20VC: One Question Founders Must Ask Themselves When Approaching Investor Selection, Why Series B Is One Of The Most Challenging Phases & What Makes For A Successful CEO Transition with Jeff Russakow, CEO @ Boosted

Jeff Russakow is the CEO @ Boosted, the startup producing vehicle grade electric skateboards rethinking how we travel. To date, they have raised $74m in funding from the likes of Khosla Ventures, iNovia Capital, Andreessen Horowitz and our friends at Initialized. Prior to Boosted, Jeff was CEO @ Gimbal where he doubled revenue in his first year and added 80 new enterprise clients. Before that, Jeff was the CEO @ Findly where he grew the company to 450 employees and 20m end users. Jeff also enjoyed prior roles with the likes of Symantec, Adobe, SAP and Yahoo. In Today’s Episode You Will Learn: 1.) How Jeff made his way from leading enterprise CEO to re-thinking the way we travel today as CEO of Boosted? 2.) How does Jeff analyse the current sentiment to fundraising in the valley, specifically with regards to business construction? How has Jeff seen the investor class fundamentally transition over the last 20 years? When approaching investor selection, what is the 1 question that Jeff always asks? Where do founders often make mistakes here? 3.) Having raised the $60m round in 2018, how does Jeff approach the theme of capital efficiency today with Boosted? How does Jeff determine when is the right time to pour fuel on the fire? Why is Series B often the most challenging phase when considering the focus on unit economics and vision simultaneously? 4.) What is Jeff's gut reaction to the statement, "hardware is hard"? Why does Jeff feel this to be a glib statement that misses the point? How does Jeff respond to the criticism of the commodity element of hard, easy to replicate and copy? How would Jeff like to see the investor class change their mindset to hardware? What is the right way to approach it? 5.) What are the core elements required for a successful CEO transition? For a potentially incoming CEO, what must they be wary of with regards to the information conveyed to them by investors of the company? Where has Jeff seen many go wrong in CEO transitions? What can the founders do to make this process as smooth as possible? Items Mentioned In Today’s Show: Jeff’s Fave Book: The Missing Piece As always you can follow Harry and The Twenty Minute VC on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

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

• 0:00Harry Stebbings?

  Welcome back to the 20 minute VC with me, Harry Stebbings. It'd be great to see you on Instagram at H Stebbings 1996 with two Bs. And there you can suggest both feedback and guests for upcoming episodes. However, to our wonderful guest today, and I'm very excited to welcome Jeff Russakow, CEO of Boosted, the startup producing vehicle-grade electric skateboards, rethinking how we travel. To date, they've raised $74 million in funding from the likes of Coastal Ventures, Inovia Capital, Andreessen Horace, and our friends from last episode with Gary Tan at Initialized Capital. Prior to Boosted, Jeff was CEO at Gimbal, where he doubled revenue in his first year and added 80 new enterprise clients. And before that, Jeff was the CEO at Findly, where he grew the company to 450 employees and 20 million end users. Jeff also enjoyed prior roles with the likes of Symantec, Adobe, SAP, and Yahoo.

• 0:45Harry Stebbings?

  But before we jump into the show's day, I want to spend a minute to talk about Brex, the first corporate card for startups. Brex founders Enrique and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y Combinator. They decided to build Brex with instant online signup, no founder liability required, and limits 10 to 20 times higher than standard cards. Pretty incredible, I know. And you can sign up for Brex and get fees waived by entering the code HARRY during signup. Honestly, it really is such a special service. And speaking of Brex, an incredible high-growth company, well, a lot of what we do on the 20 minute VC is talk to experts, pick the brains of founders and investors who tell us which trends to watch out for, offer tips on fundraising, and teach us how to excel at any company's stage.

• 1:27Harry Stebbings?

  And although there's no playbook for building a great business, we can certainly learn from people who've done it before. Beyond listening to this podcast and talking to mentors and advisors in your own network, it's important to have resources you can turn to when you're tackling a new challenge. Stripe has built those resources for you. Whether you'd like to learn how to run a pricing experiment or build a knockout landing page, Stripe gives you the information you need to start, run, and scale a technology company. Their guides are often written by or feature people like Elan Gill, an incredible individual, whom you've probably heard on this very podcast. And you can read one of my favorite guides on scaling engineering organizations and many more on Stripe.com/20VC. That's T W E N T Y V C. And speaking of scaling engineering organizations, as we did

• 2:10Harry Stebbings?

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• 2:54Harry Stebbings?

  But enough of me, and I know we all want to get into the episode. So now I'm delighted to hand over to Jeff Russakow, CEO at Boosted.

