it's like focus, because you know, right, so many startups die, because they're not focused, they're all over the place, they're scattered focus. And for that ideal customer profile, like you talked about, who is going to suck up this solution? Where do you fit insanely well with what they're doing? So you're not spending 18 months pounding down a door, but the doors open for you because you're well aligned from a value proposition. Yeah, I mean, if you put it on an X, Y axis, there's how easy it is to sell the person. And then there's how much value they get from it. Or you could do how easy it is to sell them and how much money do they spend. And if you've got a product where people are just lining up to use it like Slack or something, you don't really need to go top down and try to get IBM to buy 50,000 seats when you're starting. You just get startups to buy 5 to 50 seats. Absolutely. It's like Brex, right? How did Brex launch Brex and comes out of YC and goes back to YC and they do a lot of stuff with us, right? We're going to go back after startups. Our value proposition fits ridiculously well with a startup. That's what we're going to focus. Explain what Brex is. Oh, Brex is the really cool credit card that if you're a startup, and, and you don't have it, you don't want to sign a personal guarantee and get a credit card that gives you $5,000 worth of monthly spending or credit line. Brex is more focused that if you're a venture back, they'll look at how much money you have from your venture round, and they'll give you that basically that amount of credit. Plus they have a financial products. We have the CFO on dream it live actually, a month or two ago, great story. And they're your investors in them. No, no, no, no, no, we're not investors in Brex. You just know them really well, and they're part of when you come into Dreamit, you get a Brex, you know, preferred rates with Brex. Yeah, and they sponsored this pod, in fact. Oh, cool. Yeah, when we get back from this quick break, I want to know how much of the program is focused on the customers and the advice and the stuff we've talked about, and how much of it is based on fundraising and what your best practices are for your companies to close rounds when we get back on This Week in Startups. I got so much going on here. Obviously, the podcast is doing great. The Launch Accelerator is amazing. We've got over 100 graduates now in my fund. A ton of events. We just did Angel University for 250 people. Foundry University, we've done 15 or 20 times. So many projects, and my team members are so in the weeds, getting so much done. How do we surface and control and organize all this information, all the different projects we're doing? Well, we use something called Notion, N-O-T-I-O-N, Notion. And it is amazing. It's one tool that does many jobs. You can organize your notes, kind of like a wiki, or your docs, kind of like a word processor, as well as projects and workflows in one spot. And it lets you use all kinds of different free flowing objects. So you can have a list, you can have a table, you can have comments, you can have bullet lists. So what we did was we started a book club in the This Week in Startups Slack, you can join that this week in startups.com slash slack. And somebody who was in the Slack said, here's my notes on the first book we're doing. We're doing Robert Iger's book, The Ride of a Lifetime. So we did the first book club. And like 60, 70, 80 people showed up on the Zoom in Slack. And those are great for talking and chatting, but they both suck for taking notes. One of the members of the community made an outline of the book. And then two of my team members, Laura and Tracy and Presh, three of my team members, were contributing all of their thoughts on the book and taking what people were talking about and making an outline of notes of everything we learned from the book. And we did that beautifully. And you can see it here on the screen in Notion. So we had this incredible, flourishing conversation that would have went into the ether, the ether, but it got captured on Notion for all time. Then we took that experience that 60, 70 of us were having, and we shared it with 10,000 people. I'm not kidding. And now all those people are going to read Robert Iger's book. I guess by the way, all of this was done with notion. And it works so well for startups. It is a complete no brainer. It's your wiki. It's your managing projects, creating documents and taking notes all in the same place. So here's your call to action. Get started with notion. and they're going to give you 50% off their team plan for your first year by going to notion.com slash twist please i know you don't need to save money in a lot of cases but use that url so that they know you came from the pod notion n-o-t-i-o-n dot com slash twist i am addicted to this product. It is like one of the great products of all time. And I know this is an ad read. I know they're partners with the program. We were using this long before they decided to sponsor the podcast. It's kind of got that magical feeling like Uber or Wikipedia or slack or zoom had when you first use it. You get that tingle. We get that notion tingle notion.com slash twist 50% off their team plan for your first year. It's a great offer. It's a great it's not it's not a great product. It's a world changing product. I can say that. It's a game changing product. Alright, let's get back to this amazing episode. Okay, welcome back to this week in startups. We've got another 10 part special for you. It's called the power of accelerators. And this is our first episode in this series. With me is Steve Barr. She's a managing director at dream adventures. You can visit them at dreamit.com. They've got over 350 companies that have gone through their accelerator. They get a little bit of advisership fees and then the option to put $500,000 in your round. They focus on three verticals, security and healthcare and urban. And urban is a pretty wide one, but I think you guys understand what it is. You pick the nice easy ones, healthcare and construction. Wow. Right. Exactly. Simple little industries. Yeah, didn't want to go into the music business, huh? No. Journalism, interesting to you? Media? When we went to the commercial break, I wanted to know, I get what you're doing in terms of customers and helping them with how to think about their market and their go-to market strategy. Let's talk about the fundraising process. Obviously, we're taping this during the coronavirus, but let's put that aside and let's talk about in a normal market, maybe not as hot as we were in, maybe not as dry as we're in right now, but in a normal market. What are the best practices and how much of what you do is about the fundraising process or do you do such a good job on helping them build a great customer base and clients that it's just a formality of you just introducing people? Um, it's a great question. I think it's a third, third and a third. You know, the customer, customer sprints, getting in front of lots of customers face to face is very important, getting them ready for that. So they're fine tuned. The coaching, the mentoring is very intense, and it's a game changer for them. And we really changed the way they think about their business, and they talk about their business. And then the investor sprints and getting them ready for that process. I think it's about a it's a third, third and third all the way across. What gets them, and then was your question, what gets them ready for the investor sprint? What's that process like? Yeah, I'm curious what the process is like. Do all 10 companies come in and do two minutes each? Do they do 30 minute interviews with them and do you set up individual meetings? What's the actual tactical process of those fundraising tours? Sure. So let me walk you through that. So when companies come back from customer sprints and go home, we start getting them ready for the investor sprint. We know basically what we want to make sure they have in their investor deck, where they're going to get asked questions. We want to make sure it's really extremely well thought through because Reminder, these are all pre-series A companies, but they've got revenue. So the question, they're going to get down into the weeds of, well, what does your sales pipeline look like? How do you think about the pipeline? How are you growing the pipeline? But everything that's going to be in a deck that needs to be in there, we want to make sure that story is solid. There's no record scratches in it. It all holds together from that front slide to the back slide. And by the way, crescendos with a really great vision. We see so many startups that make the mistake of, I'm raising $2 million to get to a $3.5 million run rate. Okay, then what? So people like yourselves, other great investors, they don't want to be hitting singles. How are we going to build this into something really big? So it's one of the areas we focus on, by the way, that we see a lot of founders like, but what's the vision? How's the world change three to five years from now because you're in it? So we spend time on that. So then getting them ready for the investor sprint, we start reaching out to all the investors we know, which is a couple thousand on both coasts of the United States. We email them and say, these are the one-pagers, these are the companies that are getting ready to come. Who do you want to meet with? You pick who's interesting to you. So that curation saves a lot of time for everybody. Typical Dreamit startup will have 15 to 18 one-on-one meetings on the East Coast and the West Coast. So all of that's getting curated. The investors pick who they want to meet with. Startups are going into their offices. They get usually 30-minute meetings. We always tell startups, look, your job in that 30-minute meeting, there's one thing you want to do is stay away from no. You're not trying to close the deal. You're trying to whet their appetite and say, this is interesting. I want to find out more. Those startups are very tuned to the point right before they go on investor sprints, we do something called mock VC interviews. and we have friends of ours that are VCs, we do it, and we start beating the crap out of them. And it's like a real VC meeting. We actually say, turn off your deck. I wanna talk to you. I don't give a shit about your deck. I invest in people, not decks. Why are you doing this? And we'll distract them and do all kinds of all the nasty tactics we can think that as entrepreneurs we've been through and really get them ready for that experience. Then the process is curated. They go out for two weeks. High watermark for a Dreamit company, they'll have 30 to 35 VC meetings, individual meetings in a two week period, average 15 to 18. That's what their process looks like. Our definition of success, our KPI of what we're looking for at that stage of going through Dreamit, is what percentage of companies raise around within six months of getting out of Dreamit. And roughly that hovers around 50%, about half raise within six months of getting out of Dreamit, and then we're looking to write a check as part of it. And I'm sure out of the ones that raise or don't raise some number of them, maybe don't want to raise at that point in time, they want to go back to work and raise at a higher valuation, where they haven't dialed it into the point at which, you know, VCs are going to be truly interested, correct? Sure, absolutely. And as a matter of fact, it's interesting you brought that up. Let me unpack that a little bit. About a year and a half ago, two years ago, we actually unbundled Dreamit. We'd have companies that are like, I want to come into Dreamit. We actually have a lot of companies that come from seed stage firms. They write a check for a million dollars and say, go to Dreamit so they can go do all that heavy lifting. Let them get for you in front of customers. And then we get all the metrics and and investment rights that work for us and it makes sense. So they'll come in, they just close their seed round a month before they got into Dreamit. They don't need to go on an investor sprint 14 weeks from now, it's a waste of time. So they can actually unbundle that and do the investor sprint in the next cycle. Or they can come in and just do half a customer sprints and say, I don't really need customers, I'm fine on revenue, I need more help on investors. So they can actually unbundle Dreamit. We don't want them like, get on the bus, it's leaving. They can modify Dreamit so it works best for them. And our platform and platform team is actually set up for that. When a founder is considering going to an accelerator, what's the best way for them to judge how good that accelerator is? It's a great question. Talk to founders that have been through it. It's just like, you know, if I want to find out what's, you know, what's Jason like as an investor? You need to talk to previous companies. Talk to previous companies that have been successful. Talk to previous companies maybe that haven't been successful. I've done that for VCs that have invested in startups that I've run. It's the best way. And when you're like a Dreamit and some