Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Why Being First To Market Does Not Matter, Why You Do Not Have Defensibility on Day 1, How to Analyse Market Size and Present it to Investors, Vitamins vs Painkillers; Do Vitamins Survive Recessions and Good vs Great Messaging with Guy Podjarny @ Sn About this episode Guy Podjarny is the Founder of Snyk, the leading Developer Security platform, helping developers secure as they build. Guy was previously CTO at Akamai, co-founded Blaze.io (acquired by Akamai), and was the product manager of AppScan, the first AppSec scanner, through Sanctum, Watchfire and IBM. Guy is a public speaker, O’Reilly author, and an active early stage angel investor. In Today's Episode with Guy Podjarny We Discuss: 1.) From Israeli Military to Founding a $10BN Company: How Guy made his way into the world of startups from the Israeli military? What is Guy running away from? Why does he hate tribalism so much? Does Guy believe serial entrepreneurship is valuable or naivety of young founders is good? 2.) The Secret to Finding Product Market Fit: Why does Guy believe PMF is a poorly defined term? How does Guy define PMF? What are the single biggest mistakes founders make while searching for PMF? What are the most important elements on messaging when it comes to PMF? If you have a horizontal tool, how do you message and resonate with specific audiences? 3.) Defensibility and Being First to Market: Does Guy believe that being the first to market is really that valuable? Does Guy agree that investors expecting defensibility on day 1 is wrong? Why does Guy think market leadership is way more important than first to market? What are the true defensible moats that can be built early today? 4.) Lessons from 100 Angel Investments: What have been the single biggest lessons for Guy from his 100 angel investments? What are the biggest mistakes angels make when investing today? How should founders present their market size to investors? Where do they go wrong? Does Guy invest in both painkiller and vitamin businesses? How does he compare them? Why is Boldstart Guy's favorite venture capital firm?
Transcript 13,503 words · 3 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 I think first the market is poorly defined. What does matter is being a leader in a market and having some gap. I love to ask our product managers and angel investments that I make. This capability you're building in five years' time, would it be more or less necessary in the world and why? Why do you think that is?
0:16 Harry Stebbings? I mean my word, what a show we have in store for you today. You're listening to 20 VC with me, Harry Stebbings. And today, I'm joined by a friend, an incredible founder in the form of Guy Pajani, founder of Sneak, the leading developer's security platform, helping developers secure as they build. Sneak has raised over $1 billion since launching, with their last round reportedly priced at $7.4 billion. As for Guy, Guy was previously CTO at Akamai, co-founded Blaze.io, which was acquired by Akamai, and was the product manager of AppScan. Guy's also a public speaker, O'Reilly author, and incredibly active angel investor with over 100 angel investments. I'd also want to say a huge thank you to Ed Sim and Tom Hume. Some amazing question suggestions today, they really did make such a difference. But before we dive into the show today, you've heard me talk about how Coda is the
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3:33 Harry Stebbings? You have now arrived at your destination.
3:36 Harry Stebbings? Guy, I am so excited for this. I remember when we first did a SaaS to show many years ago. We get to do this in person now. I've known you for many years, so thank you so much for joining me.
3:45 Speaker 00 Oh, thanks for having me on. Always a pleasure.
3:47 Harry Stebbings? I want to start, stay with a little bit of context. How did you make your way into the world of startups? So most importantly, how did you come to found SNEAK?
3:53 Speaker 00 So I've been working in startups throughout my professional career. I was in the sort of the cyber parts of the Israeli army and then went into a startup in the appsec space that got acquired by another startup. They got acquired by IBM. I'm Israeli, moved to Canada in the process, left IBM to found a web performance startup, a company that's more in the dev ops space, making websites faster. And so I, at that point, I had shy of a decade of sort of application security experience, trying to get people to appreciate that it matters, trying to shift left. Get developers to embrace it, leaving them got my entrepreneurial of founding startups experience going with Blaze, which ran for about two and a half years and sold that to Akamai, where I was CTO for about three and a half years and moved with them to London. And so SNEAK was basically, once I was ready to leave Akamai and found another startup,
4:37 Speaker 00 SNEAK was was a bit of the culmination of those journeys. It was about bringing a DevOps ethos and a lot of my sort of learning, doing angel investing and from the first startup and all of that into the world of security and application security.
4:48 Harry Stebbings? Guy, what are you running away from?
4:50 Speaker 00 I think more than anything, I'm running away from tribalism, from this sort of notion of like, I'm in this group and this group is better. There's elements of that in sort of Israel and while the army kind of gave me a bunch of successful starts, I have fairly severe disagreements with how the sort of the occupying kind of army in Israel is handling today. It goes to the way I approach company building and selling a London and Tel Aviv office, but making sure where there's never like a nas versus them. And even the sort of the core business of SNEAK and sort of developers and security and embedding that in it. I worry about the de-globalization process that is happening in the world. And even my sort of charitable kind of agenda and all of that, it really focuses on inclusion and on being one, as opposed to being a part of the tribes.