• 3:06Speaker 01

  You have now arrived at your destination.

• 3:09Harry Stebbings?

  Jeff, it is such a pleasure to have you on the show today, having heard so many great things from the team at Cozler. So thank you so much for joining my dulcet British tones today.

• 3:17Speaker 02

  Thanks very much for having me. I'm a big fan.

• 3:19Harry Stebbings?

  Well, that is very, very kind, but I'd love to get started on you. So tell me, Jeff, how did you make your way into the world of startups and really come to be CEO at Boosted?

• 3:27Speaker 02

  Yeah, so thanks for asking. I'm definitely a CEO that came into startups really mid-career. I spent the first 15 to 20 years of my career in Fortune 500, S I P, Adobe, Symantec, Yahoo, and only really about eight, nine years ago started getting into growth. I had always done very entrepreneurial things within larger companies and had that gene and was always itching to try things that were more around growth and scale. So after my fourth big company, I was finally able to look at my wife and say, okay, house is paid for, college is set aside for the kids one day. I really need to be doing something else for my growth. And she was very supportive.

• 4:02Harry Stebbings?

  And then post that conversation with your wife, Jeff, how did that translate into the move to CEO at Boosted?

• 4:07Speaker 02

  I get that question a lot. And I have to admit, after doing almost 25 years of internet and digital media and enterprise software, one has to ask what kind of midlife crisis I was having to take a left hook into the world's leading electric skateboard. For me, it was actually a return home. I started out as a PhD in robotics and autonomous systems 25 years ago, and had really just left the space. I famously told my buddies, until batteries and other technologies get better, I'll see in about 20 to 25 years. And it's been almost 25 years. So I was introduced to Close Ventures, Samir Call there. He really wanted to do something with me on one of their portfolio companies. And then when I met the folks at Boosted, it was like coming home. So the founders at Boosted

• 4:51Speaker 02

  came from the exact same PhD program at Stanford that I did, same classes, and to this day, some of the same professors. So when we met, it was almost like meeting our long-lost brothers, where I was the brother that had gone off to 25 years of business experience, and they were the brothers that had stayed more techy and entrepreneurial. So for me, it's actually not been a left hook. It's actually been a return home, and it's the most fun I've ever had.

• 5:14Harry Stebbings?

  I love that, thinking of the return home. But you mentioned the names of Adobe, Symantec, SAP. I do have to ask then, Jeff, what were the takeaways for you from seeing the firsthand hypergrowth of these organizations?

• 5:26Speaker 02

  You learn a lot. I think entrepreneurship, but also leadership, that there are a lot of learned and apprenticed elements to that in that experience. And so I think, once a company hits some kind of initial product-market-fit experience, and the general management skills really start to kick in and become the critical to scaling. So things like business problem-solving, strategy, building an organization, developing people, being able to think about multiple products, multiple geographies, multiple business models, it really does pay to have been in growth and scale many times before. And having seen the movie multiple times, different angles, different industries, different types of companies, different cultures, and to have the ability to know what things should look like at scale, and to have an

• 6:10Speaker 02

  urgency to get there. And so coming into a company like this one, Boosted, we've grown from two countries to 34, expanded from one channel to multiple, and expanded from one business model to multiple. It really helps to have just seen the movie multiple times before. And so the larger companies are an amazing development ground, because within

• 6:30Speaker 02

  Company, you've got dozens of products, dozens of geographies, different business models, and you just get exposed to a lot in those environments.

• 6:36Harry Stebbings?

  Can I ask, I often get asked this by kind of emerging graduates from university. They say, Harry, I have three options. I can join the tiny startup where I have a big impact. I can join your stripe of the world, which is obviously the hypergrowth, multi-billion dollar rocket ship that it is. Or I can join your Facebook or Google of the world and gain that corporate knowledge. What would you advise that person if they were maybe your own child?

• 6:58Speaker 02

  Yeah, and it is advice that I look forward to giving to my children one day when they're ready. The first thing I'm going to say, which is not going to sound fully satisfying is there's no right answer without looking at who you are and where you are. For a lot of people in their twenties, if you have that entrepreneurial drive where you really just need to go do it, that's going to end up being the path that may make the most sense for you. I do actually think, and this is a bit countercultural sometimes to Silicon Valley. I think for a lot of people to go spend the twenties and the thirties in larger environments and being able to have the chance to get that education across different functions of a company, different business models, different types of product, how to be an executive in a company and get things done.

