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Mike: If everybody's an apple, don't be a 10 times better. Apple be the world's first banana. And most people might not like bananas, but all the people in the world who do are going to say, Oh my gosh, where have you been all my life? And most of the startups that have great success, it kind of have that energy at first.
Welcome to the Logan Bartlett show on this episode, what you're going to. Here is a conversation I have with co founder and general partner of Floodgate, Mike Maples. Mike is one of the most iconic names in the venture capital industry. Having helped define the seed capital category over the course of the last 20 years and having appeared on the Midas list a number of different times.
I have a database of every seed company that I've ever found that you would have made more than a hundred X on the first check. And I study those things like a train spot. Mike recently wrote a book called, called Pattern Breakers. Why some startups change the future. We go in detail about the frameworks that he thinks through in that book and how different startups are able to engage and beat incumbents in giving categories by changing the rules at which the category is defined. Mike and I also talk about the future of venture capital as well as what it could be over the course of the next decade. A really fun conversation with one of the more iconic names in the venture capital industry that you'll hear now.
Logan: Mike, thanks for doing this.
Mike: Thanks for having
Logan: It's a pleasure to meet in person. I,
Mike: of crazy. We
Logan: I know, I know. Well, I, uh, I, I've enjoyed, uh, I enjoyed reading your, your book and, uh, obviously been following your career for a long time. I'm curious, by the way. So do you grow up in Austin?
Mike: I, I lived there for about 10 years. Yeah.
Logan: feel like you've, you've maintained the Austin draw.
Uh, I don't know if that's what it is. Is it, is it from Austin that you've, you've, I suppose.
Mike: suppose I, I was born in Oklahoma and all my relatives were from Oklahoma. So I suppose that that was kind of the predominant,
Logan: Did you ever move to Washington though?
Mike: I was never moved there. My dad worked there for a couple of years when he was at Microsoft, but by then I was in college.
Logan: well, you have a, uh, you have a distinct and profound, uh, voice for podcasting. And, uh, yeah, [00:02:00] so I, I'm excited to excited to do this.
Logan: So pattern breakers. I, uh, I, as I mentioned, I read the book, uh, on my flight out here, uh, and really enjoyed having been in this industry and studied this industry for 12 years, 13 years at this point.
And it, uh, it, it articulated a lot of the different things that I. maybe have intuited or haven't really thought about. Uh, and so I appreciate you doing this. I think anyone that's, uh, listening and as we sort of unpack it a little bit, I would encourage them to buy a copy. I, I, uh, I don't always recommend the books that people are, uh, uh, reading, but certainly I think for venture investors, it definitely helps frame a lot of the changes that have happened over the course of time.
Mike: for just taking the time to read it. I'm just want the ideas to get out there.
Logan: No, it's great. It's great. So what was the impetus to write a book?
Mike: this will probably resonate with you a lot because you actually are a practitioner of this, but a lot of the stuff that I see about startups and venture and case studies a lot to too much packaged, too much, uh, a good fit for explaining something.
Yeah.
Logan: the end.
Mike: to a bunch of facts in hindsight. And so, and, and that hasn't been my experience at all in venture, right? My experience has been. incredibly wild. These companies, even when they work are incredibly broken on the inside and screwed up. There's decisions that you could go right, or you could go left.
And it's not obvious at the time. And it's not even obvious sometimes that you made the right call. And there's times where, but for gust of wind, it would have failed. And there's other times where the one you thought was most likely to succeed goes nowhere or, you know, they did all the right things except for they failed. And so, um, the beginning of the, of the. was, should I just retire before I get exposed? Right? Like I'm, you know, I'm a big fan of Nassim Taleb's books,
Logan: Yeah.
Mike: Fool by Randomness talks about this notion of the lucky fool. And I thought maybe I'm a lucky fool. Like [00:04:00] 85 percent of my exit profits had come from pivots and, you know, ODO turned into Twitter and Justin TV turned into Twitch, all these companies.
I was like, okay, um, Ma, what? What's going on here? Am I just lucky? Is this just random? And if that's the case, I should stop before, you know, before catches up with
Logan: And Justin TV, uh, became Twitch. Ultimately you invest in that business in 06, 07, 07. You got it. And you actually forgot that you had any stake because of, and we've had Emmett Shearer on the, on the podcast before. And so you sort of talked through the Twitch journey, but it's split into what social cam and then, uh.
Mike: so it's, the whole thing is completely wild, right? So, so I'm sitting there, I'm getting pitched by the guys from Weebly this guy walks into this coffee shop and he's got a baseball cap and he's got this camera with wires going into a backpack. And I remember thinking, that's a pretty weird looking setup. Um, walking in and then David Rosenko goes, well, did you get your email from us earlier today? And I'm like, what are you talking about? And they're like, well, we're friends with this guy, Justin Kahn, and we think you're going to like him. Is it okay if he pitches you? So it's like, literally he's walking up to our table and he sits down and he looks at me and I'm his laptop because his camera is looking at me from his baseball cap.
And 24, seven live reality show of my life. And I was like, that's the dumbest thing I ever heard. so that was, that was the beginning of Twitch. And then you're right. Like about, let's see, five or so years later, they decide to pivot into two companies, uh, social cam and Twitch. then social cam gets bought by Autodesk for 60 million.
And I just figured that was the company. So I didn't have Twitch on my financial statements. I didn't, I just kind of forgotten about it. And so. So that was part of the genesis of this idea too, was I'm like, what business am I even in? I just made 85 times my money on this Twitch deal and forgot I was a shareholder.
And I have to tell my LPs, we got this windfall, should I restate my financials and you know, all [00:06:00] this stuff. And so, uh, that's, that was when I started to really question, uh, what, what I really knew about this and what was random and what was wild and what's understandable.
Logan: So, in the book, you go through and you lay out, um, some different, I guess, principles or frameworks. I don't know what you, what you call them. Uh, what would you say?
Mike: Yeah, I would say that there, that fundamentally what I concluded was that a startup capitalist is a different type of capitalist. And so startups create value differently. So when, when Buffett and Munger talk about corporations, they talk about companies that persistently compound and that have competitive moats and that have, uh, different advantages, you know, like this Hamilton Helmer guy, the seven powers, you know, that kind of stuff. Uh, Startups don't have any of those things. And, and so startups create value, it turns out, not by compounding, but by changing the subject. And so what, what I started to realize is that the startup capitalist creates value differently in the economy harness different powers, right? So the, the, the corporate capitalist harnesses the types of powers that facilitate persistent compounding of advantages. The startup capitalist, Harnesses powers that things upside down, that deny the premise of the current rules, that break the patterns, right? And so then that led to this idea of pattern breaking, right? And the, the idea that startups make things happen by breaking the patterns rather than following any.
Logan: And so, and so you lay out, uh, so there's, there's inflections, uh, there's insights, there's ideas and movements are sort of the big four, right? Uh, and so maybe, I mean, I want to talk about each one of those. Maybe we can use, uh, because you talk about it in the book, we can use, um, you know, Justin. tv, Twitch, or, and maybe, uh, Lyft, Zimride as sort of two comparative examples of like what inflections might exist and then how it kind of derives from there.
So, so inflections, you have a very technical definition of that. What is an inflection as you think about it?
Mike: so an inflection is a [00:08:00] specific new change event, and so it's it's should not be confused with, say, a trend. So, for example, an inflection that enabled lift was the iPhone 4S had an embedded GPS chip. so. Inflections, uh, are used in other fields like in math and inflection could be the turning point where the slope of a curve changes. And, and I like the term inflection because to me it really does represent a turning point. And it's a turning point in the capacity to empower people in a new and profound way. And so, You could have had the idea for ride sharing before the iPhone 4S, but it wouldn't have mattered. You could have implemented a system that embodied that idea. And so the iPhone 4S for the first time, it was possible now to locate people algorithmically, uh, where their phones were. And so now and drivers could act like hosts and guests had an Airbnb. And so now for the first time, you could offer a new type of empowerment. So inflections are. The weapon that the startup founder uses to play, um, an unfair fight, right?
Business is never a fair fight the incumbents fight unfair in the default. And so the startup needs a way to fight unfair. And the way they fight unfair is that they use inflections wage asymmetric warfare at present.
Logan: Is, is, is an inflection kind of the answer to the adage of the why now when you're investing in a company? Is that a fair way of,
Mike: I think so. I think that that was the most important thing that we discovered or the most important takeaway that we had, like the most of the founders that I would try these ideas with, would, they would like certain ideas, like we'll talk about some of the other ones, but thing they found most profound about it was Inflections answer the why now because it talks about it's one thing to say digital cameras are getting better and that enabled Instagram. It's another thing to say [00:10:00] the camera got good enough specifically at a specific time that it became the camera that people were willing to use to take most of their photos most of the time and that before that time Instagram wouldn't have been good enough to make you want to share a bunch of airbrush photos and it wouldn't have ended up having the type of success it had. But like, it just, there was that turning point, that window of time, uh, when it all of a sudden was good enough. Uh, and so that was the, I think that, that why now, uh, is probably the hardest variable in startups to figure out. And so I think that one of the reasons people were enthusiastic about the notion of the inflection theory was that it was the, it was a explanation, uh, for how to get the why now, right.
Or to
Logan: Inflections don't necessarily have to be purely technological in nature. I mean, in the book, you mentioned a bunch of social and Brexit as an example of like a social, and I guess, can, can inflections also be, um, government changes as well in the circumstances around that?
Mike: For sure. So an inflection is something, so it's a change event, specific in time, it. It creates a set of conditions for people to change how they think, feel, and act. And so technology's the most obvious type of empowerment for that, right? But you're right, I mean, uh, the, the shelter in place, uh, laws for COVID. So all of a sudden you could do telemedicine visits across state lines. Well, that, that, uh, That creates a specific empowerment even if it's not a new technology because now all of a sudden doctors can have telemedicine visits that they couldn't have had before and they get reimbursed and similarly on the patient side. And so now what ends up happening in a situation like that is People who've never done a telemedicine visit before are suddenly like, hey, I think that's kind of how I want to do it most of the time. And so now all of a sudden, the world goes through a permanent state change in terms of what people believe and how people are willing to act and behave in certain situations.
Logan: Cause [00:12:00] if, if no one changes behavior based on an inflection, then it's, it
Mike: That's
Logan: doesn't, it doesn't matter. Right. It's, yeah, it's sort of in woods. It's
Mike: it's
Logan: like,
Mike: that's one of my favorite things about great founders is because you have a power doesn't mean you know you have it, right? So the thing that's sitting in our pockets might enable ride sharing, but most of us don't know that. Most of us are just following the day to day patterns of how we think and feel and act.
And so, uh, one of my favorite examples, uh, from the past is the wheel. And so the wheel used to be mounted, uh, horizontally to make pots. And some guy figured out that you could mount it vertically to move wagons and transport things. But it, but it was like over 500 years. And, but the, the power was there all the time.
And so one of the things I find really inspiring about inflections is they're all around us all the time. It's just that most of us aren't looking. Most of us are Doing the same thing that we did yesterday and we're going to do the same thing tomorrow that we do today. But occasionally a founder is an outlier and they see the implications.
Logan: do you think all great?
Logan: what ultimately become ideas and then movements, which we'll talk about the specific definition of those, but ultimately companies, do you think all great companies harness some inflection on the journey? Like, is it a prerequisite for success?
Mike: I, I think it is the best explanation I've found for why startups win instead of incumbents. So like incumbents may choose just not to react to a startup ever,
Logan: Yeah.
Mike: That can happen. Uh, but, but for the most part, I believe, and here's why. There's two ways to look at the future. way is to forecast the future and a forecast is a projection forward.
from the present. So, a forecast says that the future is going to look like, uh, a continuation of the present, but changing over time. What a great startup does is it backcasts, and it says, to start with the assumption that the future will be radically different, by [00:14:00] definition. Because if it's, if it's an outgrowth of the present, the incumbents have the advantage because they've defined the rules of the present. So, what I need to do is imagine. radically different futures and work backwards. And so the reason movements matter is you're a founder, you're in the future. Maybe you're in a valid future because it harnesses inflections, but you're sitting there by yourself. And so you have to bring people with you into that different future of your design.
And so that's what movements move people to that different future of your design. And you have to move the right people and not waste time with people who won't move.
