Today on the Newcomer Podcast, we're joined by Yoni Rechtman, a partner at Slow Ventures and one of the most outspoken voices in venture capital right now. Rechtman doesn't hold back on Trump, the tech industry's political reckoning, or where the real opportunities in AI actually are.
We talk about why Slow Ventures deliberately avoided foundation models despite the massive returns, where the second-order effects of AI create better investment opportunities, and how the firm is using "growth by buyout" to build billion-dollar companies in unsexy industries like parking lots.
We also discuss Silicon Valley's response to the Trump administration, the Alex Pretti shooting, why Rechtman believes most venture capitalists are "amoral financiers" chasing momentum rather than principles, and what happens when the institutions that underpin entrepreneurial capitalism start to erode under authoritarian pressure.
Rechtman shares his contrarian investment philosophy of finding "weird takes on important stories," why he thinks Git is structurally broken in the age of AI-generated code, and how AI is inverting every system built on scarce production and abundant attention.
This conversation goes beyond typical VC talking points, addressing the uncomfortable questions about what the industry stands for when democracy itself is at stake.
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If you want honest, insider analysis from the heart of tech and venture capital…you’re in the right place.
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Is Silicon Valley finally starting to feel embarrassed
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about their embrace of Trump? Today's guest is Yoni Rachman,
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venture capitalists as Slow ventures, and one of the
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spiciest up and coming voices in the tech community.
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We try to make sense of Silicon Valley's political psychotic
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break, dig into slow ventures, weird predictions about the
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future, including why they feel they need to own creators
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outright and not just their businesses.
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And finally, we talk about why they're betting that a parking
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lot company is the next AI juggernaut.
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This is the newcomer podcast. All right, welcome to the
00:00:38
newcomer podcast. You only recommend.
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Great to have you here. Thank you so much for having me.
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I feel like but. A long time coming I feel like
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maybe like 2 years too late frankly.
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Well, I was looking through it. You have how to work with me and
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#3 on. It is like give me, give me
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visibility, give me promotion to be.
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Clear to be clear #1 on it is courtside tickets to an NBA
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game. I have been brought to a Nets
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game yet not yet to a next game #2 on it is bring me cool
00:01:06
places. FJ Labs put me on a jet ski,
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which is great. All right?
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We've done a lot of business together since then #3 podcast
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counts for something when the newcomer branded, you know,
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Suite at the Knicks happens that.
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Will be the next level. Yeah, yeah, yeah.
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So a lot to talk about. I mean, you're now you were
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promoted to be a partner at State Ventures in October 1.
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I want to have you on because I was honestly thinking to myself
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like this month, just like who's hustling right now?
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I'm like who is like, it feels like people aren't like hungry.
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And I really look at you and you're like, oh, you're really
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like making it right now. Like I think you're someone
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who's making moves, thinking about what's happening in
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venture. So I wanted to talk to you about
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that and like what's going on, You know, as slow as a firm that
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almost annoyingly wants to differentiate itself from
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everybody else. So it's like whatever everybody
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else thinks, we think the opposite, which, you know, Sam
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Lesson gets gets some credit for.
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My my my partner Sam is certainly the spirit animal of
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the firm. Who you know when I was in the
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information worked out of his apartment spent some time with
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him cool. But before we get into all that
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and like do our classic venture stuff and I think you know
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everything you guys are in deep in the crater economy.
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Some of the AI roll up themes figuring out how to invest
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alongside of the foundation models or with all the funding
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flowing into the foundation models without that being your
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investment. We are going to talk politics
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first, which I don't know, both comes naturally and not so the
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political moment obviously terrible.
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I guess we both agree. First the murder of Renee Goode
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and then a second shooting that sort of broke our brains.
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You tweeted it, Alex. Freddy, you can say.
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His name, we can say it was murder.
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Right, you tweeted. Trump is unleashing brown shirts
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in our cities in murdering Americans in the streets.
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The silence, complicity, enthusiasm from our industry is
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appalling. No tax cut or M&A approval will
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ever be worth it, and no amount of campus protests or annoying
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HR meetings could ever equal it. Yeah, well put.
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I mean, I don't know if there's a question there, but like the
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reality on the ground feels very self-evident.
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I've had these conversations with people where they all tell
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me like, well, like, you know, Alex pretty, he had a gun.
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He shouldn't have had a gun. He's a left wing agitator.
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He's in this signal group. He shouldn't have.
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I, I can actually even accept all of those premises.
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I, I can accept the like legalistic arguments.
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I, I don't, but I could accept all of those arguments.
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The fact of the matter is so many things had to go so
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terribly wrong for this, like overly militarized, poorly
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trained, you know, poorly vetted paramilitary group to be
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conducting operations like that in an American city on a false
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premise like the the specifics of what happened.
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I feel like we're being gas lit if we have to argue about it was
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terrible. Like these are guys wearing
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masks, pinning him down. They've taken his gun.
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They shoot him 10 times, many times.
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I think they they, they fired 10 times and.
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They hit himself and the guy is an ICU nurse, you know it.
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Literally a hero among us. So yeah, so I don't think we
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need to get into the facts of that.
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It's just I want to talk about, you know, like where we.
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Want to talk about the venture capital?
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Of it all exactly exactly how the industry is processing it.
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I mean, you know, my attitude in the newsletter was, you know,
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when Trump got re elected was the classic like, you know,
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leopards are gonna eat your face off sort of situation.
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I had Parker Conrad at ripling who's sort of another kindred
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spirit who's like this is terrible.
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But I, you know, I exist in the tech industry nonetheless being
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like, man, he said something like, you know, I'm surrounded
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by a bunch of smart people who think this is gonna be great,
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but I feels like, no way. It's it's insane.
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And so then I think, you know, more like left wing members of
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tech community. Yeah, sort of like chilled out.
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I mean, my retweets, you know, I would occasionally flare up, but
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for the most part, we tried to note in the newsletter, you
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know, crazy moments but not go out.
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What's been your approach sort of in this sort of like give
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Trump a year to sort of? See what this is?
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I didn't give Trump a year. I mean, I remember finding
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myself at a sort of tech event among some, you know, really
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cool, fancy, interesting people shortly after the inauguration
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and got into like a really heated argument about Doge.
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You know, it's like that was the first thing it was going to be
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the thing it's, and, and this is how we're going to bring tech
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into government and we're going to take this like
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entrepreneurial mindset to government.
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And, and I, it was very clear to me that this was not a sincere
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effort, that this was not being undertaken with, you know,
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seriousness. I I do believe that there are
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like plenty of the people that volunteered for that effort and
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that mission, like wanted to contribute to the government in
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a serious way and like we're civically minded about it.
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But it was very clear from the onset to me that like all of
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that, that Trump too is going to be much worse than Trump won any
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of the, you know, guardrails and constraints and in Trump one
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were gone. My interest from, you know,
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shortly after the election was for one, trying to think about
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what can we do at a more like local level.
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I believe that, you know, blue cities and states can either be
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a real like strong point for, you know, Democrats in the
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midterms and in 2028, or they can be an albatross around our
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necks. And so like when, you know, New
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York, California, etcetera, are like run well, thriving
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Flushing. I think it's a, it's a huge
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benefit to our argument that like we actually can do this and
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government can be a force for good in people's lives and.
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What do you and I want to get into New York?
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Yeah. What is your read on the
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political distribution among like the venture capital class?
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I think that most venture capitalists are at this point
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amoral financiers. And, and I don't, I don't even
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mean that in any kind of disparaging way, right?
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I am, you know, I'm like a very deep believer in property rights
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and the importance of markets. And there are like a lot of
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things in the world that I look at with the relatively amoral
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lens. I think that first and foremost,
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venture capitalists sell money and they sell money to whoever
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they can sell money to. And I don't think it's like a
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necessarily, I think it's a relatively amoral way of moving
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through the world. And to be clear, I'm saying
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amoral, not amoral. I don't think there's anything,
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it's nothing evil, but there's nothing inherently good either.
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You know, I certainly believe that like entrepreneurial
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capitalism is, is the best form is the best kind of market
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system to pair with liberal democracy and to like achieve
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freedom and broad prosperity. And so in that way, I think it's
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like ultimately serving some some good purpose.