5:30 Harry Stebbings? Yours is a line there in particular, you said at this point I had 10 years of experience and you said about the multiple founding journeys before SNEAK. I had a guest on the show the other day that said about serial entrepreneurship being overrated. I thought it was an interesting statement. Do you agree with that? Or do you actually think that's complete bullshit and there is so much value to be had from the serial entrepreneurship?
5:51 Speaker 00 I actually think entrepreneurship is a profession. So I'm maybe I'm on the opposite side of that spectrum for that comment. I think there are some things that you only learn by being an entrepreneur. So if you want to like fundraising is probably the most obvious one, but also just the sort of the initial journey of finding product market fit. Starting from a blank slate is just not something that typically is a reality, you know, in any other surrounding, getting the first hires and figuring out how to do it, convincing people to join you. The number of people that turned me down, definitely in Blaze and even in SNEAK, is unpleasant. And so I think there's some things that you learn there. But also I think what happens is that I like to say that if you're comfortable, you're not growing. And that there is like a Freud better statement that says there's no growth without pain. Are mightily uncomfortable. You're throwing yourself in a surrounding in which you need to learn things very quickly, figure it out, run around.
6:36 Speaker 00 And so I think when you immerse yourself in a space, you build a certain perspective, like when you found a company, you learn a ton very quickly. I feel like for me, for instance, my knowledge of Dev is much deeper than probably it would have been because I founded a company in the performance space, in the DevOps space. Versus if I had worked that type of surrounding.
6:56 Harry Stebbings? And I totally agree. And I get you. You mentioned that kind of you have to get good at fundraising. Do you believe that the founder has to fundamentally embrace and be brilliant at fundraising as founder and CEO? I was on a panel the other day and they were like, no, you don't. That's not a cool job. It's about building the business. And I said, that's bullshit. Fundraising is part of building the business.
7:14 Speaker 00 I like selling and I don't like deal making. I love getting people to fall in love with an idea that I have, with a concept, with something I'm building, with a perspective I have. And so that's selling. That's really getting someone to believe the promise, believe the potential, believe in you. And I think that's very exciting. I separate that from the sort of the deal making, the sort of, okay, and how much are you going to pay for this? And I think that aspect, maybe you can actually be a very successful founder and not be very good at it. You might be leaving some percentages on the table. But I think if you're not good at selling, if you can't get your idea through, if you can't empathize enough with someone looking at the market and get your message through. I just don't think you're going to be good at building a company unless maybe you can hire someone to do that for you. But that's probably more co-founder than than him really in that case.
7:55 Harry Stebbings? What do you think makes you good at selling?
7:57 Speaker 00 My kind of core skills revolve around the combination of empathy and analysis. Deep empathy into to people around. I find people interesting and I I think I'm a good communicator. I kind of phrase things well. But that also comes back to understanding what people might want to hear. I'm analytical by nature. I'm an architect. I break things down into components, into pieces. I see that the world is that. Everything is a product. Everything is an architecture.
8:19 Harry Stebbings? It's interesting. You said about one word, that perspective and selling your perspective, because I spoke to so many people from Tom Hume to AdSim to many others. And they all said that you have the ability to see around corners like no one else. And my question is, how do you create a framework or how do you allow yourself to continuously see around corners or put yourself in a position to see the future before?
8:40 Speaker 00 Or other people do. I think the key elements are, first of all, I try to break things down into first principles. Not just I see that X is happening, but rather, why is this happening? Why is whatever DevOps disruptive to security? What are the fundamentals? You break it down, you get down to, well, it's, it predicates around independent teams. Okay, so it's independent teams are at the core of this sort of agile development approach. So how do you do security in agile? So if you break it down into sort of the core principles, then you can now try to relate them to needs or to where you think has legs to evolve and where not. And so I try to break those down. The other thing that happens when you break it down is that you can grow your thinking. Like even if you can hold a ton of complexity in your head, it's limited, even the best people around it.
9:21 Speaker 00 But when you think about a topic and you reduce it down into this sort of core principles, like you'd say, okay, DevOps builds on blamelessness, continuous processes and independent teams. Now, even you yourself cannot bother yourself with all the sort of the mess that is behind those statements. And you can build on top of that. So you can build bigger and bigger pictures, building on those components. And sure, you'd be able to drill down into one of these tracks a bit more than maybe someone who just hears those principles. But I think it allows you to think bigger if you quantify the world that way. I think the other piece that's very important to it, though, is that once you do that, you need to get into the habit of anchoring in the future. For instance, I love to ask our product managers and agile investments that I make, this capability you're building, in five years' time, would it be more or less necessary in the world? And why?
10:06 Speaker 00 Why do you think that is?
10:07 Harry Stebbings? Is there a right answer to that? And how do you analyze the different variants of responses?