Logan: Maybe, maybe let's, let's lay out the other definitions and then I'm sure we're going to go in a ton of, a ton of different directions from here. So, so after, uh, after an inflection is an insight, what's the definition
Mike: So, so the way the mechanism works, as you point, so there's an inflection and that comes external to a startup. It comes external to any company. and then the insight is the creativity of the founder comes in. It's kind of like the, the so what? And so if the inflection for Lyft was the iPhone 4S had a GPS chip, the insight was, Oh, that means you could do Airbnb for cars. So they had to, they had to connect the dots and come up with that would provide radical empowerment for people. And so, um, that now the insight should also be non consensus and right. And this was another thing that, uh, was important. Uh, and I, I actually learned this initially from Andy Radcliffe at Benchmark, but, but now I realize where he was coming from. has, human beings are conditioned to like things. And so if too many people like your startup idea, it's too similar to what they already know, which means it's an outgrowth of the present. And so the best startup ideas. tend to be polarizing. They tend to have a set of people who don't like it or think it's kind of meh or they're hostile to it. But then there's a set of people who are like, Oh my God, where have you been all my life? And those people co create the future with the startup. And so the, the, the insight has to do two things. It has to [00:16:00] harness inflections, also has to be non consensus because you can't only by being radically different.
Can you make a radical difference? And so you, you need that, you need that insight to be different enough.
Logan: And then how, how in the Lyft example, uh, how does the insight different than the idea? Like
Mike: Yeah,
Logan: which is the next. The idea would. Hmm. I think the idea.
Mike: sharing app itself. It would have been, uh, but you know, Lyft didn't start out as Lyft. It started out as Zimride. It was a corporate ride sharing service. And so, uh, there are plenty of, uh, products that start out, you know, Uber was the same way, started out as Uber cab. So there are a lot of products that start out with a correct insight, but that, uh, The first implementation of the Insights ROM. tv was like that. Justin. tv was enabling streaming, but the implementation of streaming, i. e. letting people broadcast their life, was not as powerful of an implementation as the ability to let gamers stream.
Logan: let's walk that down from your framework. So, so the insight was, Hey, you know, uh, broadband connection and CDNs and all this stuff would enable streaming in a way that wasn't possible in the past. That was the insight, uh, that, or that was, sorry, that was the inflection that was occurring around there.
The, the insight at the time was, okay, I'm going to be the first and best customer for this going around with, uh, TV, you know, streaming myself in real time. Is that right?
Mike: think so. And I think the other, the other insight that Justin had was that lots of people wanted to be internet famous and, and like, wanted to be an influencer before there was a word to describe
Logan: Yeah. Yeah. And so then the idea, I guess, then was, Hey, I'm going to be the first and only main reality TV show on all the time. And it actually evolved over time into actually let's do it for, uh, video games, I guess, was the initial use case of it. Right.
Mike: And that sort of leads to the third part of it, which relates to the insights, which is, uh, I like to ask the question, is this from the future? And so [00:18:00] Justin was living in the future. Justin was trying to build the thing that he wished he had for himself. Or, well, Justin and Kyle and Emmett and all these guys. reminds me a little bit of Marc Andreessen when he was working on the Mosaic browser for the internet. was tinkering with the technologies of the internet, but he, he didn't know there was such a thing as a digital superhighway, right? Like all Time Warner and AT& T and all these guys, Microsoft were all fighting over who was going to build it. And Andreessen's tinkering with these new technologies and he had a beginner's mind and but he was trying to make the internet immediately more useful for him. He was building the thing that he needed to make the internet work. And so this is a really important. thing that we learned was that the best startup ideas come not from trying to think of a startup. And so like when you try to think of a startup, you orient yourself into the present. You put your footing on the ground of the present. The best startup ideas come from living in a valid future noticing what's new about it, getting your hands dirty with it, and then building the stuff that's missing in that future.
Logan: I guess in living in the future then, or as you think about it, should founders pick some point because future by definitions. ambiguous, right? It's hard for them. Should, should they take some trend and bring it to its logical conclusion? Like I think of Mike Spicer and a lot of the things he does from an incubation standpoint.
And it seems like he takes, Hey, cloud is going to be ubiquitous. And therefore we're going to do to do cloud data store in the, and that's where we should go. We should run to this point that hopefully the market will catch up to. Is that the best way of, of thinking about it or.
Mike: Well, so, so by the way, I think Mike Spicer does a fantastic job of this, right? And the thing that's so about Spicer is not like he hides what he's doing, right? You see him coming a mile away. He [00:20:00] says, okay, flash storage is going to become a thing. I'm going to find the best storage architect I can.
Oh, it's this guy's the CTO Veritas. I'm going to ask him if he can do a flash storage centric pure play enterprise solution, and don't worry, I will organize a company around you. But would you like to build that thing? And then he says, yes, I can build that thing. So then what does he do with Snowflake?
Same thing, ETL data warehouse to the cloud. But it's like, Spicer has time and again, identified important inflections in enterprise. computing and found the people who understand what's new about it and who have the ability to build something that's credible around it. So that's, that is a way to get to the future.
I think that there's a few ways I've noticed people go to the future. Uh, one is they work with Lighthouse customers. And so when I was at Silicon Graphics in the early nineties, Um, Ed McCracken coined this phrase, lighthouse customers, and I love that term because a lighthouse customer shines a light like a beacon through the noise. And so a lighthouse customer is not necessarily a big customer. They don't necessarily pay you that much money, but they have the clearest vision about the future. And so like when I was at Silicon Graphics, one of those was industrial light and magic. And so I was selling computers to them so that they could make movies like Terminator 2 and the Abyss and Jurassic Park, you started to realize, if we can make, if we can make Industrial Light Magic successful, they're just going to lead us to the Promised Land. Because all the problems they solve are going to be the problems that everyone in Hollywood wants to solve someday, which turned out to be true. Okta was this way with identity management. And so. McKinnon was Salesforce. He knew all of early customers of the cloud. And so they trusted him. And so like, this is where, um, authenticity plays a big part, right? McKinnon was a very authentic entrepreneur to pursue cloud identity management. Like two kids [00:22:00] aren't going to drop out of Stanford. Justin Kahn's not going to build that company, but Todd McKinnon is not going to build Twitch or he's not gonna build Twitch because first of all, he had a wife and kids and he's not going to have a.
Live 24 7 broadcast of his life. And so there's this founder future fit is about is the founder intrinsically motivated to pursue that future? Do they seem well suited to pursue it? Do they have the right network to pursue it? Because they have to do two things. They have to notice things other people don't notice before they do. And they also have to convince early believers to believe what they believe. And if they have this authentic match to the future, that's far more likely to be true.
Logan: Yeah, it's, it's a, uh, the, the founder being meant founder, future fit, uh, I, I, I, someone once said like to me, Brian Chesky could never be the CEO of Tesla and Eli Musk could never be the CEO of, uh, of Airbnb, which it's, it's interesting. We hold all these CEOs in, in some canonical light, but in truth, they are, they're, they're Uh, perfect for the companies that they, they ran and their ability to switch to some other industry or some other set of circumstances probably aren't there.
Mike: Yeah, and so it kind of comes full circle on what you were getting at earlier. the best founders have this match to the future because they're genuinely interested in it. They're, they're interested in the way that Einstein was interested in relativity, or that Newton was interested in gravity, or, uh, Picasso was interested in cubism, right?
A lot of times they stumble into these ideas, And, and the reason we use non consensus and not contrarian is quite often they're just thinking for themselves and they just notice something that other people aren't noticing because they're pushing the envelope of something they're interested in. Most people would think they're wasting their time, but they're just obsessed with it. And it's with the obsession with what's new about it that opens a fractal of new understanding.
Logan: And, and the point there on non-consensus versus contrarian, is it that contrarian, [00:24:00] you're, you're accepting the status quo in some ways, or you're, you're, you're positioning yourself as a, as an alternative to that.
Mike: Yeah. The problem with contrarian, in my view, is that you're being contrary to something, which is another form of conformity, right? So if you have a teenage kid and they decide as an act of rebellion, they're going to dye their hair blue just to offend you as a parent, they're not really being independent minded.
They're just conforming in a different way. They're, they're act, they're reacting to something else rather than proactively discovering something. And so non consensus means You know, most of the great founders that I talked to, they feel almost guilty that they got the secret. So secrets about startups aren't about being contrarian. are earned, right? Secrets are earned by founders who explore unexplored futures. And they identify what's missing about the future. And it's in the process of building what's missing in the future. that they uncover these insights.
Logan: So we sort of laid out the, the framework and then the movement is the ability for the founder to carry people or drive people to the future. Yeah. So, so, right.
Mike: the stuff we've talked about is about thinking different, right? So that, so the first thing we need to be a pattern breaking startup is a pattern breaking idea. And a pattern breaking idea has to be something that avoids the comparison trap that has never been seen before that can't be reconciled with what's come before and leverages insights and inflections and comes from the future. okay, now we have that pattern breaking idea. We've got to get real people to do something, right? And so we have to move people to that different future. And so The next set of things that we focus on are the pattern breaking actions. Uh, some of that has to do with creating movements. Some of that has to do with storytelling.
Some of that has to do with just being genuinely disagreeable in the, in the right cases. But like a, a startup is a fundamentally provocative and disagreeable act. And so we have to get [00:26:00] people to move to a present they, from a present they know to a future that's distant, that's unknown and that's unsettling.
And who's going to do that? Who's not going to do that?
Logan: So I want to talk through some different examples that you reference in the book, but I think it helps highlight, uh, the different elements or, or, or thinking about this and not to Quibi was one of the examples that, that you talked about in the book and what was your premise of where that broke down on the hierarchy and had you stress tested it?
What would Quibi's founders?
Mike: that there's a bunch of things, right. But, um, apart from just, they spent too much money
Logan: Sure.
Mike: of stuff that you're not supposed to do, but like, I would say they didn't really have an inflection. And so Quibi was more like, okay, mobile is hot. short form video is hot. Young people consume this stuff. combine it. It's more like a Hollywood script.
Logan: Yeah,
Mike: But, but there was no specific inflection that they were harnessing. And because of that, they had nothing really new to say. They it's like they crashed the party of streaming, but, but they're like, they had nothing new to say and they had no reason to be a welcome guest.
And so they didn't have anything. People didn't understand why should I pay for another? Subscription. When I've already got Netflix, I'm already using Twitch, I've already got Hulu and Disney Plus and all this other stuff. What's this for? And, and it, it can't just be an incrementally better product.
You've got to show up in a radically differentiated way to get people's attention.
Logan: because in one of the things I thought you highlighted in the book that was a very clear articulation of this is that you want to force a choice and not a comparison. And so to be TikTok and you know, people have their own political opinions about TikTok, but as a business and products is very profound and they leveraged both the algorithmic elements.
They leveraged mobile and they [00:28:00] leveraged UGC, the fact that we're all now able to create in a way that we had infinitely personalized content Quibi was sort of playing yesterday's game, which is just the traditional streaming wars on mobile.
Mike: And it's, and it's, uh, idea of forcing a choice. So, um, let's take the original Tesla Roadster. Like the original Tesla Roadster would not have survived a normal comparison with a Porsche 911. Seats aren't as comfortable, the radio's not as good, the fit and finish isn't anywhere close. And so, um, if, if somebody had said, How does that compare to a 911? Elon Musk loses. But, but people didn't say that, right? And the reason is that Tesla Roadster couldn't be reconciled with a Porsche 911. So, like, what does Elon say when he does the Tesla Roadster? in this different future with me or don't. But like, there's no middle ground, right? Like, and people don't, people didn't buy the original Tesla Roadster the utility value of it versus the nine 11. They bought it for aesthetic reasons, right? They, they believe that Elon had an aesthetically different and compelling view of the future, a world of sustainable energy. And so most people bought it for those reasons rather than for the utility. The typical reasons they'd buy a car, you know, I like to say that if everybody's an apple, don't be a 10 times better apple, be the world's first banana. And most people might not like bananas, but all the people in the world who do are going to say, Oh my gosh, where have you been all my life? And most of the startups that have great success, it kind of have that energy at first.
Logan: The, the analogy I've used in the past is, uh, in the world of infinite choice, you, it's much better to be, uh, Donald Trump in the primary process than it is to be Jeb Bush in the primary process. And you're not trying to be broadly, uh, Neutral to appealing once upon a time, happy days, or I love Lucy got [00:30:00] made and it was about, Hey, how can we get the 75 million people that have televisions to enjoy what they're watching now?
We live in this world of infinite choice, and so it's actually about being the number one for not everyone being as narrow of a sliver as you possibly, I mean, as big of a narrow sliver as you possibly can and appealing. deeply to that. And that's one of the analogies. It's provocative in that anything with comparing to Donald Trump is sort of provocative, but you, you don't just want to be, uh, incrementally better or broadly appealing because otherwise you get lost to the noise of everything else.
Mike: in the comparison trap and a startup can't win the comparison game because like no rational customer should want to do business with a company that's 80 percent likely to go out of business. so the customer has to be desperate for the empowerment that's offered by the startup. And for them to be desperate, it can't be reconcilable with any other choices they have.
