20VC: USV's Andy Weissman on The Future of The VC Industry, Why USV Does Not Vote On Investment Decisions & Why VCs Should Be Invisible

Andy Weissman is a Partner @ Union Square Ventures, one of the world’s leading VC firms with investments in Twitter, Twilio, Zynga, Soundcloud, Tumblr, Lending Club and many more. At USV, Andy sits on the boards of YouNow, ScienceExchange, Figure 1 and previous guest, CircleUp. Prior to joining USV, in 2007 he co-founded betaworks, which both created and invested in social, real-time applications and services. You can also check out Andy's fantastic blog here. In Today’s Episode You Will Learn: 1.) How Andy made his way into the world of startups and investing, came to found Betaworks and then made the move to USV? 2.) Andy has previously said the business "is more about luck than skill and process rather than foresight". Why does Andy place so much emphasis on process? How has Andy seen his process evolve over the years? How does the process of an individual balance with the process of the firm? 3.) Why does USV not agree with voting as a method of investment decision making? How do Andy and USV approach reserve allocation? What model and simulators do they use to determine which companies receive follow on funding? 4.) Why does Andy believe that recycling cash from early exits is good for everyone? How has Andy found that LPs respond to this? What is the balance? What is the right amount for recycling, 110%, 120% or 130%? 5.) How does Andy view price sensitivity? To what extent does Andy agree with Peter Fenton that "valuation is a mental trap"? Has there been a time when Andy has lost a deal due to price? How has that changed his psyche and approach to the topic? Items Mentioned In Today’s Show: Andy’s Fave Book: On The Road by Jack Kerouac Andy’s Fave Blog: Phish.net, Continuations, Radio Free Mobile Andy's Most Recent Investment: Flip As always you can follow Harry, The Twenty Minute VC and Andy on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. If you are an early stage startup, the right infrastructure and support systems are critical, that is where First Republic is so good. First Republic’s resources network and expertise allow entrepreneurs to customise a solid foundation for their business. Why First Republic, well you get to leverage their incredible network of VC firms to prepare you for future fundraising events, you get to count on a single point of contact that will be there for you and your employees, you get access to exclusive events and networking opportunities. Their clients include the likes of Instacart, eShares and Wish just to name a few. Check it out by heading over to innovation.firstrepublic.com Segment allows you to collect data from every platform (mobile, web, server, cloud apps) and load it into Segment. Segment then sends the customer data to your tools and destinations where it can be used most effectively, destinations include email, analytics, warehouses, helpdesks and more. With over 200 sources and destinations on the Segment platform that can empower your team, Segment really is the last integration you will ever do and that is why the world’s best companies use segment to drive growth and revenue including Atlassian, New Relic and Crate & Barrel. Simply head over to segment.com to find out more.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  Hello and welcome back to the 20 minute VC with me, your host Harry Stebbings, at H Stebbings with two Bs on Snapchat, but to the show today. And this is one which probably to 18 months or so of continuous hustle and emails, but with persistence being one of my bad habits, it paid off. And I'm thrilled to welcome Andy Weissman to the show today. Now, Andy is a partner at Union Square Ventures, one of the world's leading VC firms, with investments in Twitter, Twilio, Zynga, SoundCloud, Tumblr, Lending Club, and many more incredible companies. At USV, Andy sits on the boards of YouNow, Science Exchange, Figure One, and previous guest Circle Up. And prior to joining USV, in 2007, Andy co-founded Beta Works alongside prior 20 VC guest John Borthwick. I do also have to say, it was so much fun having Andy on the show.

• 0:42Harry Stebbings?

  And thanks so much to him for being such a huge sport and for really creating the dialogue and actually enhancing the discussion today. It was one of my favourites to record. But before we dive into the show today, if you're an early-stage startup, the right infrastructure and support systems are critical. And that's where First Republic is so good. First Republic's resources, network, and expertise allow entrepreneurs to customise a solid foundation for your business across all stages. So why First Republic? Well, you get to leverage their incredible network of VC firms to prepare you for future fundraising events. You get to count on a single point of contact that will be there for you and your employees when you need them. You get access to exclusive events and networking opportunities. But don't trust me on this, their clients include the likes of Instacart, EShares, and Wish, just to name a few.

