Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
Speaker 1: This week on the podcast, I have an extra special guest.
Speaker 1: His name is David Hall and he is a partner
Speaker 1: at Rise of the Rest UH seed funds. A little background,
Speaker 1: I previously had interviewed both Gene Case, who runs the
Speaker 1: Case Foundation and is a former early executive at A
Speaker 1: O l and coincidentally married to Steve Case, the co
Speaker 1: founder of A O l um And she introduced me
Speaker 1: to Steve Murray, who works at Revolution Partners Fund, which
Speaker 1: is run by Steve Case. And in my research with
Speaker 1: Steve Murray, I came across Rise of the Rest and
Speaker 1: afterwards he said, Oh you're interested in this, I got
Speaker 1: a guy you have to speak to UH and his
Speaker 1: name is David Hall. If you are remotely interested in Oh,
Speaker 1: my goodness, so much stuff. The state of venture capital
Speaker 1: in America today, Why it doesn't have to just be
Speaker 1: focused on three areas, namely San Francisco, Boston in New York.
Speaker 1: How much entrepreneurship, technology, startup energy is in the rest
Speaker 1: of the country. Well, you're going to find this conversation
Speaker 1: absolutely fascinating. With no further ado, my chat with David Hall.
Speaker 1: My special guest today is David Hall. He is a
Speaker 1: partner at the venture capital fund Rise of the Rest
Speaker 1: Seed Funds, part of Revolution Partners VC. He comes to
Speaker 1: us with a b a. In Economics from Morehouse College
Speaker 1: and an NBA from Harvard. Prior to joining Revolution, he
Speaker 1: worked at The Washington Post as the director of Planning
Speaker 1: and Developing, managing corporate M and A and investments, and
Speaker 1: helping to launch a number of new print and dig
Speaker 1: dual publications. David Hall, Welcome to Bloomberg. Thank you, Barry.
Speaker 1: It's a pleasure to be here. So I've been speaking
Speaker 1: to a number of vcs over the past couple of years,
Speaker 1: and I'm always fascinated by their backgrounds. Your background is
Speaker 1: a little unusual. How do you get from the Washington
Speaker 1: Post to the world of venture Let's let's start with
Speaker 1: what were you doing at the Washington Post. Yeah, so
Speaker 1: I went to the Washington Post. Actually interned at the
Speaker 1: Washington Post company between my first and second years at
Speaker 1: Harvard Business School, and it was for me, it was
Speaker 1: a perfect big place because where do newly minted MBAs
Speaker 1: want to go. They want to go to industries that
Speaker 1: are in crisis, And there was no greater crisis in
Speaker 1: the two thousand early two thousand's than the print newspaper
Speaker 1: let me interrupt. You newly minted MBAs want to go
Speaker 1: to industries in crisis. I always thought they either wanted
Speaker 1: to go to high paying Wall Street jobs or high
Speaker 1: paying Silicon Valley jobs. You're suggesting other Well, I figured
Speaker 1: I could always end up in one of those high
Speaker 1: paying coastal jobs. But but for cutting my teeth, I
Speaker 1: needed to manage a business through disruption, and and that,
Speaker 1: to me was going to be such an interesting you know,
Speaker 1: how how could I be the savior of of the
Speaker 1: great gray Lady of of of Washington at least? And
Speaker 1: managing a business through disruption sounds a lot like what
Speaker 1: vcs look for in startups. It's, you know, I was
Speaker 1: reflecting on the train up here from from Washington, how
Speaker 1: much of what I've been working on has been kind
Speaker 1: of accumulative. It's it's looking for these these How do
Speaker 1: you recognize disruption before it hits? And then how do
Speaker 1: you manage through the disruption? And how do you and
Speaker 1: now from a from an investor's perspective, how do you
Speaker 1: manage that process? Sort of indirectly because we're not in
Speaker 1: the company every day, but we're advising these companies about
Speaker 1: disruption that's either coming or disruption that hopefully they're creating
Speaker 1: with their products and services that they're launching. Quite quite interesting.
Speaker 1: So that was your first experience in the workforce. How
Speaker 1: did you tack from that or to venture. It's easy
Speaker 1: to talk about, but but it's actually more visual. You know.
Speaker 1: I was sitting there one day at the Washington Post,
Speaker 1: and it's the only place I've ever worked where sitting
Speaker 1: at your desk reading the newspaper was called product research, right,
Speaker 1: And so I was reading an article. I was reading
Speaker 1: an article about Steve Case and the firm that he
Speaker 1: just launched after leaving a well time warner, called Revolution,
Speaker 1: and it was gonna build these big iconic businesses that
Speaker 1: we're gonna tackle really tough problems around healthcare and and
Speaker 1: financial services. And it just was so exciting to me.
Speaker 1: I said, I've got to I've got to plot my
Speaker 1: way there. I you know, I did a little cyber
Speaker 1: stocking at the time, finding out where the Revolution offices were.
Speaker 1: I did some LinkedIn searches to find who I knew there,
Speaker 1: and ended up finding a woman that I went to
Speaker 1: a business school with who was there a couple of
Speaker 1: free coffees for her and and a glass of chardonnay,
Speaker 1: And I found myself with with an email introduction to
Speaker 1: one of the one of the founders. And that's that's
Speaker 1: how it started. And and not I have to point out,
Speaker 1: unlike most of the big vcs, Revolution didn't set up
Speaker 1: shop in New Yorker, Boston or anywhere in the Bay area.
Speaker 1: In Silicon Valley. They're pretty close to where the Washington
Speaker 1: Post is headquarters. It's it was three blocks. It was
Speaker 1: the easiest commute for an interview I've ever had. Yeah,
Speaker 1: I mean, you know, the Revolution story and and and
Speaker 1: what Steve has built and others have built with Revolution
Speaker 1: is really phenomenal in in the Washington, D C. Area.
Speaker 1: It's you know, it's been his home. A O. L.
Speaker 1: Grew up in the in the Dullest Corridor. Has been
Speaker 1: a phenomenal explosion of just capital ingenuity in that area
Speaker 1: and has helped spawn, you know, the grandchildren of A. O. L.
Speaker 1: Or now companies like Vox Media, which is you know,
Speaker 1: run by Jim Bangkoff, who was at A O L.
Speaker 1: Or even living Social which was a huge company that
Speaker 1: was run by a former product manager at Revolution Health.
Speaker 1: So you're still seeing these spillover effects of of that
Speaker 1: that sort of huge entrepreneurial flashpoint with A O L.
Speaker 1: Now I think of that area as very heavily um
Speaker 1: laden with telecoms and other networking firms. Uh, is there
Speaker 1: any cross pollination with Revolution or you have a very
Speaker 1: specific set of things you focus on and telecom may
Speaker 1: not be it. Well, I mean, given given sort of
Speaker 1: the A O L uh DNA of our place, there's
Speaker 1: a lot of a lot of focus on on on
Speaker 1: social networking, social media, and and general consumerism, like how
Speaker 1: how do we how do we make the lives of
Speaker 1: consumers better, easier, faster, cheaper by by investing in a
Speaker 1: lot of products that that's sort of where the consumer
Speaker 1: is the end user. So a lot of our investments
Speaker 1: throughout time have been either B to C directly or
Speaker 1: B two B two C, where where the end user
Speaker 1: the business might not necessarily be generated from the consumer,
Speaker 1: but the end user was a consumer. Because just you know,
Speaker 1: the A O L D N A is really pervasive
Speaker 1: about how do you make it how do you make
Speaker 1: it easy for the average Joe to get online. That's
Speaker 1: exactly what the on ramp to the internet. That's how
Speaker 1: we described A O L for forever um. So does
Speaker 1: that background own change what you look at how you
Speaker 1: look at it, or what you put company capital in.
Speaker 1: What's the impact of the A O L background is it?
Speaker 1: Is it just so obvious, is hey, we're used to
Speaker 1: doing U B two C sort of investments, business to
Speaker 1: consumer sort of investments, or is there a change in
Speaker 1: the entire process of what comes your way and the
Speaker 1: way you consider it. Well, I guess the way that
Speaker 1: I'd most likely consider it think about it is we
Speaker 1: really approach things from a brand building perspective. How do
Speaker 1: you build the brand so that it helps the consumer
Speaker 1: recognize that there's there's trust behind the brand, there's a simplicity,
Speaker 1: there's a real value add that's coming through through the
Speaker 1: products that we're backing. I would also say that you know,
Speaker 1: we're also as we deploy capital and a lot of
Speaker 1: the deals that come to us are deals that that
Speaker 1: are are pretty focused on consumer stuff. We we have
Speaker 1: a lot of B two B this to business and
Speaker 1: investments as well, but but you know, a lot of
Speaker 1: the deals that we see just end up being really
Speaker 1: strong consumer brands. I previously had one of the partners
Speaker 1: in your firm, Steve murray on an. I discussed ever
Speaker 1: so briefly Rise of the Rest with him, and he said, Hey,
Speaker 1: I got a guy you should speak to about this.
Speaker 1: Name is David. I love this concept, and I have
Speaker 1: to just give a really brief explanation and then let
Speaker 1: you dive into this. So most of the venture capital
Speaker 1: money spent in the United States, it's San Francisco, it's Boston,
Speaker 1: it's New York. They're a handful of other places, but
Speaker 1: there are these huge stretches of entrepreneurs and innovators and
Speaker 1: technologists that it's a venture capital desert. What led to
Speaker 1: the development of Rise of the Rest side funds and
Speaker 1: tell us how it came about and how it actually operates. Yeah, sure, it's.
Speaker 1: It's It's actually stems from a very very simple premise.
Speaker 1: We believe that great entrepreneurs can start great businesses anywhere,
Speaker 1: and for so long in our country's history, or at
Speaker 1: least in the current and in the recent history and
Speaker 1: the digital history digital era, that that that belief was
Speaker 1: epicentric to the coastal hubs of As you said, San Francisco,
Speaker 1: New York, in Boston, and one of the things that
Speaker 1: we've been doing at Revolution when working with Steve, we
Speaker 1: started in twenty fourteen these these bus tours, which became
Speaker 1: themed Rise of the Rest bus tours. And let's put
Speaker 1: a little flesh on that. Half a million dollars, a
Speaker 1: bunch of people pile into a bus, you go to
Speaker 1: a specific city. What happens there, it's it's it's we started.