• 7:43Speaker 02

  Those are incredible skills to learn. And I do think people that have come through that environment and then come back to entrepreneurship do bring a tremendous amount of value to growth companies. And the entrepreneurial gene may also have been there all along. The funny thing is you look back at age 50 and you realize that people that took both paths end up kind of happy and about the same level of success 30 years later either way. And so you start to realize there's less of a right path than you felt like when you were 21 or 22. So it really comes down to, for me, look at yourself. If you're not ready to be in a high-risk, ambiguous environment and you want to have the stability of a learning environment, go bigger and branded and rotate yourself. Don't just stay in one function. Rotate yourself and be an advocate for your experience.

• 8:27Speaker 02

  But if you're going to feel very constrained in that type of environment and you really want to learn by trial and error, it's a bumpy ride, but go the entrepreneurial route. The middle ground, which I think people forget, is growth companies. When you're in a company that's maybe already gotten to a couple hundred people on its way to 1500, you get this wonderful middle ground. Where it's big enough that a lot of the systems and infrastructure is in place and mentors may exist within the company. But it's still growing at several hundred percent a year and you still get to wear a lot of hats. And so I honestly think for a lot of people, a Facebook or a Google when it's or a Salesforce when it's already hit two, three, four, five hundred people on its way to fifteen hundred.

• 9:07Speaker 02

  Actually, can a lot of times be the best middle ground. And I think people tend to think either end of the spectrum and not the middle. I think midsize growth companies are a great development ground.

• 9:17Harry Stebbings?

  I'm so glad I asked that question. Thank you so much for providing the answer to so many more graduates that now I don't need to answer. I do want to start this day, Jeff, as one could guess from the title of the show on the theme of funding. But more importantly, maybe the construction of business alongside it. So I'd love to start on this. Being at the epicenter in SF, how do you assess the current sentiment of funding, specifically with regards to business construction?

• 9:39Speaker 02

  You know, I think it's changed a lot. You know, I think about what the fundraising community was like twenty five plus years ago, thirty years ago, now it's coming out of college. By contrast, back then, VCs tended to have very deep expertise in certain industries or technologies and could go very deep on diligence. Whereas today's investors tend to be more generalists. So you're less likely to find investors today who develop a proprietary view versus have more of a consensus mentality. The math has also changed, whereas maybe twenty five, thirty years ago, a VC would tell you, you know, I'm looking to make ten investments and have one be a hit. To a mindset of every investment I need to invest in needs to be able to be the one to return my entire fund.

• 10:20Speaker 02

  And so it tends to be more home run ball versus looking to hit a lot of singles, doubles and triples, you know, to use a baseball analogy. It can cause investors to look past, you know, solid to great businesses with a high likelihood of return. To more ventures businesses with a lower likelihood of a return, but a return that may be at a fantasy level of return. And so more investments tend to be flyers seeking network effects with more willing. Suspension of disbelief than I think maybe we saw a few decades ago. I think a second thing that's changed or a third thing that's changed is I think we're seeing less investment in consumer hardware and fundamental technology companies in years past and a greater focus on business models that really complement the VC filter, particularly

• 11:03Speaker 02

  around SaaS, just because it's friendly to their model around recurring revenues and network effects. And so I think it's changed a lot in terms of the sentiment to funding. It's something that you really see when you're in a consumer hardware company like Boosted, which is more novel in the startup community, particularly here in Silicon Valley. One of the reasons I've liked working with Coastal Ventures as my lead investor at Boosted is they are probably one of the few VCs that really still exhibit a lot of these traditional VC characteristics of taking a proprietary view, being excited to invest in fundamental technologies and also adding a lot of value to their portfolio companies while they hold.

• 11:38Harry Stebbings?

  You mentioned that Coastal obviously being the lead investor, so to speak, and under your tenure, you raised the $60 million round back in December 2018. And a couple of elements really spring to my mind from that. It's a big round. How do you think about when's the right time to pour fuel on the fire and really kind of go for growth in that big round?

• 11:56Speaker 02

  I have to admit, at Boosted, it's been pretty easy. When customers are literally tattooing your company logo on their body and your product is turning up as a cultural phenomenon, it's definitely pretty easy to make the call to turn it up. More broadly, I think if you're at a point where you have a great product and a great market and you have media focus drawing attention to and customer awareness to your product and you've got your unit economics working and therefore scalable, that's a great time to really pour it on and go for growth. Once you get to a point where you've got the recipe right and the demand is quite large and now it's simply a matter of injecting capital into a working, working model and a hungry market, that's the time to really turn on the afterburners.

• 12:37Harry Stebbings?

  Speaking of kind of turning on the afterburners, you're a seasoned operator and now kind of CEO of Boosted. In terms of kind of the environments we're in, I think we'd agree that they're quite frothy, so to speak, in terms of funding. How do you think about and maybe approach capital efficiency today, thinking about kind of the $60 million raise and the next milestones for the next round?