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But like most of the people within it are, you know, I went
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to Stanford, I went to Princeton, I worked at Morgan
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Stanley, I worked at Meta, You know, I know a bunch of people.
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I did some Angel investments like, you know, my dad ran the
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TMT desk at Goldman, like. And so you do think like
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animating thing they didn't like about Biden.
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You mentioned your tweet like M&A, like blocking, blocking
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deals. There was also, you know, the.
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Crypto angle crypto. Just like make it hard for me to
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make money. This is really annoying.
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Gary Gensler and Lena Khan were, I think, legitimately like
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overzealous in a lot of ways and did a huge amount of like
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reputational damage pushing tech to the right.
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And then obviously now like more recently, some of this like
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cockamamie wealth tax idea in California is doing the same.
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And so much is, you know, look, my critique about the culture
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and venture capital is the same about the investing culture as
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it is about the political culture, which is it's
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fundamentally like Momo driven. You know, it's like what?
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Do you? What do you mean?
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We want to, we, I, I like to be on the winning side.
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I like to back winners. I like to find winners.
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And like venture capitalists are always thinking about the world
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in terms of upside maximization, not looking stupid, job security
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and, you know, up and like preserving optionality.
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And so when someone looks like they're winning, most venture
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capitalists will rush to back the winner.
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And it's just as true in politics as it is in in their
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investing. It feels like the momentum is
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going to turn against Trump. I mean, he's.
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Yeah, most venture capitalists are quite bad at predicting
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those wins. But you.
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Know yeah, it's always worrying, you know, do they think, you
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know, democracy itself will fail like is it a prediction that.
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I think a lot of people, I think a lot of people don't take
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seriously the extent to which our like system of
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entrepreneurial capitalism rests on strong institutions.
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And So what Trump is doing in our democracy, he is also doing
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to our market system. And so, for instance, like, it
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should be extremely concerning to anyone who calls himself a
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capitalist to watch him start like nationalizing companies,
00:10:50
which is what he has done in the steel industry and in the chips
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industry to watch him, you know, try and put, I mean, not put
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pressure criminally prosecute Jerome Powell to like exert
00:11:04
control. Like central bank, independence
00:11:06
is one of the pillars. And the idea that you could
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commit fraud and probably if you can pull together a couple
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$1, you can you can get it to the Trump administration
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and then you can get a partner and get out of.
00:11:17
It and so like there is no democracy without I I I really
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believe that there is no like the systems of democracy,
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capitalism, property rights, institutions, independent
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judiciary. These are all actually one thing
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and in countries that have one, they generally tend to have all
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of them. And in countries where one
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fails, the rest fail shortly thereafter.
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Like he's doing third world. You know, it's it's third world
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style corruption in the US and is, is substantially undermining
00:11:49
like the excellence of American institutions and the excellence
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of American capitalism. And like we are all going to
00:11:55
wind up paying for that. So even in the most strictly A
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moral terms, you don't care about any of the like ideas of
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about the liberal world order. Like we're going to wind up
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looking like Turkey or Argentina or Russia where like there is
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no, you know, sort of free market, there is no meaningfully
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free market system. There is no central bank
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independence. There are no strong
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institutions. There is no.
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What do you make of these? Things all together that, you
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know, if you give Trump a golden crown or whatever, he's going to
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treat you well. And Democrats, if you try and do
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it, they might say, oh, look, a billionaire, you know, we should
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tax you more. I I'm not saying Democrats
00:12:38
should get more corrupt, but there is this asymmetry where
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you get more out of cozying up to the Republicans as a business
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person. Totally, totally.
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I think the Democrats often really struggle to articulate a
00:12:50
positive vision for America and the world.
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You know, there's this, like, Simpsons meme that people always
00:12:57
share that is hysterical. And it's the Republican National
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Convention. And it says like, you know, you
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know, like. We're evil.
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We're we're evil and we know it. And then the Democratic National
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Convention is like, we hate every, we're like, like we,
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we're incompetent and we hate ourselves.
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I think that Democrats really struggle for how much they
00:13:19
because of how much they point out problems instead of being
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able to put forth a like positive vision for America.
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I think it's really challenging to hold the two conflicting
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ideas in your head. I am, you know, notwithstanding
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his like personal proclivities, often very inspired by Bill
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Clinton and, you know, his line, there's nothing that's wrong
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with America that can't be fixed with what's right with America.
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Like, I believe that very deeply.
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I think the idea of. I still don't.
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I I agree with everything you're saying.
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I just don't think it doesn't solve the corruption problem.
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Part of it is, I think when Democrats are in power, they
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need to make sure you have severe consequences.
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Yeah. And if you try to buy off the
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government, and it has to be, well, you're not allowed to do
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that. You can't have one party coming
00:14:00
to power where you're allowed to sort of be paid to pay, play and
00:14:03
corrupt in another party that says we're the principled ones,
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but we're not. We don't have enough backbone to
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actually process. No, I mean, Democrats need to be
00:14:10
more willing to, like, wield power.
00:14:13
I think, you know, Merrick Garland is a coward and an
00:14:16
embarrassment and an idiot for not, you know, putting Trump in
00:14:20
prison. The What do you tech is built on
00:14:24
immigrants. You know, Elon Musk himself is
00:14:28
an immigrant. Many of these tech companies,
00:14:30
you know, have H1B employees doing a lot of the most
00:14:34
important work yet there is. I mean, there's a strain that's
00:14:37
like, obviously immigrants are the ones being attacked here.
00:14:40
But there's also some of the leader like, you know, XAI has
00:14:43
tons of immigrants. Elon is practically, you know, a
00:14:46
white nationalist at this point. I don't know.
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What do you make of the anti immigrant?
00:14:51
But they won't go after the good ones.
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That that's. I think that is, I think it's,
00:14:56
that's the cognitive dissonance of like, you know, it's all
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happening somewhere else over there.
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It's abstract, you know, won't affect me.
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It won't affect the people in my life.
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And frankly, to some extent it might be true.
00:15:08
I mean, because of this system of crony capitalism that we're
00:15:11
now in and like really third world, third world corruption
00:15:16
that Trump has brought to America, it might be true that
00:15:20
that the people who cozy up to the administration will get to
00:15:23
keep the visas for their. Employment, but they're also not
00:15:24
that competent, thankfully, I think.
00:15:26
And so, you know, I I don't know, I just saw a tech person
00:15:29
the other day who said, you know, they tried to come back
00:15:32
from the US on an O1 visa and a cotton like jerked around and
00:15:35
they're just like moving to London.
00:15:37
You know, it is like we're going to lose.
00:15:39
People would be in Silicon Valley, even if, you know,
00:15:42
certain firms can get exceptions or special treatment.
00:15:45
Yeah. From the administration.
00:15:47
It's sort of reminds me there's a, there's a dark, there's a
00:15:52
real sort of dark potential here, which is kind of like
00:15:55
perestroika, which is, you know, could we be entering a period of
00:16:00
like rapid sort of cronyism and privatization that leaves us
00:16:05
overall a much poorer country and looking like, looking like
00:16:10
Russia with weak institutions, no judicial independence, no
00:16:12
central bank independence, but oligarchs who have successfully,
00:16:17
you know, seized, seize power based on their proximity to, you
00:16:22
know, this like fundamentally illegitimate government.
00:16:24
What's your view on how friendly everybody should be with each
00:16:27
other on Twitter and in real life?
00:16:29
You know, what do we do? It feels like, OK, we're in this
00:16:32
moment where both you and I sort of think, OK, we were right.
00:16:35
Although like, you know, the sky is falling about Trump really
00:16:38
feels true. They are shooting people in the
00:16:41
streets. They have a like, Gestapo like
00:16:44
force. They have people literally
00:16:46
cosplaying as Nazis. You know, it is just, it is a
00:16:50
dark moment. Like a lot of the things that,
00:16:53
like, if you had predicted that Trump would try to put tariffs
00:16:57
on Europe to try and take Greenland from them, you would
00:17:00
have been like mocked before the election.
00:17:03
So things I think are unambiguously worse than you
00:17:06
could have really said without being laughed at before the
00:17:09
election. So that's the world we find
00:17:11
ourselves in. Yeah.