10:12 Speaker 00 It really starts by asking the question, but it tries to step away a little bit from being stuck with something that is exciting to you to do today, but you're really just plugging a hole versus solving a systemic problem. Sometimes the fact that something will be less relevant in five years' time, it doesn't mean you shouldn't do it. It just means that you should invest appropriately. It might mean that it's okay to put something a bit more tactical about how you address it. It might mean you shouldn't rely on that as your growth vehicle. And when you're founding a company, if the answer to the core value proposition that you have isn't yes, if you can't rationalize why it is more needed in five years' time, you should pick a different idea. Because you wouldn't be at any sort of Of scale if you're just starting in five years' time, that's when your idea should be most needed.
10:54 Harry Stebbings? To what extent do you think you can actually say, and I know that sounds strange, but bluntly, the hardest thing I think about investing in AI today is the speed of evolution. I'm bluntly betting on great people who are directionally right because it's moving so fast. To the extent that you can say in five years' time, be more or less, and I say, who knows?
11:12 Speaker 00 Yeah, I think it's very hard. AI is especially disruptive at the moment, and I do think that there is AI as a whole will totally dominate the world. Specifically, there's a certain kind of honeymoon period happening with GPT and LLMs, which I think will find the right limits to it. I think typically if you're immersed in a space, if you come from a space and if you have sufficient sort of ability in it, you can roughly get market timing within a plus minus two years time horizon. The plus minus two years is like life and death for a startup, and so you do have to, you have to navigate the journey. I guess, again, my system over here is not so much to sort of perfectly land it. You're making a bet, you're saying, I think this is necessary. You've asked the question about whether it'll be more necessary moving forward. You have a thesis about your sort of theory of change and how you would do it.
11:55 Speaker 00 I try to apply this sort of big vision, small steps type lenses. And so big vision, you have to be working towards something that matters at the destination, but it has to be a sequence of steps towards it. And ideally, you don't regret taking any of those steps. If they take longer, if you get stuck in them for a couple of years, you don't regret taking that step. And so you try to figure out the destination, figure, of course, your upcoming step, have a sense of what the next step would be. You don't really know past that and you get going. And so if you get stuck, you still have something that you've built that is of value and you continue. And sometimes you find yourself on a different path and maybe that's okay and maybe not.
12:27 Harry Stebbings? You said two words, well, yeah, it's a series of them, but you said drill down and market size. When we drilled down on the market size of SNEAK when SNEAK was founded, this was a very small segment. Any traditional venture fund, you would say, the market size is too small. How would you advise founders who are building for initially very small markets and especially hear that?
12:48 Speaker 00 Yeah, I think people have a lot of sort of cynicism around market size. I think you have to separate between the existingly defined sort of market sizes as whatever, what Gartner at the time. Said about application security market size. Those are transitory, those would change over time and I think they're not important. You shouldn't make decisions based on those, they change, they have been proven to change over time. I think the second is the market size as actual kind of value proposition that you think you can deliver the world. How many people would need this, how much value you're providing? And I think for me, Sneak, I never had any doubt about the market size of there. It's we're helping make software development secure. The value proposition is the multiple of the number of developers of the size of software development and the importance of security.
13:32 Speaker 00 Both of those will just continue and the multiple is huge. I had conviction, it was never a bother. What I do think is important for founders to appreciate is when you talk to an investor, like it or not, the investor is gonna needs to have a market size in their investment thesis. It is very important, you can't be big, you can't be bigger than your market, it has to be proportional. And so you have two options, you can ignore the TAM conversation and hope that your investor figures something out that matches your needs. Or you can actually try to walk them through it and think about it and explain why you think the market is big.
14:03 Harry Stebbings? I think you can actually also use.
14:04 Speaker 00 Blazing it away is the right approach.
14:06 Harry Stebbings? But I think you can like use it as an advantage to show your depth and analysis of sort around market evolution. I hate it when people say, security market's two trillion. Okay, but the security market is actually heavily segmented and it's actually incredibly broad. Can we segment it, show growth within different segments and show how we think it changes it? Do you see what I mean? That's how the best.
14:24 Speaker 00 I do, and I think especially in early stages or when you're talking about the idea, you don't know how the market exactly would evolve. You have to focus on value. Within that value, you have to size it, okay? How many dollars do people typically pay for that type of value? Like, there has to be a dollar component to it, but you have to start from just magnitude of value that you provide and then the dollars go from there.
14:41 Harry Stebbings? We mentioned the initially small market that you served in the early days. How important is being first to market, do you think?
14:47 Speaker 00 I think first to market is poorly defined. What does matter is being a leader in a market and having some gap. And to do that, you have to have something that is differentiated in an area that matters. If you're doing something that's a little bit more wild, a little bit more different. So if you're first to market with that approach and you successfully execute on it and win some order, then you have differentiation. And being differentiated in a market. Market that matters. And so it really is just about about leadership and about differentiation more than about time. Being first to market is just one way sometimes to achieve that.
15:19 Harry Stebbings? You said differentiation, that messaging is a great way to differentiate, the way you tell the world of your story. You said before, use messaging as a way to build the right product. What did you mean by that, Guy?