Speaker 1: We kicked it off in Detroit, and we start in
Speaker 1: the morning. We we convene the leadership, I like to
Speaker 1: call it the suits and the T shirts getting together
Speaker 1: for the first time. Will bring the politicians, the mayors,
Speaker 1: the governors, the state and federal officers. Will bring the
Speaker 1: heads of economic development, the university presidents or business school deans.
Speaker 1: Will bring the heads of the tent pole companies, those
Speaker 1: big success companies that have kind of broken out and
Speaker 1: made a name for themselves. But we'll also bring the startups,
Speaker 1: the T shirts, the guys who are guys and girls,
Speaker 1: guys and ladies who are cranking every day on building
Speaker 1: the next app or the next B two B sas
Speaker 1: business and bring them together to say what's going on
Speaker 1: in Detroit, in Nashville, in Pittsburgh, what's happening in this city?
Speaker 1: What industries are flaring up? What are you what are
Speaker 1: you noticing about the flow of talent, the flow of capital,
Speaker 1: the flow of ideas into and even out of your city.
Speaker 1: We follow that with visiting, going out and seeing that,
Speaker 1: talking to these companies, and and going and being in
Speaker 1: their physical spaces and meeting as many companies as possible
Speaker 1: in that venue. And then and then we in the
Speaker 1: day with a celebration. We do a pitch competition where
Speaker 1: the winner has historically received a hundred thousand dollar investment,
Speaker 1: but it's a way for the community to show the
Speaker 1: best of the future and you know, a handful of ideas.
Speaker 1: How that's evolved over time. We've done it now in
Speaker 1: thirty eight different cities on silly seven different wars, so
Speaker 1: we've we've literally been you know, from from places like York, Pennsylvania,
Speaker 1: down to New Orleans, which is near my hometown, uh
Speaker 1: and seen seen this play out in so many different cities.
Speaker 1: And it's what you walk away from is both like
Speaker 1: the how different cities take entrepreneurship differently and how they've
Speaker 1: had to deal with it differently, which is not not
Speaker 1: undifferent from how or indifferent from how they've had to
Speaker 1: to historically deal with economic ebbs and flows. I mean,
Speaker 1: one of the things that's really interesting to me is
Speaker 1: we see a lot of robotics in Pittsburgh, for example,
Speaker 1: because of the focus of Carnegie Mellon, but also the
Speaker 1: history of steel there, which kind of makes sense if
Speaker 1: you draw a narrow line between steel to robotics. Right.
Speaker 1: You see a lot of advanced manufacturing in Detroit, which
Speaker 1: obviously makes a lot of sense, but interesting. You'll see
Speaker 1: some interest, some really interesting things like ed tech in
Speaker 1: New Orleans. Why because Katrina forced New Orleans to rethink
Speaker 1: their entire education system, and you saw a lot of
Speaker 1: Teach for America alums coming there to be helpful, but
Speaker 1: then being entrepreneurial about how do they how do they
Speaker 1: solve these problems and these these these Teach for America
Speaker 1: alums mostly started businesses in New Orleans focusing on education
Speaker 1: and education reform. So you see this, this the legacy
Speaker 1: of the great industries of America and steel and manufacturing
Speaker 1: take place. But also you see the resurgence because of
Speaker 1: current situations in places like New Orleans that that that
Speaker 1: launched these burgeoning industries and things like education technology. So
Speaker 1: what are some of the advantages of not being in
Speaker 1: these coastal urban centers. When you roll into a Detroit
Speaker 1: or a Pittsburgh, I have to imagine the costs of
Speaker 1: everything are are a fraction of what San Francisco is.
Speaker 1: It's so funny. I was on a call just the
Speaker 1: other day with a company that relocated from Boston to Wisconsin,
Speaker 1: and they were able to extend their burn by over
Speaker 1: six months just by redomiciling the company. Right, So I
Speaker 1: think that I think that there are a couple of things.
Speaker 1: I think that obviously, the call of living differences are
Speaker 1: really different, and and and and you can grow a
Speaker 1: company a lot farther on on the same amount of funding.
Speaker 1: But I think you're also seeing the flow of talent.
Speaker 1: I think you're seeing people graduate from, you know, the
Speaker 1: University of Michigan, or graduate from Georgia State or Georgia Tech.
Speaker 1: And say, you know what, I don't I don't necessarily
Speaker 1: feel like I want to go to these these these
Speaker 1: coastal hubs. I want to I want to stay here.
Speaker 1: I want to become an entrepreneur. And it's easier because
Speaker 1: my network is here. It's it's it's it's a more livable,
Speaker 1: more affordable, definitely more affordable environment. But but the jobs
Speaker 1: are now starting to happen. It's it's part of the
Speaker 1: flywheel that we're seeing this flow of talent boomerang back
Speaker 1: home because that's where they want to be. And and
Speaker 1: I think that you know, the combination of those two
Speaker 1: factors with the flattening of of the you know, it's
Speaker 1: never been cheaper to start a business because of you know,
Speaker 1: things like a laptop and an internet connection in Amazon Cloud,
Speaker 1: and you're pretty much ready to get ready to go,
Speaker 1: and and and that wasn't always the case, you know,
Speaker 1: a decade twenty years ago. Just to say the least,
Speaker 1: there is a giant um demand for STEM jobs even
Speaker 1: in the highest paying silicon valley and and biotech in
Speaker 1: in Boston and a little bit of everything in New York.
Speaker 1: Do you run into an issue of shortage of of
Speaker 1: skilled cat labor in in those towns that may not
Speaker 1: be known for their their tech workers. So I would
Speaker 1: you know that that's a that's a common issue. We
Speaker 1: hear a lot and I think that the real, the
Speaker 1: real focus is for a lot of the early stage jobs.
Speaker 1: A lot of the you know junior folks, the entry
Speaker 1: level jobs. They're coming right out of the university. So
Speaker 1: it's it's no different from leaving Morgan's Morehouse and coming
Speaker 1: up to New York to work at Morgan Stanley. These
Speaker 1: folks graduate from you know, Vanderbilt and then go work
Speaker 1: directly into one of the Nashville startup Nashville startups, I think,
Speaker 1: what about koders and and statistical analysts is I guess
Speaker 1: designers you could pretty much find it. You can find
Speaker 1: a lot of these folks anywhere, and I think you're
Speaker 1: you're starting to see the recruiting of them away from
Speaker 1: the hubs. One of the big challenges for for for developers,
Speaker 1: particularly in in the coastal hubs, is there's such a
Speaker 1: high opportunity cost on their talent. Right if if you
Speaker 1: have a bad quarter as a startup or miss a
Speaker 1: couple of year milestones, half of your development staff is
Speaker 1: looking for another job because they recognize that, you know,
Speaker 1: unless they work for Google, Yeah and and so. But
Speaker 1: but but in Madison or in Detroit, like, you've got
Speaker 1: a stickier employee, and we're seeing that those folks end
Speaker 1: up staying around longer, being more productive. You know, they're
Speaker 1: able to get a backyard and start a family. I mean,
Speaker 1: I I saw a deck one time. We're a we.
Speaker 1: The question was asked, what about recruiting, How hard is
Speaker 1: it to recruit? And the the entrepreneurs showed a slide
Speaker 1: of a birthday party. He says, it's easy for me
Speaker 1: to recruit because I can promise this. I can't promise
Speaker 1: a backyard birthday party in San Francisco, New York. And
Speaker 1: and I have to point out and ask you about
Speaker 1: the board of advisors for um Rise of the Rest.
Speaker 1: This is just an astonishing list. Jim's Barksdale of of Netscape,
Speaker 1: Jeff Bezos, Tory Birch, Ray Dalio, Steve Case, John Dor.
Speaker 1: I'm just I'm gonna stop there. But that's just an
Speaker 1: unbelievable list of investors. It goes on and on and on.
Speaker 1: What's it like working with a group that August and esteem.
Speaker 1: We are beyond privilege that that that those those notable entrepreneurs, investors,
Speaker 1: business leaders, among the best of our era, have decided
Speaker 1: to join us on this mission. And you know, we
Speaker 1: think that the things that they saw in us, and
Speaker 1: and and sort of the implicit mission of what we
Speaker 1: were doing, of democratizing this flow of capital was really important.
Speaker 1: But we also think that they're they're you know, they're investors.
Speaker 1: These folks understand business and they understand that there's something
Speaker 1: going on in the heartland, there's something going on in
Speaker 1: the middle of America that you know, either their personal
Speaker 1: portfolio didn't necessarily have have a enough allocation, but also,
Speaker 1: you know, a lot of these folks are from you know,
Speaker 1: David Rubinstein, one of our LPs is from Baltimore. You know,
Speaker 1: Basis is from New Mexico. Their their hometowns are these
Speaker 1: cities that have been left behind a lot of times.
Speaker 1: And of course everybody wants to see their hometown flourish,
Speaker 1: and they want to see the return of jobs to
Speaker 1: to a lot of these places where where they they
Speaker 1: have they haven't seen the economic growth and vitality that
Speaker 1: that that we've seen a lot on the coasts. Fascinating.
Speaker 1: So let's talk a little bit about private markets and
Speaker 1: and venture investing. Why is it that when we look
Speaker 1: at private pre public companies, there's an expectation that the
Speaker 1: performance is going to be so much better than the
Speaker 1: public markets. You know, why shouldn't people just buy an
Speaker 1: index fund and forget about it? Is? Is how someone
Speaker 1: put it the question to me, So I'm gonna pass
Speaker 1: it to you. What are the potential upsides of a
Speaker 1: venture investment? Well, well, I I think you know. The
Speaker 1: first thing is the appetite and ability to allocate risk.
Speaker 1: Whereas because of regulation, because of just the the the
Speaker 1: cost and visibility of being public, it's harder for companies
Speaker 1: in the public markets to do that. But on the
Speaker 1: private side, we're able to see things before they're before
Speaker 1: they're ready for prime time, where they're still very risky
Speaker 1: and can completely flame out. Right. The risk of every
Speaker 1: round of investment that we do a revolution and the
Speaker 1: rise of the rest we we we run the risk
Speaker 1: of the company calling us up one day saying it
Speaker 1: didn't work. And you know, as as as as painful
Speaker 1: as that is, they're luckily for us, there's so many
Speaker 1: more calls that say, hey, it's working really well, or
Speaker 1: it's what we think. We've got eighty percent of it
Speaker 1: figured out, and and then the risk has been greatly reduced.