00:17:13
I think we're so fatigued from, whoa, cancel culture era of like
00:17:17
booing everybody. Like, where do we, I guess to
00:17:20
put a direct question to you, Like, what's your view on this
00:17:23
sort of like no compelled speech, right.
00:17:25
Like I mocked, I said, I said something snide about Gary Tan
00:17:28
because he's always out there talking.
00:17:30
Let me he's always out there talking.
00:17:33
And I said, you know, he's not saying anything on this.
00:17:35
He used to be sort of a principled Democrat.
00:17:38
And I said, you know, power corrupts, I guess.
00:17:41
And he he's now blocked me on Twitter and people accuse me of
00:17:44
trying to compel speech. Like, what's your view on this?
00:17:47
I really. Don't think anybody is required
00:17:52
to have or share an opinion about anything or everything.
00:17:56
I do think that when you have an opinion about everything except
00:18:02
for one thing, that's that's a little bit different.
00:18:04
Stands out to people. Yeah.
00:18:06
So there are a lot of things that go on in the world that I
00:18:10
just don't feel like it's necessary for me to express an
00:18:12
opinion about, frankly. Like I don't live in California.
00:18:14
I don't like want to get too deeply involved in California
00:18:17
politics. So I mostly keep my mouth shut
00:18:19
because, like, it annoys me when people talk about New York
00:18:22
politics and like, you don't have you don't have a stake in
00:18:24
this. But like, we're talking about
00:18:25
America. We all have a stake in it.
00:18:27
And there's a lot of people who I think have put themselves
00:18:31
forward as not just business leaders, but moral leaders who
00:18:35
then exempt themselves from that responsibility in moments of
00:18:39
moral crisis. So I don't think anyone is
00:18:42
required to take up a mantle of moral leadership.
00:18:45
I don't think anyone is required to, like, be a public
00:18:48
intellectual. If you want to be a public
00:18:51
intellectual, if you want to, you know, be a philosopher king,
00:18:55
then like what? People are going to look to you
00:18:58
for leadership and when there are moments of moral crisis and
00:19:01
you don't offer anything, people are going to be like, oh, I
00:19:03
thought I thought you were a source of wisdom.
00:19:06
I I agree with that take 100%. How much do you tell founders to
00:19:12
pick their VCs based on their? Morals.
00:19:14
Not, not, not really at all. Honestly, I, I think being look,
00:19:19
I think it's a lot easier for me to say a lot of this stuff as a
00:19:23
venture capitalist, like the job of a founder is just immensely
00:19:29
more difficult. And I would love to be able to
00:19:32
tell someone like, you know, live your conscience in every
00:19:36
way all the time. But like, I heard this once and,
00:19:39
and it really stuck with me is that like all money is green and
00:19:41
all money is red, you know, like it all spends and it all
00:19:45
probably came from something a little bit dirty.
00:19:49
And like ultimately at the end of the day, like it's very
00:19:53
difficult to like whose money is it really?
00:19:55
Frankly, it's like it's sitting in the start-ups bank account,
00:19:57
but it was put there by a venture capitalist who received
00:20:00
it from some institution who received it from its donors
00:20:03
like. Some of these investors end up
00:20:05
having leverage over you. I guess that would.
00:20:07
Yeah. I think, you know, if it's a
00:20:08
minority investor and you're just trying to raise money,
00:20:12
yeah. I mean, I tend to be on the sort
00:20:14
of when it comes to fundraising, yeah.
00:20:17
Pretty tolerant. I mean, you know, I, I try to
00:20:20
maintain and quote and especially on deal type stories,
00:20:23
talk to right wing members of Silicon Valley.
00:20:26
Like it is a funny role that I play where it's like at once I
00:20:29
have principles, but you know, they're part of the community
00:20:33
and I'm, you know, I want to be sort of a vehicle to keep the
00:20:36
community together. And so I would.
00:20:38
Piece of it I would much rather be able to believe and I do
00:20:43
believe that like the tides will turn than saying I'm going to
00:20:47
like cut myself off from anybody who disagrees with me that
00:20:49
that's sort of incompatible with a lot of my other values.
00:20:54
And like, I have the privilege of being able to like speak
00:20:58
about my opinions and like, that is, you know, not everyone has
00:21:02
that. I, I'm, I do, but I still do
00:21:06
like have a responsibility to like my partners and my founders
00:21:09
and our investors to like do the job that they're paying us for.
00:21:14
And, you know, I think if I were to just say like, you know, fuck
00:21:18
you to everyone I disagree with, that would be like a dereliction
00:21:21
of my job. Where?
00:21:23
Where do you think things are going?
00:21:25
I mean, look, Trump's going to make some noises to moderate
00:21:28
ahead of the midterms. He will do that unsuccessfully,
00:21:31
but potentially like a credulous national news media will applaud
00:21:34
him for, you know, firing Greg Bunvino.
00:21:40
And that'll be that. But I think a lot of what's
00:21:43
happening right now is, look, Trump was elected basically to
00:21:47
do four or five things. America first.
00:21:50
Well, he's bailing out foreign governments and getting into,
00:21:54
you know, illegal foreign wars, reduce inflation.
00:21:59
He's making energy prices go up, home prices go up, not doing
00:22:03
that, you know, close the border sent, send them all home while
00:22:07
he's just shooting Americans in the head and like rounding up
00:22:10
children. And hey, by the way, our
00:22:11
deportation numbers are basically flat from Biden and
00:22:15
Trump won. And Obama was doing more.
00:22:18
Yeah, Obama was doing more. Obama was doing more.
00:22:21
Drain the swamp. He's like actively taking bribes
00:22:24
and bringing Third World corruption and cronyism to
00:22:29
America for the first time. So like.
00:22:31
He's literally pardoning. Oh, and there's and there's
00:22:33
countries. And then the fifth one is
00:22:35
released, the Epstein files, which he is actively.
00:22:39
One of the main characters, apparently.
00:22:41
One of the main characters in actively subverting that
00:22:43
investigation. So if those are the five
00:22:46
promises of of Trump too, he is failing on every single one of
00:22:50
them in like really substantial and notable ways.
00:22:52
I think he's going to get absolutely, like, drubbed in the
00:22:57
midterms. I think he is going to make, I
00:23:01
think his party's really going to pay for it in 2028.
00:23:04
And my hope is that America can then begin the like, long and
00:23:08
hard process of rebuilding trust in government and rebuilding the
00:23:11
institutions that have been like, really, I mean, profoundly
00:23:14
and severely damaged and even just the one first year of his
00:23:17
presidency. You, you.
00:23:19
You ended up supporting Mom, Donnie.
00:23:20
I did. I, I, yeah, I voted for him over
00:23:23
Cuomo. I ranked him like 4 probably in
00:23:25
the primary. I think I ranked him four or
00:23:26
five in the primary. I was.
00:23:27
I was like Brad Lander. Brad Lander?
00:23:30
Yeah, exactly. Seldner is one or two, you know,
00:23:34
I forget which exact. I think Brad because it seemed
00:23:37
like he was going to win or he had the more momentum.
00:23:39
So not that he was going to win, but and.
00:23:41
Brad is also, I mean, you know, I've, I've met him a number of
00:23:45
times. I grew up in in Brooklyn, you
00:23:47
know, and, and have sort of known him, even if only
00:23:51
peripherally for a long time. I think he is a, we're not here
00:23:56
to, and this is deeper into New York politics than your audience
00:23:59
probably wants to get. But like, I think Brad is like a
00:24:01
really, really cool and like kind of beautiful soul.
00:24:04
We talked about inside baseball stuff.
00:24:06
Yeah, yeah, yeah. And, and if you want to get
00:24:09
really, really inside baseball, the like single most personally
00:24:14
moving thing to me in Judaism is this idea of like Pitzel and
00:24:16
Elohim. We're all made in God's image.
00:24:18
We share this kind of divine, like divine spark or, you know,
00:24:22
piece of divinity within ourselves.
00:24:23
And anyway, something randomly former New York City controller
00:24:28
Brad Lander talks about a lot. And he and I have have talked
00:24:31
about it and kind of bonded a little bit over that in passing
00:24:34
various points. I think he's a really, really
00:24:37
special person and I'm excited to see what he does next.