15:30 Speaker 00 Yeah, so messaging really forces you to distill what you do into kind of customer need. I find way too often what companies, what founders do is they either they come from a very narrow thing. I'll be amazing at this whatever sort of open source library that you know codifies whatever access code and something and it'll be superb. They love the technology or AI or crypto or whatever, and they don't translate that into sort of a customer need. And on the flip side, people saying, I'll be a platform. I just had a conversation with with Action Investment that started by saying, we are the most flexible platform for this and finance. We're in beta. It's well, like, that just does not work. And so I think what messaging does is it helps.
16:11 Harry Stebbings? Why does that not work for people who don't understand?
16:13 Speaker 00 It's because you basically underappreciate, on one hand, if you're too narrow, that you have to expand it to the use case, to the need of the customer and understand their experience end to end. And sometimes, even if you only provide a portion of it, they don't have a solution for all the rest of it and you're not going to succeed. So you have to think about their entire use case. What is the value proposition that you want to offer them? What is the problem that you want to solve? And similarly, from the platform perspective, people underappreciate the complexity. But once again, they care about their tech. They care about, I will build that. And my favorite sort of statement to tell founders is, nobody cares about your product. They care about the problem that you are solving for them. And so why are you talking about your product all the time?
16:54 Speaker 00 You should really lead with what is the pain, what is the problem that you're approaching? And so messaging is a forcing function to, first of all, understand what is the value proposition that you have? What is it that you are doing for a customer? It has natural brevity constraints, like it has to be short, so you have to distill it. You can't say, I do this and this. You don't need to be a messaging expert to know that doesn't work. And so you have to naturally prioritize. It's a great forcing function. And once you do that. I think people perceive messaging as I already know what I'm doing and now I'm just dumbing it down or simplifying it for the world, but it's not. You're actually simplifying it for yourself. You are focusing yourself. If you know that you are solving a problem like for a user, you'll end up building a different product. I can give an example from SNEAK.
17:38 Speaker 00 So SNEAK's ethos was always developer for security. That was first, that was who we are. And then open source security was our sort of the first product market. And both were needed for us to be able to succeed in the market. But the ordering of them was very important. The primary problem we're addressing for companies is that developers were not embracing their security solution. And so that was the problem. And our thesis was always like, it started from use open source, stay secure. And it evolved minimally to develop fast, stay secure. But it always focuses on like the thing that you want to do as an organization and then how do we help you address it?
18:13 Harry Stebbings? How often should it change?
18:15 Speaker 00 I think messaging naturally evolves. There's the just the practicality of getting better at saying the same thing. And so if you find yourself being on a call and saying, I like phrasing it this way, although on the website I say that way, maybe you should change what's on the website. The second thing that happens is your product evolves and so your value proposition starts from something a bit maybe more narrow, maybe it shifted, maybe it expanded, and so your sort of messaging evolves. But then also the market evolves and changes and that's maybe over a longer horizon. But I think a good example of that, again, in sort of SNEAK world is at the beginning of it, we had to convince people that they should engage developers, that developers can and will own security. And today, I think a lot of that is accepted and now the conversation and therefore the messaging, the problem they have is more, how do I do that? How do I scale that? And so the messaging has to adapt.
19:00 Harry Stebbings? The challenge and the biggest challenge I see is one of kind of horizontal product marketing or messaging, which is when you are a notion, when you are a retool, when you serve such a breadth of use cases, how do you effectively message in product market? What would be your advice to founders who actually serve a very broad customer base, from dentists to accountants to developers with a very horizontal tool?
19:22 Speaker 00 Well, you have to choose. You can't be everything to everyone or you'll be pretty crap at all of it. Your platform can have a vision, have an aspiration. Of being everything to everyone, but it has to have a specific subset of users, a subset of the sort of the market for which you're amazing at the beginning. And there's a variety of reasons for it. On the product itself, it's because almost all of these problems are more complicated than you think they are. As you unravel it and as you kind of really think about the customer's entire use case, then you learn that there's a lot more that they need to build. But even beyond the product, it has a good market element to it. You want to find a group of people that talk to one another. That's the whole idea of getting a certain flywheel is you get a certain momentum. And so you have to pick a slice, be amazing at it and evolve from it.
20:06 Speaker 00 And that piece needs to be big enough and small enough, right? It needs to be big enough to care, that it can feed you for a while, that it can be an important enough anchor, that it can be a good stepping stone for adjacencies as you expand. But it needs to be small enough that you can make it to the top, that you can become a force within that community.
20:21 Harry Stebbings? I totally agree with you there. Can I ask, did it just go up and to the right? Sorry, because we look at it and say, however many billion dollar company it is, was there a board meeting with AdSim? A tool where you looked at each other and went, oh, this isn't working to plan that I might have heard about.
20:34 Speaker 00 It's amazing how sort of history remembers the successes and all the sort of the failures. I think what worked well at Snick from the beginning is getting developer adoption. And so we were very focused on the most important thing we're looking to crack is get developers to embrace a security product. If we figure that out, revenue will come.