Speaker 1: But the opportunity is still huge to come up with,
Speaker 1: you know, the next social network. You know, it's it's
Speaker 1: really risky when it's a little a little face app
Speaker 1: for Harvard University students. It's a lot less risky when
Speaker 1: Facebook is going from the United States into the world world.
Speaker 1: And I think that that's that's where the public markets
Speaker 1: do really really well at assessing risk. I think the
Speaker 1: private markets do really really well at sort of evaluating
Speaker 1: and managing risk before the drug is cleared FDA approval.
Speaker 1: So let's let's talk about those numbers. And I'm not
Speaker 1: going to hold you to a specific number, but my
Speaker 1: general understanding of the way venture investing works is your
Speaker 1: expectation is that the vast majority of investments are going
Speaker 1: to be that phone call, hey it didn't work out.
Speaker 1: How many break even or better? And how many are
Speaker 1: just outsize giant winners. I mean, look, I think every
Speaker 1: every venture capitalist underwrites a little bit differently. Um, you know,
Speaker 1: we don't really talk about sort of how we think
Speaker 1: the the ebbs and flows of the market will will
Speaker 1: affect us. The goal obviously for us is to have
Speaker 1: as few, uh as few zero returners as possible, and
Speaker 1: we think one of the benefits of of our geographic
Speaker 1: focus outside of the coast actually benefits us be because
Speaker 1: again the dollar goes longer, and a little bit of
Speaker 1: this sort of Midwestern and southeastern and and and just
Speaker 1: the the ethos of the people is I'm not gonna
Speaker 1: let this fail. And and and you know, we typically
Speaker 1: find companies that are farther along in their revenue cycles.
Speaker 1: So they're there, there have been, They've been a lot
Speaker 1: more de risked than than the proverbial napkin on a
Speaker 1: in a Silicon Valley coffee shop. Right, And so we
Speaker 1: we we see that really interesting. We also think look
Speaker 1: on the upside and then the hockey stick side. We
Speaker 1: think that there's lots of opportunity outside of the traditional
Speaker 1: the judicial coast to see those those companies really accelerate
Speaker 1: and have this explosive growth because because of the flows
Speaker 1: of capital are so or so have been so flattened. Um.
Speaker 1: But I'm really you know, to answer your question, I
Speaker 1: think that there are a handful of companies that are
Speaker 1: are going to go go to zero. That's just the
Speaker 1: nature of the beast. Um. For for me, it's all
Speaker 1: about protecting the middle and the upside and making sure
Speaker 1: that those companies that have a ants are introduced to
Speaker 1: the right customers and partners and and and executives from
Speaker 1: recruiting so that they can actually skyrocket on onto some
Speaker 1: real successes. Are you finding the valuations are better away
Speaker 1: from the coasts and that the ability to um pick
Speaker 1: and choose your spots is a little easier than perhaps
Speaker 1: what people are dealing with in the Bay area. Yeah,
Speaker 1: I think so. I mean, I think we're seeing a
Speaker 1: lot of um less competitive valuations. I think there's still
Speaker 1: I think they're still froth in the market, and and
Speaker 1: and in every market. But we were we are finding,
Speaker 1: by and large, our buying prices are a lot better
Speaker 1: than than some of our our our value competitors and
Speaker 1: New York competitors are seeing in in the standard Series
Speaker 1: A or series seed round that we would invest in.
Speaker 1: And and since you brought up froth in the market, um,
Speaker 1: we've seen a number of unicorns over a billion dollars
Speaker 1: in the private market, although a few of them seem
Speaker 1: to have gotten their wings clipped uh recently. Um, how
Speaker 1: do you view this sort of cycle? How frothy is it?
Speaker 1: It doesn't feel to me like this is situation because
Speaker 1: so many of these companies seem to be either generating
Speaker 1: revenue or heaven forbid actually making profits. How do you
Speaker 1: look at that froth and the overall cycle. So I
Speaker 1: was literally cutting my teeth in during the first big,
Speaker 1: big sort of tech correction UM and then was working
Speaker 1: at Revolution during the big economic recession of oh eight
Speaker 1: oh nine. This, this, as you said, seems different to me.
Speaker 1: And I think it's because we're seeing these companies stay
Speaker 1: private longer and not rush for a public market exit.
Speaker 1: And I think that that that helps them figure it
Speaker 1: out right. Like you know, folks were financing on S
Speaker 1: one one threats and eight o nine and and that
Speaker 1: didn't play out very well for them. And I think
Speaker 1: you're seeing the companies take the time and and build
Speaker 1: the gale necessary to get it right when when the
Speaker 1: I p O actually ends up happening. Quite interesting. Let's
Speaker 1: let's talk a little bit about the sort of venture
Speaker 1: investing you guys do at UM Revolution. What sort of
Speaker 1: returns are you looking for on any specific funds or
Speaker 1: any specific investment. Yeah, you know, we're we're a traditional VC.
Speaker 1: You know, we want to put a dollar in the
Speaker 1: machine and get more than a dollar, hopefully hopefully a
Speaker 1: five or a ten coming back on out of the machine.
Speaker 1: But but but but to me, the goal is also
Speaker 1: about building these great iconic companies that are tackling some
Speaker 1: of the toughest problems that we as a society are
Speaker 1: facing around healthcare and education, transportation, food security, and things
Speaker 1: like that, because I think that those are those are
Speaker 1: gonna be big winners for investors over security, having great
Speaker 1: and and and open access to healthy, clean food options
Speaker 1: because we're you know, we're still trying to make sure
Speaker 1: that we have a healthy population, and and there are
Speaker 1: lots of businesses that are working really hard to get
Speaker 1: Farm to table is sort of the yeah, the rule
Speaker 1: of the day, but but just trying to figure out
Speaker 1: how do we make how do we do that at
Speaker 1: a sustainable, scalable level. Right farm to table in Brooklyn
Speaker 1: or or the city or even the suburbs are small
Speaker 1: restaurants and local farmers and it's very high end and
Speaker 1: very chicy. You're talking about a much broader approach, And
Speaker 1: I want to mention industries that you're looking to disrupt
Speaker 1: include food, healthcare, transportation, agriculture. These are like basic foundations
Speaker 1: of society. How can you disrupt those? Yeah, So the
Speaker 1: way that we think about that and and we largely
Speaker 1: see opportunity through the lens of geography, and that we
Speaker 1: think that, you know, the then if you're going to
Speaker 1: come out with the newest farm tech business, kind of
Speaker 1: hard to see how that's going to be a guy
Speaker 1: from midtown Manhattan coming up with that or a lady
Speaker 1: from Silicon Valley who's gonna be able to come come
Speaker 1: up with those ideas who's never spent time on the farm.
Speaker 1: And we think that there are, you know, lots of
Speaker 1: experts in places like Des Moines or St. Louis who
Speaker 1: know a bit about farming and agriculture. We think there
Speaker 1: are lots of manufacturing experts who who come out of
Speaker 1: places like like Detroit and and and an Arbor who
Speaker 1: can help us build things as a as a country.
Speaker 1: And so we we think that those types of opportunities
Speaker 1: are gonna come perhaps outside of the Valley and outside
Speaker 1: of New York. And let let me be clear, because
Speaker 1: it was one of the criticisms. We get it. Our
Speaker 1: fund a lot is about about bashing the valley, and
Speaker 1: and we are definitely not not bachelors of the valley.
Speaker 1: We appreciates looking valley. They are the cathedral that every
Speaker 1: other city aims to be as it relates to sort
Speaker 1: of allocating capital and assessing risk for for early stage entrepreneurs.
Speaker 1: And and I tell you know, a lot of the
Speaker 1: cities when we go and tour always ask us what's
Speaker 1: one thing that they do in the valley better than
Speaker 1: what we do, you know in pick a city. And
Speaker 1: the answers always they accept failure and they accept risk
Speaker 1: so differently then you know of the cities in the
Speaker 1: country because because it's it's it's just woven into the
Speaker 1: ethos of Silicon Valley. Things fail, but out of that,
Speaker 1: like like Phoenix's, you know, these great companies can emerge
Speaker 1: from entrepreneurs we've had massive failures, and so we go ahead.
Speaker 1: We just we love to to highlight you know, we're
Speaker 1: not We're not looking to steal share from New York
Speaker 1: or Boston to the valley. We're looking to grow the denominator.
Speaker 1: And say, you know, if of all venture capital went
Speaker 1: to three states last year, Massachusetts, New York, and California.
Speaker 1: One percent of venture capital goes to a place like Michigan,
Speaker 1: one percent goes to Georgia. There's a lot of smart
Speaker 1: people in those states. And if we can just not
Speaker 1: not move California from to lift Georgia from one to
Speaker 1: two percent, but just grow the denominator. So it really
Speaker 1: because the beauty of what we do is, you know,
Speaker 1: as an asset class venture largely creates jobs. Right when
Speaker 1: when we write a when I'm investing in a company,
Speaker 1: the first thing I always ask is what are you
Speaker 1: gonna do with the money, And almost always the first
Speaker 1: answer is We're gonna hire you know, It's not it's
Speaker 1: not we're going to close the factory to generate profitability,
Speaker 1: or we're gonna close the trade at a you know
Speaker 1: three A or a I R R. It's I'm gonna
Speaker 1: go hire fifteen developers and to community managers and and
Speaker 1: a CMO because we're trying to build something great. And
Speaker 1: that to me, you know that we all know in
Speaker 1: cities and politicians are well aware of things like the
Speaker 1: tech multiplier, where every technology job generates you know, five
Speaker 1: to six general economy jobs. So when they go out
Speaker 1: and hire five people, that's you know, another dentist that
Speaker 1: gets hired, or another restaurant that needs to open, or
Speaker 1: a coffee place that needs to open on the corner
Speaker 1: to help sort of accommodate all of that growth in
Speaker 1: some of these heartland areas that have been losing for
Speaker 1: the last couple of years. I love your take on
Speaker 1: on failure in Silicon Valley. My favorite thing on some
Speaker 1: of their VC Bay area websites is their list of
Speaker 1: here's yeah, we we said no to Ober, we said
Speaker 1: no to Apple, we said no to Amazon, like their
Speaker 1: list of failures, and it's a badge of honor. You're
Speaker 1: you're dead right on that. It's quite it's quite fascinating.