other great accelerators, there's a lot of companies that have gone before you. It's like if I'm touring a university and my son's going to college or our daughter's going to college and you want to find out what the school's really like, talk to some students there that have been through that process. So that's, I think, the best way is to find out. Talk to people that have actually been through it. What are the top three things that somebody can tell you in an interview for your accelerator that make you a heck yes? I'm working on a really big, urgent problem, and here's the evidence I have. Here's all the customers I've either been selling to, talking to, but you have evidence. You know, it's like, don't bullshit a bullshitter. Don't sit there and come in with fake crap. So, you know, it's a really big, urgent problem. And I think like Brad Feld talks about, that's where I learned it from years ago. It's the first time I heard it, I don't know about you. You know, it's a little bit like in that problem area, are you selling vitamins, aspirin, antibiotics? It's an antibiotic. It's a really big, urgent problem. The thing, I don't know if you've ever heard this, Jason, we use sometimes, it's like, you know when you go to the dentist and they tap on your tooth? Jason, is it this tooth? No. Is it this? No. This. Oh, oh, that's the one. We're looking for companies that solve a really big pain point and it's clear. We're looking for a company that has a solution that's based on a really interesting, unique insight. And then finally, the other thing is we wanna understand that you understand the competitive landscape, what makes you unique, what makes you different. We wanna make sure you have a really good understanding. If those three things, those are probably the top three things that we're looking for. Should a company go to multiple accelerators and under what circumstances should they? You know, I think so. You don't wanna do it too many times. And the way I look at it, by the way, if you think about an accelerator from Dreamit, and again, we think of ourselves more as a venture capital firm these days with a pre-investment program. It's a little bit like I go to undergraduate school and then I go to grad school. And Dreamit's like a grad school for startups. We have a lot of companies, let's say, I don't know, 20, 30% have been through an accelerator before Dreamit. That's fine. You want to be careful. You don't want to, if you're signing all these notes again and again and again, are you making any real progress? And there's a lot of like accelerators that are just not very good and they don't add a lot of value, but they take something from the startup. Um, so I think it's okay. We see a number of startups that have gone through dream it. They're like, this is easy for the minor amount of advisor equity. And we get an invest, we give an investment, right? This is like a biz dev function for us. It's like, holy shit, you guys are gonna get us in front of 20 potential customers over a 14 week process. It saves us six to 12 months. So I think in that case, if you have a group like ours, a team like ours that can put you in front of decision makers and important customers, and a lot of them, it's a great thing to do. And I don't think it's okay to do more than one. And who shouldn't go to an accelerator? Who shouldn't go to dream and obviously, outside of people who are not in the verticals, but when is it not a fit to go even go to an accelerator, or to your specifically? So let me, it's a great question. Let me ask you a question, Jason. Jason, do you have any side hustles, which really aren't a scalable business, but you just kind of do something? It's monetary, you're making some money, but it's just a side thing. Hold on, the podcasting team all of a sudden says, wait a second. Nick's like, job security, right? It's a side hustle that is done well. It's a side hustle. You know, I have a couple side hustles. They don't deserve to go through Dreamit. Look, if you want to have a pizza shop, if you want to have an auto body mechanic, if you want to do something that it's going to, you know, it's look, if I make a half a million to a million dollars a year, and there's seven people working here, and I'm happy, I'm fine. I don't need all the aggravation. I don't need investors. Don't go to Dreamit. Like Dreamit and brethren like Dreamit companies and teams that do what we do. They're for companies that really want to scale. So if you want to scale something, go into a dream it, you know, if you don't, you know, why go get a PhD if you that type of thing, right? So if it's for companies that want to scale, and I have a couple side little things that I do on the side, they're not scalable, it doesn't make sense. There's no need to And when you put in the 500,000 in that case, what is your follow-on philosophy? You said you're like a venture firm. A lot of venture firms are really into following on and doubling down on the breakout winners. Do you follow on after that 500k check? Absolutely, there's a reserve right again for that same amount. Oh, absolutely, we want to follow on. So that's the intent. And we have ratios of what our expectation for follow on, but there's a reserve that we put in place for that for those companies based on certain ratios that we do want to follow on. Absolutely. So you assume that we can one out of four or five, you're going to follow on with something in that range? I don't know the ratio, so another managing partner dream, it runs more on the fun side. I'm on the whole kind of front end. I don't remember the ratio off the top of my head, but it's a lot. It's designed for a lot that we do that follow on. Yeah, it's the way we think about it. And how do you think about companies that are struggling and need a bridge and saying no to those companies, because you're not really designed to be bridge funding, I assume. Sure. No, we're not designed to be bridge funding. We will participate in a bridge, but it's something, you know, I was in EIR a long time ago with Josh Koppelman at First Round Capital and just learned so much. And I remember the expression there, it's a bridge to where? Like where's it, is it a bridge or is it a dock? And I'm gonna just walk out and I walk off and I'm in the water. So it's really understanding where's it getting to you? Why do you need a bridge? What are the fundable milestones? What magically is gonna happen when you get to the other side of that bridge? So we'll participate in a bridge if it makes sense. If the business isn't working and it's a bridge to nowhere, it's not as interesting. And at the end of the day, look, you know, when we have companies come into Dreamit and we talk to our managing directors that run the different verticals all the time, So you realize you're getting married to these companies. And I, the number of times, and I'm sure like you, especially when the times are tough, we're talking to our startups all the time. Text messages from founders at 11 o'clock at night, one in the morning, you know, my CTO just quit and we're getting on the phone. We're there to help. We're all entrepreneurs. We want to get in it to win with them. And we enjoy that. We're not just, you know, I've met some VCs, you know, they have an MBA from Harvard and they never ran a company. We love to build companies. It's our passion. We want to drive them to success. So we will participate in bridges when it makes sense. And we're always there to advise and guide and really brainstorm and soundboard through difficult issues and challenges. When you look at downstream investors, what are the top two or three firms that you want your founders to get meetings with and to hopefully close an investment from? What do you think has the biggest impact downstream for you? I think they get in front of some of the... the most prominent investors you can think of. But again, we're in these verticals. So if it's urban tech, it's Fifth Wall Ventures. If it's health tech, it might be HealthX, which is you'd think, who's HealthX? But they're a great firm in Madison, Wisconsin, terrific. As a matter of fact, we have a lot of HealthX companies that come into Dreamit. They write a check and they come into Dreamit. And sometimes it's the other way around. So it really varies by vertical. Sometimes it's the big brand name investors, whether they're gonna meet with an Andreessen Horowitz or Sequoia. they're going to meet with them. But a lot of ours are very, very, you know, they're specialized verticals and health tech isn't for everyone. So maybe it's a four or six ventures out of Boston or that type of firm. So so there's the concept being there's a the if you're specializing these verticals, you know, specific downstream investors who are also in those verticals. And you've sent them three, four or five companies in the last year already. So they know the quality that you're bringing. And it gets back to my point about the role accelerators play in anointing and picking winners. And by the way, and they're sending us companies, it goes both ways. They've written a check and send it or they're like, you know, they're not ready for their Series A. But you should go back into Dreamit and come back after you've been through that process. After you, as I wrap up here, after you go through those, like, say, 20 customer meetings, what's the chances you actually land one of those in the next year, or two or three of them even? Does that happen? It's a great question. Yeah, it absolutely does. It actually happens in the meeting sometimes, not all the time. We've actually, and it's a little bit like when you go fishing, you go fishing for one type. We've had once or twice in the last year where people are on customer sprints and they turn out to be investors. They're like, wait, wait, wait, we weren't looking for money. So it varies. Look, the number one thing, we talk to Dreamit startups all the time. When you go on customer sprints, don't sell. Talk about how you want to partner because they don't want to be sold to, if they feel like a piece of meat when they're in there, they're not doing it for that reason. So a lot of times they're looking for proofs of concepts and trials and to move forward. That's the ask. They have a very clear ask. Like, can we do a POC? Can we do a trial? How do we get this to the next stage? I'd say most companies come out of Dreamit with maybe one POC-ish, but what we hear time and time again is, we're accelerating the process. You got us in front of 20 decision makers over the last 14 weeks, and you have accelerated our pipeline by six to 12 months. And oh, by the way, the CISO of American Express, BNY Mellon, and JP Morgan, that's one day of Dreamit when we're in New York City. They'll meet with those three chief information security officers in one day. It's like I couldn't have gotten a meeting with any of them and in the next four months, they won't even return my calls. So it accelerates that overall business development process. So there's something about an investor saying, hey, I want you to meet with our latest investments that is easier than a random company, because there's so many random companies coming in the front door. It's your anointing, right? They're anointed, dream it, in these verticals. And those customer sprint partners, they don't pay us anything, by the way. There's no money changing hands between us and our customer sprint partners. I don't know if I can use the term anymore. It's a quid pro quo, right? We get our companies in front of great people, and then our companies get a chance to grow. So we don't charge for that, because it's like bullshit to us. It's so valuable for our companies. Tell me, which other accelerators do you take notes from and think highly of as we wrap up here? I think highly of YC, think highly of Techstars. Those are the ones. Sometimes startup health, a little bit in the health side. Those are the two that I think about. I like to see what they're doing, and I think they do, and I think particularly YC does really interesting, great work. I think it's interesting some of their later stage companies they work with, and I like what they're doing in biotech and health, and they do, we overlap in a lot of areas. So I think those are the two. The others, like I said to you, I find, you know, you see most accelerators around the world, and I'm sure you have too, you have visited, and launch, by the way, will be in the area. What you guys do is absolutely awesome. Yeah, no, no, what you do is really, really awesome. But it wasn't, but I know you weren't, but you know what the hell you're doing, right? You see somebody's accelerators, and the person who's running it has their MBA, is a year out of school, and they're advising startups on how to build and grind it out. What the hell do they know? Nothing. There's very few. I think most of it's tourism, like you call it tourism, right? It's entrepreneurial tourism. Having a bunch of startups in a cool space and it looks all startup-y and you do fun things and you serve some alcohol and some dinners and have some great speakers, you're not adding any value. You're just kind of sliding around over the place.