• 1:24Harry Stebbings?

  Check it out by heading over to innovation-firstrepublic.com. And speaking of incredible startups there, one that really is a must is Segment. Why? Well, Segment allows you to collect data from every platform, mobile, web, server, cloud apps, and load it into Segment. Segment then sends the customer data to your tools and destinations, where it can be used most effectively. Destinations include email, analytics, warehouses, help desks. And with over 200 sources and destinations on the Segment platform, that can really empower your team. Segment really is the last integration you will ever do. And that's why the world's best companies use Segment to drive growth and revenue, including the likes of Atlassian, New Relic, and Crate and Barrel, just to name a few. Simply head over to segment.com to find out more.

• 2:06Harry Stebbings?

  But enough of my dulcet British tone, so I'm now thrilled to hand over to Andy Weissman, partner at Union Square Ventures.

• 2:18Speaker 01

  You have now arrived at your destination.

• 2:21Harry Stebbings?

  Andy, it's such a pleasure to have you on the show today. I've been wanting to have you on for a long time, hence the incredibly persistent emails as we were just discussing, but thank you so much for joining me today.

• 2:30Speaker 02

  Thank you, Harry. I'm happy to have this chat with you and I'm happy to have you come waste your time with me.

• 2:37Harry Stebbings?

  I'm sure not, but I'd love to start today with a little about you and how you made your foray into what I most definitely call the wonderful world of venture capital.

• 2:44Speaker 02

  This is kind of a weird question for me because, you know, there's one person that I know in the world that has explicitly stated that they always wanted to be in venture capital and they kind of directed themselves into venture capital. And that was my partner Fred Wilson. I think for most other people, including me, it was just kind of random. You know, I just, I like stumbled my way into the technology industry and stumbled my way into a venture firm and then stumbled my way into starting a company about a decade ago. And that company was called BetaWorks. And as a New York company, we wanted what we thought the best and smartest and most empathetic venture investors in New York to invest in our company, which was USV. So we kept pitching them and they kept saying no.

• 3:23Speaker 02

  They rejected my company as a business, but we got to know them even better and ended up working really extensively with USV, the firm, and then with the partners at USV. And then, and then I eventually ended up here. And so like the little joke story I like to tell is I couldn't get, I couldn't get this firm to invest in my company, but I could get them to have me be a partner here.

• 3:42Harry Stebbings?

  I can tell that you're going to be one of the incredibly annoying, incredibly successful, but very humble guests. With your next comment, I read it and I was just, I was intrigued. The business is more about luck than skill, process than foresight. Talk to me then, what leads this thinking?

• 3:58Speaker 02

  Yeah. So Harry, you're a student of venture capital. You've done hundreds of these things.

• 4:02Harry Stebbings?

  Thousands.

• 4:03Speaker 02

  Thousands, right? So I'm going to ask you some questions in a few minutes, but you've done thousands of these, right? And so venture, early stage or generally earlier stage venture capital is a particular type of craft. And that craft is taking risk capital and returning a multiple of risk capital to your investors. Risk capital, meaning you're investing in some of the riskiest assets, but riskiest meaning illiquid, uncertain assets. And so when you're making investments into Uncertain illiquid assets, how do you make those decisions? And so I believe that a large, if not the largest, part of that is about the process you create to make those decisions. And if you have a process and you perfect that process and you stick with that process, sometimes it works. And that's luck, right? Whether it works or not.

• 4:47Speaker 02

  I also believe it takes a lot of skill to be lucky at the same time, but that comes from your process. And the process bakes in the randomness and the uncertainty. And then if it works, then that's pretty good and you're good at it. But it comes from process, more from, I believe, your skill in determining whether some company is transformative in what it does, right? So there's more randomness and I guess what I'm saying is there's more randomness and uncertainty than maybe we give credit to or we've given credit to from our side of the venture business table.