Speaker 1: So when you're putting together a portfolio of companies, when
Speaker 1: when I look at a portfolio of stocks, I want
Speaker 1: to see some US companies, some emerging market companies, some
Speaker 1: European and Asia, Japanese companies. How do you approach creating
Speaker 1: a portfolio? Do you think in terms of different sectors
Speaker 1: and a distribution of risk? Tell us about how you
Speaker 1: go about doing that. Yeah, so we were we're obviously
Speaker 1: a geographically diverse because that's part of part of our
Speaker 1: our mandate. But but in that we we we have
Speaker 1: lots of different industries, We have lots of different business models,
Speaker 1: and you know, some are like like we've talked about
Speaker 1: a little earlier, some are directed consumers, some are business
Speaker 1: to business and and you know, summer like will likely
Speaker 1: end up being pro cyclical, some will likely be countercyclical.
Speaker 1: And so I feel like as we you know, as
Speaker 1: we take a step up and look broadly at our portfolio,
Speaker 1: we do have a range of of of really interesting
Speaker 1: business models in in in targets of the economy that
Speaker 1: are different. You know, we've got some healthcare companies, We've
Speaker 1: got some retail or e commerce companies. We've got a
Speaker 1: handful of food opportunities that we're pursuing. And so uh,
Speaker 1: food different from agriculture or one and the same we
Speaker 1: we see food in agriculture is perfectly commingled. And we've
Speaker 1: got some some some longer plays and in the actech business.
Speaker 1: And we also have a couple of of of food
Speaker 1: brands that were also really excited about. I remember reading
Speaker 1: and it's a couple of years ago already. I think
Speaker 1: it was Wired magazine. You talk about ag tech, there
Speaker 1: are these big commercial like John Dear tractors, and people
Speaker 1: pretty much created a using an iPhone and a satellite
Speaker 1: receiver a way to self pro him these tractors to
Speaker 1: do a whole field with nobody sitting in the cab.
Speaker 1: Long before they were self driving cars and trucks. It
Speaker 1: seems that tractors were pretty much the first to do that.
Speaker 1: When you talk about ad tech, is that the sort
Speaker 1: of stuff you're referring to, or is it more specific
Speaker 1: um soil chemistry and material science and things along that
Speaker 1: or a little bit of everything. It's a little bit
Speaker 1: of everything. I'll give you an example. We're investors in
Speaker 1: a business called app Harvest. App Harvest is based in Pikeville, Kentucky.
Speaker 1: And what this business does, and it's so fascinating. The
Speaker 1: founder and entrepreneurs is just this really dynamic guy and
Speaker 1: he's found he's basically turning abandoned coal mines into hydroponic farms,
Speaker 1: hydroponic greenhouses, and he's hiring former coal workers to come
Speaker 1: work these new farms on on what used to be
Speaker 1: a coal mine. And so to me, that's that's the
Speaker 1: the essence of ingenuity, Like how do you take abandoned
Speaker 1: awful coal mines and tournament to really high, high quality
Speaker 1: produce that by by virtual Being in Pikeville, Kentucky is
Speaker 1: like less than a day from of the United States, Right,
Speaker 1: That's that's how you deliver a better, higher quality product
Speaker 1: to a greater degree of people than than while doing
Speaker 1: it in a way that lifts up a community that's
Speaker 1: been you know, by almost by definition sort of impacted
Speaker 1: by the change in one sort of the the economy.
Speaker 1: How do you respond when someone comes along and pitches
Speaker 1: you something like that. My immediate reaction is growing food
Speaker 1: in coal mines? That sounds horrible. How do you get
Speaker 1: by that initial wow, that's pretty wacky and out there,
Speaker 1: or have you trained yourself to sort of say, huh, well,
Speaker 1: that's interesting. The hardest thing about being a venture capitalist
Speaker 1: is to always avoid that initial gut reaction of that
Speaker 1: will never work, because you'll that will never work yourself
Speaker 1: to death less business and and and for me, the
Speaker 1: question always in that being well, how can that work?
Speaker 1: Imagine the possibilities and imagine how like, like, how can
Speaker 1: these ingredients be put together? You know, flour, sugar, eggs,
Speaker 1: milk independently would all taste gross, but you put them
Speaker 1: together and you come out as a cake. How can
Speaker 1: you assemble these ingredients to to be a cake as
Speaker 1: opposed to you know, a mudpie? Right? And I think
Speaker 1: that's that's one of the challenges we face every day
Speaker 1: is is because nothing's ever gonna work, and and we're
Speaker 1: we're looking at ideas and a power point deck, talking
Speaker 1: to founders with with hopefully some high degree of domain expertise,
Speaker 1: because it gives them the authority to talk about, you know,
Speaker 1: hydroponic farming and abandoned coal mines. But but but you've
Speaker 1: got to start looking through and saying, all right, well
Speaker 1: if if, if this guy is able to get you know,
Speaker 1: this technology, and and maybe find this scientist and maybe
Speaker 1: pull together this other expert, like he's got a very
Speaker 1: credible shot and making this all work. And I love
Speaker 1: doing this at at the Seed stay Age, right. And
Speaker 1: one of the other benefits of our job is we
Speaker 1: get to see this stuff before it's really ready for
Speaker 1: mass consumption. We typically like to invest post product market fit.
Speaker 1: But but but but before before sort of mass adoption
Speaker 1: and and so it's really interesting to see sort of
Speaker 1: the reaction of the first handful of consumers and and
Speaker 1: and and customers of some of these products. How do
Speaker 1: they react, how how how resonant is the product as
Speaker 1: as it's starting to hit the market. You know, the
Speaker 1: parallel in the public markets is simply when someone tells
Speaker 1: me an idea about a stock, and my immediate reaction is, oh,
Speaker 1: that's a dog. Probably means the worst of it is
Speaker 1: already priced, and I've taught myself to recognize that over
Speaker 1: the years. But you're talking about stuff that's so high
Speaker 1: concept and so interesting. I find that fascinating your responses.
Speaker 1: How can we make that work? We have been speaking
Speaker 1: with David Hall. He is a partner at Rise of
Speaker 1: the Rest seed Fund, part of Revolution Partners. If you
Speaker 1: enjoy this conversation, be sure and come back for the
Speaker 1: podcast extras, where we keep the digital tape rolling and
Speaker 1: continue to discuss all things venture capital. We love your comments,
Speaker 1: feedback and suggestions. You can write to us at m
Speaker 1: IB podcast at Bloomberg dot net. Follow me on Twitter
Speaker 1: at Rich Halts. You can check out my Deli column
Speaker 1: on Bloomberg dot com. I'm Barry Hults. You're listening to
Speaker 1: Masters and Business on Bloomberg Radio. Welcome to the podcast, David,
Speaker 1: Thank you so much for doing this. This is really
Speaker 1: fascinating stuff. I am endlessly in treged by the ideas
Speaker 1: um within the venture community, and you guys are actually
Speaker 1: disrupting the way traditional venture capital is done. It's amazing.
Speaker 1: At the vast majority of the states in America don't
Speaker 1: have a whole lot of venture investing, and I really,
Speaker 1: I really am fascinated by that. So I didn't mention
Speaker 1: Steve Case, who is the founder of a O L.
Speaker 1: Really this seems to be his brainchild. Is that a
Speaker 1: fair assessment? So? So, how did this come about? And
Speaker 1: how was this announced? Was it supposed to be a
Speaker 1: one off when Steve first um did this? Or give
Speaker 1: us a little little background on that. Yeah, So I
Speaker 1: think that the notion of the Rise of the Rest
Speaker 1: started as as just an interesting slogan for how how
Speaker 1: can we engage some of these communities and and find
Speaker 1: find great entrepreneurs, find great deal flow for our funds.
Speaker 1: But as we started to uncover what's going on in
Speaker 1: these communities, it grew to its own, It spawned its
Speaker 1: own sort of life and its own own being, and
Speaker 1: it was really interesting to become part of these communities.
Speaker 1: And what it ended up being for us was a
Speaker 1: great way to meet and have authentic relationships with the
Speaker 1: people on the ground and a lot of these cities
Speaker 1: that we're building the businesses and supporting the entrepreneurs. It's
Speaker 1: it's interesting, it's so great to meet the the entrepreneurs
Speaker 1: support organizations, the ecosystem building organizations like the accelerators and
Speaker 1: the incubators, which have really exploded over the last couple
Speaker 1: of years, and and and understand how they are supporting
Speaker 1: and having to do it differently and often very grassroots
Speaker 1: and a lot of these communities where it isn't sort
Speaker 1: of the thing that you do, and and and and
Speaker 1: having that that drive to keep going and saying, you
Speaker 1: know what we're gonna We're gonna bring our We had
Speaker 1: eight companies in our last accelerator class, We're gonna expand
Speaker 1: it to ten companies in this next cycle. Like that's
Speaker 1: really interesting. And so what we were doing and what
Speaker 1: Steve lad and you know, Steve's I've come to respect
Speaker 1: him more and more the longer I've worked with him.
Speaker 1: I've been working with him for over a decade now.
Speaker 1: And you know this is there a lot of people
Speaker 1: of Steve's caliber that spend their time doing lots of
Speaker 1: other things. Steve Steve invests in entrepreneurs. That's his passion
Speaker 1: and that's what he does. And and it's been great
Speaker 1: to learn from him on on having that be part
Speaker 1: of not only his legacy but his passion to invest
Speaker 1: in entrepreneurs and and traffic in these great ideas and
Speaker 1: great future. I mean, he's he's one of the most
Speaker 1: accomplished futurists I know about thinking about where the where
Speaker 1: the ball is going and trying to sort of marshal
Speaker 1: the resources to be there and in in revolution as.
Speaker 1: I think the symphony that he's been able to create
Speaker 1: by bringing the right people together to help execute on
Speaker 1: that that vision of of of really thinking about the
Speaker 1: future and thinking about how entrepreneurs can drive and be
Speaker 1: changing change agents in the future and again some of
Speaker 1: the bigger problems that we're going to be facing, which
Speaker 1: which is why I would guess that list of notables
Speaker 1: who were on the who are investors in and board
Speaker 1: members of Rise of the Rest, I'm not going to
Speaker 1: read the names. Go to their website and look at it.