### Human: You were successful. And I'm successful. And I'm wondering, are you happy?### Assistant: Okay, now I'm just gonna play it again, and I'm gonna play it at a lower volume here while I talk over it. It does sound a little robotic on the margins, you can hear that tinny-ness. But boy, if are you I saw this in a actual trailer. And I did watch this trailer actually, and I didn't pick this up. But and that is means it crossed the uncanny valley other moments of uncanny valley that may have not crossed for you. Scorsese did the Irishman and they and they made everybody look younger. That was clearly did not cross the valley for me. But Luke Skywalker in the Mandalorian spoiler alert, Luke Skywalker shows up in Return of the Jedi kind of format post Return of the Jedi. I bought it. Maybe I wanted to buy it. And so that's part of this. But here we go. We're now at a point where a dead person could be in a film or a younger version of a person. And just closing the loop on this great article that found this nugget. So congratulations to the to the reporter, who actually figured out that this, you know, asked a really good question, like, where did you get these clips? If you watch the film, other than that line, you mentioned, you probably don't know what the other lines are that were spoken by the AI and you're not going to know, Neville says. we can have a documentary ethics panel about it later. And that's one of the things about documentary films, because they are, you know, an interpretation by a filmmaker of a subject, they have very loose rules. That's why you'll see, you know, in a narrative film based on a true story, kind of gives them a little bit of ability to wiggle around is this actually this actually happened to these conversations happy happen. Anyway, I I think this is amazing. I think Bourdain would love the fact that, you know, they did this and you could actually hear his voice savings and it had more resonance. Of course, you could use this in a cheesy way. And you could do it in a disrespectful way. But this is the world, right? And I I think about all the wonderful possibilities here. Heath Ledger, tragically died early of an overdose taking five or six different pills was really tragic. I don't do that stuff, kids. Like literally, the doctors may give you 10 types of pills that you're not required to take them. Certainly don't take them, you know, in a cocktail. But it would have been amazing to see Heath Ledger's Joker again. Now, is it disrespectful? Or is it an homage? Or is it honorable to bring him back? I think it's honorable to bring him back. And I would love to see Philip Seymour Hoffman, you know, do a comedic role again. I mean, talk about a tragedy, again, another overdose, just this artist overdosing is just so tragic. But you know, you remember Along Came Polly, the amazing Ben Stiller film. And he a lot of people say that I play basketball like him and the rain dance scenes amazing Maybe we can drop one into the YouTube video here without getting in copyright Trouble put in a little box and tilt it and zoom in on it and we'll probably get past the YouTube sensors But wouldn't it be amazing to see him do a spin out of that film? I think they were always thinking about having that child actor do another film And just putting it out there If somebody out there is an AI specialist, and they think that this is as intriguing as I think it is, I would love to back a music startup. I'm just thinking about music right now. I would love to back a music startup where I could say, I want to hear Mark Knopfler of Dire Straits cover. Wish You Were Here by Pink Floyd, I would like to hear Pink Floyd and Roger waters cover this Dylan track, tangled up in blue. This could be an amazing unlock for creativity, to be able an art to be able to do mashups. Now, some people might consider this sacrilegious or, you know, against some human purity test. But the way I look at it is we created the AI, we should get to benefit from it. And what an amazing startup that would be, if we could take people's voices and artwork and ip and reinterpret them even if it was a tool i mean if you came out with a tool that allowed somebody to put in a bunch of videos are a bunch of audio and then let the user you know take ownership of exporting that i pay that would take you out of the ip business. Or you could be in the IP business and create this technology, and then go to an estate and say, Hey, Elvis Presley estate, we would like to make these 10 tracks of the Elvis AI singing these 10 songs. Would that be interesting to you? Of course, you can have an impression is do it. But there's something about the AI being able to do this methodically and get better and better at it. And the revenue potential is obviously extraordinary. And you know, you see a little mini version of this in ways, which is not using AI, they're having somebody record 1000 words, and then stitching them together. That's why when you have ways, and you know, somebody, some character, like Cookie Monster, we have Cookie Monster on ours, the kids love it. When Cookie Monster says, make a left turn, you're approaching a railroad track, you know, everybody laughs. But that's somebody actually recording it. It's not AI. So we live in the future. And I love it. So give me some startup ideas, people. I got checks. I got money sitting here. I want to invest in some crazy. Let's go. over the past few years, everybody's been talking about no code. And one of the first no code apps was bubble. You've heard of bubble bubble empowers people to design and launch their own apps, marketplaces or tools without ever needing coding skills or pricey engineers bubble offers a digital editor and cloud hosting platform for as little as $29 a month users can build pretty much any complex web app from marketplaces to social networks to SAS and more. So why is bubble so great for founders? Because you can spend 10 times less on building out your MVP, your minimum viable product. I have so many people come to me and say, Hey, J Cal, give me money. I want to build this. And I'm like, have you built an MVP? And they're like, no, I don't have a developer. I'm like, well, use bubble, use no code. drag and drop elements in their visual editor, and you can quickly and easily build a powerful app. You can go from idea to a launchable product in a matter of days or weeks, not months or quarters or even years. And they handle all the annoying stuff like the deployment and hosting of your app. So you can focus on your product and your customers. Bubble has over 1 million users worldwide and they enable over 1 billion in business volume. Bubble is offering one month rate on any of their paid plans, ranging from their personal plan of $29 a month all the way to their production plan of $529 a month, but act fast because they're only offering this deal to the first 500 redemptions. Again, head to bubble.io slash twist, bubble.io slash twist, and snag one of those 500 coupons for your first month free. back to our never ending obsession with fraud, or I should say mine, I am obsessed with business frauds, Theranos, Madoff, perhaps Nikola, perhaps tether, you know, or people doing things that are not on the up and up. Well, there's a company called Lordstown Motors that might be a fraud. And it could be going to zero I'm using I know how to use the words now, as having done over 1000 different podcasts. I know how to frame this without getting myself in trouble. But just this morning, CNBC has reported that Lordstown Motors another pre revenue EV SPAC. Okay, so it's pre revenue. That's one thing. It's in a really hard space, electric vehicles, and it's a SPAC a way to get public quicker, maybe with less scrutiny, not in all cases, but you do have to buyer beware when you're looking at this category of companies going public, they tend to be early. They confirmed they're being investigated by the DOJ for its reporting of pre orders. Oh, like it's one thing to not even have customers but then to lie about pre orders. Oh, this is really gnarly. So two weeks ago, the Wall Street Journal reported the DOJ was inquiring with Lordstown, which CNBC confirmed. Okay, so we got real journalistic outlets, Wall Street Journal, CNBC confirming that the DOJ is looking now, they're inquiring that doesn't mean they're guilty, right? Just because somebody is looking into something doesn't mean that there is a crime. It just means there's a suspicion and there's enough of suspicion that the DOJ would take it seriously. And they have a large list of things they could look into. And they've chosen to look into this one major red flag. Lordstown Motors said in a filing on Thursday that it had received two subpoenas from the SEC for the production of documents and information including relating to the merger between Diamond Peak and legacy Lordstown and pre orders of vehicles. And we have been informed by the US Attorney's Office for the Southern District of New York that it is investigating this matter. And we hear about the Southern District of New York all the time. That's where Rudy Giuliani started his career before going absolutely bonkers. That's where Preet Bharara from the great cafe insider go to cafe comm and subscribe to his amazing podcast or stay tuned with Preet, which is a free one. Anyway, if the Southern District of New York is involved, that is a major red flag. they are serious, and they are known for having a very independent streak to them. So before we break down Lord's town, I want to remember Jason's law, Jason's law is something I came up with. And I codified it, I think in September of 2020. I've been talking about it for years. But this is my I called it originally my Theranos rule. If a startup becomes worth 1 billion before they launch their product, they are either going to fail or be complete fraud examples punch up let's workshop this. And I did in fact, punch it up in December 20. Remember Jason's law, if you invest in a company without a launch product and over a bill at over a billion dollar valuation, you will lose all your money, and it might turn out to be a fraud. So I've been workshopping this concept. Nikola ticker symbol NKLA is a private company as a private company, I said in this tweet would be worth about $100 million max. So I expected in this tweet to lose 95%. We had Trevor Milton on the pod episode number 1090. It is a classic episode, it will be one of the 10 best episodes of my career. Because my god, this person was delusional. And I think that was like, peak Trevor, and it all came apart shortly thereafter. So in March 2021, I made my third version of Jason's rule, if a private company reaches a $1 billion valuation before it launches a product, or has customers, it's probably going to fail. And it might actually be a fraud. So be careful retail investors, when you buy Fisker or Nikola, you're taking a big risk. And so the reason I refine this is, it's very rare for a private company to reach a billion dollar valuation before it launches a product or has customers. And I put that caveat in there, because you could have people pre ordering things like Virgin Galactic, which had a very successful launch this past weekend, congratulations to Richard Branson. And when you think about that, they did have a think 600 pre orders of 200k those people actually paid money. Or you have people pre ordering cars now whether it's Tesla or Ford. So I could see a situation in where which people pre order and give their money that those are not letters of intent. So keep that in mind. But It seems like I'm now reminding people of Jason's law every three to four months. So consider this your three to four month quarterly reminder and some very important things to keep in mind about these red flags that we just covered valuations that don't make logical sense. What would this company's valuation be? Let's take a SPAC in company be in the private market. Well, sometimes, you know, because it's been a private market valuation. In other words, Airbnb, before they went public had this private market valuation, now they're going public. Now, that's a company Airbnb, that we all have rented Airbnbs, or we know somebody, so they have a product in market and tons of customers and tons of revenue. So they don't fall under Jason's law. But as an example, you know, the the previous valuation, Nicola peaked at around $34 billion in June of 2020, with no revenue, and basically close to no product as far as anybody can tell. And I mentioned that as a private company, ventures investors would have probably invested at them around 100 million max, you put in 20 million, you get 20% of the company. that seems, you know, like a rich valuation, but you know, it's reasonable for a hardware company like that, that's capital intensive. But But that's a 340 x multiple from my valuation. And I am an expert on this. This is what I do for a living for 10 years, I've invested in over 300 early stage private market companies, I know what I'm talking about. And so now they're trading at around 5.5 billion, which is about 50 times too high. And so once again, If you can't see who's holding the bag, check your hands, it's probably you. So the people who bought Nikola at 34 billion thinking, Oh, well, this is a fraction of the valuation of Apple