• 5:18Harry Stebbings?

  And so you said, I'm a student of V C R. I'll be a student of you today. What process then do you adopt? And how's that changed since you kind of assess your venture career?

• 5:27Speaker 02

  The interesting thing about process, right, is that there's no one type of process. There just are certain types of process that works for certain types of people or certain types of group, you know? Beta works, we had two parts of our business. One was an investment part and our process had to do about a theory about social networking and social media. And that led us on the investment side to make investments in things like Tumblr and Kickstarter and the Twitter ecosystem, right? U S V has a different process and that process, a part of it is an investment thesis, but part of it is a structural process too, right? The size of the fund, the number of partners and the number of offices we have, how we think about reserves, all those kinds of things. And everything goes into that process. I imagine you have a different process and everyone else has different processes, but

• 6:10Speaker 02

  I think what's important is at least acknowledging that process and trying to understand that process and trying to perfect that process and have conviction around that process, if that makes sense.

• 6:19Harry Stebbings?

  Has that requirement and need for process changed over your career?

• 6:23Speaker 02

  I think my acknowledgement of it as being an important or maybe the most important part of the business has changed. And you know, processes can change over time. There's this great quote that I love by John Kenneth Galbraith and it says, If you think about part of VC is thinking about the future, right? So his quote is there are two kinds of forecasters, those who don't know and those who don't know they don't know. And I would say as I've gotten more mature, though I am not mature, I'm really comfortable not knowing what I don't know. And in this world of uncertainty or in this business of uncertainty, so therefore I've gotten more comfortable with process being something that maybe over time I can prove I'm good at versus predicting the future or even picking individual companies, though that's part of the job.

• 7:08Harry Stebbings?

  Can I ask, how do you separate individual process from firm process?

• 7:12Speaker 02

  Ah, this is such a good question. I think that different firms have different styles, right? So I would say the USV process is a collaborative consensus process. And so a person that would rely more on individual process probably wouldn't enjoy themselves here. And so we make decisions collaboratively as a group and therefore we all share in the upside of those decisions or the heartache or downside that comes from those decisions. So again, it's different. Maybe there are firms that are like, everyone has their own individual process and then that's the way the firm works. We're a very collaborative process. I think that collaborative process actually comes from the thesis that we invest in as well.

• 7:52Speaker 02

  Here's my question for you, having done thousands of these, have you found that more firms rely on individual processes versus firm processes where you've seen that?

• 8:01Harry Stebbings?

  I think with the rise of specialization within funds, we're seeing more collaborative consensus process driven funds. But I think in the generalist and majority that I've interviewed, it's very much an individualist process that's enacted upon opportunities.

• 8:16Speaker 02

  Right. This is interesting. I had about five years ago, soon after I joined USV, I lost a deal. And some point within the year after losing the deal, I realized it was a mistake. It was a real, it's a fantastic company. It was been perfect for our thesis. It was people that I knew and I made a mistake by losing the deal and I got stuck on price is probably why I lost it. And I went into my partner Brad's office and I said, you know, I'm obsessed with the fact that I made this mistake and I kind of can't get past it. What should I do? He said something to me that stuck with me, which is, well, that's okay, because with this business, we actually don't have to be right every time we have to make a decision, just a couple of times each fund. And so he was talking about process, right? That's

• 8:59Speaker 02

  about process. Not every decision doesn't have to be correct, but the process will lead to it being correct, hopefully over a couple of times over the course of a fund. And that was fairly liberating for me, because I got this regret over this individual deal out of my head.

• 9:13Harry Stebbings?

  You said about price sensitivity there. That's one of my all time favorite topics, as you said, as a student of VC and a complete VC nerd, to be quite honest. On that topic, Peter Fenton said on the show, never turn down a company based on valuation, it's a mental trap. Would you agree with this, especially given that mistake?