Speaker 1: It's the most mind blowing list of investors I've ever
Speaker 1: seen associated with one organization in my entire life. It's
Speaker 1: it's astounding, and I don't even want to build up
Speaker 1: the hype too much. Just go go to the website
Speaker 1: and check it out Google Rise of the Rest funds
Speaker 1: um investors or advisors, and it's it's really astonishing. You
Speaker 1: mentioned um incubators and other types of accelerators. You know,
Speaker 1: we know about those in cities like Boston and New
Speaker 1: York and San Francisco, and there were a number of
Speaker 1: some of which one actually went public. There were a
Speaker 1: number of of incubators that had been around for a while.
Speaker 1: Where are you finding incubators outside of the coasts and
Speaker 1: are they private? Are they public? Are they private public
Speaker 1: joint ventures? Tell us a little bit about yes. Simply
Speaker 1: you find it takes different different types of organizations to
Speaker 1: help the war, the the the ecosystems, right. I mean,
Speaker 1: there are quite a few, and most, the majority, overwhelming majority,
Speaker 1: i'd say, are private enterprises that people are running and
Speaker 1: hopefully running for profit. Some include coworking, so that there's
Speaker 1: like a real business model there. Others are you say coworking, Um,
Speaker 1: I immediately think of we works, But that's not what
Speaker 1: you're necessarily referring. Very similarly, you you the entrepreneur rents
Speaker 1: desk space, and so that becomes the revenue model, the
Speaker 1: business model for the coworking space and helps to feed
Speaker 1: the incubator or accelerator. But but we we've seen dozens
Speaker 1: of models of how this can work and you know,
Speaker 1: and I think a lot of them are specific for
Speaker 1: the company, specific for the city of geography, but the
Speaker 1: goal is unlocking entrepreneurship. It's taking the man or woman
Speaker 1: who's working for one of the big companies in the
Speaker 1: city saying, you know what I can. I've been working
Speaker 1: at Procter and Gamble forever in Cincinnati, and I love
Speaker 1: what I do. But boy, I have a great e
Speaker 1: commerce opper community that'd love to go and start. And
Speaker 1: now there's a vehicle for them to extract themselves from
Speaker 1: that big corporation and like, go start a startup somewhere.
Speaker 1: So let's let's talk about some of the cities you've
Speaker 1: been to. You mentioned Detroit, Pittsburgh, Cincinnati, um, New Orleans.
Speaker 1: What other cities have have you guys invested in and
Speaker 1: how do they vary um from location location geography to geography. Yeah,
Speaker 1: so we've you know, we've been You've named a few
Speaker 1: of the cities, but cities from as small as a
Speaker 1: couple hundred thousand people to as large as you know,
Speaker 1: three or four million people. We are most recent seventh
Speaker 1: Rise of the rest tour three or four million. That's
Speaker 1: like Chicago. Is that what we're talking about. You know,
Speaker 1: we we went to Dallas, Chattanooga, Birmingham, Memphis, and Louisville,
Speaker 1: Kentucky on our last tour. That's a great cross section
Speaker 1: of the types of cities that we go to. Some big,
Speaker 1: you know, big major cities that that everybody has heard of.
Speaker 1: Others all these cities are people cities people have heard of,
Speaker 1: but but others less well known for being tech hubs.
Speaker 1: Like I don't think of Chattanooga as a tech hub,
Speaker 1: and you'd be surprised to find out that Chattanooga has
Speaker 1: such a strong logistics tech industry that well, I think
Speaker 1: it's there the proximity of Chattanooga to both obviously Atlanta,
Speaker 1: which is a huge because you have, um who, you
Speaker 1: have a couple of airlines there, a couple of transportation companies,
Speaker 1: but then you go up to Chattanooga and it's it's close,
Speaker 1: it's it's it's close to lots of that transportation tech hub,
Speaker 1: but also a lot of freight travels through Atlanta through Chattanooga.
Speaker 1: And even the winner of our Rise of the Rest
Speaker 1: tour in in Chattanooga this year. It was a company
Speaker 1: called Freight Waves that is waves, not freight wave freight
Speaker 1: WA waves yea. And what that company is doing is
Speaker 1: building the technology platform to help shippers properly assess and
Speaker 1: and and and UH book freight. So it's a data
Speaker 1: platform that helps them determine the freight cost because of
Speaker 1: all sorts of things like fuel and temperature and load
Speaker 1: it's being being transported between any two end points. Hard
Speaker 1: industry that was basically done analog up until these guys
Speaker 1: have come along and help them, help them digitize this
Speaker 1: and create a fulsome platform for for the transmission of freight.
Speaker 1: That that's quite fascinating. What what cities have surprised you?
Speaker 1: That seems like an interesting surprise. What else has really
Speaker 1: surprised you, either in their focus or any other way. Yeah,
Speaker 1: so I'd say one of the big surprises to me
Speaker 1: was Indianapolis. Um, Indianapolis is obviously a great city, has
Speaker 1: storied American city. And what one of the things and
Speaker 1: one of the big highlights is there was a business
Speaker 1: they're called Exact Target that sold a salesforce for multiple
Speaker 1: billions of dollars. The founders of Exact Target after they
Speaker 1: sort of spun out of the salesforce, UH world, double down,
Speaker 1: triple down in Indianapolis and and created an ecosystem. They're
Speaker 1: focused on B two B business to business softwares of
Speaker 1: services companies, and so they've really like anchored themselves around
Speaker 1: this notion of B two B sas is going to
Speaker 1: be what Indianapolis is known for, at least from a
Speaker 1: technology a startup perspective, and it's become a hub. They've got, uh,
Speaker 1: the founders that have created a company called the High
Speaker 1: Alpha Studio. They've got a fund there they invest in
Speaker 1: and handfuls of companies that are coming out of Indianapolis
Speaker 1: and who would have thought right, And it was so
Speaker 1: it was such a sort of great ecosystem that Salesforce,
Speaker 1: after their acquisition of this company, Exact Target, moved it's
Speaker 1: HQ two to Indianapolis and now has one of the
Speaker 1: largest buildings UH in the city of Indianapolis is by
Speaker 1: Sales is owned and operated by Salesforce and has a
Speaker 1: couple of thousand employees in Indianapolis. And so it's it's
Speaker 1: amazing to see how that city has kind of really,
Speaker 1: you know, really exploded in growth around a couple of
Speaker 1: founders who said, we're gonna double down in our in
Speaker 1: our hometown. That's what give me one more city. That
Speaker 1: kind of was like, wow, I didn't expect to see
Speaker 1: that an overwhelming set at voices or you know, well,
Speaker 1: I'm trying to come up with a really good, good
Speaker 1: example for you. I mean, I'll go back to to
Speaker 1: to Chattanooga. I was really surprised. I mean, they you know,
Speaker 1: they're they're a handful of just really great companies. There's
Speaker 1: a company we were not investors in, but but it's
Speaker 1: it's a logistics and a moving company called Bellhops based
Speaker 1: in Chattanooga. That's a really strong company. And seeing how
Speaker 1: a city that that's not the largest city by by
Speaker 1: any stretch of the word, has really focused on building
Speaker 1: this really dense community. We have this this this phrase
Speaker 1: that we use a lot called network density, which you
Speaker 1: know network density, network density, which means how how can
Speaker 1: you how can you create this this tight network of
Speaker 1: people of entrepreneurs of of of of uh fans of entrepreneurship,
Speaker 1: bring them together and have your little city play a
Speaker 1: lot bigger or at least have the startup part of
Speaker 1: your little city play a lot bigger, right, And what
Speaker 1: they've been able to do and by bringing you know,
Speaker 1: fun and startup accelerators in the Chattanooga area. Together, they've
Speaker 1: created this strong network where everybody knows each other and
Speaker 1: all the entrepreneurs are are are talking about, you know,
Speaker 1: best practice, sharing and and recruiting new people. When new
Speaker 1: people come in, they meet a handful of the executives
Speaker 1: at other companies that say, you know, come move from
Speaker 1: Chicago to Chattanooga. We'll we'll show you around, We'll we'll
Speaker 1: take you out on the on a on a boat,
Speaker 1: and you know, really wine and dine you as a
Speaker 1: community to say that you're joining our community, not necessarily
Speaker 1: just joining this company. Interesting you mentioned Chicago. Have you
Speaker 1: spent any time in the West Loop that that's a
Speaker 1: little bit of a tech hub that seems to be exploding.
Speaker 1: We're really excited to have one of my one of
Speaker 1: my UH portfolio companies that we invested in earlier this
Speaker 1: year is a Chicago based company called Foxtrot that's on
Speaker 1: a trend that I love on the future of retail.
Speaker 1: Foxtrot is reimagining the convenience store. We we all know
Speaker 1: lots of convenience stores and and and obviously we're sitting
Speaker 1: in New York City where where the corner bodega is people.
Speaker 1: People love their their corner bodegas, but in a lot
Speaker 1: of America there there isn't that that sort of deep
Speaker 1: passion around around your convenience store. Foxtrot does half of
Speaker 1: its business through mobile app orders that get delivered to
Speaker 1: your door in and you know, in less than an hour.
Speaker 1: And it's a great business, perfect for launching in a
Speaker 1: city like Chicago. And and we're really excited about that
Speaker 1: opportunity because we think that you know, there hasn't been
Speaker 1: a lot of disruption in the convenience store market and
Speaker 1: over a generation. And being able to have really cool
Speaker 1: products ordering ordered at the tap of a phone, but
Speaker 1: also be be your corner store that you walk past
Speaker 1: and get a bagel and a coffee on your way
Speaker 1: to work in the morning. Is is actually pretty cool
Speaker 1: that that's interesting? So I wanted to I was gonna
Speaker 1: ask you how you source companies, But I'm going to
Speaker 1: change that question a little bit. When you announce, hey,
Speaker 1: here's our new tour and we'll go into these five cities,
Speaker 1: does that open a floodgate of inquiries or are you
Speaker 1: still flipping over rocks to find where the next great
Speaker 1: entrepreneur is? When we go to a city and we
Speaker 1: announced that we're gonna come to the city, we we
Speaker 1: get scores of applications to participate. Even in our pitch competition,
Speaker 1: we're able to put those companies in our database and
Speaker 1: start to track them. Um. We we we really have,
Speaker 1: I think, have taken a more data driven approach to
Speaker 1: looking at and lots of different companies across the country
Speaker 1: because it's the only way that we're gonna be able
Speaker 1: to do it with a relatively small team at scale,
Speaker 1: and and we also rely heavily on our network partners.