Because if the customer has a valid way to solve their problem that the startup's solving, why would they do business with a startup, right? So the, the, the has to offer a a solution that's so radically different, that so can't be reconciled with anything that's come before that the customer says, well, it's the only possible route I have to solving this.
Logan: It's either.
Mike: with a startup or don't solve the problem.
Logan: And so if they, because if they have the ability to fall back.
Mike: the incumbent choice, they will.
Logan: And ideally, you're picking a lighthouse customer that's going to set the pace of where the future's headed. And so this is a tip of the spear into the market where you have very deep product market fit with a small subset, but that's a very fast growing subset over time.
That's right.
Mike: So like, when I was selling to industrial light magic, the SGI computers could render and re render, uh, radically faster than anything else in the market. Like if IBM had said, oh, well, we're going to ship a new [00:32:00] version of AIX and it's going to have faster graphics on the motherboard nine months from now, would have been like, well, the movie's got to be released nine months from now, right?
Like I need this today. And you know, I can't render these dinosaurs with eight layers of skin unless I use exactly this machine and only this machine. And so that's what you, you, you don't want to be the best. You want to be the only, and you want to be seen as by the customer as the only possible way they have to solve it, because going to make mistakes.
Like when you're a startup, you don't have any people. You don't have any money. You don't have a lot of execution capability. So you're gonna make a lot of mistakes. You're a lot of things are be screwed up and your value proposition has to be so radically different that the customer will tolerate all of those mistakes.
Yeah.
Logan: I mean, that's where the Lyft and Uber versus a taxi, no one was confusing those things in our portfolio, I guess, as you talk, I think about, uh, DraftKings, uh, and no one was confusing DraftKings with Caesar's Palace, you know, or the sports book that existed there, right? And obviously it went from Daily Fantasy, but as that market opened up, they were, on the slope of the line.
I think that's a, it's a, it's a profound thing where oftentimes a lot of our best investments, I'd be curious if you agree with this, the markets are actually super small initially, but they're growing really quickly to some inevitable future state. That's going to be much more mainstream than it was before, because if it was actually a big market today, someone else would address it.
Like one of
Mike: then it's defined by the rules of today, right? So like, I, I like to say there's a difference between the TAM, the total available or accessible market the TFM, the total future market. And most of the great products I've been involved with defined the markets. And so they, they created entire new categories and became the category king. And so what they started with was not a high TAM, They started with a powerful inflection that resulted in a future high TAM [00:34:00] and it's the, it's the power of the inflections and the empowerment that they provide that create the conditions for the large future category.
Logan: the things you talked about in the book, uh, general magic, which is long lost history. I think there's, there's a great. Documentary on general magic. Yeah, people should go, go watch it. But maybe, maybe for people that don't know, uh, what was general magic and then as that relates to the iPhone, uh, or, or, or the circumstances around why general magic wasn't able to succeed to the extent and the potential it had.
I thought that was a particularly interesting one.
Mike: General Magic had, uh, a lot of people at that company who were my heroes, right? A lot of them came from Apple's hardware team. Uh, I think Andy Hertzfeld was there. They had, uh, Tony Fidel before he got famous. You know, he was about to do some cool things, uh, you know, with the iPod and eventually with Nest.
Uh, Susan Kerr, who did the original icons for the, for the Apple Macintosh. was there. So they had, they, the, the people they had, the talented assembles was just wild. And all of their ideas about the future were right.
Logan: What year is this circa?
Mike: would have been early
Logan: Yeah.
Mike: been like 92 to 95 ish timeframe. And so they had this vision that someday you're going to have mobile devices that can, you know, surf networks and allow you to buy things online. before the internet took off. And so like they had like these virtual, you know, corner stores and stuff like that. And you'd go shopping and you could buy things and you could browse for stuff because I think, um, I think Atkinson may have been there too, the guy that invented HyperCard. So they had, you know, they had all these hyperlinked different types of experiences. They, they did a big network, uh, agreement with AT& T. In fact, I think AT& T owned a significant the company. And so if, if you look back on all the things they were saying were going to happen in the future, they were right. It's just that the technologies weren't good enough to enable the [00:36:00] future of their design. You know, the inflections hadn't occurred that would allow these devices to be powerful enough to empower people.
Logan: And it sheer, uh, from, from Twitch, we'll say like, you can either be. too early or too late. And, uh, you're never started on the exact right day. And so your job, if you're too early, is to survive, uh, until the point at which, and that's probably true of General Matt, had they been able to survive, which is obviously impossible, you know, for, for, it probably would have taken another eight to 10 years for them to actually get to where they're going.
Uh, but your, your job is to hunker down and be a cockroach until that, that inevitability Yeah, like
Mike: in today's world, uh, a good example of that would be 3D printing. So like I sit there and I say, okay, someday trillions of parts will be 3D printed probably because trillions of parts are right now used tool and die. is that going to happen 10 years from now, five years from now, 30 years from now?
I'm not sure. And so, uh. I think you're exactly right. In those situations, you have to be alive when the market develops, when the inflection occurs, and so if you get your burn up too high before that happens, you can end up being out of business, and then the person that comes later gets it.
Logan: I think you share the opinion, uh, that I do that no idea is really new and it's sort of like some combination of why you and why now, uh, to some extent, I guess, how do you, how do you think about that? How does that inform your investing?
Mike: I think that's right. So like, uh, my partner, Anne, uh, and I, uh, we like to say that you should assume that there's a pretty efficient market for startup ideas. so probably just about any startup idea you can conceive of, somebody's thought of it before. But we also like to say all of it will happen. so the question is just when is the time for it to happen? And, uh, inflections help us increase the odds of being right, that this is the right time because it gives [00:38:00] us. example of a specific form of empowerment for specific people in specific ways. And so now we can all of a sudden time box the ability of that change event to create the new kinds of empowerment.
Logan: Now, as you, um, as you've reflected on these pivots, and, uh, 85 percent you said of your, uh,
Mike: I think 80, 80 to 85
Logan: between, so, so, so Twitch, uh, Twitter, uh, Lyft, uh, a number of, Chag, yeah, a number of these have evolved over time. I guess, um, I know that was sort of the foundational premise of wanting to write this book. The book, but as you, as you now think about how that informs your investing, do you spend less time on the actual idea itself and focus on the inflection and the insight?
Mike: I do. And this, this is where like the way you invest in the way I invest might be a little different. Right? So, um, when I invest, is very little data about the customer demand for the product. And so what I realized is that, okay, if 85 percent of my exit profits come from pivots, Okay, if, if, um, if I pick right, there's an 85 percent chance it's going to change. I'm like, okay, how do I think about that? What am I investing in? And what I realized was that in a startup, first product is a reference implementation of the insight. so when you have a valid insight about the future, you're in the future before other people, have a first mover advantage into the future, and you're showing your product implementation to people.
In that future, and they're either going to love it right away, in which case you get product market fit, or more likely is the case there. You're talking to the wrong people or your implementation is off.
Logan: And so if
Mike: the art and science of product market fit is your implementation or modifying your [00:40:00] audience you get perfect alignment. so what you're betting on when you bet on a startup is, A, do I believe this insight and the, the authenticity of it to the future? And B, do I believe in this founder's ability to juke and jive and navigate the product to the right alchemy of the right, uh, desperate customers, but then also are they going to have the persuasive skills to convince people to move with them to that future and convince them to deal with the fact that the product's going to have lots of warts and bugs and be screwed up in a lot of ways.
Uh, and so that's what you're really betting on. And so when, when you look at it that way, you start to say, at least in seed, uh, I need to not be too attached to whether this product for what it is is going to succeed or not. I need
Logan: I need
Mike: I need to really understand the, cause like, you know, Zoom, it started out as a consumer, every man's product called Saspy, but Eric Yuan had been at Cisco for what, like 10 years working on video conferencing software.
So like if you, the signal of him as a future founder was very strong for conferencing, but if you'd focused on what his first product was, You, you wouldn't have seen the opportunity, you wouldn't have seen what the real investment opportunity was.
Logan: And so as you as you distill down then and you go through these different, uh, uh, frameworks or considerations of investing today, and you're looking at this, like, do you have predefined inflections that you're currently looking for kind of a prepared mind around it? Or do you wait for founders to come in and tell you the, the, the.
both the inflection and the insight and then you react to whether or not it's true.
Mike: Some of both, um, there will be, from time to time, we'll see an inflection and we'll say, that's really interesting. So, for example, Everybody knows LLMs are pretty interesting, but for me, the question becomes, [00:42:00] okay, how can you connect that inflection of the LLMs to an insight is truly non consensus and right, and that isn't going to get leapfrogged and copied right away? so that's, that's a harder question. The other interesting question to me about LLMs is, what are the unanticipated types of empowerment they can provide. So like how might LLMs provide more fun for consumers? How might they provide more social connections? How might they provide better gaming experiences?
Whatever the case may be. It's not my job as the investor to know the answer to that, but it helps me pose questions, right? So I'll be having a dinner with a bunch of smart consumer people and I'll just start asking, okay, this feels like an inflection. Do you guys agree? Uh, you know, in what ways might this inflection empower people?
Who does it empower? How many people is that? How, how powerful is it? Uh, so I find that useful. Um, and I find it as a useful sanity check. And so when I'm, I need to do two things as a seed investor, I need to protect ideas that sound dumb, that are good. So I passed on airbed and breakfast back in the day. And would have made, uh, over a thousand times my money, right? Um, but you know, at the time I saw it, it was a WordPress site. And at the time I saw it, they didn't have Facebook connect yet. And they didn't have, know, the hosts and the guests stayed at the same time. And the hosts gave pop tarts to the guests the next morning and had an air mattress and all this stuff. you know, You have to protect the ideas that sound bad that are actually good or could lead to something good. But you also want to eliminate the ideas that sound plausibly good that aren't good.
Mike: So
Logan: And that's the most dangerous, uh,
Mike: the worst. Yeah.
Logan: and why is that the worst?
Mike: like this is what happens so often.
Uh, and, and by the way, I'm not trying to dog on MBAs, but like, um, I'll, I'll interact a lot of times with business schools and they'll have some type of a class or program about. [00:44:00] Doing a startup and lots of people want to do startups, right? So what do they usually do? They say, go find a big market, assess that market, find gaps in the market, find white space and build a product for an underserved customer in an underserved market. And so, uh, what will happen is, that will end up with a plausibly good sounding mundane idea has a limited upside. So the reason that good sounding ideas are so dangerous is everyone you talk to will say, I could see that. So like, um, Sarah Leary and Nirav Tolia, who are great founders, Before they did Nextdoor, they had a startup called Fanbase, network for sports fans. And so, they would talk to people, hey, I got this idea, social network for sports fans. People would say, I think that's a great idea, you know, social networking, hot, sports fans, lots of them, you know, that sounds like a good idea. The problem is there was nobody desperate for a social network for sports fans. And since there were no desperate customers for that empowering set of capabilities, it was a 0 billion market, right? And so that was the problem they ran into. This is the biggest problem. Most founders I meet face is they. pursue an idea that sounds good on the surface, but that is not a valid use of their talent and time. And that was another reason that I worked on this book was, um, to help founders avoid the avoidable trap of pursuing an idea with bounded upside.
Logan: And so that is the is the inflection and you had in here like the inflection stress test. Is that the best means of assessing whether or not something's worth their time or how do you think about
Mike: that's the way I looked at it. I looked at it like, you know, before you take off in a plane, you do this pre flight check, right? You check a bunch of knobs and levers and, you know, levels of [00:46:00] different gas and fuel mixture and all this stuff. Do I have enough gas to do the flight? reason you do that, it's kind of like a sanity check.
Right before you take off, you want to make sure that all the conditions are met for you to have a safe flight. And so what I say to founders is I'm not in a position to judge whether you have a good idea or not, but I can ask you a set of questions that you can, you decide if you think it's a good idea. If your idea doesn't embody any inflections at all, it still may end up being a good idea. You might find an inflection later, you know, Twitter found an inflection later in the iPhone, which massively improved their ability to take advantage of people tweeting. Uh, I mean, they had inflections before that, but so, so you might stumble into one later. You don't get to do that many startups in your career, and so you might as well pick opportunities that you think are the most worthy use of your time. then the other thing I like to say to founders is you only have to be right once if you're doing it right, right? So if you're pursuing big ideas with unbounded upside, you only have to be right once in your career.
Logan: it?
Logan: And so the Twitter example, we talked about the Justin TV one, but the audio to Twitter example. How. One, how did you make that decision to, to roll forward the, the capital, uh, or to reinvest? Was it roll forward or reinvestment?