• 9:31Speaker 02

  I don't think there's one truth in anything, in particularly this. Clearly, I'm giving an example of the mistake being that I got stuck on price. So in that instance, that was a mistake. I do think part of the craft of VC is math, right? And that math is, we have to take a fund and return it, let's say, three or, you know, return three to four times the capital to our investors. And there's math that goes into doing that, right? You can come up, you can model that out or attempt to model that out. So I think it can be a mental trap, but there's also math involved as well. And that's the balance. The reason I always go back to process is like, you could go crazy looking at individual deals, trying to figure out whether are you falling for the valuation mental trap, or are you making the right decision? But if you have a process, right? And this is what

• 10:16Speaker 02

  Brad was saying to me, if you have a process, you'll get it right a couple of times each fund. So that's okay. So you don't have to get stuck on it individually. That being said, there are investments that we have not made because we think the price didn't make the math work. At the same time, there are investments we haven't made where we made a mistake focused too much on that.

• 10:32Harry Stebbings?

  How do those conversations look internally? Is that Monday morning meetings? And is that voting structure unanimous? How does that conversation play out?

• 10:40Speaker 02

  Well, as a firm, we do not vote. We have a conversation and that conversation leads to a point where everyone is comfortable with the parameters of an investment. And those parameters, there are a bunch of things that goes into those parameters, right? One is, does it fit? Or would we be a good investor for this company? And that primarily goes to Do we believe the same things they do? And that drills down to is this consistent with our investment thesis? And then there are things like, can we spend the time on this that is required that this entrepreneur deserves? And sometimes location comes into that. And then also it's like, can we own enough of it and we have no ownership targets? That we think the math will work over the course of a fund. And we don't vote, we have conversations around those things. And when you work with a group of people long enough, you get a sense for everyone is in some form of general consensus

• 11:23Speaker 02

  that this is the type of thing we should do or shouldn't do.

• 11:26Harry Stebbings?

  Do you think that's an industry-wide applicable voting structure? Or do you think it's very unique to the partnership you have?

• 11:31Speaker 02

  I think this is the way that we do it and the way that we've consciously chosen to do it and the way that we continually try and get better at doing it. It's a way that works for us. I think every firm should do it their own way and they probably do it their own way. This way has constraints as well, right, for us. So, for example, I believe this is a methodology that works best when everyone is in the same room. So therefore, we only have one office. And so if we have one office, there's probably coverage in getting to know companies that we don't get as well as firms that have multiple offices. So, everything comes with a trade-off. We're a group of people that have decided this is the way we like to do it and we believe works for us. Does it work for everyone? I don't know.

• 12:10Harry Stebbings?

  Going back to the lessons, though, that I learned from venture, I also learned that actually the best investors see investing as a two-stage process. First, choosing the company and building conviction around it. And then allocating reserves and kind of stack ranking the portfolio according to that. So I'm intrigued with regards to reserve allocation. Your thesis around it and kind of what the investment decision-making is there as well? And how you define conviction in those that you choose?

• 12:34Speaker 02

  I think like, sometimes I try and, and I would, I'd be very curious if you have heard this in your thousands of conversations. I try and boil down to, again, complicated business that deals with uncertainty. So what points of certainty can we get to to help us make decisions? So one of those points of certainty, which is obvious, which is we want to own relatively large pieces of large companies. And the math works if we do that. So when we think about reserves, you want to own a large piece. And the way we define large is wide range, there's no targets there. And then you want to continue to own a large piece of that company. So that's bucket number one, if you think about reserves, right? Company's doing well, you've bought a big piece of the company, you generally want to maintain that piece. Bucket number two, we believe when we make investment decisions because they're thesis-driven,

• 13:19Speaker 02

  we think about the transformational potential of a company over a long period of time and we evaluate how they're doing over that long period of time. So we reserve money for that investment over a long period of time and our expectation is we're going to keep backing it because we're not looking for success in shorter periods of time. We don't know, there are lots of examples of companies that take three or four years to hit their stride and if you don't continue investing in them, you're not going to own a large piece of that company when it gets to that point. So we view ourselves, and we don't invest a lot, you know, maybe eight or 10 times a year. So we're long-term, very engaged partners, so that means we reserve full amounts for our companies and we generally keep investing in them. Things change, sometimes we don't continue to be a good investor for a company, sometimes

• 14:03Speaker 02

  it's a company that maybe shouldn't have venture investors, sometimes it's a totally different business, but I think those are outliers. I think generally speaking, we buy an initial ownership position and we love to keep that position for as long as possible.