Speaker 1: So when we go to these cities, we meet the
Speaker 1: local vcs and the regional vcs and we asked them, hey,
Speaker 1: you know, are there what are the two or three
Speaker 1: companies that you guys are most excited about in Raleigh, Durham.
Speaker 1: And they're happy to tell us the two or three
Speaker 1: companies that they're most excited And you do that to
Speaker 1: two or three local funds and you've got to you know,
Speaker 1: a dozen companies at the end of the day that
Speaker 1: that are you know, ones that that tend to bubble
Speaker 1: above the some of the rest. But but it's also
Speaker 1: a temporal thing, right you come back six months later
Speaker 1: and it's a new batch of companies. So we we
Speaker 1: we love to maintain these really authentic relationships with with
Speaker 1: the partners and investors in the community, and then that
Speaker 1: helps introduce us to the entrepreneurs that are really making
Speaker 1: a difference. Huh, what what about competition? You mentioned other
Speaker 1: vcas and areas. Are you at all concerned that you're
Speaker 1: going to start running into competition in some of these
Speaker 1: places or is it still a sort of cooperative, friendly
Speaker 1: um group of other players in the same space who
Speaker 1: might be co investors in the same companies. Yeah, I
Speaker 1: I see them more as as collaborators and competition. We
Speaker 1: we we need people were We're not going to write
Speaker 1: a full investment round. If a company is doing a
Speaker 1: five million dollar series seed round, we're not going to
Speaker 1: do that entire round. So if we do some of it,
Speaker 1: we're gonna need other people to help participate. And it's
Speaker 1: always helpful to have you know, local eyes and ears
Speaker 1: on the ground who know the company, or know the founder,
Speaker 1: or know the have domain expertise in in the business
Speaker 1: and so being able to bring all of those folks
Speaker 1: into the round is one of the reasons why we're
Speaker 1: doing this we were able to be massive connectors of
Speaker 1: of You know, if you might be a healthcare expert
Speaker 1: fund based in Nashville and if we found a healthcare
Speaker 1: deal in in St. Louis, we'd love to bring you
Speaker 1: guys into that deal because it just only helps make
Speaker 1: that deal, helps de risk the deal to our limited
Speaker 1: partners in our and our fund, but also helps potentially
Speaker 1: expand that the access for that company. So it's not
Speaker 1: just network density, but then it's the network effect cross
Speaker 1: pollinating from city to city. You got it quite interesting. Um,
Speaker 1: do you have a target for number of investments you're
Speaker 1: gonna make each year or is it really you just
Speaker 1: kind of take it as it comes. Yeah, I think
Speaker 1: we'll do about a hundred hundred fifty investments out of
Speaker 1: this fund over the next couple of years. But we're
Speaker 1: we don't have a specific target. We we again are
Speaker 1: being super opportunistic about about finding great companies in in
Speaker 1: in in these regions. And you mentioned this fund. My
Speaker 1: assumption is this is set up as a traditional VCG
Speaker 1: general partners and limited partner. There's any thoughts on is
Speaker 1: there going to be a rise of the rest to
Speaker 1: rise the rest? Three you're gonna stack that down down
Speaker 1: the years. What happens when you basically say, okay, we're
Speaker 1: filled up. You know, I'm focused on deploying the hundred
Speaker 1: and fifty million that our limited partners have invested in
Speaker 1: and in us in this fund and and and hope
Speaker 1: to really make a difference and obviously create a lot
Speaker 1: of value and and and and in the fund that
Speaker 1: we're in. You know, who knows what the future is
Speaker 1: gonna hold, But we're super excited about about the limited
Speaker 1: partners trusting us in the capital that we're deploying into
Speaker 1: what I think are a fantastic array of companies that
Speaker 1: that showcase the best of of what's going on in
Speaker 1: you know, at least forty seven of the fifty states,
Speaker 1: although we do have investments in California and in in
Speaker 1: uh in in New York, but but not necessarily in
Speaker 1: Silicon Valley or City. And you know, I've danced around
Speaker 1: this question, and you you came close to answering it,
Speaker 1: but I haven't asked it, So let me just blurt
Speaker 1: it out. Um. I have to imagine there are a
Speaker 1: lot of misconceptions about venture investing in general. You reference
Speaker 1: the misconception about your relationship with Silicon Valley, But just
Speaker 1: speaking broadly, what do you think is is some of
Speaker 1: the biggest misconceptions about how venture capitalists operate what they
Speaker 1: invest in, just generally speaking, So I think from the
Speaker 1: from the capital deployment side, the biggest misconception is that
Speaker 1: it's easy. Is that you just you sit around listening
Speaker 1: to a couple of pitches and whenever something rang out,
Speaker 1: you're right a check. And I mean, and you know,
Speaker 1: we we apply science, we apply data to to to
Speaker 1: our decision making, and you know, and and we we
Speaker 1: do a lot of work. I mean, we're it's not
Speaker 1: just come in for a pitch and come out thirty
Speaker 1: minutes later with with the check, right, I mean the
Speaker 1: closest we get to that or in our pitch competitions.
Speaker 1: But but but for our our our our normal investments,
Speaker 1: we're doing due diligence and we're asking big questions about
Speaker 1: the market opportunity and about the founder's domain expertise, and
Speaker 1: about all sorts of ebbs and flows of the real
Speaker 1: market opportunity in the business model. I think from the
Speaker 1: capital receiving perspective, I think the biggest misconception is that
Speaker 1: a lot of entrepreneurs have great companies, but they're not
Speaker 1: necessarily venture backable. And I think that there's this this
Speaker 1: misconception that that venture is is the the financing source
Speaker 1: of of of kings. And and you know, I was
Speaker 1: tell whenever I start having conversations and talk to particularly
Speaker 1: large audiences of of entrepreneurs, I say, the first best
Speaker 1: source of financing is revenue. Right, revenue doesn't take any
Speaker 1: of your company, you don't have to pay any of
Speaker 1: it back. And if you can scale your company through revenue,
Speaker 1: that's best. But a lot of a lot of folks
Speaker 1: have really good businesses that just aren't necessarily venture capital
Speaker 1: are VC backable businesses because they're either not growing at
Speaker 1: a scale or have a broaden off large enough market opportunity.
Speaker 1: I mean, typically venture capitalists are looking for billion dollar,
Speaker 1: billion dollar businesses and and we have a specific model
Speaker 1: to help help help de find what that means. And
Speaker 1: you look at companies like Uber, it's totally reimagining the
Speaker 1: taxi dispatch industry. Period. That's a billion that's it's easy
Speaker 1: to see the global unstoppable. But there are there are
Speaker 1: lots of there's lots of really good, really small, really
Speaker 1: great small businesses where the proprietors are going to be millionaires,
Speaker 1: but those aren't necessarily always great venture backable businesses makes
Speaker 1: a lot of sense. The one question I before I
Speaker 1: get to my favorite questions, the one question that has
Speaker 1: been um annoying at me has been this, what cities
Speaker 1: have you not gotten to that you're looking forward to
Speaker 1: going and doing a rise of the Rest tour through. So,
Speaker 1: like I said, we've been the thirty eight cities. You
Speaker 1: can do the math and know that there are lots
Speaker 1: of cities that we haven't been to. You know, we
Speaker 1: we we are in the process of thinking through and
Speaker 1: and plotting out our our next tour. But we I'll
Speaker 1: leave as a nugget and we'll we'll make sure that
Speaker 1: very you're on the list of people that we tell
Speaker 1: when we we decide where we're headed the bus to next.
Speaker 1: But it's it's you know, we we look to find
Speaker 1: cities where there's been some some entrepreneurial some startup activity,
Speaker 1: where there's been a few successes and their their their
Speaker 1: companies to point to where there's a willingness by all
Speaker 1: of the stakeholders, from the local university to the politicians
Speaker 1: who are leaning in on saying, yeah, we we support startups.
Speaker 1: We we want that type of ecosystem to be in
Speaker 1: our town, and we want to try to have those
Speaker 1: those cities flare up on our map and get in
Speaker 1: front of us. And we have we've got to we've
Speaker 1: perfected the way of getting it done now and and
Speaker 1: we'll we'll we'll let you be among the first to
Speaker 1: know where we're headed ups. I'm looking forward to it,
Speaker 1: all right. So let's jump to some of my favorite
Speaker 1: questions we ask all of our guests. Tell us the
Speaker 1: most important thing people don't know about your background. So
Speaker 1: that's a pretty easy one for me, and and it's
Speaker 1: it always surprises you want. I want to see the
Speaker 1: look on your face. I'm sorry you guys can't see
Speaker 1: it who are listening, But I am a former competitive swimmer.
Speaker 1: I was going to say that, you know, I was
Speaker 1: going to guess, yeah, hard, hard, hard for those of
Speaker 1: you guys listening. I am six ft tall, two d
Speaker 1: and fifty something. He's a solid. I thought you're gonna
Speaker 1: tell me you were like a middle linebacker, not competitive swimmer.
Speaker 1: What you swim? I I swim. Uh started at age
Speaker 1: six and swam through college, actually through first couple of
Speaker 1: years of college, but I did a lot of medley
Speaker 1: and sprint freestyle because I just obviously I'm not gonna
Speaker 1: do distance. I definitely don't have a body for distance
Speaker 1: um recreationally, and you know, I have to take the
Speaker 1: kids out. But for me it was such an important
Speaker 1: thing because number one, it's it's the perfect both individual
Speaker 1: and team sport. And so he really teaches you how
Speaker 1: to how to be a member of the team, but
Speaker 1: also how to really focus. And then the second thing
Speaker 1: for me that it really taught was how to It
Speaker 1: showed the direct link between preparation and execution. Right, you
Speaker 1: go to practice, you work hard, and practice, your times
Speaker 1: get lower, you win, and and and this the side
Speaker 1: benefit was it also taught me to deal a little
Speaker 1: bit with with defeat and losing, because it's just it's
Speaker 1: important for six and seven and twelve year old to
Speaker 1: learn that also important for forty somethings to learn. That.