00:24:40
But do you think you know if Mom, Donnie and AOC are the
00:24:43
future of the Democratic Party? I think they're the future of
00:24:46
the Democratic Party in New York.
00:24:47
And I think it's really, really important to like, be able to
00:24:51
meaningfully distinguish between like, the bluest of blue States
00:24:55
and the rest of the country. Like, I don't, you know, John
00:25:02
Fetterman is a Democrat, like Tim Kaine is a Democrat.
00:25:06
You know, Joe Manchin was a Democrat.
00:25:09
Like there are a lot of different flavors of Democrat
00:25:14
around the country. I'm not really super convinced
00:25:17
that the like the way to win is to like put forth figures like
00:25:25
Mandani and AOC on a national stage.
00:25:26
I think they do really well in certain corridors.
00:25:29
I think they have some good ideas.
00:25:30
I think they have some really bad ideas.
00:25:34
I don't think that that is the future of the Democratic Party.
00:25:37
I I think that there are like honestly on some of the kind of
00:25:41
bread and butter issues. I think that the the left does a
00:25:43
much the like the left of the Democratic Party just does a
00:25:46
much better job of like talking about things and frankly like.
00:25:49
Talk like the affordability buzzword.
00:25:52
Affordability and like that, you know, then just becomes this
00:25:57
question of like do we do we see affordability through a supply
00:26:01
side lens, which is more of the kind of like abundance and like
00:26:06
YIMBY movement or do we see affordability through more of
00:26:09
the demand side lens, which is the historical democratic
00:26:12
approach of like subsidized demand and then watches prices
00:26:15
spiral out of control. So the emerging Democratic
00:26:19
consensus does actually across the sort of range of Democrats
00:26:23
does seem to be more supply side or abundance oriented, which is
00:26:27
really encouraging. I work in New York with a group
00:26:31
called Abundance New York. Who these guys, these guys are
00:26:35
great. Shout out, you know, Catherine
00:26:37
and and Ryder. And then nationally, I'm, I'm
00:26:40
close with the people around the inclusive abundance initiative.
00:26:45
I think there's like the whole idea of abundance politics can
00:26:49
work really well. I think the language itself is
00:26:52
very like elite coded and and and maybe not super transferable
00:26:55
works better as affordability. Let's do more things and make
00:26:58
things cheaper. But that to me, is like the sort
00:27:01
of positive vision of the future that the Democratic Party should
00:27:05
be putting. Forward we just in California, I
00:27:07
think Matt Mahan is now running for governor.
00:27:09
People are clearly going to circle around him.
00:27:12
Yeah. I mean, I, I hope the Democrats
00:27:14
don't mess it up. You know, I, I think if it's
00:27:17
abundance oriented positive mindset like just the California
00:27:22
tax while I'm fine with taxing billionaires taxing unrealized
00:27:26
gains is such a disaster that then then having these taxes
00:27:31
floated even though I know it's sort of like, you know, some
00:27:34
union puts on some ballot initiative but it really feels
00:27:37
like it could plausibly pass in California.
00:27:39
I I that stuff. I don't, I don't think it, you
00:27:42
know. I don't think it will pass and I
00:27:43
also don't think it would stand up to like a core challenge.
00:27:47
But like, yeah, the the like wealth tax idea in that way is
00:27:52
really stupid. I think they're like actually
00:27:54
right way to do that is get rid of the step up and basis, which
00:27:57
is basically like a reintroduction of the estate
00:27:59
tax. And then the second thing is
00:28:01
like, come up with some. Ideally on a national level so
00:28:04
people aren't. State shopping and and and do
00:28:06
some approach to taxing the like buy bar or die strategy.
00:28:11
Right. And then give people health
00:28:12
care. And I, I think if the tax is for
00:28:15
something, it's easier to sell sometimes when Democrats are
00:28:19
talking about it just as a tax without saying this is the
00:28:22
policy we want to pay for. It just feels sort of mean
00:28:25
spirited and anti capital. I mean, look, I think what's
00:28:28
happened in New York is actually like a really encouraging
00:28:31
version of what this could look like, which is New York
00:28:33
introduced congestion pricing, which is functionally A
00:28:37
consumption tax. Instead of talking about it as a
00:28:40
victory of how much revenue we've generated.
00:28:43
I think Kathy Hochul in particular like has done a
00:28:46
really good job of talking about the outcomes that.
00:28:49
It No, I was such a hater. I know.
00:28:51
She's so much better than I thought.
00:28:53
It's like crazy. Oh yeah.
00:28:54
Just wait until after the election like do.
00:28:56
It in a much more politically. Palatable way get some seats for
00:28:59
Democrats. Like, yeah, she's, she's like,
00:29:01
totally. Right.
00:29:02
She's a she's a political. It's like, it's like, not my
00:29:05
like vibe and aesthetic, but like she's fucking knocking out
00:29:09
of the park. And, and part of it is like she
00:29:12
is been very, very, she's had a really hardcore message
00:29:15
discipline, but not talking about how much money they've
00:29:17
raised, but instead talking about the outcomes and what
00:29:20
they're spending the money on, which is like, you know,
00:29:22
improvements to the subway system.
00:29:24
And hey, look at all of the outcomes we're achieving in
00:29:26
terms of like shorter commute times and lower air pollution
00:29:30
and less noise pollution and you know, more, more shoppers on the
00:29:34
street. And yet all of these things are
00:29:36
like awesome and real and we have proof of and like it is
00:29:41
just that is a positive way of talking about government
00:29:45
intervention that is like exciting.
00:29:47
And you make a case for how you're going to make people's
00:29:49
lives better instead of making a case about how you're going to
00:29:52
make their enemies lives worse. All right, so talking about the
00:29:56
business of venture capital, talk a little bit.
00:29:59
Oh, that, yeah, our job. You know, your job and sort of
00:30:02
the main thing I write about. I think, I think probably like
00:30:05
all of you know, the rest of my team is.
00:30:07
There's this moment. Yeah, fucking God, he's done.
00:30:11
We'll have a little link where people can just join us, like,
00:30:14
Oh yeah, they're done with politics.
00:30:16
Talk about. Tony Eric living out for 20
00:30:18
minutes. Give us give us your
00:30:22
articulation in classic spicy slow fashion of what slows slow
00:30:26
venture philosophy. Is yeah, what look, we are a
00:30:29
very decentralized partnership. So it's it's for partners
00:30:32
investing the seed fund and and I think we often it's like 80%
00:30:36
alignment with the last 20% being language.
00:30:38
What I always say is like we need to find really awesome
00:30:42
people with weird takes on important stories and it's
00:30:45
that's it. The the really awesome people
00:30:47
thing is like self-evident. We talk about what awesome
00:30:49
people look like, what really, really exceptional people look
00:30:51
like. By and large, everyone buys the
00:30:53
premise. You need awesome people.
00:30:55
I think where most people in venture get wrong is they just
00:30:59
look for really cool stories and they forget the second part of
00:31:06
it, which is like weird takes they're on.
00:31:08
So my belief very deeply is that we need to find things that are
00:31:14
are a little bit like off kilter, out of center, non
00:31:17
obvious, non consensus. Basically you need things that
00:31:20
are like unique inputs to achieve unique end of 1 outputs.
00:31:24
And like that's it. That's the entire business.
00:31:26
There's nothing else. If you believe in power laws,
00:31:29
like don't invest in things that are obvious or same, same.
00:31:35
So I am a generalist. I think I can find those kinds
00:31:39
of weird takes and and important stories in a lot of different
00:31:43
places, But really try and like constrain myself to companies
00:31:48
that can sort of be articulated through these like big if true
00:31:50
statements or really feel like when you first hear you're like,
00:31:54
that's fucking stupid. And then if you think about it
00:31:57
for a little while longer, it kind of starts to it grows on
00:32:00
you. There's a creeping realization.
00:32:02
So how do you invest around AI? Yeah.
00:32:04
How are you in foundation models?
00:32:06
No. OK, no, we're not in any
00:32:07
Foundation models. What?
00:32:09
That's a big mistake on some level, all right.