• 12:55Speaker 02

  Yeah, I'll come back to the frothy part in one second. I think in any market, you've got this reality as you grow a company through seeds, series A, B, C, D. As a growth company, particularly on B, VC, you need to keep a healthy balance between getting excited About the froth and the market opportunity with running an increasingly capital efficient business. When you're at seed and series A where you're pre-revenue or first establishing a product in the market, it's almost 100% about establishing the vision and is the product in the market category going to be successful. And then on the flip side, when you're already up at CDE, you've already got the recipe. You're at larger scale and it's really just about pouring capital into something to scale it.

• 13:36Speaker 02

  In the middle around series B, you're at this really interesting inflection point where it catches a lot of management teams by surprise. Where you're still maybe growing at hundreds of percent, but you need all of your financial metrics and operational metrics to start performing because you're kind of going from all vision in A to it's already working in C. And so B is that point where the numbers really start to matter. And how are your revenues scaling and are your gross margins improving? And is your OpEx getting more efficient? And are you reducing your customer acquisition costs? And 20 other really critical measures. And these are critical to show yourself and investors that it is time to pour money on and scale. And so investors are very wise to that. And that's why series B is often the toughest inflection point in terms of fundraising.

• 14:20Harry Stebbings?

  What do you find the most challenging in terms of that itweena stage? Being the series B stage where you have everything that you want needs to succeed, potentially on the foundational level, but also not in terms of necessarily all the data points proven out. How do you think about the biggest challenges at that stage?

• 14:35Speaker 02

  Yeah, I think the biggest challenge at that point is you've got the biggest stretch between the vision and the metrics being in your hands and proven. And so you need to do a very good job of being able to demonstrate to yourself and to investors, maybe leading indicators or things that indicate that the metrics are pointing the right way. Because it's the biggest bet for the investor at that point where you're asked, you start to ask for real money, but you're still finalizing the recipe and you're not fully efficient. So you have to do a few things. You have to be very transparent. When you're at vision stage, you can paint a dream. When you're in series B. You can still point to the vision, but there'll be stuff that's working and the stuff that's not. You have to be very transparent with your investors and help them understand and diagnose

• 15:18Speaker 02

  why what is working is working and why what is not is something that will work as opposed to what's a fundamental thing about your business and it's something that's addressable and operational versus fundamental. And so you need to do that for them, but also for yourself. If you can do that really well, then you can gain the confidence to keep gathering funding and keep going. But that is the toughest thing for most companies going through that stage where you're not yet profitable. You're growing like crazy. It's mostly working. A few things aren't quite where they need to be. And you're asking investors to really, at that point, step up.

• 15:49Harry Stebbings?

  It's been your kind of investors stepping up and switching sides of the table. And you're thinking about the raise and the investors that you're presenting to you. I'm always fascinated by kind of investor selection. How do you approach investor selection, Jeff?

• 16:01Speaker 02

  Yeah, as you gather from my last name, I'm Russian. And so there's an old Russian saying, it's better to pick potatoes with people you like. And so for me, actually, I have the simplest litmus test ever. I have three daughters. And so when I meet investors, one of the first questions I ask is if my wife and I needed to go run off for the weekend and handle some terrible emergency and leave my three daughters with this person just for the weekend without a word said, would I even think twice about it? And if the answer is I'd have to think twice, that's probably a good litmus test. Because if I'm not sure I can leave them to watch my girls for a weekend, why would I want to be committed to them for the next seven, eight years in a journey together where we're counting on each other to be successful for my kids' college education?

• 16:41Speaker 02

  So to me, it really is, are they fundamentally good people, character, integrity, trust? Every company hits moments of success, but it also hits air pockets. And you need to know there's somebody that's going to be there with you through thick and thin. So that really is the gut check. After that, there's a lot of investors that can provide capital. And so what's the investor value beyond the capital? Some of the things that I find really helpful is can they help with talent? Can they help source talent? Can they help close talent to a company? Especially when the company is young and the brand of the venture capital firm or the investor may be larger than the company until you've gotten more successful. And can they also help you attract independent? Board members add domain value to your company.

• 17:21Harry Stebbings?

  I have to say, I absolutely love that element of the litmus test, leaving your daughters with them. I do have to ask, you mentioned the element of air pockets there, absolutely they happen. Can I ask, how do you personally deal with air pockets? I go to the gym and run like a maniac. How do you personally deal with air pockets?