Mike: Well, it, it ended up being a, a, a, a new investment. So Ev gave me my money back.
Logan: Got it.
Mike: Uh, yeah, so it was, and,
Logan: Was it dollar for dollar, money back and then money over? Yeah. So, so, um.
Mike: and I would like to say that I was present in any way here, but like, I was excited about podcasting, I invested in Odeo weeks after. our check clears, uh, Apple decides to give podcasting away on iTunes. And at the time there wasn't an iPhone. And so 90 percent of all the MP3 playback devices were iPods. So like, there's no way you're going to make money as a legitimate
Logan: Yeah. [00:48:00] Podcasting. Hmm.
Mike: the playback devices are owned by them and they give it away on, on their platform. Ev to his credit tried really hard to figure out what to do. And after about a year and a half, he said, uh, you know, I just don't think we have business here. And, and I won't, I won't, uh, highlight any specific individuals, but there were individual investors who were pretty disenchanted with Ev and with ODO. And so he decided it was easiest to just give everybody, All their money back, because Ev had made money by selling Blogger to Google.
So he could afford to just give back the entire Series A. So that's what he did. I was like, look Ev, you know, I don't, you don't owe me anything. I'm perfectly happy to just take the L here, right? You win some, you lose some. He goes, it'll just be easier for me if you just sign these documents, take your money and everybody takes their money. he got to have all the intellectual property, and they had this side hustle that was working in the background called TWTTR, and he even told me about it at the time. He's like, we're working on this thing on the side. We're going to either call it TWTTR or Voicemail 2. 0. and, you know, I'm like, okay, well, what does it do?
And he says, um, you say what you're doing I'm like, okay, yeah, then what does it do? And he's like, that's it. Then 140 characters or less. That's all it does. I'm like, what's the roadmap? There is no roadmap. What's the revenue model. There is no revenue model. And he's like, I don't, I don't even know if it's a product. And so, um, then it blows up at South by, and I figured that I was probably going to get aced out of the deal. All of a sudden it became this hot deal at Silicon Valley. And Ev came back to me to his credit and said, Hey, um, did you mean it when you said you wanted to invest in a Twitter? And I said, I said, heck yeah.
And he said, okay, now's the time. So he, he showed a great deal of, uh, you know, honorable behavior there, you know, and it was funny because at the time I told him I wanted to invest in his next thing, no matter what it was, [00:50:00] uh, after he gave me my money back. And then when he described Twitter to me, I'm thinking, okay, now I've lost it
Logan: Yeah, yeah, yeah. That's one thing to be wrong once, another to be wrong twice. Uh, but by the way, just to replay the history and it's been a while since I've read hatching Twitter or whatever was the case. So, so they went to South by, it blew up at South by, then they came back. And what was that initial round that was pulled together?
Mike: that the initial round was led by Fred Wilson
Logan: Yes, that's right.
Mike: So I think it was something on the, uh, 6. 5 million at 20 pre
Logan: Oh, wow.
Mike: like
Logan: Really expensive for those days. In those days it was, I mean,
Mike: a lot of people decided not to do it because they thought it was too expensive. Some of the angels.
Logan: Wow. That's a, that's a, that's a wild trip down memory lane. What did you see in, in Ev? Cause he had lost your, or I guess you got your money back, but it was, it was a zero, uh, from an investment standpoint, or a one X from an investment standpoint. Um, and it sounds like they toiled away at the idea and it was just kind of the wrong idea.
Like what, what were the, was it, was it the blogger success that had given you some confidence? Say this person probably can figure something out or what was your confidence in him?
Mike: and it's one of the secrets. Um, I like to say the secret to getting on the Midas list or, uh, having success in venture is to be lucky in your first five
Logan: Yeah.
Mike: And, you know, you think about the two first entrepreneurs I backed were Evan Williams and Kevin Rose. And I mean, that's pretty dang lucky,
Logan: Yeah.
Mike: I just, I just show up out of nowhere from Austin, Texas and Silicon Valley. And I remember meeting, uh, Ev at South Park and he's describing, uh, Odeo to me. And I was already doing, I was playing around with podcasting. I had an aux input in my car and I was, uh, playing podcasts and I was using the iPod or it was an open source thing. And so I already knew about podcasting and was excited about it. Thought it was going to be a big deal. Uh, and then when Ev described it to me. He was doing one, and then this guy, uh, Adam Curry, who was doing one called [00:52:00] Pod Show. And I just thought Ev was a more authentic match to this idea than, uh, I thought, you know, now, it's funny because most people thought Adam Curry was going to be, it was kind of a media idea, all this stuff.
But I thought Ev was, Ev just has kind of this, um, about expression, you know, and he just, he just knows how to make a product sort of look tastefully good for self expression. I mean, we'll see what happens with Medium, right? But even Medium is a well crafted product, right? Uh, and Odeo was certainly that way.
Twitter turned out that way. But, um, yeah, it was a bet on Ev and his ability to make it work.
Logan: Yeah. That's fascinating. Um, so, so on the, the, the force, uh, first a choice, not a comparison. I mean, I think it's true of not just, uh, technology companies. It's probably true of almost any. Decision you make in some ways that you want to, and I think about venture firms as well.
Logan: I'm sure, sure you do, uh, with, with floodgate in the early days, you were, you were one of the original seed firms pioneering that industry.
And so you were not fighting the fight of a comparison versus Sequoia or benchmark or whoever it was you were, Hey, we do this one specific thing pretty well.
Mike: Yeah, so in the early days, it was you can't raise a million dollars in Silicon Valley. And so, um, myself and another guy, Josh Koppelman, had this opinion that 500, 000 is the new 5 million. And that was around the time that lean startups were starting to happen and all this stuff. And so we just kind of caught the zeitgeist of this lean startup movement. And so there was a change event at the exact same time that there was a lack of funding for that type of company that was being built. So nobody ever said to me or Josh, well, how does your 500, 000 check compare to Point's 5 million check or Accel or whatever. I mean, none of those [00:54:00] firms had any desire to compete with us. And I had no reason to say anything negative about those folks. And so I was like, well, you know, if you want to raise about a million bucks, we're your guys. And chances are, we didn't have enough money to do the whole round. And so I'd call Josh or he'd call me. And so we didn't even think of ourselves as competitors.
It was like, how are we going to scare up enough money to do this? And so it went from that world to Now there's over like 2000 seed funds and there's accelerators and there's angels. And there, if you type in angel investor in LinkedIn, there's more angels than there are founders. And so the world just utterly changed in terms of seed funding.
Logan: How much of the, the, the seed funding element, uh, uh, was that insight that you had? And there was a unique opportunity to force a choice and not a comparison versus circumstances of like, Hey, this is what I can go do. I could get, I don't know what, how big was your first fund?
Mike: Uh, my first fund was 15
Logan: 15 million. So you probably with that, you probably couldn't have gone and led 5 million rounds either.
And so how much was circumstance versus just like the unique passion around?
Mike: was, it was, um, uh, I was living in the future almost by accident. So I was running into all these founders. I'd go to the web 2. 0 conference and, and people forget, right. That there had been this. com crash. so consumer internet wasn't really in favor, right? Like Google IPO, but it's, it's, it's funny to think back, like back in those days. People thought that there's only about two or three people who, who should even be allowed to invest in consumer internet, right? John Doerr, uh, Mike Moritz, Shriram is an angel, uh, Bob Cagle from Benchmark. And that's about it,
Logan: Yeah.
Mike: Like, like, there weren't consumer internet investors. And so there was kind of this bubbling up of stuff happening. like the PayPal mafia doing some interesting things, uh, but all of them were trying to raise like just a million bucks. [00:56:00] So if you went to the Web 2. 0 conference, you would have seen Stuart Butterfield. You would have seen Evan Williams. You would have seen all of these people, but they were doing these little Web 2.
0 startups and they weren't really sure that they were going to be big companies. And, uh, and so I was just seeing all these founders where the amount they wanted to raise was like a million dollars and there was no place for them to go. so like Kevin Rose, right, he had started Digg for 1, 500 over a weekend. Uh, and so I was like, I would say to him, you know, why, um, why don't you, what are you going to spend your money on marketing or whatever? And he'd say, Oh God, no. He's like, I don't want to spend money on marketing. My servers are crashing all the time. I need to buy more servers. And so I remember saying, okay, my checkbook is in my car.
I'll be right back. And you know, it was just, I just saw project after project where those were the, the characteristics of what was happening.
Logan: What is the through line of these founders that are all very different? You mentioned some of the characteristics around storytelling and, uh, what's the term not difficult, uh,
Mike: Disagreeable. Yeah.
Logan: uh, like these different types of founders, the ones that you found to be most, uh, most successful and the ones you've enjoyed working with over the years?
Like what are their traits that they share?
Mike: Yeah. Most of them are willing to do things that would seem to be kind of unthinkable. And so, uh, for example, Kahn, when I met him, I thought this is a pretty wacky startup. I went home that night to study it, and I discovered that he and Emmet Sheard started a calendar company called Kiko, Google decides to come out with Google Calendar.
So it's kind of like Apple doing podcasting right there. Clearly they're out of business. so they decide to sell the company on eBay. And I was like, I didn't even know, like, I'd never heard of anybody selling their company on eBay before, but they had sold it for like a quarter of a million bucks.
And here they are 18 months out of college. And so I just remember thinking, [00:58:00] does that? And I didn't have any theories at the time to think about investing. It's just instinctively. I thought that feels like. sign for a founder, Chesky had started Airbnb, funded it by selling cereal boxes, right?
Obama owes and Captain McCain crunch. Uh, and you know, the Lyft guys, they launched a service that they knew was illegal in San Francisco. And so it was like, just, and they put these big, fuzzy pink mustaches on these cars. And it's just like, Who does that? And so, um, time and again, I've seen founders willing to do things just, you know, there's, they don't teach you that anywhere. Uh, but they somehow, they managed to do something that deviates from norms, but in a good way.
Logan: Is that a trait that you now look for in some way when talking to an entrepreneur? Like how do you tease that, that out of people? Yeah. And so that, that.
Mike: the reason we, we want that is we want people who are able to think outside of the box and the existing patterns, right? And so, and so that's a good sign that they can. And so what we want is, uh, people who, um. willing to zig when the rest of the world's willing to zag because most of us get rewarded in life, in school for having answers that the teacher wants to hear, uh, for doing things that allow us to progress in the current status dominance hierarchy, right? And the great founders are able to their own independent thoughts and act their own independent ways. And you know, that's going to be important if they're going to create a radically different future.
Logan: As you think about, um, like the ability to bring people to where the future is headed, uh, and, and establish that movement, uh, the storytelling element of it. Storytelling is part of, I think every. job when you get senior enough in an organization. Um, how do you [01:00:00] think about, uh, storytelling and the traits of a good storyteller?
And if a founder or a company has a mission or, uh, stands for something that can be, uh, a good story to get behind?
Mike: Yeah, the person who taught me the most about storytelling is, uh, Nancy Duarte, who helped, um, Al Gore with An Inconvenient Truth, and she's done some work with Benioff at Salesforce. So that, combined with watching Brian Chesky later, after I foolishly passed, uh, he started to do these narrative storyboards, right, for Airbnb. And so, um, What I come to realize is that even happened before the written word. And so, you needed to have a way to persuade groups of people, and it relates a little bit to Sapiens by Yuval Harari, right? So, you need to find a way to get people to move from where they are to a different place. And storytelling done well, into your emotions, you know, it can cause involuntary reaction, your heart race, your, uh, you know, eyes to blink faster, all these things. And so what, what you realize is that the entrepreneur has to be a storyteller because they need to, need to convince all of the early believers their lives will be transformed by working with the startup.
And so, like, I like to say that a startup founders like Obi Wan and the early customer employee, Or venture capitalists is like Luke. you have to say, okay, you're living this boring life on dusty Tatooine. You don't want to be here anymore. You want to be a pilot. You want to use the force. You want to go beat, um, the empire.
You want to rescue the princess. But usually the hero resists the call at first. They say, no, I got to work for my aunt brew and uncle Owen for the summer. And so then he comes back and, um, the farm is all burned up and he says, okay, forget about it. Let's go. So Obi Wan takes them. They find co conspirators. They defeat the bad guys, they rescue the princess, they [01:02:00] merge transformed. so what a, what an entrepreneur does is the world that is, is the world of the present, they need to create a sense of grievance with the present. they need to present the world that could be, and they need to present the world that could be in such a way that, uh, initial set of people ready to believe are compelled to accept their call to adventure. And so like, like, um, I've learned is that even, even insights and products play into this. So the, the hero has to have a reason to believe that he can credibly succeed. so Obi Wan, right, goes to Luke and says, okay, there's this thing called the force. that's the insight, right? And, and, and he has this thing called a lightsaber.