00:32:11
Look, on some level, yeah, we probably should have done it.
00:32:14
It's a great trade. We should have done it and sold.
00:32:16
And you know, we could have whatever we didn't.
00:32:21
Sometimes maybe we're a little bit too like honest and
00:32:23
principled for our own good. And if we see something we think
00:32:25
doesn't make sense, we just don't do it.
00:32:28
But I know we're not in any foundation models.
00:32:30
So I am at this point much more interested in the like second
00:32:34
order effects of AI. So rather than saying like, how
00:32:37
do we like Max tokens, what happens after we do?
00:32:41
Let's just like accept as a general premise that like, yeah,
00:32:44
it's like, this is a real thing. It's going to keep getting
00:32:47
better. It's going to wind up in more
00:32:48
parts of the economy. Like not without some pain and
00:32:50
struggle and strife, but like it's going to wind up in more
00:32:52
parts of the economy. What happens then?
00:32:55
And I think to my point, I'm like, OK, do you like
00:32:59
improvement in deployment of AI is a really important story
00:33:03
like, but the most basic version of that is like, well, I'm just
00:33:06
going to make the capabilities better.
00:33:08
I, I think that's the wrong approach.
00:33:10
I think honestly already at this point we're on the wrong side of
00:33:15
some scaling laws around this. We're like and, and frankly, a
00:33:19
lot of even feels unnecessary. I think that all of the model
00:33:21
development could stop tomorrow and we would have like 10 or 15
00:33:25
or 25 years of really big important work in front of us.
00:33:28
And we have some evidence for that, which is that like, you
00:33:32
know, we're still in, we like the whole economy is still in
00:33:37
the move to the cloud like 25 years later, you know, so this
00:33:40
is not going to happen overnight.
00:33:42
But like, what are then the things that only make sense are
00:33:44
only possible in that world? What are either the types of
00:33:48
problems that AI creates and new businesses will need to solve or
00:33:52
the types of opportunities that only become available once once
00:33:57
like the capabilities have gotten there?
00:34:00
Sure. So I think throughout, like
00:34:05
probably the number one feature of like what AI is really good
00:34:08
at is inverting any kind of system that relies on like
00:34:14
scarce production and abundant attention.
00:34:18
So like things like writing phone calls, hiring, coding, all
00:34:24
of these are things which previously we had pretty like
00:34:28
limited ability to produce. You can only make so many phone
00:34:30
calls. You could only write so many
00:34:32
lines of code. And we have entire social
00:34:35
systems built on the fact that you have like effectively
00:34:38
unlimited bandwidth to like review and process those things
00:34:42
that have happened, those things that have been produced that is
00:34:44
very obviously reversed. So like what are some of the
00:34:47
consequences of that? Well, like everything is slopped
00:34:49
out. Like, sure, yes.
00:34:50
But specifically, like you know, even as the amount of code
00:34:56
getting generated is going up in large or in, in, in large
00:34:59
organizations, large companies, velocity is going down because
00:35:03
now code review has become this unbelievable bottleneck and all
00:35:07
of our system of. Every AI hater is just gonna be
00:35:10
like they're pumping out tons of words and not valuable.
00:35:15
It's creating problems. When it's free to produce code,
00:35:18
you produce more code, but it's not free to review that code.
00:35:20
So I think, I mean, I think Git is like really, really
00:35:24
structurally challenged. And GitHub is, you know, in this
00:35:28
weird moment where they're like, basically all the good talent is
00:35:30
left and they're in this feature freeze.
00:35:31
And Git Lab is like sort of perpetually on the verge.
00:35:34
Of a bat in this race of. Course.
00:35:37
What is it? Yeah.
00:35:38
So, so we backed this business called Atomic, which rather than
00:35:41
trying to be like this layer between Git and, you know, the
00:35:46
LMS or something like that, which a lot of people are
00:35:48
working on, they want to just be an entirely new, you know,
00:35:54
replacement, forget so like exist, you know, down here.
00:36:00
And we've seen this happen before, used to have centralized
00:36:03
version control systems and then sort of the advent of like open
00:36:08
source and specifically Linux like broke that open.
00:36:10
Like none of those centralized version control systems could
00:36:13
manage it. Linus Torvald created Git and we
00:36:15
have this like, you know, an unbelievable amount of
00:36:19
enterprise value created off of the back of that.
00:36:22
Well, that's 20 years ago. It seems unlikely to me that Git
00:36:26
is going to really survive like code Gen. and LLM assisted, you
00:36:32
know, software development for the next 20 years.
00:36:36
One approach that is taken venture capital by storm and I
00:36:41
you you guys were early on it but are also passionate is this
00:36:44
roll up idea. Take some old world business,
00:36:48
give it AI make a bunch of money.
00:36:51
What? What is slow doing?
00:36:53
Easy 3. Steps.
00:36:55
What is the slowest approach and what's your view of sort of
00:36:58
venture capital embracing? The so so this is what we
00:37:02
internally refer to as a GB O or growth by buy out.
00:37:05
We've been doing this for a long time, since well before I joined
00:37:08
the firm. So you know, the first kind of
00:37:11
canonical example of this that we have is our business
00:37:14
Metropolis. Metropolis started off as
00:37:16
software for parking lots. They eventually wound up raising
00:37:20
$100 million, buying a parking lot operator, installing their
00:37:23
software, making that business way more profitable.
00:37:25
They then raised another I think billion and a half dollars,
00:37:28
bought the biggest public company in their space, took it
00:37:30
private, did the same thing. They recently announced that
00:37:32
they raised another I think 4. Billion AI for parking lots just
00:37:36
underline. That AIAI for parking lots it's.
00:37:41
Doing well. Oh, it's, I mean they just
00:37:42
raised I think another 4 billion dollars, 456.
00:37:46
Who's to say? And the idea is just like
00:37:48
computer vision, and the monitoring is much easier, you
00:37:51
know? It's it they, they basically run
00:37:53
these parking lots now entirely autonomously and they monetize
00:37:56
the payments and and. Harder to not pay.
00:37:59
Yeah. And so the basic idea in all of
00:38:03
this stuff, in our view, is that like there's a lot of markets
00:38:09
that are screaming out for like software or AI, but are like
00:38:16
fundamentally unsound places to build a business selling it.
00:38:19
So rather than trying to like, you know, invest a ton in sales
00:38:25
and marketing to bring this product to market that nobody
00:38:28
wants to win a very, very small amount of of budget, you know,
00:38:33
in, in each one of these customers.
00:38:35
Like, why don't you just go, if the if the economics are
00:38:38
transformational enough, just go and buy the business, transform
00:38:41
it yourself, own all the upside and like be compete on the basis
00:38:46
of technology using M&A as a go to market motion.
00:38:50
So this is I think where this is very different than private
00:38:52
equity, where our view is like is really trying to be laser
00:38:57
focused on product, not process. So we meet a lot of people will
00:39:01
say like, well, I'm just a really smart, I went to this
00:39:03
school, I did this thing like, we're just going to be really
00:39:05
good asset owners here. And I think that is an awesome
00:39:08
private equity approach that is actually going to perform really
00:39:11
well in this moment. We're like we're going to know
00:39:14
how to use these tools the best, we're going to integrate them to
00:39:16
the best, but it's not necessarily built for scale or
00:39:20
built for repeatability or built for defensibility.
00:39:24
So we're very interested in these opportunities where we can
00:39:27
underwrite like a product team to go and really validate some
00:39:32
kind of transformational, economically transformational
00:39:34
product in a market that we think will support this kind of
00:39:37
motion. But you know, you could envision
00:39:41
buying a professional services firm, you know that that has
00:39:46
like, you know, call it 10 or 15% EBITDA margins.
00:39:49
And if you've built a product that you think transforms that
00:39:52
into a, you know, call it 30 or 40% EBITDA business like that is
00:39:58
huge value creation for yourself obviously.
00:40:01
It also means that you can afford to buy these businesses
00:40:04
like much more aggressively, like you're maybe not quite as
00:40:07
sensitive on entry price, like maybe you can pay, you know, 11
00:40:11
times instead of 10 times or anything, something like that.