Speaker 1: Tell us about some of your early mentors who affected
Speaker 1: the way you look at the world of investment. So
Speaker 1: the first, obviously, and I'm sure this is something you
Speaker 1: hear a lot, is it was my dad. I mean,
Speaker 1: he's a dentist, just retired dentist, but an entrepreneur, a
Speaker 1: small business owner. And my first job was working in
Speaker 1: this office and seeing seeing how it's it's a daily
Speaker 1: seven opportunity, thinking about you know, the practice and the
Speaker 1: building and the employees that you've got working for you,
Speaker 1: but also seeing the benefits that come from working really hard.
Speaker 1: And so he you know, we we we working and
Speaker 1: work was always important in stress to our in our
Speaker 1: in our home, and and being thoughtful and being really
Speaker 1: good to to the people that worked for you was
Speaker 1: also a really important character uh uh. Character building that
Speaker 1: that I saw through my dad every day. UM My
Speaker 1: uncle Eugene Flood is a was was was working on
Speaker 1: Wall Street. Kind of opened my eyes. I worked for
Speaker 1: several years after college at Morgan Stanley. UM huge mentor
Speaker 1: to bring me, take a little southern boy from Louisiana
Speaker 1: and expose them to sort of the the machinations of
Speaker 1: Wall Street. Was really a big eye opener and career
Speaker 1: changer for me. So let's talk about venture investors who
Speaker 1: affected the way you approach um deploying capital as a
Speaker 1: as a venture capitalist. So this is gonna sound a
Speaker 1: little contrarian, but um, the again, having worked at the
Speaker 1: Washington Post company under Don Graham and the Graham family,
Speaker 1: who were heavily influenced by Buffett. You know, it was
Speaker 1: a board member and a shareholder for a very long time. Yeah,
Speaker 1: and and but the essence of that for gilosophy is
Speaker 1: kind of invest in what you know and and and don't.
Speaker 1: Don't don't try to to to force fit an idea
Speaker 1: or a company in a certain in a certain milieu
Speaker 1: where where it's gonna it's gonna it's gonna go where
Speaker 1: the company needs to go. And and and and I
Speaker 1: really appreciate particularly the notion that that you know, if
Speaker 1: if if you don't understand it, you can't invest in it.
Speaker 1: And so you've got to be smart about figuring out,
Speaker 1: like what what makes sense? How do you follow the
Speaker 1: money from the customer's wallet to the cash register? And
Speaker 1: if it takes too many hops and starts to get
Speaker 1: a little blood blurry, then that's it's hard for me
Speaker 1: to want to back that type of company. Everybody's favorite question.
Speaker 1: Tell us about some of your favorite books, be the fiction, nonfiction,
Speaker 1: venture investing, or otherwise. So the book that I really
Speaker 1: like and have gone back to, it's a little tiny,
Speaker 1: thin book, but it's called The Inner Game of Tennis,
Speaker 1: and it's by a guy by by the name of
Speaker 1: Timothy Galway and basically talks about how do you how
Speaker 1: do you maintain high levels of performance while still being
Speaker 1: relaxed and and sort of allow your your inner game
Speaker 1: the game that you know, not the game that you
Speaker 1: necessarily practice for, but what happens when you're on the
Speaker 1: court playing how do you how do you perfect that
Speaker 1: game as opposed to the very mechanical of throw the
Speaker 1: ball up, hit the serve and and make sure the
Speaker 1: ball goes in to like you're playing against an opponent,
Speaker 1: how do you make that? How do you allow yourself
Speaker 1: to relax and and practice that? And it's it's so
Speaker 1: the implications of the book will beyond the tennis court
Speaker 1: have been huge for me from from a business perspective one.
Speaker 1: How do you maintain intensity while still being relaxed and
Speaker 1: thoughtful about about how you can approach the game from
Speaker 1: a different angle that that's fascinating. Any of the books
Speaker 1: you want to mention um I just finished reading recently
Speaker 1: a book called Disintegration by Eugene Robinson who at the
Speaker 1: Washington Post. It's a fascinating take for me on on
Speaker 1: the subsegmentation of Black America. Basically, African Americans for for
Speaker 1: so long have been considered by politicians, by by marketers
Speaker 1: to be relatively monolithic but uniform block. They're all going
Speaker 1: to vote this way, they're all going to do, They're
Speaker 1: gonna buy this kind of product. But but in reality,
Speaker 1: Robinson points out that there are four different types of
Speaker 1: real subgroups. The elite, so the Obama's and the Oprah's
Speaker 1: of the world. The middle class, which is the broad
Speaker 1: sort of group of us that are African American and
Speaker 1: college educated and who are who are working and living
Speaker 1: parts of the American dream. But then the two that
Speaker 1: are really interesting to me were the emergent class. So
Speaker 1: this is the group of folks that are are biracial
Speaker 1: or biracial with with African American being part of that
Speaker 1: that that composition, but also the African diasporan immigrants who
Speaker 1: are first, second, third generation immigrants who have a totally
Speaker 1: different view of themselves because some of them aren't necessarily
Speaker 1: African Americans, they might be Nigerian Americans. But but but
Speaker 1: the the notion that that they see the world and
Speaker 1: they they act and and interact with the world differently.
Speaker 1: And then the final group was the what he calls
Speaker 1: the abandoned, which are the folks that just have really
Speaker 1: been left behind and are are the folks that that
Speaker 1: we hear about and read about frequently in the news.
Speaker 1: And it just understanding that that that that black America
Speaker 1: is is really sub segmented into these different groups that
Speaker 1: have you know, obvious similarities but but some pretty stark
Speaker 1: differences was a really fascinating reason. Some of the data
Speaker 1: on that fourth group is really very discouraging in terms
Speaker 1: of employment gains, wage gains. It's just the numbers have
Speaker 1: been pretty, uh, pretty intimidating. I'm going to definitely take
Speaker 1: a look at that book. I have to ask you
Speaker 1: if you play tennis um and and if the book
Speaker 1: was at all helpful, it you know, my results not
Speaker 1: necessarily worthstanding, But to me, yeah, it was absolutely That's
Speaker 1: that's it's it's one of my passions. I you know,
Speaker 1: I try to get out as frequently as I can.
Speaker 1: I just registered for a new flex league, so I'm
Speaker 1: excited to get out on the court and and and
Speaker 1: work out some of the cobwebs. But yeah, the the
Speaker 1: ability to to relax on the court and focus not
Speaker 1: focus on the mechanics of getting in the right position,
Speaker 1: but just play and breathe and and and then control
Speaker 1: that that you can't that you can't that you can control,
Speaker 1: right like, so you can control how many times you
Speaker 1: bounced the ball, and you and and it really teaches
Speaker 1: you to focus on the things that you can control,
Speaker 1: because there's so much that you can't control. So in
Speaker 1: that moment, focus on breathing and focus on where you
Speaker 1: want to hit the ball as opposed to the exact
Speaker 1: mechanics of how you're gonna stand and how you're gonna
Speaker 1: position your racket and your feet to hit the ball.
Speaker 1: So it's a it's a great reads. The book is
Speaker 1: was published in the seventies and has been used. I mean,
Speaker 1: like folks like Billy jing King swear by it, and
Speaker 1: it's The author has now written several other books about like,
Speaker 1: you know, the inner game of golf and the inner
Speaker 1: game of business and things like that. But but for me,
Speaker 1: the application as somebody who loves tennis and loves playing
Speaker 1: tennis into business this into my personal life has been
Speaker 1: a really helpful. Guy. That's fascinating. I am late to
Speaker 1: the game of tennis. I only started playing with in
Speaker 1: the past few years. Um and my one of my
Speaker 1: biggest issues. I do these drills on Monday nights and
Speaker 1: most of the I shouldn't say most, about two thirds
Speaker 1: of the it's men's drills. Two thirds of the guys
Speaker 1: are considerably younger than me. And then there's a group
Speaker 1: of guys in their fifties and sixties, most of whom
Speaker 1: are are either good or very good. And the problem
Speaker 1: with playing with the young studs are that they want
Speaker 1: to crush the ball. It's baseball. And as much as
Speaker 1: I laugh at them, it's like unforecedra unforced era. When
Speaker 1: you're playing with big hitters, you can help. The crowd
Speaker 1: sucks you along and suddenly I'm trying to smash the
Speaker 1: ball and it's a constant effort. I love that idea
Speaker 1: of relaxed intensity, don't try and kill the ball, play
Speaker 1: within yourself. And but you you mentioned that, and I
Speaker 1: immediately went to that, I'm going to crush this ball
Speaker 1: Roger Federer style. But you're not retro Federer. You don't
Speaker 1: have that swing. Just get get the ball across the
Speaker 1: net the place that you wanted to go. If you
Speaker 1: can hit the ball where you want it to go,
Speaker 1: you will nine times out of ten win the point. Right,
Speaker 1: And if you if you can focus on just that,
Speaker 1: hitting the ball where you want it to go. Well,
Speaker 1: before I learned the proper mechanics, I could literally put
Speaker 1: the ball anywhere on the court, not with power and
Speaker 1: not with speed, but I I could kiss any line
Speaker 1: I wanted to. Once I learned the proper way to
Speaker 1: stroke a ball, that skill set took a step back
Speaker 1: as you start learning the mechanics and becoming more comfortable
Speaker 1: with it. But um, it's like Mike Tyson says, though
Speaker 1: all of that preparation goes out when you get hit
Speaker 1: in the fits exactly That's exactly right. And and that
Speaker 1: testosterone poisoning, that competitive spirit. These are drills. It doesn't
Speaker 1: there's no winning and losing. Who cares? You get sucked
Speaker 1: right into it. It's the most amazing it of of
Speaker 1: crowd psychology. Yeah, it's I'm gonna look into that book
Speaker 1: because it's definitely uh appealing. And and and once again
Speaker 1: we digress about tennis instead of talking about what we
Speaker 1: should be talking about. Um, so let's talk about the
Speaker 1: venture capital industry. What's changed since you've joined the industry,
Speaker 1: and is this for the better or the worst? Yeah,
Speaker 1: I'd say the biggest thing has just been the the
Speaker 1: influx of data into the industry. You know. It's it's
Speaker 1: funny we we require and and suggest and advise our
Speaker 1: companies to leverage data and your decision making. And I
Speaker 1: think for the for the first time now we've got
Speaker 1: huge sets of big data that help us understand and
Speaker 1: rank and and and target entrepreneurs. And so it's it's
Speaker 1: important for us to to leverage this data because it
Speaker 1: helps us. It helps us make better decisions and helps
Speaker 1: us be more algorithmic about our decision making. But it
Speaker 1: also really helps us recognize that we can bring in
Speaker 1: more entrepreneurs of color and women entrepreneurs into the fold
Speaker 1: because we're not necessarily relying on just network pattern matching
Speaker 1: from from guys who went to Harvard or guys who
Speaker 1: went to Stanford who all look alike. And so it's
Speaker 1: it's I'm happy that that that's the case because it's
Speaker 1: making the table bigger and adding allowing us to add
Speaker 1: more seats to the table of of entrepreneurs and broaden
Speaker 1: that scope of entrepreneurs. Particularly for as we were talking
Speaker 1: about earlier some of the people who who have been
Speaker 1: left behind. Even further so, when we look at um
Speaker 1: the sort of demographics of of who venture investing is
Speaker 1: giving money to. Specifically, do you think Revolution is more diverse,
Speaker 1: more gender friendly, more people of color friendly than the
Speaker 1: typical let's call it Stanford based or Stanford located vcs.