20:51 Harry Stebbings? That's not always the case though, is it? We see a lot of tools which get a lot of developer adoption, a lot of love, and revenue does not come.
20:59 Speaker 00 Yeah, I think it depends. You have to assess your market and I do think that I had a certain depth of understanding in this one. And so I thought the most difficult thing, the biggest thing to prove, was that developers will actually embrace the security solution if you build the right company, if you build the right solution. I entirely underestimated the gap between getting that to be successful, which we did, to actually getting a commercial business going.
21:21 Harry Stebbings? What was the gap?
21:22 Speaker 00 We basically successfully got developers to embrace this. And then at some point, we sort of opened up the payment gateways and allowed people to pay for it and nobody did. And then we worked through it. This is so maybe about a year into the company, we had GA'd, you know, we've had a beta out for about nine months. And we had thousands or maybe tens of thousands of users at the time. And we opened up the online purchase and nothing like a minimal miniscule trickle came in. And really, a year later, we were still at a hundred thousand ARR. And so at this point, it's two years in and many millions of dollars burned and tens of thousands of users. Did you still believe that? So I had to reaffirm the conviction. I had two primary moments where I had to do that.
22:03 Speaker 00 One was I had an advisor who was, I really think of him in high regard. Who heard, he wasn't super involved, but heard the conversation doing it and says, guy, I think you're fucked. You're basically classic dev tool pitfall, which is you get a lot of developer love, but nobody's willing to spend money on it. And really, I was pissed. I was really annoyed. I came back to San Francisco, flew back to London. And basically spent sort of the weekend fuming and thinking, am I? And why am I doing it? And the bottom line was basically reaffirming the conviction that I would rather crash and burn than pivot to just focusing on the security audience in that I don't want to build just another slightly better mousetrap. I want to build something that matters and what matters is breaking through to developers.
22:43 Speaker 00 And so that was a big one. And then I guess sort of a similar, maybe a little bit more frequent case is even before that. I had a whole horde of VCs come along, see the thousands of users outside, see the visibility and basically trigger a preemptive process. And I leaned in, I said, okay, it looks compelling. I think like I basically drank my own Kool-Aid and I leaned in and everybody and everybody looked at the company. And repeatedly, everybody and everybody looked at it and says, oh, amazing usage, no revenue. Can we stay friends? Maybe we'll consider for the next round. We don't know you yet. Do you have any advice for founders having been through that then? I think you have to be careful around how quickly you lean into a preemptive notion.
23:24 Speaker 00 Preemptive and the idea of sort of VCs coming along and saying, hey, maybe I want to, I want it so bad, I will pay up ahead of time. It's very ego boosting and it feels very good. And then you also know that you don't want just one horse, like you don't want just one bidder. And so it's very easy to say, why don't I talk to everybody now? And when you do that, you're sort of going a bit all in and you, I think you can really leave some scorched earth. I think for us, if it wasn't for Ed Sim and Boltstart and like him and Elliot being believers, and they basically topped us up. We did get some offers, we just didn't get like the right offer from the right investor. And I had a whole personal thing. My father-in-law passed away literally during the same sort of week on it. And I was thinking of whether I take VC calls from the Shiva. It was an intense period. And they stepped down and says, look, we see it, we believe it, we think you're sort of on the right path.
24:08 Speaker 00 Why don't you take this sort of smaller, this bridge check on the best valuation that you've received in this sort of term sheet, but a smaller amount of money? And that was great, like really all around. And that set us up and allowed us to get to the point, this was still eight months before we got to a hundred thousand ARR. But then four months after that, instead of a hundred thousand, we were at six fifty. And a year after that, we were at four and a half million. And so basically the roughly two years in, two and a bit years in, the dollar funnel started going to the right direction.
24:37 Harry Stebbings? I'm in many companies that are a hundred K in ARR after several million dollars burnt and several years. And honestly, as an investor, I'm going, oh, God, why don't they just give me my money back or give up or do something different? This is not fucking working. What do you say to those founders who's been through it? And how do they know whether to keep going or actually just it's not like?
24:58 Speaker 00 Just call it a day. I think you have to have an understanding. To me, it comes back to that sort of first principles thinking. And so you have to break it down and says, why is it not working? If the answers are only, if only I built this feature, if only I like talked to that person, then I think you're missing something. So I think if you're just churning, if you're just trying to hit in different directions, then it might indeed be sort of a problematic sense. You have to have a theory of change of what is it fundamentally that is causing my current situation? And what am I doing about it to significantly change it? Whether it is reach, whether it is core product principles, and therefore which use cases do they enable? Whether it is indeed a different sort of buyer persona than a user persona, et cetera.
25:36 Harry Stebbings? That's a really interesting one, different buyer persona versus user persona. Cause I think what we're seeing now with kind of the downturn in the macro is the kind of reversion back to purchasing power to the CFO, away from kind of individual contributors and teams having a lot of purchasing power. And so we now have very segmented buyer personas and then user personas, as you put it. How do you think about effective messaging when the person buying is not the person using?