• 14:14Harry Stebbings?

  And speaking of follow-on and further rounds of funding there, I think one very special thing about the US ecosystem is the early liquidity cycles. I'm really intrigued to hear how you think about recycling cash in the fund at USV and how you look to maintain LP happiness in doing so.

• 14:29Speaker 02

  So you've done a lot of these conversations, Harry, because recycling is like an obscure thing that is so beautifully constructed, right? Everyone wins with recycling. It's so good for your LPs, it's additional investment dollars that they're not paying management fees on. And so over the course of a fund, if you take gains and you reinvest it, that's more money that you're investing that lowers the average amount of management fees that they're paying. That also is better for the GPs too, because it affects the returns in the carry. And so we do reserves analysis continually a couple of times a year on each one of our portfolios. We run Monte Carlo simulations and we look at where the average of all those potential outcomes are and we evaluate when we may be thinking we need to recycle money because

• 15:11Speaker 02

  the average amount invested in a fund may be more than what we've committed. And then so we Can recycle earlier on in the life of a portfolio. Recycling is a beautiful thing.

• 15:21Harry Stebbings?

  What's your balance? Is it a one twenty, one ten, one thirty?

• 15:25Speaker 02

  I don't know. You know, I don't think we've ever said it as a number. I think it probably comes to one twenty, but I don't know if we've ever done the math on that. I'm sure, I know our documents have probably limits to the amount we can recycle, but I think every one of our last three funds, I don't, can't recall a situation where we haven't recycled in the early stages of the fund. But I don't know if we have like a number that we try and peg towards.

• 15:46Harry Stebbings?

  And you said about the last three funds there. I spoke to Albert before this interview and he told me, talk about the future. Talk about the next three funds, Harry. So I'm intrigued to talk to you about the future of VC and how you view the world of VC changing with maybe the unbundling of VC value add with the likes of ICOs. How do you view that?

• 16:04Speaker 02

  So this is maybe the most exciting part, right? I imagine you've talked, you've done thousands of these conversations. This is what you're getting to, right? So here's a couple of things that potentially really interesting and tell me if you agree or disagree, right? I believe on one point that early stage software technology based venture capital is a near perfect craft for what it does. And by that, I mean it is a near perfect allocation of a certain type of capital, risk capital into endeavors that are focused on returning way more than what you could get from the S and P, for example, in a liquid, liquid market. And it's worked really well at that, but it does that one thing.

• 16:46Speaker 02

  And so does that model apply, for example, to investments in consumer products companies? Does that model apply, for example, into hard scientific problems? Does that model apply in the world of ICOs and blockchain technologies? So the exciting thing is, I think the answer to those questions is the model works really well for that one specific thing we just discussed, but maybe there can be better or different models for different categories, categories of businesses, asset classes, ways to structure things. Part of what is exciting about ICOs, if one believes in what's happening and there are lots of reasons to be skeptical.

• 17:26Speaker 02

  Is that they are resulting in an external stimulus for change in financing structures for a certain type of sector. And so therefore it doesn't have to come from within, it's coming from without. That's what's really awesome about that. But does that mean this model works for science? Does that mean this model works for content? Let's say if you want to invest in content. I'm not so sure. And I think the answer to those questions are answers to how VC change was with unbundling of VC value. And I'm pretty interested and Albert is pretty interested in thinking that through and then what that means for us. Because what we do is, in a way, we're very conservative in the structure and the way we look like this. We look like same VC, way VC firms looked thirty or forty years ago. Our structure has not changed at all.

• 18:10Speaker 02

  That both comforts us and also freaks us out a little bit. So we're asking ourselves these questions.