or Tesla or Amazon, you're literally comparing the most successful companies in the history of humanity against, you know, some deep bleep, the second half of that word, please get some dip, who's never accomplished anything in their life. be careful out there. And what are the insiders doing? This is another thing you have to look at are have they exited or are they cashing out? Most of the time the people who are running the best companies have inside information that leads them to not want to sell it. And 100% of the time the people running a company have inside information like literally in their brains are their plans and their hopes and fears and their assessment of is this a good stock to own? If those insiders are cashing out, it's a red flag. Now, if they're cashing out modestly, that can be reasonable if it's a person's first company, if they have to pay their taxes, because they got awarded some stock, there are some valid reasons that an executive has to sell some shares. But Trevor Milton sold like $70 million in shares before they went public or right as they were going public. And he tried to explain it on the podcast, and it made no sense. That's a big number 70 million if he sold 7 million you think okay, you sold 7 million, he's gonna buy a house, you pay your taxes, you got 4 million left, depending on what state you live in 5 million. You can buy a house for that, you know, for a CEO to buy a $4 million house, you know, they're not buying a $60 million jet or a $30 million jet and three houses. So that was a major red flag. Today, many small business owners are busier than ever, and because they're focused on managing and growing their businesses, they can't spend the time they need to on recruiting, and that's why LinkedIn Jobs has made it easier to find and hire the best candidates for free. We have had such a great experience finding two more producers for this week in startups, researchers to sort through all the deal flow I get, and it has been amazing. It's a great place for you to look for a job, and it's an even better place for you to post a job. So many talented people are sitting there, waiting to hear about your career options for them. And we use targeted screening questions to get our roles in front of the most qualified candidates with the experience, skills, and motivation we need. 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Remember sound familiar Nicola badger. Literally Trevor talked about his competing car to the cyber truck. It does make sense why people are very excited about this category. In fairness, the best selling vehicles in the United States were trucks 2020 data from car and driver. Number one Ford F Series 787,000 units sold the Chevy Silverado 586,000 units sold and Ram pickup 563,000 units sold. So those top three are selling close to 2 million. Just the top three pickup trucks. This is a big prize trucks are also the most profitable products in automakers lines. That's why so many startups are going after this. That's why Elon did the cyber truck. He knows if you're going to have a lineup of cars, that is a great one to have. there's a lot of people who love to use trucks both for work and for pleasure and as their personal vehicles. So much so that Ford who has the F one series didn't decide to take this sitting down, they unveiled their EV truck, the F 150 lightning they've got 100,000 pre orders. Cybertruck reportedly has a million reservations. And back in September 2020, Elon said they were well over a half million. So that number is probably correct that 1 million is according to a crowdsource tracker. And so I think it makes sense. So you look at this, you have Ford, who is the number one player, they've already got 100,000 1000 pre orders. And that has a 300 mile range, it's got tons of outlets, I mean, electric pickup trucks are going to be the dominant pickup trucks, it doesn't matter, you can say people are rednecks, or they're dumb, or they're laggards, when they see the performance that an EV can do, and they can start plugging in their tools and charging their drills and taking it on the road. And, you know, having a giant electrical source, it's like bringing a power plant with you into the woods or onto your site, you don't need to bring a generator with you anymore. That's going to be, I think, one of the most exciting things about this people who are doing work or, you know, taking their boats out, they're going to love these electric versions, Lordstown q1 revenue 2020 was zero. their net loss was 125 million, their market cap peaked around 5 billion in September 2020. They're now at 1.5 billion after the DOJ news, I would think this is going to zero or be sold for scrap. I could see the 5 billion going down to 50 million in scrap. In other words, you lose, you know, 90 99% of your value as an investor. And I think the equity holders could get wiped out completely because there could be debt and lawsuits, etc. They were founded in 2018 by somebody named Steve Burns, who was the former CEO of an electric vehicle manufacturing company workhorse group that I've never heard of. In November of 2019, Lordstown became the owner of a former GM plant in Lordstown, Ohio. After signing a sales agreement with the automaker, a lot of these automakers have done this. In fact, Elon's Fremont, I think was a former Toyota plant. So these plants trade hands, just like stadiums do or buildings do GM loaned Lordstown Motors 40 million in order to underwrite a substantial part of the plant purchase. So that already is a red flag. Okay, so GM wants to get this plant off their books, and they give this new company $40 million in order to do it or underwrites alone to do it. Major red flag feels like self dealing doesn't mean GM's in the wrong, but it doesn't come from a position of strength. And in total, GM invested about 75 million into Lordstown Motors and joined its board. So those would be to somebody watching the SPAC go public somebody thinking about buying into it. Oh, GM's involved. Well, are they really involved? And what is 75 million if they're taking this plan off their hands, you net out the 40 million? Okay, there's another 35 million sitting there. What exactly is going on here? Well, in March of 2020, according to the Ohio Business Journal Daily, We always like to give credit to the journalists who we mentioned here and who give us the data with these new stories that I do the analysis on. In March 2020, Lordstown Motors paid workhorse group $12 million for the licensing rights to the intellectual property of the workhorse w 15 pickup truck Wait a second. So the CEO's new company bought the rights from the old company. Okay, that's self dealing. It's weird. It's only for 12 million. Maybe you could explain it away or maybe it's a red flag, right? So these things start to pile up. It kind of reminds me of what we saw with WeWork and the self dealing there. Remember, Adam Newman was buying buildings and then leasing them back to WeWork or he claimed he owned the WeWork IP and domain name or the brand and he was leasing it back to the company. People who do this kind of self dealing are typically not visionary people. They're nickel and diming people who are trying to hustle other people. It is really, really bad form to do this. I bought mahalo.com inside calm on my own. And I sold them to the company that I run for the cost basis I bought them for. even though I bought them low, I think I bought inside calm for $60,000. That's a million dollar domain, I could have tried to sell it to my own company. And then my shareholders would be like, Oh, you profited from that? Why would I want to deal with that? Why would I want to deal with that? What you see is the opposite with baller CEOs with vision. They do what I do like an inside calm, I think I take a $1 a year salary, I haven't taken a salary in six years. I don't need the money from the salary. I'm trying to build a company and have it hit 10 million in revenue. And we're 30% of the way there. So we're getting there. Remember, workhorse group CEO was Steve Burns, and that's his previous company. So this is self dealing. And yeah, you know, you could sit it out. But anytime you have to explain yourself, and things go wrong, that's when there's a problem. Now, if we work went public and became worth $100 billion, know, the the Adam Neumann behavior would have been like, Okay, that was weird. But we all made money. So it's forgivable, right? So keep that in mind. When you do something that has the appearance of impropriety, like sometimes a founder will want to give themselves more shares in their own company. Well, if everybody makes a ton of money, it didn't feel that bad that the founder awarded themselves 5% more of the company and the board approved it because we all got rich. But if the company gets sold, and the founder gave themselves 50% more of the company or whatever it is, that's when you start to have problems. So be very careful as leaders out there who are listening. The appearance of impropriety is impropriety. That's what I learned early early in my career from Dave Johnson, who was my first boss at Sony Music. He was the general counsel, a great boss. And so as part of the business deal, workhorse group was given 10% equity stake in Lordstown. So then the Steve Burns still own Lordstown. I mean, it just becomes so much self dealing that you have to wonder what are these people thinking in August of 2020, Lordstown announced they were merging with the SPAC diamond peak holdings, their shares peaked at $29 to share a $5 billion market cap they officially listed as dollar sign ride. That's a great ticker symbol in October 2020. Fast forward to March 2021 short sellers Hindenburg research Hindenburg research the same people who covered Nicola. These are very serious. It's a small firm. I talked to the guy on the phone once I don't know much about them. But I can tell you when they get their hooks into something, you know, meat is on the menu. Like this. These guys know how to chum the water. These are the big these are the big sharks. They may be a small firm, but Man, they take a big bite out of companies when they release a report and they released a report the Lordstown Motors Mirage fake orders undisclosed production hurdles and a prototype Inferno. In the report, they claim that Lordstown had misled investors on both its demand and production capabilities. The company has consistently pointed to its book of 100,000 pre orders as proof of deep demand for its proposed EV truck. Our conversations with former employees, business partners and an extensive document review show the company's orders are largely fictitious, and used as a prop to raise capital and confer legitimacy. let that sink in. For example, I'm quoting again from the Hindenburg report, Lordstown recently announced a 14,000 truck deal from e squared energy supposedly representing 735 million in sales. e squared is based out of a small residential apartment in Texas that does not operate a vehicle fleet. What? I mean, literally, sometimes journalists just write these stories, and they never knock on the door or they never look into the company. And then somebody like Hindenburg research, even though they have the term research, they're actually investors. And I think in this case, they're shorting the company. Therefore, man, if they find any kind of fraud, they're going to put it out there. Now, there is a debate to be had here about using the technique of fear, uncertainty and doubt FUD to try to make a company lose value and short it. And sometimes it's legit, that you're actually finding fraud. And sometimes you're spreading fear and uncertainty and doubt. Ultimately, you as a retail investor, which I think a lot of us are here, we own shares in companies, some of us play the market, some of us buy long, some of us like to trade daily. you really need to look at the totality of what's happening and what milestones are completed. Because these are private companies, essentially, that are now going public. Well, what do I do to avoid this as a private company investor, I will look at the company, and I do diligence, and I look at the original contracts, and I talked to the customers. In this case, if I was doing my diligence on this company, we would say show us the contract with e squared. And Who signed the order show? Okay, whose signatures on the order? Great. Well, we'll talk to that customer and ask them, why did you order 14 instead of 140? Or 4000? Why 14,000? That simple question is going to get a really telling answer. And if you can't get that person on the phone, well, then you don't do the investment. So and this is what I tell my team when we do diligence, if the if the company takes a long time to get us the diligence and there are 345 red flags and they can't explain them quickly. boy, we're probably going to pass on that deal. So for people who are in a private company who are raising money, keep your diligence tight, never ever exaggerate. I talked about this in my book angel, where a company told me they had Facebook and Google as customers. And when we asked to see the contracts, they told us they had an oral agreement when I asked them to who the people were that they had the oral agreement with they said the person at Google they had to deal with, they met at a party and they don't remember their name. And I was like, Okay, you're committing securities fraud, you're literally telling us that certain things are true, getting us to buy shares, the SEC takes this seriously. In business, it's important to be memorable and sending gifts is a classy way to create that great memory. But gifting is tough, it can take forever, or you can send to the wrong location. And people never get it. It's never been scaled properly until now. SnackMagic is a stress-free, easy, and customizable way to delight employees or customers. SnackMagic uses software to help recipients build their own snack box. Giftees can choose from over 500 snacks and beverages, including diet and allergy-friendly options. All you need is the recipient's email. 