Well, that's the product. And so now Luke's like, you know, with this new kind of magical thing and this new magical tool, I have a credible chance of defeating the bad guys. I couldn't have done it before, but now I believe I can. like, if you, if you go back to a startup lift, insight was, You could share rides using an app and a mobile phone.
And then the product was that the riders were the initial heroes. The world that is, is parking sucks in San Francisco. Taxis never come. Uh, you can't use your credit card. Uh, you can't get people places on time. The world that could be is you just have this cool app. You just zap yourself there. You don't need to bring a car to San Francisco.
You don't need to park it in San Francisco. This was where the genius of the mustache came in. So understood that people might resist the call, right? They might say, Hey, it's scary to get in a stranger's car. That's kind of crazy. But now when you see a bunch of cars driving around in San Francisco with these pink mustaches, people say, Oh, What's going on with that?
There's like, Oh, have you heard about this new thing? And so we need as founders to honor the fact that customers, early customers are likely to resist the call. And we need to give those people a reason to, if they're on the fence to give us a, give us a chance.
Logan: I think I think it was in your book, you articulated [01:04:00] like appealing to a higher purpose and attacking the status quo. And Tesla, I think, is a great example of that or Salesforce and the no software way back when is a great example of like building that narrative, maybe the Tesla, like their slogans of what you see in the car, maybe use that as an example as well.
Mike: so pattern breaking product has to go to market differently. So, like most people, when they think of go to market, they say, I've got a sales funnel, I've got customers, I've got a marketing mix, and I just need to optimize my marketing spend across various channels and bring people into the funnel and convert them. That's not how pattern breaking products take hold. They take hold by creating a movement that harnesses the grievance of a minority against the tyranny of the majority, the status quo. So like movements, most of us think of them in terms of social, you know, Martin Luther King and civil rights. So movement creates this stark dichotomy between the world that is and the world that could be. they, you know, when you're, when you're Martin Luther King, you can't, you know, You can't be half in on not being racist, right? Like you're sort of, you either believe people should be judged by their character and not the color of their skin or you don't. not a middle ground. You know, it's like occupy this future with me or don't. And so what you do then is you find the people who are ready to move with you and you create that tension between The world that is, and the tyranny that that world represents, and the world that could be, and the way that you would self actualize if that world came about, and you focus on the people who are ready to move with you at first, and then over time, what was once heresy accumulates and accelerates and becomes the conventional wisdom.
Logan: I think one of the elements that, um, until I've gotten involved and worked with more startups or lived this, uh, this ecosystem for a longer period of time, I didn't fully appreciate is the amount of, um, [01:06:00] attack that founders can go on and just well, or poorly intentioned PR or misreporting of stuff and all that, um, I, I know you've lived that with different ones of your businesses as well.
Uh, I'm curious how you think about, is that just an inevitable state of trying to get people to the future? And so founders need to be psychologically ready for all the takedown hit pieces that are going to come their way? I
Mike: Yeah, so I think the irony of being a founder is, at first, It's frustrating because nobody believes your idea is right or not enough people do. So most people think you're stupid or wrong or it doesn't matter. And so that's frustrating because like you're not getting, nobody believes what you believe or not enough people, but then it flips in the other direction.
Then, then you succeed and everybody's like, well, who said you deserve to have all this power? And who said you, you know, you, you, they, the, the status quo. has the word status embedded in it, right? And so there are a lot of people in the status quo who want to see the status quo persist, possibly most people. And so they're going to, the president's going to fight back and it's not going to fight back fair. You know, the taxi lobby wasn't interested in negotiating with Lyft, right? There's no, there's no way to reconcile what you're doing with the taxi medallion system, right? Like one's going to win and one's going to lose.
So there's no middle ground and they're not going to just say, ah, easy come, easy go. You know? We don't want, we don't want our business anymore.
Logan: think so. Hmm. Do you think founders appreciate going in and starting a company that that this is something that they're going to first time founders that they're going to have to wage war on if they're successful? Or do you think this sneaks up on a lot of founders?
Mike: think it varies. I think it sneaks up though. And I think this is another aspect of disagreeableness. So just like being non consensus is a little bit different from being contrarian for its own sake. I think a lot of these founders Because they're not so focused on status by [01:08:00] conventional means, they, it's almost like they just don't even notice that people are upset with them the way normal people would. And so it doesn't occur to them as much that they're going to piss people off. They just kind of do the thing they're doing they're interested in what they're, working on. And so the company becomes a vehicle to actualize the thing they're obsessed with. But a lot of times they're just confused at the hostility, right?
They're, they're just like, Hey, I'm just doing the thing to make my thing real. I don't see what the fuss is all about.
Logan: Yeah, it's fascinating. As you've reflected on examples like Airbnb or air bed and breakfast at the time, I certainly think part of this book is, is making sure that you've refined your mental model for thinking about those types of things. But as you see those situations present themselves today. What would you have done differently in that moment with Airbnb when he came in and barely had a website that was up and running and it was, you know, kind of funded through cereal box campaigns and all that?
Do you think? that you would have made a different decision. I assume you hope you would have made a different decision today. Uh, but like, what, what, what are the reflections that you sort of think about in that example?
Mike: think that, that the fact that he was funding it with cereal boxes and just, you know, Brian Chesky. even then you could tell he had a certain X factor to him. I mean, I, right after our meeting, I introduced him to Reid Hoffman. And I was like, this is somebody you should know. I don't know about this thing, but he's, he's going to do something interesting. And so you just knew that he had that extra gear for sure.
Logan: Just like the first time I met Justin and you're just like,
Mike: a very memorable, compelling persona. Right. And you're just like, is the type of person who's going to attract luck in the universe. And so I should have. I should have into that more.
Logan: and what is that? I mean, I realized those are [01:10:00] distinct, but what is the reflection that you, or the, the, the feeling you get when you meet someone like that? Is it just, you know, when you see it, Or is it, is it, does it, does it make you uncomfortable in some way or does it, yeah. Especially on consumer. Yeah.
Mike: Yeah.
Logan: And what, like, what are the characteristics of, I mean, Justin was doing something weird. I assume Brian, was Brian super intense or what is, I don't know Brian well enough to know his stuff.
Mike: was just, um, it's, it's hard to describe. He, uh, he had a charisma to him and, um, a lot of these great founders I find they have a certain type of charisma and it can vary. Like Williams had charisma, especially when you got him talking about his products. Brian had a charisma how he would describe how he evolved the idea and how he would talk to customers and how he was figuring this stuff out.
And just, you know, the fact that he was selling cereal boxes, right? He just, he was just interesting, right? Um, he was the type of, you know, You know how many meetings we take, right? And, and, you know, a lot of them, you don't remember that well, but he was one you were going to remember. Uh, and, you know, so, so I'd say that that's true. then the, the, the other thing I would say is that they just, um, they have this authenticity to the future that they're trying to pursue. You know, you, you look at them sometimes and you, you say, man, I, I can't imagine them doing any startup but this idea. That's the part where it would have still been hard to spot Airbnb because it's still changed a lot. And, uh, you know, inflections were there, but they weren't as powerfully obvious as in some cases.
Logan: Have there been CEOs that you've just sort of, maybe you haven't seen that inflection, uh, or the insight necessarily that you've just felt like this person was going to win in some way, shape or form? Or do you really always go back to the, [01:12:00] to the inflection and the insight and then the person's going to be more of a derivative of that?
Mike: most recent person I felt that about in a very palpable way Where it's played out that way would be Casser Eunice at Applied Intuition, like, like I remember meeting him and so, and part of, part of what led to this book was I was like, okay, I tell founders force a choice and not a comparison, and now I'm one of 2000 seed
Logan: Sure.
Mike: and so I'm basically a hypocrite now, how do you, how do you stand out as a seed fund?
I thought, okay, one way you can is you can help the founder evaluate their ideas. You could help the founder stress test their ideas then they start to know you before there's a company to present. And so in the case of Kasser, we'd spent 14 months together riffing on ideas back and forth before he decided to start apply to tuition.
Logan: was Castor doing at the time? Um, you know, I.
Mike: Combinators, the COO at YC, uh, he was thinking about starting a startup, but he said, I'm, there's a certain set of things that have to be true of any startup idea that I'm going to pursue. And he was going through a bunch of different ideas, uh, and eventually converged on, on this idea of the AV simulation software, um, for cars and then, and then broaden from there. But I, I felt like he was going to be great, you know, I, and, and it's funny because we got to a point where he had the idea and I invited him to just talk to some other folks at Floodgate. And he didn't have slides or anything. He just came in with Peter and they described what they were doing. Then Iris, who tends to be our most skeptical partner, as soon as he left, she's like, What the hell are you doing?
This guy, as soon as he pitches people, everybody's going to want to fund this because this is amazing. This guy's a stud. Like we have to find a way to get into this project. And so, so that was one where I felt very strong convictions about it.
Logan: So you've been, uh, I guess, [01:14:00] in this industry now for, I guess, seed investing officially 19 years? Yeah.
Mike: It's pretty crazy.
Logan: And were you doing angel or anything before that? No. I've never made an angel investment in my life.
Mike: before I moved to California.
Logan: Wow. And so you moved to California in, oh,
Mike: Yeah, so I moved it to California in, uh, January of 2005.
Logan: January 2005. And was it with the intent of raising a seed fund or was that a happenstance afterwards? Yeah, it's funny. I knew I wanted to invest.
Mike: come back to California from Austin and I was hoping to get a job, uh, at a venture firm. I didn't know anything about venture capital. I couldn't spell LP. I, I, I mean, I knew literally nothing. I'd never made an angel
Logan: What had you been doing right before that? Uh, I'd. Okay.
Mike: And, uh, but I was pretty crispy, you know, we'd started the thing in 97, gone through the run up. We were going to go public in early 2000. Chuck Phillips of Morgan Stanley
Logan: Sure.
Mike: And we were going to, you know, you, you make the mistake of adding up your shares and the value per share and how much money you're going to make.
And you just, in your mind, you're going to be worth that much someday. And then everything melted down and the longest IPO window had ever been closed, like nine months. Four years later, we went public, right? And so, um, so I was kind of tired and I thought about starting another startup, but I didn't feel like I was, I didn't feel like I had the juice and the fire to do it because you got to will that thing into
Logan: Sure.
Mike: And so, so I thought I would look at venture. And so I spent some time in California and I was like, Oh man, I've got to come back to California. I'm sitting on the sidelines, Web 2. 0 is happening. It's time to get the party started again on the internet. And I just, I just knew I had to do that.
Logan: And so did you actually go, you hung out at some venture firms for a while, right?
Mike: I hung out, uh, at Foundation Capital for nine months and then August Capital for nine months.
Logan: Just sitting in partner meetings. And[01:16:00]
Mike: doing whatever, right? And just trying to learn the venture business. And it was in the course of doing that, that I started to see this whole 500, 000 is the new 5 million. And so, um, it was, you know, but, but I thought, okay, maybe I don't know what I'm doing here. I should make a few angel investments. I should see if this works. And so, um, you know, and, and at the time I was still living in Austin. And so I was. flying out every Sunday night and staying till every Thursday. And the goal was to find something exciting in Silicon Valley.
And
Logan: so then
Mike: uh, this idea, this gap between angels and VCs emerged and, you know, in many ways, without knowing it, I was embodying some of the behaviors I encourage others. You know, I was living in the future and I was noticing what was missing and paying very strict attention to the things that, that were being overlooked by most.
Logan: do you think about joining one of those or a different venture firm full time or how, how close was the consideration set?
Mike: about it, you know, um, if, if, um, if Kleiner Perkins or Sequoia had made me an offer at the time, I would have surely done it. Uh, I give them a lot of credit. So, um, known John Doar from a long, long time ago. And so we started to have some discussions, but, you know, I realize in hindsight how Incredibly naive it is to think you're going to get a job at Kleiner Perkins when you've never made a VCE or angel
Logan: Yeah. And
Mike: And then, here's something kind of interesting about Sequoia. Um, a friend introduced me to Don Valentine. And so I went and met
Logan: was Don still active at the time?
Mike: And, and, you know, obviously you take that meeting,
Logan: Sure.
Mike: I'm like, I meet Don Valentine and I said, Hey, look, I, I, I've already met one of your partners, Doug Leoni. He said, he's not hiring. I'm not here looking for a job because I've heard that I've heard that Don Valentine could be a little curmudgeonly and I didn't want him to say, what the hell are you doing here? We're not hiring you're wasting my [01:18:00] time. he's like, well, who said we're not hiring partners? I said, look, I'm not like Doug said that and that's fine.