• 18:17Harry Stebbings?

  So I'm pretty worried about it, to be honest. But I'm worried to the extent that I'd like you to tell me why you're skeptical and if there are reasons why we could be skeptical.

• 18:25Speaker 02

  Skeptical about what?

• 18:26Harry Stebbings?

  ICOs and their potential for disruption.

• 18:28Speaker 02

  You have funding mechanisms that are happening incredibly fast at incredible magnitudes. And they're happening incredibly fast, incredible magnitudes, because they're programmatic, they're code-based, and they're worldwide. And so now imagine there's a project that gets capital for that project based on a smart contract that they write from a group of funders that can be around the world. That's fairly unique. Now, the interesting part is the tokens that are part of these are actually, or should be, value-added to the actions and activities of that network or of that protocol. And so you have a situation, maybe, where incentives for all participants are aligned. That's kind of cool.

• 19:13Speaker 02

  And what role do you and I as VCs play in that? Not so sure yet. We'll have to figure that out. But those new facts are very different than what exists today.

• 19:22Harry Stebbings?

  Well, that did not alleviate any concerns at all, Andy. Thank you so much for further making me feel further conscious that I'll be unemployed in two years' time.

• 19:30Speaker 02

  Here's an interesting question, Harry. What do you think? Like, you've done a thousand of these. You're not only your student, you have the benefit of Zen. Mind beginner's mind, right? I'm like, I'm stuck with the baggage of twenty years of experience. And so what to you represents, if you could characterize the ideal venture investor? What would that, what do you think that would look like to you? Like, what do you think the most value-add thing currently today of venture investor does? Could we boil it down to one thing, or is that too simplistic?

• 20:01Harry Stebbings?

  I think it's too simplistic because I think you have masters of fundraising. You know, I'd say my greatest ability in all honesty for startups is to bring a lot more money and a lot more good money.

• 20:10Speaker 02

  Yep.

• 20:11Harry Stebbings?

  Having said that, I think there are certain people, your Jeff Jordans of the world, would be enormous strategic value-add. Having done it, having mastered marketplaces at OpenTable, he would be immensely valuable to you, do you know, in a different perspective.

• 20:23Speaker 02

  So what's interesting is you came up with two archetypes, and both are really good archetypes, that the characteristic of those archetypes are very human. Your personal ability to connect and bring capital, his personal ability to run businesses. What's interesting to me in thinking about those archetypes is will we also move to purely quantitative investing? In early-stage technology venture, I don't know the answer to that question. We have made investments in other sectors where we believe the answer to that question may be yes. We've done that in consumer products with CircleUp, we've done it in quantitative hedge-type financing with Numeri. And so I don't know if I have an opinion yet. On the venture side, what I like about the archetype, you expressed value-added characteristics that I believe only human beings can deliver on.

• 21:08Harry Stebbings?

  For sure, and I think if you just go to the only quantitative model, you would never have funded Twitter, or Instagram would have never been funded, Bourbon was not a success.

• 21:17Speaker 02

  You're talking about identification, you know, and maybe the identification of those is some human characteristic. We've talked a lot about, I believe, process can get you there. Can there's something quantitative? Is there some data element that a machine can identify about those? I think that's a really interesting question. I have no freaking idea of the answer, by the way. But like I said, our process has led us to believe that may be the case. And as investors, we want to make money if that's the case, and we've made a couple of investments that believe the quantitative algorithmic approach. May actually work in certain instances. I guess the theory being if we're going to get put out of business, at least let's try to make some money while we're getting put out of business.

• 21:56Harry Stebbings?

  Is that the reason for USV's thesis currently?

• 22:00Speaker 02

  I don't know if that's the reason for it. I think there are aspects of it that the thesis intersect with, you know. So for example, we're investors in an entity called Numeri, which is a hedge fund that uses a community of data scientists and has some intricacies around that to make its trades. We believe that's a community-based business, which is a network business, which has network effects, whose business model happens to be a hedge fund. And so that's very consistent with the way we think about the world. So we thought we could be good investors, even though we had never really invested in a fund like that before. So it intersects in certain instances and that's what we do.