• 17:36Speaker 02

  I want to say two things. So it's part of growing or scaling or hyperscaling. You're going to make bets and some are not going to work out and you're going to learn from them. If you're very transparent when you hit air pockets, when you do a really good job of analyzing what have you learned from it, then I actually think those are things that strengthen the company and build credibility. But separately, if I were to push the metaphor of air pockets a little bit further, and this is probably back to big company versus small company. One thing that's interesting for a lot of folks when they come into the companies of this size is air pockets really catch your attention. When you're in a big company, you're like in a jet airliner. You barely notice all but the biggest air pockets and it's a pretty smooth ride.

• 18:18Speaker 02

  When you go into a startup or growth company, it's more like getting into a two-seater, a little airplane. It's like a kite with an engine on it. And so you bounce around and you get buffeted a lot more by the wind and the events. And so it's very natural to become alarmed or freaked out the first time you suddenly plunge 25 feet. But after a while, you get used to it because you realize that's just the nature of being in a small plane. There's 25,000 feet of air between me and the ground and so the wings will catch. And so it's the ability to understand what's an air pocket versus what is a serious problem. And to dial in on what's a natural amount of bouncing around versus what should alarm you. So that you can not spend your time focused on things that are just natural bouncing

• 19:02Speaker 02

  and really focus on the things that are a real problem, like a wing's coming off.

• 19:05Harry Stebbings?

  I mean, so many things are unpacked there and so unfair of me to go off schedule. But I do have to ask, how do you think about determining between air pocket and potential kind of flight failure mode?

• 19:15Speaker 02

  I mean, as I said before, transparency is helpful just to push the metaphor further. It is helpful if your plane is well-instrumented and you know whether or not you can understand what's going on. But it also, there's no replacing experience. If you've been in that plane a hundred times, you know instinctively when to investigate versus when to not worry. If it's your first time in the plane, then it can be more alarming and it would be helpful if you have a co-pilot or somebody next to you that has been in that plane a hundred times and just to go with their guidance. So combination of experience and just read your instrument panel. Is something, are little arms going off or is it just a little bouncing around?

• 19:54Harry Stebbings?

  Well, we have killed it with this analogy. I absolutely love that, Jeff. Speaking of the experience, I've interviewed over 2,500 VCs, if you can believe it. So yeah, I speak to them a lot and we mentioned hardware earlier. And the most common thing that I hear when I speak to investors about hardware is, ah, Harry, hardware is hard. And you've said to me before that sometimes this misses the point. So I do have to ask first, before we get to missing the point, what's your gut reaction when you hear hardware is hard?

• 20:21Speaker 02

  My first reaction is it's very glib and alliterative. And so you might wince when you hear it, but oftentimes it's a little bit of an excuse or shorthand to bypass actually thinking about different business models rather than just looking for one business model that fits your investor equation.

• 20:37Harry Stebbings?

  What do you mean by that in terms of the business model element? And what would one like to see more in the VC class than when digging deeper into the hardware stack in an opportunity?

• 20:46Speaker 02

  I think when people say hardware is hard, almost by connotation, other businesses are easy. And I think that misses it. All businesses can be hard and simply matter what flavor of hard, but all businesses can be successful. And I say this because I've been in all the bug. In hardware, you've got a lot of pain upfront. It might take you a year to get out the product. The product has to be perfect before you get it out the door because once you get it out the door, you can't get it back and it takes a lot of capital to get going. But once you launch it, if it's successful, it can be incredibly easy to hyper-scale just because people love the product and they just start snatching it up like hotcakes. And then you can build defensive moats around brand and channel.

• 21:27Speaker 02

  In software, I think the thing that people miss is, look, launching the product is easy. Heck, in enterprise software, it doesn't even Need to be fully baked. It could be forty to sixty percent made and you have a great PowerPoint. And so you don't need this painful year and all this capital to launch the product. But then you've got to sell the product and now you can be in sales cycles that are nine and twelve months long. And if you've ever tried to sell enterprise software to HR or marketing departments, now you've got a year of selling. And then once you sell it, then you have months of them getting them to adopt the product and use it. And then you have to come back twelve or eighteen months later to show the value in the ROI to get them to upgrade. And so my experience has been that all business models are hard.

• 22:07Speaker 02

  It's simply where in the cycle is it hard around the product launch or around the go to market and the resale. The other thing which is interesting to me is along with hardware is hard often comes, hey, hardware is a commodity. It's very easy once you've done something for people to replicate you and dilute most of your value. And that always is interesting to me because if you are making hardware that is a commodity, like a pencil or a plastic part, that's absolutely true. But if you're Apple or someone and you're making a product that's highly differentiated and it takes hundreds of millions of dollars to play, it could be quite differentiated. In contrast, if you're investing in the fifty first SaaS software company that makes the same HR payroll software or marketing automation software,

• 22:50Speaker 02

  by definition, how is that not potentially also a commodity if it's the fifty first one? So I think it's important to just look at businesses and look at the fundamentals of them and decide whether or not there's real value there versus to discount certain business models, you know, just because of some conventional wisdom.