25:58 Speaker 00 Yeah, it's really tough. I do think this is a bit of a tough moment for PLG companies. I still think that it's a temporary reality. And so you have to think about.
26:05 Harry Stebbings? What makes you think it's a temporary reality?
26:08 Speaker 00 I think a lot of the fundamentals that got us to sort of the PLG movement is the fact that modern organizations rely on an empowered. Workforce that can make decisions and move quickly. At the moment, everybody's looking for places to cut. Empowerment is not the word of the day and things get centralized. If you're a startup, you have to acknowledge that in the current reality. And you can shift your messaging a little bit to focus on, you know, for instance, productivity or cost savings that this product can provide. But it's a little bit tricky because you might get lured down a path that is not product led, that is enterprise, even though your market is really best situated to be one with product led. So it's a bit tricky. I have a few angel investments like that and it's not easy. You have to make a case by case decision. But I think fundamentally, over time, I still think product led, empowerment oriented solutions
26:52 Speaker 00 that focus on the user versus the buyer are important. You have to help your users communicate with your buyers. You have to help them understand what is the use case, what is the value proposition. I've said use case probably already a dozen times and I say it all the time because people confuse this with, they say ROI, they say features, you know, they say they talk about the technology. They talk about just finance. All of those are not important. What's important is the value to the customer. All of these things are just symptoms of it. And so you really have to understand what is the value. And my favorite statement to customers is to say, look, if we align on the value that we provide you, we should be able to align on the price. So I think if you figure that out as a company, what is the value you provide? Now it's just an articulation element. It's about how do you get that message across?
27:33 Harry Stebbings? So I agree it's a tough time for PLG. I also think it's a tough time for unbundled specialized products. I think we're going to see this kind of reversion back to a world of bundling where everything is just cheaper. You will probably give up your calendar and go back to Google Calendar if you are in a large organization as an example. And I, do you agree with that reversion back to bundling? And how do you advise founders then who are in an unbundled world?
27:55 Speaker 00 I think it's always a bit of a balance between them. And so best of breed products for the point activity that they provide are presumably better, they're best of breed. I think right now there is a lot of platform consolidation. I will admit that Snake is benefiting from that now that we have the breadth. But I think a lot of it is from, just from cost savings, single vendor relationships, things of that nature. But I think there are ways to build a platform that may, actually makes it truly better in total. If you make your products work together. It really, it again comes back to that notion of how much additional. Value, how differentiated you are. If you're a point best of breed product that is twice as good as the generic product, you probably will still succeed, like companies or customers will still want to use you as long as you articulate that value.
28:38 Speaker 00 I think what maybe has changed is the appetite for a product that is 20% better, but is indeed separate and has all the overhead of having another vendor and another solution implemented.
28:47 Harry Stebbings? Products often categorized as either painkillers or vitamins. Do you invest in vitamins?
28:52 Speaker 00 It is better to have a nerve. It's better to have a pain that you're addressing when you're talking about the primary. I like to think, I have this two by two in my head, which talks about kind of pain and frequency. So if something is is low frequency, high pain, something that maybe like a big incident that happens, or maybe building your sort of R back system or something, then really you need a strategy that is all about presence. It's high pain, so when it happens, you need to be there and be available. If something is high frequency, low pain, then it's all about friction. It's something that always bothers you a little bit. And so the effort of picking up a solution needs to be proportional to the pain that you're sensing. So it's really all about friction. And so I think those are the two primaries. If something is high frequency, high pain, it's all about comparing it to the existing solution.
29:37 Speaker 00 Because there's no way that they're not doing anything about something that is high frequency, high pain. And so it's all about the better mousetrap. It's all about differentiating from existing approaches to solving it. And if something is low frequency, low pain, and maybe that's like a version of some of the vitamins, then it can't be your lead. At the best, it can be a feature, but it can't be the primary thing that you're doing.
29:56 Harry Stebbings? I really like that kind of matrix to think through. We're both big fans of Seven Powers, Hamilton Helmer, probably one of the foundational books that I get everyone to read who joins 20 VC. Why do you think it's really important for founders to understand seven powers and where their powers lie first?
30:10 Speaker 00 I mean, so I'm a big fan of the powers framework. For those who don't know, at a high level, it just talks about how do you deliver value to a customer, eventually forming as like free cash flow in a way that is sustainable, superior and significant. So something that is truly better, it's truly superior, it's significant, it matters that it's better at whatever it is that it does. It's not whatever an ice cream truck with sort of the tallest roof, it doesn't matter. And it is sustainable, it's hard to copy. I think the reason It's important is the worst thing that can happen, in my opinion, to a startup is not to crash and burn, but to get stuck, is to build something that is like a little bit valuable and you build it up to a business that is two, three, five million in ARR, not dismissing the sort of the difficulty of doing that. But then you get stuck, you grow at a 20% rate from that rate and it's too good to just walk away from.