00:40:14
So you have your pick of the litter on on which business you
00:40:16
want to buy. And if you can go and start
00:40:19
buying increasingly large businesses over time, as
00:40:22
Metropolis has done, you have a chance to, within a relatively
00:40:25
short amount of time own this like.
00:40:28
Huge. Cash flow generating really,
00:40:31
really like unique asset and just like run it forever and
00:40:35
take it public. And so we're not interested in
00:40:39
these opportunities to say like we're going to go and fix a
00:40:42
broken business and like modernize it.
00:40:45
And we really want to think about.
00:40:48
And this is I think why it really is fundamentally venture
00:40:50
is like be very, very focused on the upside that we can create in
00:40:54
these businesses rather than thinking about how we can make
00:40:57
money through, you know, financial engineering or
00:41:00
turnarounds or any of that. It's it is.
00:41:02
It's just a different go to market for software instead of
00:41:06
some different business model for us.
00:41:09
But all the competition for these businesses has got to
00:41:11
drive you crazy right now. There's all this money pouring
00:41:14
in. So every strategy is going to
00:41:16
have all of a sudden if you have a dry cleaning business, all
00:41:20
these VCs said, oh, I need that company.
00:41:22
We're going to bring AI to it, so.
00:41:26
I think the answer just like anything else is it means you
00:41:28
have to be willing. Like a few years ago it was
00:41:31
unconventional enough to even be thinking about this strategy
00:41:33
that like that alone was the off kilter unique kind of end of one
00:41:38
approach. I think today we just need to be
00:41:40
looking in weirder places. I think we need to be looking at
00:41:43
like weirder types of teams. I think we need to be looking at
00:41:46
them earlier, different kinds of interventions, different kinds
00:41:49
of product approaches, but it's just the, it's the same.
00:41:52
It's like. Private equity at least respects
00:41:55
expertise in the domain, yeah. Whereas venture capital often
00:41:59
scoffs at the people who've been running the dry cleaning
00:42:02
business or whatever, and then they they don't understand sort
00:42:06
of the particular things that make a business succeed or.
00:42:08
So I, I, I don't know if I agree with that premise, honestly.
00:42:12
I think that if you're coming in to sell software to that, I
00:42:16
mean, look, let's let's use like real examples here.
00:42:19
You know, if you're coming in and you're like building toast
00:42:22
for, you know, SM BS and restaurants and stuff and you
00:42:25
don't have like. Toast the payments processor.
00:42:27
Yeah, yeah, Toast, toast, the like, you know, Yeah.
00:42:30
And you don't have like a ton of respect for your customers and
00:42:33
you're not like really willing to listen to them and understand
00:42:36
them and like, they're not going to buy your product.
00:42:39
It's not going to work. You're going to build the wrong
00:42:40
thing. Like I don't think that it's
00:42:42
unique to this instance to say that you need to like if you
00:42:46
think about these companies that you're acquiring, if you think
00:42:49
about them as your customers and your partners.
00:42:51
You're just saying any successful entrepreneur, any
00:42:53
success empathetic to there, but it's just easier if you've grown
00:42:56
up in the OR it's you know, I'm in media.
00:42:59
You watch people get into media sometimes and famous.
00:43:01
You're like, you don't know any of.
00:43:03
Famously, private equity is extremely respectful when they
00:43:06
go in and buy media. Companies, well, they're but
00:43:08
those strategies are just like, you know, burn them and take the
00:43:11
profits as we can. But whenever somebody says, oh,
00:43:13
I really, I'm not from media, but I'm a smart, yeah, I'm gonna
00:43:16
like, really? Yeah, reinvent it.
00:43:18
It doesn't usually, yeah. Work I I mean this is one of the
00:43:22
reasons why we tell people build then buy like don't start the
00:43:28
business and immediately. Go to become that thing like.
00:43:30
Do a version of. It first, well, what I mean is
00:43:32
like go and service them as customers first, build a product
00:43:35
that is like really good and transformational to them first.
00:43:39
Maybe it's a lot cheaper to build software than it is to go
00:43:42
and buy a business, especially today.
00:43:44
So you should be able to test and validate that what you've
00:43:47
built actually like justifies going and raising a bunch of
00:43:53
money to buy these assets. And in the doing, you're going
00:43:56
to learn a lot about the the like customers and partners that
00:43:58
you're serving. So I just, I just don't, I think
00:44:02
it's a different go to market, but I don't think that it is
00:44:05
exempt from the same kinds of like basic physics of build
00:44:09
business building, which is like, you know, customer
00:44:13
centricity and like keep respect and interest in solving problems
00:44:18
for them. If you had to bet on one other
00:44:19
investment firm doing roll ups, who would it be?
00:44:22
I think to some extent it might just be like, look, the whole
00:44:25
collection of like kind of what I would call bold bracket
00:44:28
venture is doing this well. They're taking a very different
00:44:32
approach to this than we are, which usually starts with
00:44:35
capital rather than starting with a product.
00:44:38
I don't think it's wrong. I think it will trend towards a
00:44:41
very different kind of outcome. But like every every one of the
00:44:45
like, you know, mega funds, which they increasingly look
00:44:49
indistinguishable from the mega private equity funds and even
00:44:52
the mega hedge funds, you know, they all have teams now focused
00:44:56
on this. I don't think that they will be
00:44:58
wrong. I just think they will wind up
00:45:00
selecting for different kinds of people and opportunities that we
00:45:03
will and they're going to capitalize them very
00:45:05
differently. So one of the reasons this whole
00:45:07
idea is so attractive to them is because it's an opportunity to
00:45:10
go in like deploy mondo dollars from day zero.
00:45:14
That's not our approach. Our belief always is that like
00:45:18
too much money too fast throttles progress and like, you
00:45:23
know, you, you have an overstuffed pig and it dies.
00:45:27
It allows a level of, you know, poor discipline and loose
00:45:32
thinking. You've you've talked some about,
00:45:35
you know, king making. Yeah, in venture capital it can
00:45:38
work. I mean if you throw enough, I
00:45:40
mean open AI right now is sort of proving well, a too big to
00:45:44
fail. Strategy.
00:45:45
So yes, I think it's a question of when though, because like
00:45:49
Open AI, open AI was so profoundly non consensus from
00:45:54
its start. It wasn't even let alone AC
00:45:56
Corp, it wasn't a for profit company.
00:45:59
So it's all of this stuff looks in it like the present looks
00:46:03
inevitable in retrospect. But the number of companies that
00:46:06
are like wildly successful today that were deeply, deeply non
00:46:10
consensus at the time. You know, Open AI is actually a
00:46:14
really good example of this where like, it was not an
00:46:17
investable business at its inception.
00:46:20
It wasn't an investable business for its first like 5 or 6 years.
00:46:23
Enthropic people thought was an insane thing to even attempt at
00:46:28
the time. Cognition started as a video
00:46:31
conferencing app. Clay wandered in the desert for
00:46:34
like, you know, 10 years. There's so many examples of
00:46:38
this. And in retrospect, yeah, we all
00:46:40
know what the chart looks like. And eventually the chart starts
00:46:43
going crazy and it's was always going to happen and it never
00:46:46
could have gone any other way. Like each one of those are
00:46:50
really really, I mean ramp ramp was like the stupid ever was
00:46:54
like, what the hell are they doing?
00:46:56
Don't they know about Brex And like it's what for five times
00:46:59
Brex now? So like these things always look
00:47:02
in like winners always look inevitable in retrospect.
00:47:05
I just don't believe in that as as the reality on the ground and
00:47:10
I and I think history largely proves me right.
00:47:14
What the problem is with this whole sort of like idea of king
00:47:17
making is it's not putting this is going to be a, a, a
00:47:22
overwrought metaphor. It's not putting a crown on the
00:47:26
crown on the head of the Crown Prince upon the death of his
00:47:28
father. It's like putting a crown on a
00:47:31
baby out of the womb and believing that that the crown
00:47:34
itself confers legitimacy instead of the like the
00:47:39
legitimacy conferring the crown. And in each one of those
00:47:41
examples that I mentioned, those are businesses that now today
00:47:45
like have unlimited access to capital and incredible talent
00:47:48
and everyone wants to work there, but you're dealing.