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So basic diligence, the public who's buying, you know, $10,000 or $100,000 in shares in the company, or maybe, you know, a Robin Hood trader or somebody on a trade buying $1,000 as a flyer, they're certainly not going to take the time to do this kind of diligence. But here we go, Hindenburg does basic diligence. letters of intent and pipeline are words that people who don't have real businesses use. Let me say it again, letters of intent and pipeline are complete and utter when I am talking to a company or I invest in a company, and then they start putting in their board decks, or when they're raising money, their pipeline, I'm like, Okay, enough with the pipeline. I get it. There's a pipeline report. It's great internally to know. These are the 100 advertisers who might advertise on this week and startups. I don't care. I care about the signed contracts. I don't care about the pipeline. Oh, the pipelines growing. Great. nine times out of 10 pipeline, and people who are focused on that metric are people who can't close sales. I know people disagree with me on this issue, but get focused on actual real customers. The Hindenburg report also led to the SEC requesting information from Lordstown Motors regarding the short sales claims of misleading investors. So a great way to think about what Hindenburg does is the anti deal memo, here's why you shouldn't invest. And, you know, it's different than my business, which is, here's what could go right. This is like, you know, really, really great filter. And it's great that people like Hindenburg are out there. Now, we have other examples where people were spreading fear and uncertainty and doubt about maybe AMC, or GameStop, or even the Tesla Q movement, where you know you had one set of reality which is people taking deliveries of the model three or buying plaid and people using self driving and have this tesla q group saying. that, you know, there's all these Tesla's in remember all those drone videos of Tesla's in parking lots, and they're like, Oh my god, Tesla's has no sales. And then you go to the mall, and you see everybody parking Tesla's everywhere. And you're like, Wait a second, you just need to go on Twitter and say, I got my Tesla today and see all the people who are sharing their new Tesla, or go to the pickup line at school and see all the Model X's. I mean, it's crazy. So when you see the product in the real world, that's when I tend to think, you know, the the chances of it being a fraud are kind of gone if people are using the product. And I think this actually happened with a bunch of fear and certainty and doubt about a multi level marketing company called Herbalife. And you had two giant headphones. It's a really sordid story. But you should do a Google search on the Herbalife back and forth because it might have been a smarmy business. I hate that multi level marketing nonsense. but there were people who were selling and buying herbal life and so you could say i don't like that business and it's feel scammy or smarmy whatever the worst interpretation is of it there were people who had Herbalife vitamins on their shelves who were taking them. And there were there were orders being placed. So there's a range of what could happen here. And I think the true north is always the customers. Later in June, an independent investigation commission by the board found that pre order agreements were overstated in number and in seriousness in order to generate press. There it is. The board figured this out in June 2021. Both the CEO Steve Burns and CFO Julio Rodriguez resigned from their positions. This is sketchy stuff, folks. And these people could be going to jail. And every time we have a boom cycle, you have the world comms, the end runs the made offs. That's when these type of scams manifest themselves is in a boom market when people stop doing diligence and people get greedy because i got a lot of poker chips you ever see somebody, you know run the poker table or they're doing incredible blackjack and they just got tons of chips everywhere and then their play gets a little lucy goosey and maybe they start drinking and they feel invincible. that's kind of the market we're in right now people are starting to feel a bit invincible. And they're starting to splashy cashy just make bets without doing their own research buyer beware. And if you just compare that to Nicola both the founders left the company after the SPAC you had Trevor cashing out 70 million there's no word if Steve Burns has cashed out But at least two exec cashed out millions before reporting that disappointing q1 earnings. According to the Wall Street Journal, the head of Lordstown's propulsion unit sold 99.3% of his vested shares for more than 2.5 million. It's a small amount of money, but the percentage is meaningful. And Lordstown's President Rich Schmidt sold 39% of his vested shares over a two day period to pocket 4.6 million both exaggerated claims of pre orders as revenue both were producing an EV pickup truck and Cybertruck competitor. So our Nicola and Lordstown both frauds. This is sketchy stuff. And I would advise anybody who's a shareholder to get out now and not be the bag holder and put your money into Disney, Tesla, Uber, which I own shares in Robin Hood, which I own shares is going public. Airbnb, Microsoft, Google, Facebook, anybody, Amazon with a real product in the world that you use and love. If you use and love the product, man, how can you go wrong? Having a fraud like this? It's I'm trying to think of a situation in which I loved a product or service. And owning the shares resulted in a fraud. Is that even possible? Like, was there somebody who got their blood done by Theranos who was a shareholder? Who who then was, you know, tricked into buying shares? Okay, so let's wrap up here. Flag number one, crazy high valuation flag number two, no real customers. Flag number three, self dealing flag number four, cashing out executives. major flag number five Hindenburg investigation. And then flag number six up against Tesla and Ford. This is roadkill. Get out of the way, folks. Do not buy this stock. If you own the stock, I would admit defeat, I would lose 90 cents on the dollar 99 cents on the dollar all money has value take whatever remaining money you have. If it's 10 cents on the dollar and put it on something that could 10x from here. If you believe that's Coinbase, if you believe it's Robin Hood, if you believe it's Airbnb, whatever it is, all money has value. A chip in a chair, get that 10% that you have left and put it in something that doesn't have these kind of red flags. Now I know some of you like SPACs because you can buy a share for $10. You have to be very careful with SPACs. Some of them are very early stage companies that are very unproven. Other ones are later stage companies that have great customers and you may use their product. But I know that sometimes retail investors were interested in them because, well, they were priced at $10. And buying a $10 share is easier than buying a share that's in the hundreds or 1000s of dollars, whether it's Apple or Amazon, or whatever's trading, you know, at a higher amount, and you're just making small little bets. Well, you can now buy fractions of shares on services like Robin Hood and E trade. So I'd rather see you buy a fraction of a share of Apple than to buy some of these or if you do insist on buying these really look at them like buying lottery tickets or worse, like scratch offs, and then buy some actual real equities in companies where you've used and love the product. All right, everybody, we talked about this on Episode 40 of the all in podcast last night, where one of my besties got the Delta variant, we are now going to have a big giant debate about the reopening, which in California here started on June 15. I thought I would share some of my thoughts and maybe talk about some of these data points. I believe that if you are vaccinated, you are able to make your own decision of how much risk you want to take. But I also believe that businesses get to make their own decisions. And that even local communities can work on standards they want. And here we go. We have a bunch of people debating the risk assessment and the actual cost of another lockdown, whether this would be the third or fourth lockdown depends on which city you're in. But California, which just celebrated this reopening, and they were the last to reopen on June 15, due to the rising cases and the Delta variant in LA specifically, and how much more contagious it is, they've reinstated the indoor mask policy for all residents, not just fully vaccinated ones. So here we go again, if you go into a store in LA, you got to put your mask on and do a lot of this mask theater because maybe when you go into a restaurant, they're not shutting down in door dining. So you're going to walk to your table in a mask, but then take it off to eat or you're supposed to take it off in between bites. I'm going to be traveling on a commercial airline over the summer. And I was reading that you in this one airline, they said in between bites or sips, you can take your mask off. But during the entire meal, you can't take your mask off. So I I was on a flight and I was sipping my tea. And I noticed the person next to me had no mask on almost the whole flight. And he had a bottle of water in his hand the whole flight. And I was like, that's a hack. I get what you're doing. But obviously, he was vaccinated. And I actually did talk to him about him being vaccinated. And we actually talked about his hack. But I want to get him in trouble. So for the seven day period that ended in Wednesday, la is average was 1000 new cases a day. And on Thursday, la reported 1500 additional cases of COVID. So yeah, it's definitely ramping up but deaths are not hospitalizations will and 99% of people going into the hospital seems to be people who are unvaccinated. So what I think is the delta variant will be the motivating factor for people who have been dragging their feet or unsure if they want to get the vaccine. between December 7, and June 7, the unvaccinated accounted for 99.6% of LA counties coronavirus cases 98.7 of COVID-19 hospitalizations and 99.8% of deaths. In other words, and really that point 2% that were people who are vaccinated and died, I would love to see that number of cases, it might be dozens of cases. And if they died from COVID, or with COVID, or that really difficult statistic, which is you know, how many days of life did they lose? Because maybe this was a person who was, you know, a smoker who had compromised lungs, who was obese and had a bad liver, and they were going to die in the next 60 days. And instead, they died six days, you know, earlier. And so, you know, it's really hard with these statistics to actually understand or make policy. But the policy I've made is, I am not going to change my behavior, I'm fully vaccinated. And I'm willing to take a little bit of risk in regards to catching the delta variant, because I don't think that I'll get long haul COVID I hope not knock on wood, or I don't think I'm certainly going to die. So I've chosen to focus on my health, I'm eating healthier, I'm losing weight, I'm working out. And I had asthma when I was a kid. So I'm actually looking at this as an opportunity for myself to maybe work on other issues as a 50 year old man, I turned 50 this past year during COVID. So I want to work on my health and be stronger in case I do get something like this in the future. But Florida is taking a unique strategy. You know, Florida was, you know, didn't really shut down all that much. And they've taken keeping the place open. And it's really hard for us to know if these closures actually did anything. Obviously, masks do work. You'd have to be crazy to think masks don't work. But in which settings do they work? And now we have to start this whole process again. To what extent do masks work with the delta variant? What if the delta variant is so contagious that masks don't actually help it? We don't know. But Florida is the cruise capital of the world. Everybody knows that all the cruises go out there in Florida took a strategy of saying, Hey, listen, you cannot, as a cruise company require people to be vaccinated. So they actually did their own mandate, which is kind of like over the top. So what cruise ships decided to do was they decided to require people who were not vaccinated to pay for insurance. Here is a clip from my friend Seema Modi.