I'm. totally cool with that. And so then he's like, okay, well, it's kind of random, but you know, do you have any questions? And I'm like, okay, sure. So I asked him questions probably like an hour and a half and he was super gracious and would just answer everything. And then his phone started blowing up.
He's like, Oh no, I gotta, I gotta, I'm supposed to be in Carmel. I gotta go. And so, so, um, so he leaves and I just remember thinking, man, that was awesome. meeting Don Valentine. And then, uh, by the time I'd landed in Austin, I get a call from Doug Leone that says, would you ever consider coming up here to meet Mike Moritz? And so I, I was like, okay, things are looking up, right? So I go, go to meet Mike and Mike tells me five minutes in, okay, look, I hope we haven't mismanaged your expectations here. We're not going to hire you. You've never made an angel or any of this stuff, but like, we're You never know what's going to happen in the future and stuff.
And so, so I was like, Oh, okay, well then I've got a bunch of questions for you. And so, um, and, and Mike Moritz, I mean, another set, it just, the guy can just turn a phrase like people, people underappreciate just, a gift he has with words and the way he can say something profound in a short sentence that captures the tapestry of like a huge amount of things. And so I just remember just marveling at just his vocabulary and the way he would express himself and just how he could, you know, get to the heart of an issue so quickly. Um, but, but like I give Sequoia a lot of props in hindsight. I mean, I'd never met any of those people. They had no idea who I was. I mean, I'm just some rando from Austin, Texas. And, but they gave me the time to kind of teach me a few things and, you know, at least considered it, you
Logan: Was Motive locally funded? Was it Austin Ventures or who was it?
Mike: Austin Ventures and then, uh, [01:20:00] Jim Breyer from Excel who I've
Logan: Kept in touch with. Yeah,
Mike: years.
Logan: now,
Mike: friends.
Logan: he's now in Austin, right? He's in Austin, yeah. Yeah, yeah. Oh,
Mike: to, when, uh, when we had motive, my dad has a pretty cool ranch outside of Austin.
And so we'd have these offsites at the, at the ranch.
Logan: that's cool. So, so you've been in the industry, uh, and seen it evolve from that point in time to, to, to now.
Logan: Uh, I guess I'm, I'm curious, uh, where do you think from an inflection standpoint, like, what are you Paying attention to, are we, are we in a trough with this or is AI kind of the, the opportunity that presents itself?
Is it too consensus to really be an inflection?
Mike: Yeah. So one of these days we should spend some time riffing on this a little bit,
Logan: Yeah. So
Mike: here's how I've been thinking about it lately. So, Occasionally you have something bigger than an inflection. You have a C change, right? And so, I was a kid, the C change was mass computation. And you had Moore's Law, and you had the transistor becoming asymptotically free, and start to realize, okay, in that world, power shifts and the scarce resource becomes software. And so if you'd understood what was happening, Your mind would have been more awake to the possibility that companies like Microsoft were going to be important companies, right? Or Intel, right? Because they were providing the commodity inputs, uh, for, for mass computation. So then in the early 90s, you have, uh, what I now call mass connectivity. And rather than it being animated by Moore's law, it was Metcalfe's law. And rather than have a computer on every desk in every home, you try to get all the people in the world as connected nodes. And rather than microprocessing becoming asymptotically free, communications bandwidth becomes asymptotically free. And so rather than software becoming scarce and expensive, it becomes open source commoditized. And now the valuable companies are the people that can aggregate the [01:22:00] largest number of network nodes and the largest amount of attention among the people who occupy those nodes. And so I'm like, okay, that's what happened just now. I think we're in this era
Logan: until that point in time, by the way, you would have invested in Cisco. What, what, what would have been, it would have started with Netscape. Netscape.
Mike: with eBay, but this kind of comes back to, to the question, right? Because don't remember now, but that the early wave of internet companies, a lot of them didn't end up being that persistently
Logan: No.
Mike: right?
Like the companies we all take for granted day, Google, Facebook, Amazon. I mean, Amazon took off of early, but like you could have, if you'd invested in Amazon in 1999, you would have lost 95 percent of your money before you made 300
Logan: Yeah.
Mike: or whatever.
Mike: And, and, you know, um, eBay was really, eBay was the most successful company of that era in its time, right?
And, and, but you had a lot of these companies, nobody even remembers now, AltaVista, HotWired, uh, uh, all kinds of, you know, uh,
Logan: Geocities. Sure. All these companies.
Mike: And so, um, so now we're sort of in this era of mass cognition and, or at least I think we are. And I, I think that the interesting question is what types of cognition are becoming asymptotically free? And, and so then you start to say, okay, well, In what cases can cognition be bundled or unbundled? And in what cases is cognition expensive rare, and it's going to someday be, um, cheap? And, and, and in what places is cognition, you know, mass cognition a compliment to humans? Is what situation is a substitute? What is the relative value of new knowledge in the future versus pre existing knowledge in the future? All these kinds of interesting questions. Uh, what types of fields, uh, cognition overpriced relative to what it's about to be? And, and, you know, where are there chances to bundle and [01:24:00] unbundle it? so that's one thing I've been thinking about a lot.
Mike: But then it also brings me back to the days of the internet, because I remember Roger McNamee back in those days talking about internet manias. how all these companies were investing insane amounts of money into creating broadband infrastructure. People forget at home was a company, right, that went bankrupt, uh, but it was one of the hot companies of the era. And so now you see the CapEx in these, uh, you know, NVIDIA clusters, right? And it just, it rhymes a lot with those early days of the internet.
Logan: And so what does that mean, uh, given eBay was the one that was kind of contemporaneously successful and others had their volatility around it, does that mean you're, you're, you're more patient, uh, with, Hey, just cause a trend's happening doesn't mean the companies that are going to create equity value out of it are.
Mike: Yeah. So like the, the, the, the, for example, um, I see a lot of LLMs that are really exciting and I look at the products and I'm like, I could totally see using that product, I don't see the insight or I don't see why there won't be a flood of competitors. and because I have a set of frameworks for thinking about this, uh, I tend to shy away from those kinds of projects,
Logan: Hmm.
Mike: what, like when I saw applied intuition, I'm like, okay, not everybody is going to be. Someone like Casser who grew up in Detroit, went to General Motors Institute, worked on Google's maps teams, and partnered with a guy that grew up in Michigan and also, you know, was on the Waymo team. I was like, guys are from Central Casting and Sam Altman's not going to be able to just, you Put out an LLM that just like, helps cars
Logan: Yeah. Hmm.
Mike: So, so like I, I thought, okay, he has an insight, but, but a lot of the, a lot of the AI ideas I see. I'm like, I could see myself using that product, but the problem is I don't see structural competitive advantage for this company.
Mike: So, so the, so there's that, um, the other thing [01:26:00] that, that rhymes though. For me with the internet was in hindsight, you had to hold two things in your head at the same time, right?
Like the. coms were overvalued, but the new economy was actually going to be a thing. Like
Logan: Hmm.
Mike: look at John Doar's pitch at the time on the new economy, the stuff he said was right in the main, in the long run. And so, and the new economy was underpriced you had the right time horizon. But if you had a two year time horizon, you were going to get, you were going to get in trouble.
Logan: Do you think that's true today? Do you think that's kind of where we are?
Mike: I don't know, but, but it is interesting. You know, we have a lot of young folks on our team and I find myself a lot of times them saying, don't understand. We gotta be in this space. We gotta be in this category. This is where the hot happen and new deals are happening. These are where the, all the hipster AI folks are hanging out. And I'm like, man, this rhymes with what I've seen, right? Like I was, it's like, you know, it really turns out that you don't have to do anything if you don't, if you're not like convinced that they're on to something. And so, you know, I would say that that, that, that rhymes a little bit for me. And I, the person I talked to about this recently is, um, Hans Tung, who I think is very
Logan: Yeah,
Mike: And Hans is very much like, you know, AI feels a lot like the early days of the dot coms, right? That it's like, you know, it's valid. It's probably under hyped in the fullness of time, but the specific, the question you got to answer is, What specific companies are you going to fund today? Yeah. And, and those can't be overpriced or you lose your money.
Logan: I've only been doing this now for 11, 12 years, uh, in, in venture specifically. And any time we've, we've considered, uh, altering our investment process, uh, either the underwriting frameworks or how we [01:28:00] prosecute investments, uh, Because of a not because of an individual company, any individual company, you should be willing to break rules.
Hey, maybe you're late to the process. Maybe it's competitive, whatever. Like you should break the rules around it when you're holistically talking about a category and it's like, no, we have to think of it this way because, uh, this is the way that this, these things are now being thought of anytime. That's proven true.
Crypto was that way. I think, oh, growth investing was that way. There was the chatbots before that there was mobile before that, right? Uh, anytime it's been holistically true of a category, it's proven to be a bubble. And I think it's, it's hard for me to not be so enthused by what AI is doing right now.
And it's also hard for me to call it anything but a. bubble within the venture ecosystem, at least just with how many people are changing their underwriting frameworks, how they prosecute investments, all these things, just, it smells like these frameworks or the, the, the, the, the process would imply bubble, uh, you know,
Mike: well, and the other thing is it, it has a set of conditions that correspond to a lot of wishful thinking. So like a lot of these funds that have been raised are just gigantic. And so what a great time to be funding companies that consume crazy amounts of GPU right? It, it's, it's, it's, it's appealing to think that that's the way the world is going, that that's the way the avant garde cutting edge people should think,
Logan: And you can tell LPs it's a forgivable thing right now to tell limited partners we're long AI and we're going to be investing in lots of AI and it happens to, to your point, uh, conveniently tied to a need for three, four or 5 billion funds in some cases to like justify it.
Mike: and some of these I think, like inflection is a good example of this. of these I think are [01:30:00] just divisions of big tech companies, company TBD. And so what they're really creating is sustaining innovations. that would normally happen inside the big tech companies, but they could just move faster. Uh, but they're, you know, economic model as it is right now, in many cases is I don't think viable. I don't think that their underlying economics are even viable because they're getting these big money investments in this funny money back and forth with credits and things like that. so, so you've got that issue, uh, as one, the other one that I think is, for the fact that some funds are pretty big is this Adams meet bits kind of startups, right?
So like now everybody wants to do defense tech. Everybody wants to do Adams meet bits. And I'm like, I'm like, that'd be great if, and I hope that a lot of those companies succeed. when I look at the sweep of history, the ones that have succeeded have Musk, who can just overcome. the amount of pain and anguish and impossibility. So I think that there are some startup ideas where the, the, the founder future fit needs to be somebody like Elon. They can't just be right that they could build a car. They can't just be right that they can blast a rocket into outer space. Like Elon probably is going to have to sue NASA along the way, or, you know, in the Andrew guys did have to sue the gut repellent tear or guys like that. And so, you know, the, the capabilities of the prime mover in those kinds of startups just have to be off the charts
Logan: And where is the company that gets started and is successful at the peak or at some like uh, top point in a market cycle? And so those examples you just, you just articulated of, uh, of, of SpaceX, Palantir, and, and and roll. Those were started way before this defense tech thing got going. And now they're, [01:32:00] they're held in this esteem.
And I think part of that is, uh, to your point, the non consensus element of it and, uh, the, the, the founder future fit of those people uniquely had a passion of going after this. And so they were willing to chew glass or whatever it is to will these things into existence versus when it becomes the cool thing, the incremental founder might want to pursue.
that doesn't have that unique passion, and there's probably three or four other companies that are going to copy them in some way, shape, or form, and they're all going to try to pull each other down.
Mike: going to find out that selling to the government's hard, right?
Logan: I've heard.
Mike: like, no,
Logan: Yeah, yeah.
Mike: but it's also that, um, a friend of mine, Eric Paley at Founder Collective told me this once, I'm still trying to coax the data out of them. But, um, said that they looked at the companies that had the biggest exit the year that they started, and they were almost never popular.
They were never in a popular sector of the year. So like I remember 10 years ago, direct to consumer was all the rage. it's like this year, you just almost can't get a direct to consumer startup funded. Right. And, and, um, this would probably be the year to do one. Right. Um,
Logan: That's one of the things I think about consumer right now is into your earlier point of, of talking about, like, there was only four people who were allowed to do consumer in the early 2000s. And it's, it's funny, it's, it's funny. Fallen so far out of vogue, uh, over the years and AI seems to have breathed a little bit of life back into it, but
Mike: Yep. Everyone.
Logan: uh, seems to be a B2B investor these days.
And it does make me, it does make me think that if everyone has decided that that's a good idea, it might mean that now is actually the right time to go do something totally different.
Mike: Yeah.