• 22:31Harry Stebbings?

  No, that makes sense. So if I was to turn that on you, what would your VC superpower be?

• 22:35Speaker 02

  My VC superpower?

• 22:37Harry Stebbings?

  Yeah.

• 22:37Speaker 02

  Is that, is that, so here's what I would say. I would go back to what I said before, right? I believe that I don't know what I don't know and I'm very, very comfortable with that.

• 22:46Harry Stebbings?

  But that means you do know what you do know.

• 22:48Speaker 02

  Yeah, but it also, it means that and it means that plus an acknowledgement of the uncertainty that comes into this and the acknowledgement of making lots of decisions in the face of enormous uncertainty. And then some experience doing those in uncertainty. By the way, I don't believe at a fundamental matter, I'm old fashioned in the way that I believe actually VC should be invisible, you know? And so I know you ask this question to a lot of people, what would you like most like to change in the world of VC? I've heard that in a number of your interviews inside most of them. Mine is that I think we should be more invisible. I think we're a services business that has capital attached to it. And we stand behind the people that we back and those are the ones, those are the men and women who should be in front of us, not us.

• 23:30Speaker 02

  And maybe VC is, that means we should be a little more opaque.

• 23:34Harry Stebbings?

  Interesting. What if, what if the VC and the brand that they bring gives such social validity to a startup? That it's actually an advantage, having USV in your enterprise startup allows big corporates to feel comfortable that there's a sustainable cash runway in this company and they can trust them as a vendor and a service provider.

• 23:52Speaker 02

  And that's part of the value we provide, which is we're public about every investment we make. In fact, Our investment memos are our blog posts. You know, when we make an investment, every single time we write a blog post explaining why we made that investment, that acts as our internal and external investment memo and it's public, then it's there for the world to see. So we do that, which I believe operates to solve kind of the fact set that you just said, but we can do that and also remain a little more opaque or invisible as well.

• 24:19Harry Stebbings?

  No, I I get you. I fundamentally disagree, but I get you.

• 24:22Speaker 02

  There's no one truth, man. That's what we're talking about, right?

• 24:25Harry Stebbings?

  I love it, but I would love to move into a quickfire round with you now. So I say a short statement and you give me your immediate thoughts. Five questions, five minutes. Sound good?

• 24:33Speaker 02

  Yes.

• 24:34Harry Stebbings?

  So your favorite book and why? I'm terribly illiterate. Tell me, what should I read?

• 24:38Speaker 02

  My favorite book is On the Road by Jack Kerouac is the book that I have read the most times because it is the it's the book that represents the most about life, about having a sense of space in life, physical and mental. It's also a love story. It's about the love of ideas, the love of people. It's the meaning. It's about the meaning of country and the meaning of home. And it also captures that, you know, that fleeting moment when you're between adolescence and adulthood, how that feels when you're right on the edge. And I think that's an important feeling to capture. And so that's why it's my favorite book. Also is written fifty or nineteen fifty five, many years ago, and it feels as relevant today as ever before because it's so human.

• 25:16Harry Stebbings?

  How have you seen yourself change as a board member?

• 25:18Speaker 02

  I think that managing conflicts amongst board members or amongst founders is a thing that just takes more experience. And I think I'm getting better at it. I don't think I'm good at it, but I think you just have to go through that enough times to be good at it. And that's the biggest way I've changed.

• 25:35Harry Stebbings?

  Biggest mentor to you, and how did that relationship come about?

• 25:38Speaker 02

  So here's the thing, Harry. My biggest mentors don't know they're my mentors, so I can't out them.

• 25:43Harry Stebbings?

  Oh, of course you can out them.

• 25:44Speaker 02

  No, I can't because they don't know. They don't. It's never been defined as that type of relationship.

• 25:49Harry Stebbings?

  Okay.

• 25:50Speaker 02

  They don't know that they're my mentors.

• 25:52Harry Stebbings?