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This could save you 10s of 1000s of dollars depending on the size of your business and the volume you trade sign up today at pipe.com slash twist. Happy piping everybody. All right, next story, Amazon is expanding its educational benefits to include a bachelor's degree program. According to the Wall Street Journal, Amazon is offering a new education benefit to its employees that have worked for at least 90 days. The educational benefit could be a way to retain more hourly workers as Amazon has hired 400,000 employees during the pandemic alone and is looking to hire more in the coming months. According to the Wall Street Journal, article mentions that benefits include upfront payments for a bachelor's or associate degrees, high school diploma programs, GEDs, English as a second language certificates. So the devil's in the details on these. So let's see if we can get into those workers must continue to work for Amazon part or full time while taking classes, but part time staffers receive 50% of the college costs according to the Wall Street Journal. Is there a cap on that? Can they go to Harvard and pay $75,000 a year, there must be a cap. The Wall Street Journal notes that previously Amazon had covered quote, 90% of the cost of an associate degree or other certification program and didn't offer four year college degree. So this is an expansion. Robert Kelchin, a professor and head of the Department of Education, Leadership and Policy Studies at Knoxville tweeted about the potential eligible colleges for the program. It'd be very interesting to see which colleges become approved partners the size of Amazon makes this something to watch. So this is incredible. And I think this speaks to the fact that the free market works and what i mean by the free market works a lot of people have been doing some hand wringing about gig workers hourly workers. Well when you have a free market and it's booming and it's thriving. what happens eventually, because America is building products and services that reach the rest of the globe, we need more workers and we are not letting as many people into the country. So this is creating a labor shortage. Obviously, there's a labor shortage as well, because people got stimulus money. There's another issue. People got rich off NFTs. I don't think that's actually a really big one. I think some people have reconsidered their life choices. And one of those is maybe to live a more modest, low cost lifestyle, and maybe not need to make as much money, which then I think drives more people to the gig economy because they want to kind of shape how often they work. I wonder if people who are watching live how many of them are rethinking their career choices and how much free time they spend right because of COVID. And then people are retiring earlier. So because a lot of nurses, teachers, etc, are just saying, you know what, I was gonna retire in five years the pandemic, I might also just call it quits now and start enjoying my life. I have friends who died from COVID. I had to put my life on hold for a year and didn't go out of the house. I want to YOLO. So I'm just gonna retire early. All of those things have led to an environment where I think there's upwards of 10 million available jobs. This has led to, as you know, Amazon put their base wage at 15, which was double the federal minimum wage. And then you have all the ride sharing and delivery companies battling it out. And then you can't get retail workers. And then a lot of restaurants and cafes are shutting down now. a lot of them are shutting down. Because not because they don't have customers, the customers are coming back, but they can't find employees. So the free market is at work. And I think we're seeing what I think is a kind of great moment in time, where labor individuals will be able to command more for their work product or lower their burn rate and not need as much money. That's the ultimate way to have power in this dynamic with your employer. If you don't need to work if you're a trust fund kid, and your parents gave you you know, a $10 million trust fund, if you don't like what you do at work, you literally get up, tell the boss to go pound salt and make you a ham sandwich and you leave. But not everybody can do that. I certainly couldn't do it. I couldn't just leave. I had to think early in my career about where I would go. Well, as the gig economy has emerged, there are people who know if I quit this job, I can go drive for Uber, Lyft, DoorDash, Postmates, get a job at Amazon, whatever, get a $500 bonus $1,000 bonus for taking the job. And I have a safety net. And if I've lowered my burn rate, well, if I'm living, you know, at a lower cost outside of a major city, and I'm not commuting anymore, and the commuting was costing me 300 a month, and I was losing 60 hours a month, well, I can gain those 60 hours back. It's really interesting, I think what's happened. And I think it's good for society. I think we're seeing a lot of people having more agency over their lives and their careers. That's what the free market has done all of those additional jobs that were created in the gig economy. I know that the unions don't like it. And I know that people don't get benefits. But all of the gig economy companies got together and said, let's have a third way of doing this. You have full time employment where we tell you what shift you work, and you have no choice and you wear the logo target or whatever, and you have to have your hair cut a certain length, yada, yada. They control how you behave at work, you have no agency, you show up for your 6am shift, you work till 4pm, no choice, you take a half hour lunch when we tell you Well, that's not what the gig economy provides a gig economy as I turn on my app, and I work and if I work on Friday and Saturdays and make more money, and that's my hack. And then I take my weekend on Monday and Tuesday, and I make 50% more on the weekend. So I can take three days off and spend more time with my kids. That's the type of thing we want everybody thinking about. We want everybody looking at their lives, as if they're the CEO of their own life. Then you have agency, what the unions are doing is they want to collect dues, they want to gain power. And they want to force employees who have agency to then listen to them and be part of their tribe. And that kind of sucks. I'll be totally honest. I'm not saying employees shouldn't have power. But I think the true power comes from them being able to make their choices in life and to move from one employer to the other. So once you become a shift worker, you lose all your power, right? I mean, we can all agree on that when you're a shift worker, and you're dependent on one person for your revenue, you have lost all your power and all of your agency. And 70 80% of the drivers at Postmates and DoorDash and Instagram. Yeah, everybody wants to make more money, but none of them want to work shift work. So I really think these like unions are pushing for something that makes people into children who don't have agency over their lives and i think the gig economy and this vibrant competition where amazon is paying for people school. The driver companies are giving huge bonuses. I think that's creating a really vibrant market and we should bet on that. We should bet on that. Not shift work shift work is for suckers. That's my belief. I believe that is the raw deal because once they get you into that shift work and you got that manager grinding you down, and telling you when you have to work and then you can't see your kids and you don't get to set your schedule take two weeks off, you know, it's just, it's bad. That's my personal feeling. I wonder how you feel in the comments. Yeah, health insurance is a really interesting part of this. And this is why I think all of the country now the right and the left need to get together on that one issue. Let's give a basic health safety net to everybody and take healthcare out of the realm of employment. That is a dysfunctional part of our society. Make healthcare just like public education. If your bank charges outrageous fees, you need a bank account that's built for small business. 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Wow, think of the scale of that. And so Reuters reports property developer, China Evergrande Group plans to suspend interest payments due to loans to two banks on September 21. Financial intelligence provider our EDD reported on Wednesday citing four sources briefed by bankers stopping payments. Hmm. bloomberg reports shares briefly fell below their 2009 initial public offering price after a second credit rating downgrade in as many days boosted concern the developer will default on its debt these most recent credit rating downgrades came from fitch ratings one of the big three credit rating agencies snp global ratings and moody's have also made similar downgrade fetches current rating for evergrade is CC default imminent. Oh, wow, that is an ugly looking chart. Zoom in on that chart. Oh, my lord, that is gross. You do not want to be in that stock. Ouch. You know, debt is really dangerous for equity holders. Just to stop for a minute and just explain debt versus equity, you buy a share in a company. So let's say the company has, you know, for the argument sake had 1000 shares in you at 10, you own 1% of the company. Great, you own 1% of the company companies, you know, making a million dollars a year, you own 1% of it, you're getting a $10,000 dividend, all is great. Now the company's like, wow, we're doing so great, we make a million dollars a year, let's take out a $10 million loan to build a factory to do whatever. And then it doesn't work out. And then their interest payments are going up, they have to pay back the principal, you've all done this, maybe on a mortgage or a car payment. and they can't keep up with those payments. Well, then that company gets taken over by the creditors who gave them loans, you know, who comes after the creditors, the equity holders, the equity can get wiped out. That means it goes to zero super dangerous. This is why I tell startups do not pay venture debt, do not do debt instruments early in your life. If you have like a million dollar credit line, because you have $10 million in revenue, and you're profitable, and you've got 20 million in the bank, Yeah, that's different. But I sometimes see companies that are raising 1.5 million try to put 500,000 in venture debt on it, or some kind of debt device. And I'm like, why don't we just make it work with $1.5 million, I build a business plan that works with a million to 1,000,005, as opposed to trying to put this 500,000 on top of it, because then the next investor comes the next investor looks at all that debt and says, I'm not buying that. And that's what we're seeing here, who would buy this stock now who's going to buy the stock, if it has all this pro all these problems with debt, you're going to stay away from it because you have other opportunities to invest. So If you look here at the Moody's ratings, you know, you have triple a prime and then it has high grade and then upper medium grade and then you get into that junk, which looks like it's BA one BA two, I'm not familiar with all of this. But when you get to the C's, it does not look good. It's beyond highly speculative. Now here's the rub, you will find people tweeting about these two topics together. If you remember, we talked about tether on this podcast many times and how tether was no longer backed by dollars, they said they were back at one to one, it's a stable coin, you buy this cryptocurrency USD t, and it's backed by $1 in a bank account. And then they said, Oh, yeah, you know what, that's not true anymore. Like I think that 3% cash equivalents or something. And then they had this idea of commercial paper, what is commercial paper, it's loans to companies like Evergrande. Now, we don't know who tether was investing in, but people started asking them savvy people, maybe people who had inside information, do they have any commercial paper in China? And the really, I would say smarmy, just less than reputable team over a tether might be a way of saying it that would be generous these folks are really weird people and they seem to have a problem just saying what's the truth they seem to be truth challenge. probably not a great idea to have a truth challenge group of people and honesty, transparency, their transparency challenge, that's a great word. So you have the transparency challenge tether executives who won't tell you who the commercial papers with. And