30:55 Speaker 00 But it's really not what you signed up for or your investors signed up for. I think powers really are about the ability to grow your business. You think ahead, again, you anchor in the future and you say, what is it that I'm building that will actually allow me to build on and grow? And if you don't have power, if you're building something that just has product market fit, but it's actually pretty easy to copy, if you're building something that purely relies on operational excellence, then you're in a pretty risky situation, right? And if any competitor comes along or like a burst of incumbent sort of operational excellence and you might lose your place, the idea of power is indeed to be that multiple. And so I don't think you should like dive in and only care about power at the beginning. You're, you need to be building value or like sustaining some value you created.
31:39 Speaker 00 But if you don't think about it, then you're carrying that risk of just getting stuck.
31:43 Harry Stebbings? Do you believe in defensibility at the early stages? I'm very strong, which is like defensibility from day one is bullshit, I always think. Do you agree with that or do you actually think when you're looking at companies you angel invest in are highly defensible? I like this and defensibility plays a big part of your mindset.
31:57 Speaker 00 I think at the beginning, you can't be defensible, you have nothing. I think maybe the only exception to that is if you have very unique knowledge in the faculty, then maybe that's an exception.
32:04 Harry Stebbings? I think now it's a really unique time with kind of a new wave of AI companies, which like if you come out of 10 years of Stanford's AI lab, that is a defensible mode of knowledge, which other people likely don't have.
32:15 Speaker 00 Potentially, although now that has grown. So that's the cornered resource kind of power. And do you have some sort of very unique set of skills that nobody else can have? And are they indeed superior and indeed significant? I think specifically right now in AI, the space is moving fast enough and there are enough people that it's not really a cornered resource. It can be a necessary and a valuable capability, but I think it's hard for that to be alone. But what I do think is critical is to think about how does this business become defensible? So if you assume success, if you assume you found product market fit, which absolutely should be. Consuming ninety plus percent of your attention should be on product market fit, not power at the beginning. You have to build something of value to then sustain and differentiate.
32:54 Harry Stebbings? So sorry, step one, get product market fit, and then we think about the seven powers.
32:58 Speaker 00 Correct. So I think when I invest, I think about some theories about how you could build a defensible project over here. If this was to succeed, what is it? Would you have a network? Would you be accumulating some data? Would you be aggregating, accumulating switching costs from within the customer? Is there any sort of counter positioning that you're doing there? Are you doing something that incumbents, even if they see, they would choose not to adopt? Like the Netflix blockbuster example, right? Or for sneak, it was dev first. Dev first is something that is counter positioned to the security industry.
33:26 Harry Stebbings? If you look at this with traditional journalism, they will never send you questions ahead of time, and they choose not to. I will always do that. It's a counter positioning example, I think.
33:34 Speaker 00 I think so, and I don't know the industry well enough, but it's an example of that, of saying, if people are already well incentivized to believe and stick to the existing system as it works, because that is what makes them powerful today, then counter positioning against them. And so I think per Helmer's book, the two powers that you build at inception are cornered resource and the counter positioning. And so you can come indeed with some unique knowledge or perspective, or with a counter position that is hard, that's like the innovator's dilemma, hard for the incumbent to produce. I don't think you should focus on those, but as an investor, even at the early stage, I try to theorize about what could it be? And then once you theorize that, you put that aside, and you really just focus on product market fit, and you have to get something working. Once you get something working, then you start tweaking.
34:17 Speaker 00 When you're getting to the point where you hit product market fit, and now you need to scale some things and things like that, maybe you should tweak priorities. You shouldn't overhaul priorities, but you should tweak priorities for things that matter. It could be the type of legal license you give to your customers around the use of data that you have. It could be investing in some viral mechanism. It could be trying to invest in stickiness, in switching costs.
34:39 Harry Stebbings? If we think about kind of product market fit, this is the first chapter before we move to the seven powers. I had an investor update last night. It was a one point four million ARR business. It's got there over a two and a half year period. It's getting a little bit slower than everyone thought. It's not growing particularly fast, but it's starting back. Badly, but it's taken quite a lot of cash to get there. And I slid it and I said, does this have product market fit? I don't know. Customers are staying, they're paying, there's enough of them, there's enough money, one point four million is not nothing. It's not being pulled out of their hands.
35:09 Speaker 00 Yep.
35:10 Harry Stebbings? Was it very obvious for you when you have product market fit and when more often than not with your angel investments, is it obvious?
35:16 Speaker 00 Yeah, I think sometimes it isn't. To me, product market fit is really about when demand outweighs your capacity to satisfy it. Kind of can't hire people fast enough, spin up servers fast enough, whatever it is, the scale, because demand outstrips it, then I think you hit product market fit. I think like first to market, it's a little bit of a poorly defined term. For Sneak, there were at least two elements to it. There was the product user fit of getting to developers. And so I think we hit that one pretty quickly. And there was a lot of learning still about getting that done, but I think we got that. But it was very different between that and the product buyer fit, which is probably a bit more akin to product market if you're talking about the business.
35:52 Harry Stebbings? For me, with you, you've got the product user fit and then you've got the business model fit. It's almost like the same problems Twitter in some ways, I find, which is like Twitter's a great product, like sneaking there these days was. But you now need to layer on a business model that works.