  I'll let you get away with that one. So what do you believe then that most around you disbelieve?

• 25:57Speaker 02

  Two things. One is that the only truth is music. Everything else is uncertainty. And the second one is whatever you do, take care of your shoes. You have to have quality footwear.

• 26:06Harry Stebbings?

  Got to have quality footwear. You wearing some Allbirds?

• 26:10Speaker 02

  Whatever it is, quality footwear, keep yourself comfortable when you're moving around.

• 26:14Harry Stebbings?

  I love that.

• 26:16Speaker 02

  Anything else.

• 26:17Harry Stebbings?

  Okay, favourite blog or newsletter? Obviously can't be a USV, can't be Fred Wilson, which is fantastic, but what is your favourites?

• 26:24Speaker 02

  I have three favourites, which are three things I'm interested. One is phish.net, and so P-H-I-S-H dot net, which is about music. The second one is Radio Free Mobile by this guy Richard, who has the most fascinating succinct writing style and analysing technology. And I know I'm not supposed to talk about ones of my partners, but Albert's blog to me is one of my favourites because this is, this is a partner and a friend and someone who I know so well, but through his writing, I get to watch his search for meaning in the world and I love that.

• 26:56Harry Stebbings?

  Yeah, no, I absolutely love it too. I would love though to finish on your most recent publicly announced investment and why you said yes.

• 27:03Speaker 02

  The most recent publicly announced investment was a company called Flip, which is a marketplace for sublet apartments around the country. And the reason we said yes is that the vision of this company is to increase individuals' economic freedom by giving them more options and choices as to where they live and when they live there and why they live there.

• 27:27Harry Stebbings?

  Absolutely. Joanne did it, didn't she?

• 27:28Speaker 02

  She did earlier on.

• 27:30Harry Stebbings?

  Loved it. But Andy, it's been such a pleasure. As I said, I've been so looking forward to this one. So thank you so much for joining me today.

• 27:36Speaker 02

  Harry, thank you. Next time I interview you. That's the more interesting.

• 27:39Harry Stebbings?

  That's the deal. Okay, deal.

• 27:40Speaker 02

  Deal? Okay.

• 27:44Harry Stebbings?

  Well, it looks like we have a deal there. So let's do the deal itself. And by September the 12th, this time in a year's time, September the 12th, 2018, Andy will have turned the tables on me and will do another interview. I do want to say again, a huge thank you to him. It really was such a pleasure and a highlight for me to have him on the show. And you can follow him on Twitter at A Weissman. And if you'd like to see more from us behind the scenes, you can follow us on Snapchat at H Stebbings with two Bs. It'd be fantastic to hear your thoughts and feedback. But before we leave you today, if you're an early stage startup, the right infrastructure and support systems are critical. And that's where First Republic. Republic is so good. First Republic's resources, network and expertise allow entrepreneurs to customize a solid foundation for your business across all stages.

• 28:25Harry Stebbings?

  So why First Republic? Well, you get to leverage their incredible network of VC firms to prepare you for future fundraising events. You get to count on a single point of contact that will be there for you and your employees when you need them. You get access to exclusive events and networking opportunities. But don't trust me on this. Their clients include the likes of Instacart, E-Shares and Wish, just to name a few. Check it out by heading over to innovation dot firstrepublic dot com. And speaking of incredible startups there, one that really is a must is Segment. Why? Well, Segment allows you to collect data from every platform, mobile, web, server, cloud apps and load it into Segment. Segment then sends the customer data to your tools and destinations where it can be used most effectively. Destinations include email, analytics, warehouses, help desks.

• 29:08Harry Stebbings?

  And with over 200 sources and destinations on the Segment platform, that can really empower your team. Segment really is the last integration you will ever do. And that's why the world's best companies use Segment to drive growth and revenue, including the likes of Atlassian, New Relic and Crate and Barrel, just to name a few. Simply head over to segment dot com to find out more. As always, we so appreciate all your support and cannot wait to bring you Wednesday's episode with Cat Utect at Core Innovation Capital.