00:47:51
Rejecting what people? Somebody was calling it like the
00:47:53
coconut seed round, you know, saying coconut round, Yeah.
00:47:56
Yeah, Mango. Seed or whatever.
00:47:57
Yeah, yeah, yeah, yeah. Is that that's where you're sort
00:48:00
of pushing back again this sort of we're going to put up so much
00:48:02
capital into? Question of scale, I think there
00:48:04
are businesses that require a lot of capital upfront and like
00:48:07
that's a ton of risk and the power to you if you have the,
00:48:10
you know, if you have the Piggy Bank to pull that off and, and,
00:48:13
and you know, the balls to do it, like good for you.
00:48:18
I think that's different than saying by mere dint of putting a
00:48:22
bunch of money into this company.
00:48:24
We just know it will work. Like that's not true.
00:48:28
I I don't think there's any evidence in history to suggest
00:48:30
that that's true. You guys have had a very
00:48:32
creative creator economy strategy.
00:48:35
I mean, you Sam has been bullish on this idea of like, we need to
00:48:39
invest in a person, not just a business, like get our talents
00:48:42
into someone who's promising like now and like, watch them
00:48:45
go. Is is this when you ask us for
00:48:46
money? No.
00:48:47
No, they're too far along the. Think about how much further
00:48:51
along you could be with a couple $1 for the newcomer.
00:48:55
Yeah. How's that strategy going of
00:48:56
investing in individuals? So basically we have in addition
00:49:00
to our seed fund and our opportunity fund, we have a
00:49:03
third vehicle which is our creator fund, which is a $65
00:49:06
million fund. And basically what it does is
00:49:09
rather than investing in like consumer media brands or the
00:49:14
companies started by creators, we're trying to make these like
00:49:17
sort of, you know, 360 deals with creators to just capitalize
00:49:23
them for everything that they do.
00:49:24
And we own our piece. So that's run by my partner
00:49:29
Megan and Sam. Megan, like cap is awesome.
00:49:33
She came in to slow at the same time I did to kind of figure out
00:49:37
this and like really make it a thing and and it's going really
00:49:40
well. The idea is basically that like
00:49:42
in a world where, and I would put this under, by the way, like
00:49:45
second order effects of AI, in a world in which like all of these
00:49:48
kind of performance channels are getting really like clogged up
00:49:54
owned access and distribution is like a hugely valuable asset.
00:49:58
And so rather than saying, hey, like we want to be media
00:50:01
investors, we want to invest in media brands that can go and
00:50:03
build really big businesses on top of them.
00:50:06
And so there's a lot of like obvious places for this.
00:50:10
You know, I think like Glossier honestly is a good example of
00:50:12
this. It was started out of Into the
00:50:14
Gloss, which was a blog that Emily Weiss started and then
00:50:18
like built this really big commerce company on the back of
00:50:20
it. So like all of those kinds of
00:50:22
consumer opportunities I think are fairly obvious.
00:50:24
We backed this guy Jonathan Katz Moses, who's like a woodworking
00:50:27
creator on YouTube who's built this really successful like
00:50:31
tools business. I think that these opportunities
00:50:34
are also to. Bring in the entrepreneur or
00:50:36
there's somebody beside them to run the business.
00:50:38
Or are they? It it it depends.
00:50:40
I mean, in our view, he's the entrepreneur.
00:50:43
Like does he like, does he need someone to help him, like to
00:50:48
help support him on, you know, maybe it's a president or
00:50:51
something to help support him on the operations of the business?
00:50:53
Totally. We can maybe help him with that,
00:50:56
but it's it's largely on him as ever, Like we're we're money,
00:51:01
you know, like we're, we're mine.
00:51:03
We're willing to make bets that other people aren't willing to
00:51:04
make. It's.
00:51:05
Like you run your business? Good luck.
00:51:07
Yeah, yeah. It's like, let's find incredible
00:51:10
entrepreneurs and it just, we think we've found a whole new
00:51:13
category of entrepreneurs that like the market doesn't yet
00:51:16
really have a good way of backing.
00:51:18
But are we a peak creator yet or where do you think we are in
00:51:21
this sort of Arc of? Now, I mean, I think it, it
00:51:24
feels very evident to me that that's just what the future of,
00:51:29
I don't know, all media is like. I mean, we're seeing more and
00:51:32
more companies adopt like mature large companies adopt strategies
00:51:38
that look like that because they're finding that their
00:51:40
performance channels just like don't work and they need some
00:51:43
way to reach people and to talk to people.
00:51:45
So this is very clearly like we've looked at any number of BB
00:51:49
to B companies doing like some version of this and we're going
00:51:53
to look at a lot more over time. I'm really bullish on the idea,
00:51:57
healthcare companies, I'm really bullish on the idea that we're
00:52:00
going to find these kinds of like creator LED opportunities
00:52:04
horizontally, not merely within like, you know, consumer
00:52:09
discretionary categories. Yeah, running a newsletter can
00:52:11
definitely feel like running a marketing channel without a
00:52:14
product. I mean, thankfully our events
00:52:17
business has delivered on like that's something that people
00:52:22
just don't love paying for content.
00:52:23
I know you know, obviously Sam is married to Jessica Lesson,
00:52:27
who I work for and really believes in subscription.
00:52:30
Even she has expanded the business beyond just
00:52:33
subscription. Yeah.
00:52:34
But I just think as much as you know, I love our subscribers and
00:52:38
think it's a cornerstone of newcomers business.
00:52:40
And yet you never say thank you to me.
00:52:44
Yeah, I I'd be willing. I'd.
00:52:45
I'd be curious to go back. Like where do I, you know, where
00:52:48
am I? What number subscriber?
00:52:49
I bet you early I. Couldn't be I must be a a triple
00:52:53
digit subscriber. I might even be a double digit.
00:52:54
Subscriber I can try to check. Paid, I bet.
00:52:58
I mean, I just think people don't like paying for media.
00:53:01
You know, they, they, they have this feeling that quality
00:53:03
content will just get to them. Yeah.
00:53:06
And so, yeah, I I think this idea that you use media as the
00:53:11
ways to build a relationship with people and then sell them
00:53:14
something they're more inclined to pay for, it makes a lot of
00:53:17
sense. I mean, I think I should get the
00:53:18
chocolate bar business. That's, I think I think it's an
00:53:22
interesting exercise that genuinely like sometime when
00:53:26
Megan's in New York or you're in the Bay, I think you guys should
00:53:29
get up on the whiteboard together and be like, I'm, I'm
00:53:31
100% serious. I think you guys should get up
00:53:33
on the whiteboard together and like, what are the kinds of
00:53:36
products and opportunities? Like, you know, I think what
00:53:38
you've done in in conferences, for example, is like fairly
00:53:42
directly extensible off of the media off of like it's still is.
00:53:45
Part of them. It's still part of within the
00:53:47
category I didn't invent. The idea that you pair a
00:53:50
newsletter with media with events I.
00:53:53
I would bet that if we sat here for 5 minutes, we could come up
00:53:56
with like a list of 25 things and some of them would probably
00:54:00
require capital for you to do, you know, like it's crazy to me
00:54:03
that you don't have a head hunting business.
00:54:05
It's. Oh yeah, they're, they're a,
00:54:07
their business is similar to mine where they they do.
00:54:09
That it's, it's you could make, you could make so much money if
00:54:14
you hired a, if you hired A recruiter to work within the
00:54:19
newcomer brand. And like that's not hugely
00:54:23
capital intensive because that's like, that's like paying a
00:54:25
salary and they're probably largely Commission based.
00:54:27
So you don't really need it upfront.
00:54:29
But if you then told me, like, you know, there's this product I
00:54:32
really like Aaron Harris used to be a partner at Y Combinator.
00:54:36
He now you've probably interviewed him or met him or
00:54:38
something. Yeah, I talked to him.
00:54:40
You know, he now has this product called like the Venture
00:54:41
Codex, which I use. It's like a really cool like,
00:54:44
hey, like who should my company raise from?
00:54:46
It's sort of in the overall category, like a pitch book or
00:54:48
something, but like. But he doesn't monetize that.
00:54:52
He monetizes like an investment for fundraisers.