Mike: The, the other, the other one that intrigues me is, uh, crypto. I think a lot of the crypto stuff was just ridiculous, right. But, um, Bitcoin strikes me still as pretty profound. And [01:34:00] if, if you believe that Bitcoin in the steady state is gonna approach. The market cap of say gold, you're going to have not just that appreciation, but you're going to have financial services industry around Bitcoin. And I look at that and I, and I say, okay, can I squint and see that? I'm like, eh, know, I could
Logan: Do you think that financial services around Bitcoin would be different than the existing financial services?
Mike: I think that it could be, the reason I think it could be different is, uh, you know, I think there'll be some hybrid stuff where you've got the rails between fiat and Bitcoin, but I think that you'll have dedicated Bitcoin centric products. Like, let's, let's say that I'm Michael Saylor, and I'm just unbelievably all in on Bitcoin, now I want to buy a house, and I want to get a loan for this house. like to use my Bitcoin as collateral for the loan without selling my
Logan: Yeah,
Mike: And so there's probably going to be services
Logan: sure.
Mike: better at that. Is it possible that all the big companies someday are going to want to have some amount of Bitcoin on their balance sheets? I think it's reasonable to
Logan: Yeah.
Mike: right? there going to be company countries, right? That sort of to adopt the posture of, uh, El Salvador. I'm like, eh, you know, I could see that happening. I could see that happening in a lot of African countries. I could see that happening, you know, in a lot of the Asian countries. So I'm like, uh, you know, and if that happens, it doesn't have to move very far for that to amount to a lot of
Logan: Yeah. And I think that's probably, I've been a, uh, historically very negative on, on crypto, but I, I think that, uh, if, if what you're saying is centered around Bitcoin specifically and, uh, And the, uh, the, the ancillary services that are going to need to be provided for Bitcoin, or you could even talk, I don't know, talk me into a theory or something.
It's when you really go deep in the web three, uh, use cases that I, it starts to break my brain a little bit, or I'd [01:36:00] start to feel like we're recreating things that already are already exist, but it does seem that Bitcoin has had staying power. And at the end of the day, If people believe it to be worth something, then that's sort of what everything, it's not like we're using gold and melting it down and, you know, for some utility, some utility at this point, it's sort of a shared belief that it has value.
Mike: and I don't know if you've ever gone down this rabbit hole with like this. It's like a 14 part interview series with Michael Saylor. And this guy has, it's a show called, uh, What Is Money?
Logan: No, no, 14, 14. Michael Saylor seems like a very interesting guy. 14 of any Michael Saylor thing, I will not be.
Mike: I'll tell you what, man, it is really interesting. I mean, the, the, You can agree or disagree with Michael, but he ain't stupid, right?
Logan: Yeah. Oh, yeah. Oh, yeah.
Mike: and his, his, uh, reasoning is very tight about Bitcoin.
Logan: That's interesting.
Logan: What about the venture industry? You mentioned a bunch of capital. I think we both probably share some level of cynicism on, um, uh, people back solving for, uh, not giving money back or something and trying to find new avenues of parking capital, I guess. I'd be curious just, uh, at a higher level of someone that's both studied.
The companies as well as lived the industry in a lot of ways. I'm curious, just your zoomed out view of of where we are today in the industry
Mike: Yeah, I, I think it's, it's hard to say for sure, you know, I guess I used to think, okay, there's this cycle of capital where there's way too much and then there's too little, there's way too much, there's way too little. It's like a sawtooth. I think there's still some truth to that, right? Um, the thing that I think is a permanent is just increasing competition and increasing efficiency, right?
Like, I just think that when I first [01:38:00] saw venture capital, was a very inefficient market, very little transparency, uh, now I think there's a lot of noise, but I also think it's harder than ever to find inefficient gaps in the market. And in the end, that's how we got to make money. We've got to find stuff that other people haven't found
Logan: or there's no way to outperform the index.
Mike: And so, uh, to me, that's the thing that's gotten permanently harder.
Logan: It does, I mean, I think every market probably moves to more efficiency over time, at least I would hope. And so one of the questions I guess I would ask about the sawtooth is I agree that capital, there's inflows and outflows. Um, it seems like. That's maybe become something of a consensus view. Uh, and so in reaction to that, it feels like the limited partners are actually being far more even keeled and less manic in their dollars because they recognize that.
This year. Yeah. Yeah. Uh, and it might be another three or four or five, six years before we feel the full brunt of the implications around that.
Mike: Yeah.
Logan: I haven't seen it totally be the case with the number of funds that are still raising four or five, 6 billion. Uh, funds in 2024 even like it doesn't feel anywhere near at least what I have studied to be true of 020304, uh, and, uh, and all of that.
I'm curious if your perspective on that from a, you know,
Mike: Um,
Logan: I think
Mike: that
Logan: that the thing that's
Mike: different. So in the late 90s, early 2000s, you had these big funds, uh, not as big as what's happening today.
Logan: Sure,
Mike: Uh, and a lot of them ended up giving most of the money or half of the money back.
Logan: we did it.
Mike: back then, the tech industry was still kind of its own thing.
Yeah. And, uh, you know, you just, you, the value, it [01:40:00] was just so comically overvalued that you couldn't think about it any other way. It really was a mania. now I think there's a strong argument to be made that tech is embedded in the very fabric of the economy, probably started in the late 2000s. so, like, if I'm going to steel man it and say it's justified to raise these giant funds, I would say Tech is the most important industry in the world.
It's animating all factors of the economy. If you're an LP and you want exposure to tech, you have to be in those
Logan: sure.
Mike: right? And, and it's like, some of those funds will do well, some won't do so well, but like you have to be, you have to be at that table in that game. If you really care about tech as a permanent. of your investing strategy. And, and I can see the logic in that. Like, I don't think those funds will necessarily have the highest cash on cash returns, the highest IRRs, but, but they might outperform S& P.
Logan: I've heard some LPs refer to it as venture, venture alpha versus venture beta, depending on what funds they're participating in and how they think about it. They're like, Hey, we're looking for beta in this case, or no, we're just, we're actually seeking alpha in this case, which is an entry. I never heard that adage before, but whether or not they really think outperform the median or the return of the industry.
Mike: Yeah. So, so it's, it's interesting, right? Because interesting question is, are there an increasing number of amazing exits year after year? I don't see a lot of evidence, right? Like, I, I think for the most part, there's 20 to 30 amazing new companies created each year in the U. S. uh, I don't think that that's varied a whole lot through time. I, I think it may be an expanding universe, but it's linearly
Logan: Yes, yeah, yeah, it's up from 18 10 years ago. Yeah to 24 this year. Yeah,
Mike: and you have these exit windows where these acceleration [01:42:00] times, you know, from like 98 to 2000, uh, from, you know, we just went through one and probably 80 percent of the profits of 15 year window are made in that.
Logan: sure.
Mike: you know, in many ways you can argue the secret of the venture business is to have enough good companies in flight when that, you know, you guys had Snowflake and if you, it's like, if you have enough of those, like, you know, It almost doesn't matter what you
Logan: totally the window gets out. Yeah, it's funny. I joke that like all my friends, uh, that I grew up in venture with are now running firms. And it's like, Oh, well, Logan, that's you pick great firms or your friends. It's like, no, actually I got going in 2013, 14, and these were all the associates sourcing software deals at their respective firms.
And it's kind of this fooled by randomness, like survivorship bias of these people rising in the industry. And the consumer people that were at these firms are now Operating or have long pivoted to B2B or something else. Right. And so it's, uh, just having the unique luck of the moment in time is,
Mike: yeah, it's funny because this would be a great time for someone to start a career in venture an eye towards having a bunch of companies that come of age that 18 month window. years
Logan: Oh, sure.
Mike: right?
And, and it's like, and why is that maybe profound? I've met so many people who entered the venture business from until say last year, they're going to have to unlearn most of what they
Logan: A hundred percent. Like the stuff they learned that they think is true about venture is the opposite of
Mike: of like
Logan: what they should be. Totally. Right. Totally. They're actually worse than they're worse off than being naive. It's interesting the number of people that are the I think the iconic investors in the industry that got going after the dot com.
bubble. And some of that is, hey, if you rode the dot [01:44:00] com bubble, then you probably got fabulously wealthy and you've retired since then. So some of this might be some episodic, uh, you know, whatever exits that ended up happening. But I do think it's, it's, it's interesting yourself, my partner, Scott Rainey, uh, uh, Jeremy Levine.
Yeah. Peter Fenton near a Jagger wall. Uh, I mean, we can come up with a laundry list of names of folks that are amazing investors that got going in 0 1 0 2 0 3 0 4. And it's probably, yes, some right age and whatever, all those stuff is, but it's also probably learned a lot of good lessons coming out of the internet bubble.
Uh, and I wonder if we're going to see the opposite of that, of people that have been around in 2021, 2020,
Mike: and I learned a lot about this from, uh, uh, Breyer. So Jim Breyer used to tell me, this is a long time ago, it's like 2000, 2001, that like navigating bubbles is part of the job. And it's like when. in the present is too excited and hyped up, you need to find a way to exit companies in those windows, and you need to be very clear on the fact that you need to do that. uh, I just always remembered that, um, because I remember the feeling in 2001, 2002, when I was a founder of like, oh my gosh. Like, how are we going to find a path to the light? Like, what are we going to do here? Uh, and, and I think about that a lot when we make our decisions to sell in recent years. You know, so like, okay, this is an exciting company, but like, it has to be like, it has to be like the best company the next 15 years. To be this exciting.
Logan: How do you, do you guys have some distribution methodology or
Mike: is it
Logan: is it case by case?
Mike: don't have too much of one, but we, we always, um, whenever one company starts to become more valuable than the entire fund, we start to say it's important for us to have a point of view about whether we should sell or not, or sell some
Logan: Sell something. Yeah. That's what I've [01:46:00] always respected about Fred Wilson specifically is I feel like no matter what they're selling some into the IPO or maybe a little bit before the IPO and just recognizing, Hey, this is an iterative opportunity. Why not take a little bit of your principal back or whatever it is.
Mike: I think, uh, Naveen over at Mayfield did a good job of this in the kind of the early 2020s,
Logan: Interesting.
Mike: here's the other thing people say, well, that's easy for you to say, how are you going to get out? But like, what happens is you've probably seen this dynamic. The company is so hot that like, if you want to sell people are like, okay, well, you got to do me a solid and sell way more than that.
Logan: Yeah.
Mike: you know, if anything, it's like you struggle to sell, uh. Uh, you know, less than what you end up having to sell,
Logan: Totally.
Mike: like, you know, and usually when that's happening, that's kind of a sign of top
Logan: Yeah, yeah, yeah. Everybody
Mike: when there's no price, it's too high and everybody wants it. And you got to sell more than you even want to sell.
Logan: usually I've written down some of the lessons, uh, or, or, some of the things, and at some point maybe I'll, I'll share them, of like, this is a sign of a bubble, and it's a good, uh, I just did it cause I feel like we've gone through a few of them in the last even, uh, I don't know, 48 months or something, and just There's, there's little things like that, that if it's happening, then it's probably a good sign to head for the exits, at least in part.
Now, the, the scary part about our industry is one, the outliers end up paying for the rest of the, uh, the pattern breakers, if you will, end up paying for, for all of, uh, all of the sins that we make and to, uh, quite a bit of money is made on the runoff right before the music stop. as well. And so getting out early might be missing out on, you know, some of that.
But uh, yeah, I think psychologically it's a lot better to not be left holding the bag.
Mike: I think, I think so. And, um, it, you know, there, there's just no easy answers to it. But, but I do think that, that, um, it's surprising to me how few people are on a posture of [01:48:00] wanting to sell at the time they should be in this industry, right?
Logan: It's human nature, isn't it? I mean, it's just, it's all the things that you learn and think about and you read an Annie Duke book or you read a, whatever, a fool by randomness and a seem to lead book, you read these things and you're like, Oh, of course I won't fall victim to that.
Mike: Howard Marks saying, well, I pay attention to what people are saying in the present because, you know, they get overhyped and it's like, you're just like, yeah, he's
Logan: Yeah, he's totally right. And can I buy some more in that company? Arguing with his son about,
Mike: whether they should buy more
Logan: yeah, exactly. It's like, you're just like,
Mike: you're watching it play out in real time. it's, it, it is just so hard to have the presence of mind. You know, 20 21, 20 22, you start to say, yep, this is the first real year or the 21st century, and like there's a permanent change and
Logan: COVID has pulled through all the, yeah.
Mike: gonna be remote and distributed worldwide and digital and all this.
You know, you start to, you start to believe the hype,
Logan: There's a handful of these moments that have happened and COVID was one of them, uh, and what it's done to e commerce sales and just like how we're right back on the line that we were headed on before of all this. I think COVID is one of the all time, hey, I really. don't know, uh, the, I can't project the future.