other people do report or their commercial papers with And the commercial paper, people are speculating is outside of the US. And they're speculating it's in China. And in fact, if we zoom in on this tweet, maybe we can zoom in on that a little bit. And I can read that tweet. And here it is from Bitfinex. I'll just read a series of tweets here. And this is from September 6, tether refuses to deny holding ever grand paper When people said they could be holding commercial paper issued by exchanges, they denied it. They're also likely holding it through a shell account proxy because what they're doing is illegal in China. Oh, that's interesting. Duck 14,001 says, I'm absolutely convinced that Evergrey paper makes up a not insignificant portion of Tether's backing. We should find out soonish. last beer standing ever great update this time a tether boy oh boy have things got an interesting caveat up front this is a theory that has been circulating in bits and pieces below i've tried to summarize the argument evidence but it's definitely worth reading so there's a series that was from july 22nd so there's a series of people speculating this again, pure speculation, right? I'm not saying that this is accurate. I'm saying this is speculation. Now when you see anonymous accounts speculating on Twitter, it could be FUD, fear, uncertainty and doubt designed to drive a stock price down. We saw that with the Tesla Q people. They were like, remember they were taking like pictures of Model threes like it with dust on them in parking lots. And but then you would see Model threes and Model Ys everywhere on the road like oh my god, they're Tesla is like putting Tesla's in, you know, garages because they can't sell them. And then everybody you know, who ordered a Tesla was complaining that their Tesla was back ordered and they had to wait three months. And you're trying to figure out the FUD where Tesla's are all over and you see them driving with your own eyes and you see this picture of 18 Tesla's in a garage and you're like, Hmm, I wonder what's going on here. Well, there are people from anonymous accounts spreading fear, uncertainty and doubt. And sometimes people use anonymous accounts, because maybe they're insiders, or maybe they have an axe to grind, because they're a previous insider, they got screwed by the company. Or they're just one of those unique people who pursues fraud. for the justification of doing it, or they've taken a short position against it. Anyway, we don't know here, who bitfinext is. We had bitfinext on the program, obviously, it was the first and only time we've had a anonymous person, but I thought it was worthy since they had become such a interesting account that was being talked about. So sometimes we'll talk about things here that have to do with anonymous accounts or fear, uncertainty and doubt and these kinds of things, speculation. But you notice I always tell you that right up front, and I'm very clear. That's because when I was a journalist, we were clear about these things. We try to inform you as much as possible. I'm not trying to manipulate you the audience. I'm trying to figure things out together to be candid and try to explain things to you. as best as I understand them so that you can then help me understand them better. You saw me do that on yesterday's show, when I was talking about these folks learning out their cryptocurrency and we learned a lot institutional owners buying cryptocurrency, okay, and they have their Bitcoin as collateral. So if the Bitcoin goes from 50 to 25, they get liquidated that pays down their debt, yada, yada, and they KYC they know their customer. Interesting. So this will be something very interesting to watch. tether is maybe the they're under investigation for wire fraud from previous banking shenanigans that they kind of admitted to like using bank accounts that were not meant for money transfer using for money transfer. So it's gonna be very interesting to see how this all plays out. What a great show. Thanks for all the comments. Now it's time for me to answer your questions. And I asked everybody today, to really think about me as a friend. I think that's my superpower in life. That's my friends tell me is that I'm like the best friend to them. And that makes me feel great. I always try to be as a as a general rule, the best friend I can be to my friends. I just think about them. And I think like, what are they struggling with? Sometimes I'll call a friend. And I'll just say, Hey, haven't talked to you in a while. I'm just calling to check in on you. How are you doing? say i'm great missing how you really don't what's going on me about how your kids are talking about how it's going with your wife or spouse has business you know and so let's do that here on the podcast. You're my friends, you listen to the podcast, we've been together doing this for over 10 years with many of the people in the audience. And we're doing this live. And I love interacting with you. It's given me a lot of energy. So I'm going to take some questions here. And I want you to just tell me candidly, you can use your initials or say make this anonymous. So when I talk if this makes it to the podcast, not just the live stream, we can take your name out. Okay, so we have Richard from YouTube. If you don't necessarily need the funding to continue building iterating on your MVP, and can bootstrap from your own funds is joining an accelerator worth giving up that six to 7%? Absolutely interesting question. So you really do want to bootstrap for as long as possible, because you're learning all that time without starting the clock of venture capital and jet fuel. What do I mean by well, venture investors, angel investors, they want to get a return on their capital. And once you start down that path, you have to because you've decided to have a partnership with investors, and you took their money, and you issued them shares in your company. you've now changed the dynamic, what you're working on as a project, you have to think about that partner, and how you and your behavior is impacting them. In other words, you have to be a fiduciary for all the stakeholders and shareholders in your company. stakeholders means people who don't necessarily own shares, your employees, maybe in some cases, your partners, the community that you build the product for you get the idea, just people you impact in general, your supply chain would come to mind. But for shareholders, you really do have a serious fiduciary responsibility. So if you want to change the product, if you want to fire your customers, if you want to make your product, which is, you know, you're charging $1,000 a month to 10 people, you want to make it for free, and you want to put off making money for a year, you know, if you have investors, you're gonna have to explain that to them, you'd have to send them a monthly update or a quarterly update, you're just on this fast track. So yes, if you can keep doing your MVP and learning and making progress, if you can do that indefinitely and own 100% of your company, never take money from investors. And that has happened in the world a handful of times. And I've seen what we call a Pegasus internally at our firm launch, which is launch.co our website, we probably should update that at some point. I'm thinking I just make it a notion page. So we just put copy up there in text launch. looks for pegasus is which is that can skip around a financing or two every time you do a financing is between ten and twenty five percent dilution let's put the number of fifteen you do that five times you get an idea of what happens to your holdings go down significantly. So we saw with calm calm, they raised money in the first round, when we put in 378,000, I believe. Sometimes you don't forget those numbers when it's a big win, put 378,000 when it was a $5 million company or so, then they let some friends in to invest at 20. And then the next round of funding was at 250. The next round, if that was 1.2 billion. And then I think after that, it was, you know, multiple billions. So when you look at that trajectory, they skipped multiple rounds of financing, which means the founders own a lot more of the company and my original six or 7% my 6% ownership or whatever was didn't get diluted all that much. So I still own four or 5% of that company. It's amazing. So you really do want to do that. Now, in terms of going to an accelerator, accelerators are great. If you go to the top three or four, launch accelerator, the one I run, Y Combinator and Techstars. Why those top three? Because those top three signal to investors, downstream investors, seed funds, etc, venture worthiness. You've passed the screening of David Cohen, Jason Kellock-Anister, Paul Graham, essentially. my program i think is not doing the screening now i do the screening in a cursory way my team meets all the companies and they say yes or no or these are the ones we want to accept is improving questions and then we accept them and then i come to a third of maybe the accelerator classes now. And then you have you know textiles around the world. So is it worth it it is worth it if you want to have that stamp in your passport and you want to meet in our case a thousand investors and you have that halo. A third time founder you know if you're mark pincus or evan williams or travis kalanick like what value would provide none right you already can raise those round so it's really for people who are getting started in the business. not as a young, but people were getting started in the business and maybe don't have all the connections. Okay, that was a great question. Dusty asked me on YouTube, how can someone deal with disappointment of not getting chances to pitch an idea? If you're a nobody, just keep pushing forward? You know, Dusty? I really like this question, because I was a nobody. And I felt like a nobody for a large portion of my career. And what I realized was, the more I created in the world, the more I went from being a nobody to people following me. There are people with ideas and people who talk and then there are people who create. And once I created Silicon Alley Reporter, and it was just a 16 page photocopy, my phone, my lunch schedule filled up. I had made something in the world. And I got addicted to it. When people when i handed them a sixteen page photocopy and they read it and it was good and it was interesting it was nineteen ninety six and they were reading about tech companies in new york in this place called silicon alley and there were two dozen tech companies there razorfish and voyager making cd roms and prodigy like wow this is exciting. And so who made this magazine i did. How'd you make the newsletter? I was like, well, I went to a photocopy store. I wrote the stories. I shot pictures on my 35 millimeter and I did page maker to print it out with Brian Alvey. And they were like, wow, that's incredible. You made this? They couldn't believe it. So don't worry about people pitching pitching people your ideas. Worry about your skills and what you create because there's so many people in the world and they're also busy that what we're all looking at is we're looking at the landscape and we're saying who's made something interesting. Right and so i listen to this podcast called red scare. two women in new york they are part of what's called the dirt bag left. And i like it because they're super candid they're somewhat intellectual they're a little edgy they're inappropriate a little howard sterny kind of but intellectual. And it reminds me of new york and the people i used to hang out with when i was younger living in new york and i noticed that the you know having listened to them for like two years or so. I catch probably every other episode and i was subscribe to them on patreon for a walk someone to support them they. I just watched their careers, because I also follow them on social media. And the woman Dasha, who is one of the two, I've watched her getting acting jobs and making her own films and documentaries. And it's like, she made a podcast, which has no production quality. I mean, it is like, they're, they're fumbling with the recorder. The sound is terrible, but they're funny, and they're interesting. And they read books, and they read articles, and they have a hot take on things. And it's, you know, they're entertaining. just by doing 100 episodes of their podcast, I've watched Asha's career. And I think you'll see her on secession this year, or one of those is either secession or billions. One of those two shows she's going to be on I don't think it's a session, I think it's billion