• 23:08Harry Stebbings?

  Listen, I totally agree with you there in terms of clip statements and how there's such nuance behind them. Speaking of kind of centrality to the business, though, I do want to touch on the final element before we move into the quickfire and staying on central, always the CEO and you'll see who are boosted, but not the founder. And so I'm certainly intrigued by this and the founder and CEO transitions. And so with that in mind, what are the core elements, do you think, Jeff, for a successful CEO transition like this?

• 23:33Speaker 02

  Yeah, I think the first thing to look for, particularly coming in as a CEO into a startup or growth company is, are the founders genuinely asking for the help and the partnership and the change? Has been initiated by them. Usually that is a very healthy sign that you can add a lot of value and that it's going to be a really positive integration.

• 23:52Harry Stebbings?

  Okay, totally agree with you there in terms of that. Sometimes it doesn't work. Why do you think, and I'm sure you've seen over the 25 years, why do you think people maybe make mistakes in trying to instill this foundational change and it doesn't work? What are the root causes?

• 24:06Speaker 02

  Yeah, so I'll answer that with a small aside. When you're looking for as a CEO or potential CEO to come into to a growth company, 19 out of 20 times, the story is something like the following. The company is is growing like crazy and has this revenue. It's near profitability. The investors are excited and there's plenty of money around the table. The founders are excited to bring in some additional help. There's plenty of energy to to go the next mile with the company. And what quite often is is the case is don't divide the revenue by two, divide it by four, just because the the investors are optimistic and almost giving you next year's projection, which means that it's not near profitable. It's still potentially losing a lot of money.

• 24:50Speaker 02

  The relationship between the founders and the investors may be strained and the investors are looking to bring in a professional CEO to help and the founders may not be fully supportive. The founders and the management team by that point be somewhat fatigued and the relationship between them and the investors may be somewhat toxic. That's more typically the case than not. And if you've seen the movie enough times, it gets easier to see. And so I think where it works well and what you tend to look for is the things about the company that you want to be great are great. So in the case of Boosted, for example, amazing product and technology, great service, great brand. And then the things that are not where they need to be yet, you know, around general

• 25:30Speaker 02

  management or scalability or economics or supply chain are things that you know are very operational and either fixable or scalable and that you can add value to. And in this case also, the founders were the ones that stuck up a hand and said, we really would like to get some additional experience around the management team to work with us as brothers and sisters and work together. And so you know that they've got a self-revelation about what they do. You add value around and where they can be helped and they're going to be good partners and be coachable on the things that they don't know. And so you're really looking for that signal that the founder stuck up a hand versus it's investor initiated because there's usually something else that's going to make change management hard behind that if that's what's been happening.

• 26:11Harry Stebbings?

  I absolutely love that description of reality versus illusion and that's a fascinating one. Final question for the quick fire and it's you mentioned the experience there and we're actually both lovers of history, I think. Because when we chatted before, you said past is prologue. Told me about this and how you made me think of using history as always a leading indicator for future events.

• 26:30Speaker 02

  Yeah, I think it's interesting. One of the challenges that we all have in the startup world, both as investors and operators, is how do you strike the right balance of being a disruptor and challenging how things have been done and how people think with not losing sight of basic economic principles or realities of human nature that are probably not going to change. I will give an example from the industry I'm in, just because it's been so timely is in boosted, we're involved with making vehicles and thinking about transportation, how people get around. And so it's very easy to see in the press, the last, you know, six months, there can be almost a euphoria around the idea that all vehicles will only be shared vehicles and no one would ever own a vehicle again. And it's very easy to get caught up in that disruptive whirlwind.

• 27:13Speaker 02

  But then if you look back at history and you realize, for example, 99% of cars are owned and all the car shares and taxi and rental cars on the planet are less than 1% of all cars. Or 99% of bicycles are owned and all bike share is less than 1% of all bikes. And, you know, even with electric scooters, which are all the rage now, it's already a $15 billion industry. And if you add up all the scooter share vehicles, it's still a small percent. And so the issue is you need to come back and look at fundamental human behavior and you realize that when humans travel, there's ad hoc travel where rideshare works really well. And then there's routine travel, like commute or running errands, which is like 99% of travel, where people prefer to own the vehicle.