Speaker 1: I don't know what what other other vcs UH entrepreneurs
Speaker 1: look like. I'm very proud. Data is not broadly shared,
Speaker 1: to say the least, but I'm very proud that that
Speaker 1: we we've got quite a few entrepreneurs of color, women
Speaker 1: entrepreneurs um in in our portfolio, and and they've performed
Speaker 1: thus far really well. We we One of our exits
Speaker 1: was by an African American female entrepreneur who had this
Speaker 1: business part Pick that was sold to Amazon and part
Speaker 1: part Pick. It's it's it's like Shazam for visual search.
Speaker 1: So take a picture of something and it will run
Speaker 1: its algorithm and say this is most likely a screw
Speaker 1: and you can you know, and and Amazon acquired the
Speaker 1: business a couple of years ago, and you know, and
Speaker 1: so when I use the Amazon app and say I
Speaker 1: want to see this, well, you can take a photo
Speaker 1: of something. There are parts of the Amazon app. I
Speaker 1: don't know exactly how how it's been filtered into the
Speaker 1: Amazon application and basically algorithm, but yeah, that basic concept
Speaker 1: is part of that part of that part of the
Speaker 1: Amazon DNA now and you know, and I'm just very
Speaker 1: proud of that. I'm very proud that we you know,
Speaker 1: we we look at a broader we have a broader
Speaker 1: aperture for for who is an entrepreneur and and and
Speaker 1: what types of investments were willing to make. Tell us
Speaker 1: what else you're really excited about these days? Oh, my
Speaker 1: tea is a little bit earlier, But I'm really excited
Speaker 1: about thinking about the future of retail. You know, we
Speaker 1: every every e commerce is eating the world, yet eighty
Speaker 1: five or some of the things that we buy are
Speaker 1: still things that you buy sort of in person. And
Speaker 1: we were investors and I mentioned this company, Foxtrot, which
Speaker 1: is redoing the convenience store. We're also investors in a
Speaker 1: in a company called Neighborhood Goods. It's a Dallas based
Speaker 1: company that's looking to sort of reinvigorate the department store model.
Speaker 1: You walk into a department store today, you see more
Speaker 1: employees than you do customers walking around. And that's because
Speaker 1: it's it's become so transactional. Uh, you want a white shirt,
Speaker 1: you go to the department store, you buy a white shirt.
Speaker 1: But if you wanted to go and see what's there,
Speaker 1: you don't naturally think to go walk through a department
Speaker 1: store and and sort of browse and be, be and
Speaker 1: and have have an experience. And and what what Neighborhood
Speaker 1: Goods is looking to do is is sort of bring
Speaker 1: back some of that experience. It's almost really a throwback
Speaker 1: to the way that the department stores used to be
Speaker 1: where you'd get you know, you can go and brows
Speaker 1: and look at at something that's seasonally appropriate, but also
Speaker 1: have a bite to eat at the lunch counter, and
Speaker 1: you know, you have a broader array of things to buy.
Speaker 1: And and so these guys are curating lots of digitally
Speaker 1: native brands that are looking for retail points of presence
Speaker 1: because it's become obvious with businesses like Warby Parker, like
Speaker 1: having stores actually matters because people want to touch and
Speaker 1: feel and experience your product. But then there are other
Speaker 1: larger and more mainstream brands that are looking for new
Speaker 1: ways to activate and and show off their products to
Speaker 1: their their existing consumers as well as new consumers. And
Speaker 1: then you see lots of like um makers, local folks,
Speaker 1: local craftsmen that have cool products that they want to share.
Speaker 1: They don't have a big showcase arena to do that.
Speaker 1: And then obviously wrap that all around with food and
Speaker 1: community music, art, and it's a really cool installation in
Speaker 1: in sort of how how we think, or at least
Speaker 1: the company thinks consumers want to shop in the next
Speaker 1: next generation. Tell us about a time you failed and
Speaker 1: what you learned from the experience. So I was a
Speaker 1: banker and and you know there there there are no
Speaker 1: no limit to the failure stories there. But one particular
Speaker 1: moment where I I I consistently said yeah, I understood
Speaker 1: what I was doing and had no idea what I
Speaker 1: was doing, and I got it wrong. The the end
Speaker 1: result of the analysis was completely wrong. And for that,
Speaker 1: for me, was was a hard failure to take because
Speaker 1: I never wanted to be the guy that got it
Speaker 1: completely wrong. But what it led me to understand and
Speaker 1: recognize is that I'm not going to walk away if
Speaker 1: I don't understand what's going on. Like I asked that,
Speaker 1: don't assume that I asked the dumb questions. You know,
Speaker 1: in a world like like banking, you get caught up
Speaker 1: in the jargon, and folks were dropping all sorts of terms.
Speaker 1: I had no idea what they meant, and instead of asking,
Speaker 1: I just tried to figure it out. And two o'clock
Speaker 1: became four o'clock became six o'clock in the morning, and
Speaker 1: I'm still looking at the blank screen. And it was
Speaker 1: it was an embarrassing, awful failure. But it was the
Speaker 1: last time I ever had that failure. Interesting, Um, what
Speaker 1: do you do for fun? We know you played tennis,
Speaker 1: but outside of that, tell us what you do to
Speaker 1: keep either mentally sharp or fit outside of the office. So, ye,
Speaker 1: tennis is the main thing. I've got two young kids
Speaker 1: and try to spend as much time with those folks,
Speaker 1: and and you know, they're they're they're young boys, and
Speaker 1: all they love to do is run around and and
Speaker 1: so I I get a good work out with with
Speaker 1: those folks. But uh, it's it's it's it's harder these
Speaker 1: days to find that time to to get sharp and
Speaker 1: and I really I struggle with it. It's one of
Speaker 1: the things that I really work on. But but I'm
Speaker 1: recognizing more and more now that I've got to take
Speaker 1: the hour or two hours for myself and either go
Speaker 1: play tennis or go right on the peloton or whatever,
Speaker 1: and and and try to try to sweat it out
Speaker 1: a little bit. If a millennial or recent college grad
Speaker 1: came up to you and said they were interested in
Speaker 1: a career in venture investing, what sort of advice might
Speaker 1: you give them? I would say, start a business, become
Speaker 1: an entrepreneur. I I the I don't think that this
Speaker 1: was given much to my generation of of of college graduates.
Speaker 1: And I think again, as we talked about the cost
Speaker 1: of starting a business or nothing, and the opportunity cost
Speaker 1: of doing it when you're twenty two, you know, if
Speaker 1: you fail, you dust yourself off and onto the next
Speaker 1: go on to you know, go get a regular job there.
Speaker 1: But but you have so few opportunities to start a
Speaker 1: business and live off of Ramen noodles for for a
Speaker 1: year with your three three best mates in in a
Speaker 1: in a in a tiny either coworking co living facility
Speaker 1: or or small cheap apartment. Starting a business, all you
Speaker 1: need is good WiFi. Like you said, good WiFi, and
Speaker 1: and and and Amazon Web Services account you've got a
Speaker 1: business going, so I think that they should start businesses.
Speaker 1: That's the best way to learn this job by being
Speaker 1: an entrepreneur. And and my final question, what is it
Speaker 1: that you know about venture capital investing today that you
Speaker 1: wish you knew fifteen years ago or so when you
Speaker 1: again started. I wish I appreciated more how much this
Speaker 1: was an apprenticeship business, right, how much you've got to
Speaker 1: learn from people, And you've got to You've got to
Speaker 1: sit there and and sort of really it's it's hard
Speaker 1: to do this unless you've been an entrepreneur and have
Speaker 1: lots of domain expertise. But by going through the typical channels,
Speaker 1: you've got to learn from somebody else. You can't read
Speaker 1: books about this, you can't watch Shark Tank and and
Speaker 1: come away as as a VC. You've got to learn
Speaker 1: from other people. And then by asking questions, you know, so,
Speaker 1: so was that a good or a bad company? And
Speaker 1: having those questions asked to you and developed that that
Speaker 1: gut and that that that that insight and intuition around
Speaker 1: around what makes a good founder and what what's what's
Speaker 1: the right business opportunity? A lot of that's got to
Speaker 1: be shown. You've got to be shown the way or
Speaker 1: shown a handful of examples on how to do it,
Speaker 1: because every VC is a little different. But I think
Speaker 1: that that most of us, as you talked about, from
Speaker 1: sort of business mentors. We learned how we approached these
Speaker 1: from from other people, from books or or from classes.
Speaker 1: Quite fascinating. We have been speaking with David Hall. He
Speaker 1: is a partner at the Rise of the Rest seed Fund,
Speaker 1: part of Revolution UH Partners. If you enjoy this conversation,
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