started already. And oh, and by the way, now they're making $46,000 a month. So they're, they're making 20 grand each. doing a podcast. And you're either creating or you're waiting, you're creating or you're waiting. And what I like about the Red Scare story is not only are they making all this money from their podcast, which is, you know, all it took was a recorder and two people with an opinion. They're now all their other parts of their careers are also booming. What if my ideas are too big to make my own? Then do I work on how polish the pitch or the visuals for the concepts are dusty green again on YouTube follow up question. So dusty, I think what you want to do is iterate I wanted to start a cable channel and be a media mogul in my earlier years. But I started a 16 page photocopy, because that was the best I could afford. So I think what you have to do is maybe look yourself in the mirror and say, what's something I can do today at a very high quality level that proves to the world I'm capable of doing something. And that is a stepping stone towards the bigger picture. In the in the example with Red Scare, maybe Dasha wanted to make a movie but didn't have the money. Well, then she starts making 20k a month from doing this podcast. and has an audience who will now buy the first 10,000 tickets to her independent film, right? And because people listen to the podcast, and they know she can promote it, well, then maybe the other co host can get a book deal, you get the idea. So what you're doing in life is you're iterating. And you're proving to the world that you're a creator, not a waiter. And I don't mean a waiter serving drinks or food. I mean, a waiter, somebody sitting around waiting. So you right now, feel like a waiter dusty, and you feel like candidly, you're making excuses. I'm giving you permission to forget about the giant big picture for a minute, you can still keep it up there. It's not going anywhere. Put it on your wall, I'm going to own some giant media company just like I wanted to. Okay, but what can you do today? What's your 16 page photocopied newsletter? What's your Red Scarab podcast with, you know, $100 in donations on Patreon that grows to 46,000, right? That's what I would challenge you to think about. Oh, here we go. This is a great personal problem from ruffle duck. My problem is laziness. How do I get myself to work on my projects? Like my life depends on it. Well, I wonder if ruffle duck has like a trust fund or something. And, you know, does it need to fight to survive in the world? That is a great question. If you're lazy, it's probably there might be a root cause to it, like in your childhood or something, there could be like a psychological reason of why you're lazy. Or it could just be habit. And I think if you were to talk to a therapist or a coach, They might take different approaches towards this a therapist might be like tell me about your childhood what about it is the reason and then you know if you're talking to a behavioral psychologist or somebody who does cognitive behavioral therapy cbt i was a psychology major so i know a lot of the stuff and i've thought about it a lot working with entrepreneurs. you might just have bad habits, right. And so redoing your habits, just to set some goals for yourself every day, I'm going to do x, y, and z, and really get yourself into a routine where you just do a little bit of performance each day, find some meaningfulness in what you do. Those are two different approaches. I if I was you, I would maybe look at both of those. Maybe you have some fear from your childhood, or maybe people told you weren't good enough, which is what people told me. Now, if people tell you you're not good enough, that can go one or two ways you could actually believe it or you can use it as fire to say I will prove you wrong. right? Like, they say, Jake out, you're never going to be anything. You're just a kid from Brooklyn, you got a 71 three year average at Severan High School, you're going to become a cop. And, you know, and I said, Well, no, I'm gonna go to Fordham. And I'll just go at night, it will take me five years. And, you know, I'll try to make it work by being a waiter and fixing laser printers. I took that lack of belief people had. And I said, You know what, instead of internalizing it, and saying, I'm not, you know, good enough, or whatever, or they're right. I said, I'll prove them wrong. So I think that's where therapy and talking to somebody who's a therapist in a professional setting, and saying, Listen, I have, I'm lazy, why am I lazy. And then the other approach is to talk to a coach about it, and find a coaching service. And I think if you are motivated to do either or both of those, you might have a breakthrough. And then a very simple thing, I think, is habits. And you know everybody has laziness and laziness in different places you know i was lazy about my health habits and you know now that i've got the wealth checked off and i've got happiness checked off i'm really trying to hold myself accountable on the weight front i'm down from two thirteen down i was today i was one ninety two so i'm twenty one pounds off the peak and you i'm gonna be in the one eighty soon so i I feel sometimes I'm lazy. I got this really cool app. I know this is silly. And, you know, but it's been helpful for me. So maybe it'd be helpful for you. It's called streets. My friend Mark Suster, who lost a lot of weight, put me on to it. And I've been talking to the founder of the company. He's in Australia. And it's a nice lifestyle business. I don't know if this could become a bigger business. But you set goals for yourself. So I have in my goals, like standing a certain number of hours drinking water, doing push ups, climbing stairs, burning calories, eating a salad, which I haven't done eating the smoothie, which I've been drinking Muni, my friend, freeberg smoothie, working out flossing my teeth, taking my vitamins, actually recording my weight, which is something I wasn't doing, doing weight training. And I'm just trying to like set modest goals for myself, which streak does is it will lower the goals if you're not hitting them. So it's like, Oh, you're not hitting six glasses of water day, should we set it to five for next week and see if you hit that. So it's kind of really smart. Ah, here we go. Question from the demo night 789. So I like these, I like the ones that are like really personal and about your fears and about, you know, the stuff that maybe is less tactical in business. I mean, I do love tactical business questions. I'm a tactician, but I do like these ones that are more emotional in nature. how influential is social class and breaking into the corporate world consulting finance. Coming from lower working class background put one at a disadvantage. Certainly it does put you at a disadvantage I think I didn't know anybody at Stanford I didn't know anybody at MIT and I felt like I wasn't worthy, or, you know, maybe, maybe that's the wrong way. So now it's worthy. But I just I did have to go build those connections. And, you know, the what was interesting is, I found that people some group of people thought of me in my 20s. When I was in New York making Silicon Valley reporter, which was my first magazine, some people kind of resented me that I was a nobody, and I became powerful with the magazine. And then once I realized that, that those powerful people were resenting me, I leaned into it. leaned into it. So I would host events for 100 people. And I would specifically cap it at 100. I'd specifically leave people out. And I would invite other people to come. And then some famous person, but Oh, yeah, I'll definitely come to your 100 person dinner. I'm going to bring this person. I'm like, Yeah, I'm sorry, there's no plus ones. And I would say that to somebody who's worth $100 million. And they'd be like, Oh, okay, well, can I bring something like I'm really sorry, maybe next time, I'd love to meet them. But for now, the only the 100 people coming to my dinner are people I know. And I've got 50 people on the waiting list already, but certainly next time, and I'd love to meet them, you should introduce me to my email, I'll have a cup of coffee with them. So i was like once i realized that people look down on me a little bit or maybe dismissed me i was like oh well how can i change that i know i'll do the silicon alley one hundred. It's looking at was the name for new york's taxi in the nineties so i ranked a bit of ranked list as a nobody of the hundred most important people. in business and technology in New York, when I was 27 years old, that I was, you know, taking people my age now 50 year olds, and I was saying 17, they're 17, the most important. I mean, I was deranged. So I'm not exactly telling you to do this. But I realized early on, I owned a magazine and I picked who was on the cover. man, that would be powerful. And I could lord that over people. And then people would respect me. So I took like a little bit of a maniacal approach to, to getting power. Because I didn't have it. And I think it was a little dysfunctional. I think I because I didn't have power, because I didn't have status, I was like, I'm going to create and manufacture my own, I will show everybody. So back to the motivation question we started with, it was just a driver for me, you know, I see it clearly. Now, at the time, I just thought I was fighting for my life. to survive and be important in the world. And I think you should think about it that way as well. If, and it's less so today, people don't care about your diploma as much as your skills. And especially in this work from home post COVID world, you know, it used to be like, well, you know, who went to journalism school, okay, they're going to be a broadcaster. And then you look at some like youtube and podcasting who gets to be a broadcaster, the person who broadcasts every day, like my friend CP who's doing next fan TV like eating the best of my knowledge CP can tell me I don't think CP the franchise went to, like get a master's degree in communications and then was an intern at You know yes pn or something i don't think that's how he built his channel and i don't think that's how red scare about their channel or whoever else is killing it joe rogan you know podcasting is not like somebody, nbc said only put the joe rogan show on eleven p.m writing ask any gatekeeper to do it. you just do it, right. And it's about skill and showing up every day, really, and I hate to be like a motivational speaker here. But, you know, just from what I've learned in life, if you just do the work every day, that's why I put that sign behind me do the work. That's like a reminder to all of you. But more than anything, it's a reminder to me. That's why I show up here every day. People I literally had a friend of mine, they're like, J Cal, you can do the podcast once a week, you don't have to do a five days a week, you don't have to keep pushing yourself so hard. And I'm like, Yeah, it's just not who I am. I just want to keep doing it every day. I like doing work every day. Sorry. I like the result of it, too. I like the result that the audience is growing, and I get to hang out with you guys and get all these great questions. All right. I think we did enough questions. What is your standing amongst the besties? I am the least I have the lowest net worth of all the besties. I might have the lowest IQ of all four besties, but I am in a bar fight. The one you would want to have with you in a zombie apocalypse, I would be in charge and I would be the one who would survive the longest. And I would be the best friend who would jump in front of a punch for the other besties. You know, everybody's got their role in life. I think I'm the loyal one who will fight for their friends, and I'm definitely the funniest out of the four of us. That's for sure. For sure the funniest. All right. Talk to you soon, everybody. Bye-bye.

"### Human: Get out of here with that garbage.### Assistant: such garbage. All right, listen, in a t(...TRUNCATED)

"### Human: Thanks for listening to Cameron Titleman's Ask Me Anything. If you'd like to participate(...TRUNCATED)

"### Human: So when you work with a broker instead of business insurance incumbents, you're not deal(...TRUNCATED)

"### Human: Because, you know, journalism. Journalism. Oh, right. It's very exciting. Actually, I wa(...TRUNCATED)

"### Human: Some obvious red flags, when a founder is really combative and defensive about their ide(...TRUNCATED)

"### Human: All right. Thanks, Ray. Finn can't spill coffee on a white shirt or wave at someone who (...TRUNCATED)