• 27:56Speaker 02

  And so as you look at the history of a vehicle. Probably from Ben Hur and the chariot forward, you realize that that fundamental nature of commute means most people will own most vehicles. And then rideshare is an amazing opportunity for ad hoc travel, whether it be taxi, or rideshare, or scootershare, or bikeshare. But you tend to look at history and go, hey, ninety-nine percent of vehicles have been owned. Chances are, ownership's gonna be around for a while. And even this past year, you can look at business cases around bikeshare in China, OFO and mowbike, you know, going bankrupt and needing to get bailed out. So what's, I think, a challenge for us in the startup community is, a lot of times, we tend to look past or disregard business examples, as recently as last year in an adjacent country, or to just go do the market research and say,

• 28:39Speaker 02

  how have vehicles played out in this case for many, many years? And therefore, how much disruption is an appropriate amount of disruption? And how much is too much willing suspension of disbelief? So that's an example, just, I mentioned, it's around my company right now, but it's also just one of the top trending areas in the media now. But I think, six months after Euphoria, people started to come back to, well, how did this play out in the past? And they go, oh, I guess there's some fundamental truths that are still true. The technology may evolve, but the human race is not evolving as quickly, and they may still handle things the same way.

• 29:11Harry Stebbings?

  No, listen, I totally agree with you, and I love that kind of look back and determine how we can perform better in the future and analyze the future more accurately. I would, though, Jeff, love to move into my favorite element, being the quickfire round. So I say a short statement, and you give me your immediate thoughts. In about sixty seconds or less, per one, are you ready?

• 29:28Speaker 02

  In the spirit of rapid fire, let's do it.

• 29:31Harry Stebbings?

  Okay, well, then, let's start with your favorite book and why.

• 29:34Speaker 02

  The Missing Piece, and I can't tell you why, it's just the one that's coming to my mind, by Silverstein.

• 29:38Harry Stebbings?

  Love it. The Missing Piece is added to the book list. What advice would you give to someone entering a leadership position for the first time?

• 29:45Speaker 02

  Be humble and listen, and don't assume that whatever worked for you in the past at a different company necessarily applies at the next company you go to. Come back to fundamental principles of problem-solving every business or role you come into.

• 29:58Harry Stebbings?

  What motto or quote do you frequently revert back to, Jeff?

• 30:01Speaker 02

  As I did a few moments ago, it's still the human race. And no matter how fast the technology may evolve, the human race is still evolving at a far Slower pace.

• 30:10Harry Stebbings?

  What moment in your life has served as an inflection point and maybe changed the way you think?

• 30:14Speaker 02

  I think for me, I definitely had an inflection point about halfway through my career to date. Early in my career, I was definitely the classic, I'll call it brain on a stick. You know, go get the, go to the best school, go get a PhD, join the biggest brands. And there's a right answer and there's a meritocracy kind of mindset. And if you do great work and you you've got a great resume, a great experience, you keep going up. And then you get to this point where you get, particularly for me, as you get into real life and in large companies, where that's not really how it works. Being bright is helpful, but you start to realize there's 15 other skills that really matter. Leadership, common sense, experience, the ability to influence others, relationship building,

• 30:59Speaker 02

  building long trusted relationships. And these things matter as much if not more than just the pure business problem of the situation you're in. And so a lot of us would just connote that as EQ, you know, as a coworker and as a leader. And so I found about halfway through my career, I started just thinking differently. My office is a living room and invite everyone in and suspend your own agenda. Always ask people what their agenda is first and work on that with them first. Because if you love working together and feel people feel comfortable around you, you might only get 80% of what you wanted to get done today, but they're going to be happy to come back again tomorrow when you'll you'll keep going. And I found for me, my career was doing well before that, but it feels like I grabbed four more gears.

• 31:43Speaker 02

  Once I just really changed my mindset around that, and I guess you can call it just maturity and EQ. But if I could have told the 22 year old version of myself what to focus on, it would have been more around those types of skills.

• 31:55Harry Stebbings?

  Well, I'm thrilled to hear it. As someone who's always had lots of EQ and rather little IQ, that makes me very happy. But tell me, Jeff, what would you most like to change about Silicon Valley today?

• 32:05Speaker 02

  I think for me, what I'd come back to is a little bit of what I was talking about earlier. I would love it if we could get back to a day where we did more proprietary work, where investors really did have provocatively different views and there was more of an opportunity for debate. I think we've become very consensus driven around, you know, certain business models, around certain themes. And so there's a greater risk of the group overall, the conventional wisdom, just missing things. Completely. I think a second thing that really concerns me is, once again, and I have this lens from Boosted where I am now. We've pretty much conceded, almost as a community, the consumer product or the hardware world to other countries. We've conceded a lot of fundamental technology research that used to be our hallmark to other countries.