00:54:55
Correct, Correct. But my point is like if you told
00:54:58
me that you were going to build some, if you told me like you're
00:55:01
going to build a product like that, that's a really
00:55:03
interesting product that you have good distribution.
00:55:06
For, I've thought about building a data product, but then it's
00:55:08
not my expertise. Honestly, my biggest challenge
00:55:12
for a lot of these ideas is just like getting a coder excited
00:55:15
about. I'm looking for a coder, you
00:55:18
know? It's always finding the.
00:55:20
Right, haven't you heard? We're all coders now.
00:55:22
I know I've tried. I have vibe codes, you know, I,
00:55:25
I just feel like. The challenge is in shipping
00:55:27
something and it's it's getting it from 70% to 90% and then
00:55:31
maintaining it that's. And then my time is not well
00:55:33
spent there, you know, it's like I have a lot, a long list.
00:55:36
Of things. And so by the way, that would be
00:55:38
on the list of things where it's like, well, my time as as like a
00:55:42
creator CEO, my time is too constrained.
00:55:45
I just like, I don't really have the budget for this.
00:55:47
It's kind of like highly exploratory and it's risky.
00:55:50
There's maybe a lot of upside to it, but it's hard for me to
00:55:53
underwrite with like, you know, a relatively fixed pool Today, I
00:55:57
could just basically pay the person out of my own pocket.
00:55:59
Like that's the case where we come in with the creator fund
00:56:02
and say, like, Hey, show us those 10 experiments that you
00:56:04
want to run and we'll give you the money to run all of them.
00:56:06
And as and like something will work as long as we're like
00:56:09
disciplined about choosing the, you know, choosing and
00:56:11
prioritizing those experiments. And we find people who are
00:56:15
entrepreneurial and ambitious and, and aspirational enough to
00:56:18
actually like do them and have the execution ability to pursue
00:56:22
them doggedly. Like that's the business.
00:56:24
And have you stuck to this idea that your investment really
00:56:27
needs to be in the person rather than the company?
00:56:30
Or you're just worried people will run away from the company
00:56:32
and or why? It's it's because the whole sort
00:56:37
of thesis undergirding it is that the is that the
00:56:40
distribution is what differentiates it.
00:56:42
And you know, like we want to bet on a person to run all of
00:56:47
those experiments. I mean, Mr. Beast is, is a good
00:56:49
example of like where this kind of doesn't work, where like
00:56:51
beast burgers didn't work. Beast burgers.
00:56:54
Like if you would have invested in Beast burgers, you would have
00:56:56
lost all your money, even though you totally made the right I,
00:57:00
you know, like this, by the way, goes back to like weird take on
00:57:03
important story. You're like, hey, I think this
00:57:04
influencer is like a huge amount of reach is going to like build
00:57:08
this really awesome thing. You'd be completely right on a
00:57:10
directional basis and completely wrong about the vector of
00:57:12
approach like. He doesn't keep them all within
00:57:15
the same He might not. He's the risk, I guess.
00:57:18
He now does. There's there's Beastco.
00:57:21
I'm running like Jeffrey Hausenbold from SoftBank to be a
00:57:24
top executive. If if you say so.
00:57:29
I. I would, I would believe it.
00:57:31
I mean, look, we have our issues with with Mr. Beast
00:57:34
specifically, like we're more focused on kind of like you
00:57:36
have. Your issues or?
00:57:37
Yeah, I mean, it's like it the the the challenge that we see
00:57:41
with Mr. Beast is like how much does he have actually like sort
00:57:44
of proprietary owned audience and how much is what he's doing
00:57:47
basically like kind of running on a treadmill to like hack an
00:57:50
algorithm repeatedly? And like if he stopped doing
00:57:53
that, how quickly would? It's media, you know your only
00:57:55
because your last story you have to.
00:57:57
Yeah, consistently. So.
00:57:59
So you know you don't. Feel that way about your
00:58:01
woodworker that he still needs to have great woodworking
00:58:04
content. He definitely needs good work
00:58:06
woodworking content, but we know why people, it's not like for
00:58:09
instance, stunt based, it's not celebrity.
00:58:12
So the answer is is not like you always need to one up the last
00:58:16
thing that you did. That's like a really hard place
00:58:18
to get into and like probably burns out over time.
00:58:20
Like I don't think you grow up with people that way.
00:58:23
And then that means you have like a shorter shelf life.
00:58:26
All right, you any last question, who who is hustling
00:58:29
right now? Like when you look out, like
00:58:31
when you think of who's your short list of like startup
00:58:34
founders that you think they are hungry, they want to win right
00:58:38
now. Start the of startup.
00:58:40
Founders. Yeah, startup founders or other
00:58:41
people in venture, but startup founders.
00:58:42
Yeah. I mean, look, the startup
00:58:43
founders are all of my companies that haven't yet.
00:58:46
Haven't yet. Announced rounds, yeah,
00:58:49
obviously it's those are the people.
00:58:50
That does it feel like it feels like a quieter time for me or I
00:58:53
don't know if it's like the foundation models, like looming
00:58:56
so large. It just doesn't feel like the
00:58:59
new doesn't feel genuinely to me genuinely.
00:59:02
And if you spend time with, I think, and this is a challenge
00:59:07
for you, I think of being in a media business where you spend
00:59:10
time with people who are on one side of the hill.
00:59:13
Right, like the people. People wanna read about names
00:59:16
that. They've heard for sure, and as a
00:59:18
result, they think. They wanna read about people
00:59:19
they haven't heard of. And the reality is if you spend
00:59:23
time at the earliest stages when companies don't exist yet, when
00:59:28
it's just people, when they're in the early phases of building,
00:59:31
when they've launched their, the energy right now is
00:59:34
unbelievable. Like for all the posturing about
00:59:38
like 996 and blah, blah, blah, the real people doing the real
00:59:41
work, they just fucking show up and do it.
00:59:43
And they're not going to like talk about how hard they're
00:59:46
working because they're too busy working the like level of energy
00:59:49
and excitement. I mean, we have this company
00:59:51
that just announced AC ground in New York a couple weeks ago
00:59:54
called Phoebe, which is like a, a basically building like a
00:59:57
network of agents for healthcare labor.
01:00:01
And the, the CEO Justin is like unbelievable.
01:00:05
And his team is just like the, the energy in the office is
01:00:09
insane. They're like.
01:00:12
They're like very technical, very focused, very heads down,
01:00:16
and they're just like winning every.
01:00:17
Day they're like, these are the last five years to make wealth
01:00:20
before they're painted. Underclass yeah.
01:00:22
Like I think if you honestly, I I would just really encourage
01:00:25
you to try and spend time around some of the like less polished
01:00:29
more just like in the thick of it.
01:00:32
Basically, when people go from being you often meet people when
01:00:37
they've gone from being founders to being CEOs.
01:00:40
And I think if you spend more time around people who are just
01:00:42
founders, you will completely reverse course on this idea that
01:00:47
like there things are quieter, people aren't hustling or
01:00:49
there's no energy. Like the amount of energy within
01:00:52
our early stage portfolio is unbelievable.
01:00:55
When I'm around New York and the founders that I meet who are
01:00:57
like, I mean, it's like they're like killing themselves with
01:01:01
happiness, you know, because they're so excited about what
01:01:04
they're working on. It's like it's a very, very
01:01:06
exciting time that feels really different than when I started my
01:01:10
career and people had a level of like maybe caution of an
01:01:16
entrepreneurship. And I can't even imagine what
01:01:19
that felt like compared to 10 years before that.
01:01:20
But like, no, I, I kind of reject the premise of the
01:01:23
question. I think there's a lot of people
01:01:24
in Venture who are lazy for sure, but like.
01:01:27
Right, Yoda, thank you for staying in principle.
01:01:30
Thanks for talking politics, playing pundit next time, I
01:01:32
guess. Courtside, yeah.
01:01:33
Next time courtside. All right, man.
01:01:35
Thanks. Thanks so much for listening to
01:01:38
the Newcomer Podcast. I'm Eric Newcomer.
01:01:40
Follow us on substack@newcomer.co.
01:01:43
Hope you enjoyed the episode. See you next week.