And so it's just like you, you, you probability weight and you try to hedge a little bit and you go all in where you can. But I, if you had told me we were going to end up exactly back on the same slope of e commerce sales that we were in, you know, 2019 was projecting I never would have bought it in a million years and here we are right back there.
So,
Mike: if you told me in March of 2020, we were gonna have this major acceleration window where you know, 80 percent of the profits in venture were going to be made, I would have said, how's that
Logan: yeah, exactly. How is that? How is that going to work? What about, um, so, so there's a lot of young investors, uh, that listen to, uh, listen to this podcast or aspiring investors.
Logan: Um, What would you [01:50:00] say, other than unlearn what you've learned in the last couple of years, uh, beyond that, what would you, uh, if you're giving advice to a junior employee, a floodgate or just someone randomly wanting to get into the industry or already in the industry, but trying to think about how to make a career that sticks, are there things beyond reading your book, uh, that, that you would recommend for people?
Mike: Yeah, um, so I've spent a lot of time, uh, studying, uh, Buffett Munger, right? And, and so, and I think they have some lessons that are pretty durable. Like one lesson they have that the opposite is true. They say, let rule one is don't lose money. Rule number two, don't forget rule number one
Logan: In our book. Yeah.
Mike: rule number one and seed is don't pass on Airbnb,
Logan: Yeah. So you
Mike: you know, you fail because of a failure of imagination and a failure of understanding the underlying powers of the startup. I'd say that the thing that feels really durable is this idea of knowing what your circle of competence is. And so, for example, I think that I'm better than some at being willing to invest in a incomplete product idea that embodies a powerful insight with a big inflection, right?
Like, I'm willing to say I'm, I'm comfortable with the uncertainty of whether the product's right or not in the case where a lot of people wouldn't be comfortable, and sometimes that allows me to get a better evaluation, for example. But like this idea of a circle of competence, I think is big. And so it sort of says there's, there's times where, you know, you have an advantage and you do have an advantage then there's every other time.
And, and so one of the ways that we've moderated our investing pace is I have a list of every first check I ever wrote where 20 X after a while, it becomes an existence proof, right?
Logan: run back, I'm like, okay.
Mike: Okay. I'm about to write a check for an idea and a strategy where I've never once made money doing that in 20 [01:52:00] years. So, uh, does that mean I just need to expand my circle or do I need to stay within it? Usually I do better when I stay within it and try to,
Logan: And
Mike: And most people don't realize that without having a circle of competence, all you're ever going to be at best is the average. Because you have, there's no basis for you to be an out performer if you don't know something. The market doesn't know or have access, the market doesn't have,
Logan: that's one of the things that I've thought about is like it's counterintuitive, uh, to when you're early in your career to narrow your scope in a really meaningful way. Because You want the optionality of doing the other things. And so you want the choice of like, well, you know, yeah, AI sounds interesting.
And then, uh, but, but consumer, we'll see how that plays out. And, you know, infrastructure software, that that's always been good. And you sort of dabble in a bunch of different things. And what's hard about that is you never build the, uh, the full competency in any one of those, those things. And it's going to require you to like the way I've articulated.
I think this is similar to companies is like pick something. That you think is going to be more important tomorrow or in the future than it is today. Become the smartest person you possibly can on that. And then as your firm or as the industry moves in that direction, uh, you will be there to meet them and you'll be the AI expert when AI is blowing up or whatever the case may be.
It could be health, it could be digital health, it could be genomics, it could be defense tech, it could be whatever it is, right? But like, if, if what You, you were pursuing today as an associate or, you know, whatever principle at a venture firm is the popular thing. They have more than enough people to go do that.
People want to do the popular thing. You should be going over, which is a really hard thing to do. It's really hard to tell people, no, don't [01:54:00] focus singularly on AI or go pick some really narrow subsegment of AI if you want to do that and go really deep there because that's going to be more important in the future.
Mike: and it's funny, uh, I now realize how profound, so like when I was a kid, my dad used to always say, do your best. a lot of people. A lot of people would say to their kids, be the best, but, but that's not what he was getting at. So he was basically saying that there's only one you if, and every day is a gift and you're never going to get today back. And so how are you going to spend the time to honor the gift of your time to be your very best self? Because if you're your very best self, there's only one you, nobody's going to be able to compete with you. You're, or you're going to be hard to compete with. like, like, let's say that I think Peter Thiel is a really smart guy.
He is. I try to be like Peter Thiel, there's no way I'll ever be as good at it as he is. like, I, I have a database of every seed company that I've ever found. that you would have made more than a hundred X on the first check. And I study those things like a train spotter. And if, and I'll tell a founder sometimes, take my money versus the next seed investors.
I'm like, put us each in a room, give us a pop quiz on how do startups work and how to start up capitalism work and see who knows more.
Logan: Yeah. And you're
Mike: thought about it more. And it's not that like I was trying to be better at it. I'm more interested in it, right? I'm, I'm more interested in what makes a great startup. And I want to understand it, the, the way Buffett Munger would read every fortune 500 annual report, just because like, I want to understand startups better than anybody's ever understood them ever
Logan: reframing the, the conversation or the consideration set. And so in that Peter Thiel example, I actually think Vowters Fund's done an amazing job of appealing to a libertarian, anti establishment, um, you know, or even politically conservative, like [01:56:00] contrarian type, like they, and, and to those people, which I think if you had asked San Francisco, uh, 10 years ago.
What percentage of entrepreneurs that was people maybe would have said 5 percent or 10 percent or something. And it turns out actually we found lately and as times have changed, it's actually maybe closer to 50 percent or 60%.
Mike: It's a high
Logan: It's a,
Mike: ones.
Logan: a high percentage of the good ones. And to, to, to that group now they've become.
Uh, Sequoia, right? Uh, and those people uniquely appeal to them. And, and you can't, uh, you need to pick some, some lane or some narrowness that deeply appeals to some subset of the population. And so you, when you're having that discussion with someone, you say, If what they want is Peter Thiel and the zero to one and the libertarian and whatever, then you can disqualify yourself from that conversation as well, because the worst thing is to come in second.
It's like,
Mike: Yeah.
Logan: because then you've wasted all the time and the cycles and all that, right? Better to get disqualified early on.
Mike: they need to want me because they think I'm like a startup philosopher King,
Logan: Yes. That's
Mike: need to care about and, and you know, you can't be for everybody.
Logan: No, you can't. It's fine. It's actually, that's actually, you want to deeply appeal to some narrower subset of people that are going to opt in to you and to you. You are the end all that they want to work with, right? And that doesn't have to be, it just needs to be, you mentioned 20 to 30 a year. Like if you get four or five of those, you're, if you get one, you're, yeah, you're going to be,
Mike: small, we're
Logan: keep your funds small.
You get one of those. You're going to be doing this a long, long time. Yes.
Mike: of goes back to then in the founder future fit and that kind of this idea of doing your best. If you're doing your authentic best, you can't be defeated in that thing you're doing your best
Logan: Yes.
Mike: Because everybody in the world is different. Everybody in the world has their own balance sheet of comparative advantages and disadvantages. And so nobody can be exactly like you at the thing you're the best at being you about. And so ironically, the way to be broadly successful is to. [01:58:00] Not pay attention to too much of what everybody else is doing and to be better at tuning in to what you can be your authentic best at.
Logan: picking the single or the things that are the most Mike Maples, uh, that, that you can possibly be in leaning into those and you want it to appeal as broadly as you can. But what's most important is appealing as deep as you can.
Mike: I
Logan: And that's what, that's what, um, domains are probably the easiest way for, for more junior investors to, to, they probably won't be able to be the train spotter, uh, that you are write the book or write the zero to one and be the political, uh, uh, you know, um, influencer and savant that Peter Thiel is, or whatever, like you're not going to be able to do that.
So domain, uh, is, is the one that I, tend to, tend to tell people to lean into, uh, now then the question that I inevitably get back is what domain? And I say, that's not for me, like, listen, I don't know, like, it's not for me to decide that. I'll still, I'll be able to pivot into that, uh, if it becomes the new thing, because, uh, I, I have a, uh, a fancy title at Redpoint.
And so if that becomes true, then, but if you're the associate at XYZ firm, you're Your ability to rise within your organization is going to be threaded to your domain and your knowledge of that. So
Mike: and I think that a lot of it does, it's, it's what a lot of good founders do is. find an area that is an authentic match to your train spotting level
Logan: yes,
Mike: And you just go down the rabbit hole and it doesn't seem like work, right? You're, you get in this state of flow and you lose sense of time and all that stuff. And it's like, it's, it's by doing that, that you're going to open these fractals of knowledge and find the insights that aren't obvious. Founders are going to instantly magnetize to you because they're going to, They're going to see that you care about what they're doing more than other people care. Uh, I think that's the path, uh, to the light.
Logan: and it's not something that you inherently needed to have studied in school or it's just like when you get into it, you find it insatiable and your pursuit of it. That's the way I was with, um, uh, [02:00:00] software way back 12 years ago or I just sort of
Mike: Even
Logan: in
Mike: into VC, I
Logan: Yeah, no, no, before I got into VC and I read all the software books, uh, software and hard drive and I learned all these things and, uh, now it's even easy.
You don't have to go buy hardback, uh, books like I, like you did way back when. Now you can go get it. And the acquire guys just still this stuff down and there's, you know, YouTube transcripts of a lot of these, uh, anthologies. And so I just think picking a category is a really.
Mike: guys are great example of this. weren't famous people, right? But they just are train spotters about like breaking down these companies and they, they do it just because they're just darn interested in
Logan: Darn it. And you know what, if you look at all their growth,
Mike: you
Logan: it's, it's compounded and it's grown over time just by them doing it and getting better at it consistently. And it builds on itself. And that's what I think is interesting of like, there's no shortcuts. And in this, there, there aren't any shortcuts.
And what's, what's interesting is if you look at the people that have grown to be the best at podcasting, for example, um, they've generally started from no names around it. And And then they built over time. And what's, what's nice about that is when you're at your worst, no one's listening. And as you get better and better, then people discover you.
And you've refined your product. And I know the acquired guys have thought about that or Harry Stebbings, or I don't know, Patrick O'Shaughnessy or Tim Ferriss or all these people, Bill Simmons, like whatever industry it is, like people generally. And I, uh, it's hard. I mean, I fell victim to like, well, let's get the biggest guests I possibly can on.
And it turned out in the early days, I was just very bad. Uh, It's inevitable. It's not even being self deprecating. It's true. You hadn't practiced it. And so I,
Mike: good run though, you were a study. I'm, I'm,
Logan: working hard at it. It's a lot of work.
Mike: but it is interesting, right?
Mike: Because, um, like all those people that you mentioned, they were, they, they weren't like Lenny Ruchitsky, right? Like who would have thought that 700, 000 people want to listen to a podcast [02:02:00] about product management? Like you would have never, would have never foreseen that. Like, you had, show is good because he just cares about
Logan: He cares about it. And by the way, Lex Friedman, uh, AI podcast, and it's easier to start super narrow. And this goes back to the same thing with industries. It goes back to the same thing with startups. Lex Freeman was called the AI podcast, uh, acquired was only focused on acquisitions. Uh, you know, Harry Stebbings was 20 minutes with venture capitalists.
Mike: Yeah.
Logan: Lenny was just product managers and you know what, you get, you get the opportunity to build concentric circles around it when you build a lawyer listener base, uh, rather than starting broad with your own interests, which again is counterintuitive. Like going super deep with product is something that you wouldn't have guessed, but it turns out a lot of people are interested in product.
Mike: And the other thing I think that's counterintuitive about it is if you're going super niche at the beginning, if it doesn't amount to anything, you're no worse off because nobody's paying attention,
Logan: That's right. That's right. Yeah. Nobody knows you screwed up.
Mike: nobody was
Logan: That's right. No one listened anyway. So, yeah.
Mike: so like Brian Chesky, right.
He would launch relaunch Airbnb every month. And he realized I might as well, cause nobody knows who Airbnb is. I can just pretend it's a new thing. Right. So, so like, if you're, if you're doing something that. You're interested in just for its own sake. Um, if it doesn't take off, okay, fine. You learn something you're
Logan: Totally. Totally. Yeah. Well, Mike, this is great. Thanks for doing this.
Mike: for putting up with me.
Logan: A lot of fun.
Thank you for joining this episode of the Logan Bartlett show with co founder and general partner of Floodgate, Mike Maples. If you enjoyed this discussion, we'd love for you to share with anyone else you think might find it interesting as well as subscribe on whatever podcast platform you're listening on.
We look forward to seeing you next week with another great guest on the Logan Bartlett show. Have a great weekend, [02:04:00] everyone.