• 32:49Speaker 02

  And we've really given a lot of ground to others to potentially eat for us on those technologies. I think we need to come back and think about whether we have enough, I won't call it biodiversity, but innovator diversity. Here in Silicon Valley, or whether we've overly honed too much of our efforts around one or two business models and one or two themes. And we're investing in fifty of the same thing, rather than in ten companies in five different sectors instead. And I think that we're starting to see the rise of other innovation centers around the world. Who are have greater appetite to take on some of these other areas that we have acquiesced.

• 33:24Harry Stebbings?

  And then final question here, Jeff. What would you, in terms of the next five years for you and for Boosted? What does our future look like? Paint that picture for me.

• 33:32Speaker 02

  Yeah, I think five years from now, my hope is that we are in the midst of a second mobile revolution. Where the first mobile revolution was more around anywhere, anytime computing with the phone. And the second is really around anywhere, anytime commuting with light vehicles. We've pretty much reached a point where an automotive-based society is breaking down. The idea of people going around in thirty-five-hundred-pound cars or fifteen feet long being stuck in traffic. It's now become probably one of the biggest inefficiencies in our lives. And so I do think that the need for less small transportation options and light electric vehicles is a fundamental revolution. And the pun is on mobile revolution.

• 34:11Speaker 02

  And so I'd love it if five years from now, a significant portion of the population was going around on all manner of light vehicles. You know, skateboards, scooters, bikes, wheelchairs, walkers, whatever they want to come up with. And then for Boosted, we really see ourselves as, you know, like the Apple or the Peloton of that space. And we would really love to be the hallmark brand and benchmark for that range of class of vehicles, the way we are on skateboard today.

• 34:36Harry Stebbings?

  Jeff, listen, it's been such a pleasure to have you on the show today. I can't thank you enough for giving up the time. So, thank you so much.

• 34:42Speaker 02

  Hey, I really appreciate it. It's been fun.

• 34:46Harry Stebbings?

  Huge thanks to Jeff for giving up the time there and I absolutely love that question on investor selection. Would you leave your kids with them for a weekend? That really is a takeaway. If you'd like to see more from Jeff, you can find him on LinkedIn, Jeff Russakow. Likewise, it was fantastic to have you here for the show today. If you'd like to see more, you can join me on Instagram at H Stebbings 1996 with two Bs. It'd be great to see you there. But before we leave you today, I want to spend a minute to talk about Brex, the first corporate card for startups. Brex founders Enrique and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y Combinator. They decided to build Brex with instant online signup, no founder liability required, and limits 10 to 20 times higher than standard cards. Pretty incredible, I know. And you can

• 35:27Harry Stebbings?

  sign up for Brex and get fees waived by entering the code HARRY during signup. Honestly, it really is such a special service. And speaking of Brex, an incredible high-growth company. Well, a lot of what we do on the 20 Minute VC is talk to experts, pick the brains of founders and investors who tell us which trends to watch out for, offer tips on fundraising, and teach us how to excel at any company stage. And although there's no playbook for building a great business, we can certainly learn from people who've done it before. Beyond listening to this podcast and talking to mentors and advisors in your own network, it's important to have resources you can turn to when you're tackling a new challenge. Stripe has built those resources for you. Whether you'd like to learn how to run a pricing experiment or build a knockout landing page, Stripe gives you the information you need to start, run, and scale a technology company. Their guides

• 36:11Harry Stebbings?

  are often written by or feature people like Elan Gill, an incredible individual whom you've probably heard on this very podcast. And you can read one of my favorite guides on scaling engineering organizations and many more on Stripe.com/20VC. That's T W E N T Y V C. And speaking of scaling engineering organizations, as we did there, did you know that there are five job openings for every one developer in the United States? No wonder hiring great engineers is impossible. And that's where my friends at Terminal come in. Terminal is your dedicated partner in quickly building skilled and remote engineering teams. How do they deliver both speed and quality? Well, Terminal does this by focusing on everything necessary to successfully source, set up, and support these teams. From little things like managing office logistics to big things like benefits, lead

• 36:55Harry Stebbings?

  Eagle and Community, they've developed this proprietary and comprehensive remote team solution, based on decades of experience building remote teams across multiple continents, so they know what works. But don't take my word for this, take the word of Eventbrite, former 20VC guest Hims and Dialpad, all customers and lovers of Terminal, and you can find out more, stay at terminal.io. As always, I so appreciate all your support and I can't wait to bring you another set of phenomenal episodes next week.