36:04 Speaker 00 Yep. And so that's why I think in use cases, I think in value propositions. And so who is it that you provide value to? That's the first question. If you don't provide value, then you know, it's no good. And are there enough of those? And then eventually is, would they pay?
36:18 Harry Stebbings? Do you think there's different degrees of quality when you look at the different seven powers? So brand power is one. And when I look at that, I'm like, I love it. And I'm as much a brand person as anyone. But I believe it's inherently more transient and momentum driven than some of the other powers that we can discuss. Do you believe there's different variants of quality of power?
36:38 Speaker 00 Yeah, for sure. I think, actually, I've had a couple of conversations with Hamilton. And so we discussed this. He ends up dissing his own brand and process power. So it says both of those are just so easy to claim that they end up being a little bit loose in in your definition.
36:52 Harry Stebbings? Do you agree with that? I like a brand like Chanel, like Louis Vuitton.
36:57 Speaker 00 Though brand power is very powerful, it's like for a tech startup or for a company that is that is building out. It's just so easy to claim that you have brand. I think the idea of brand is really to be able to sell the same product for a significantly higher price because of people taking pride for it. And so like, for instance, you think about SNEAK, you know, so SNEAK has a certain amount of brand power. There's a certain amount of like fairy dust, sort of DevOps fairy dust that all the security companies want. There's a certain amount of that that people believe, but it's not a sustainable, sort of superior, significant capability. I think that's really the sort of the risk with powers is that try to call everything a power. And that loses the sort of the whole kind of idea of defining and understanding your powers is that you know where to invest.
37:37 Harry Stebbings? But let's analyze SNEAK. Which of the seven powers, if you could choose two, are you like, I hang my hat, we have these the strongest?
37:44 Speaker 00 Yeah, we went pretty deep on it and we've done sort of power exercises for different competitor groups. Like our powers as compared to the dev tools that try to go into security versus our powers compared to the security players are a little bit different. Because the sort of the capabilities, what's normal in the ecosystem is different. I'd say that SNEAK's two primary powers are, you know, one was counter positioning, which sort of still holds in the security space. This notion of coming in developer first is to an extent at the expense of some CISO power, of some sort of top down decision power, in which a lot of these security companies have been designed to satisfy. And so that that whole approach is very different. And then the second is, and I will claim process bar here despite the sort of the criticality, and that is developer product led growth, sort of the PLG in the security industry.
38:29 Speaker 00 And that was actually my argument with Hamilton, which was to say, I think that if you go into an industry that is traditionally top down, it is coming in with a product led approach is counter positioned at the beginning, but over time you build process power by the sense that, let's say a bunch of people resigned from SNEAK and went to an existing sort of a company, even a new company, but definitely sort of an existing one. And they tried to replicate the product led growth motion within that company. It'll be very hard for them to do it. It is mirrored into the culture and the product and the go to market and it's so intertwined in how. We operate, that is very hard to replicate, but it is a power against the security incumbents. It is not a power against the ones coming from the dev.
39:10 Harry Stebbings? If you isolate those now and you sit in the room with your team, you're like, great, we know those two powers are really well. Does it change your footprint?
39:16 Speaker 00 Yeah, I think firstly, it might be interesting to think a little bit about the exercise that we've done. So what we've done was we took four primary competitor categories. And for each of those, we try to write down the primary capabilities that we differentiate on in those areas. And then we thought about the capabilities we could build that we think that are sort of interesting to us. And then we, for each one of those, we sort of assessed, are they truly superior, significant, sustainable? And that was a good exercise, even if we've done nothing else. And sometimes, actually, we've done this a few times, sometimes we've done nothing but the conversation, but it still distills your understanding of it. And I think that's very important. It's a mechanism, this and questions like, would this be more important in five years or not? Are things that I do with the product organizations and definitely with the labs organizations, which is very skilled in this now,
39:58 Speaker 00 to help us anchor in the future, to help us think about where it is going and where it is headed. And so that is very valuable. By the way, the hardest part is then distilling that into the top items. What is the one or the two items that you would pick for every sort of box?
40:11 Harry Stebbings? What do you think is the biggest mistake that founders make when they consider seven powers?
40:16 Speaker 00 Most of them just don't consider seven powers, right? They think about things a bit more loosely, but I think people are unwilling to pick. They think this is important and this is important and this is important. And so they end up under investing in the things that matter most. And so especially in a context of success, at some point, you feel like the world is your oyster. You can do a lot of different things, you go into them. So at the beginning, it's about product market fit, it's not about powers. So if you actually over rotate on powers, that would be the mistake. Over time, as you get something that is successful, I think powers are important because they help you pick the next thing to do. They help you ask, okay, if you're going to expand in X, add another product or expand an audience, the best question to ask is which of your powers help you in that expansion?
41:00 Speaker 00 If the answer is none, then you really should pause and reconsider because basically you're saying, I'm going to go into those areas and I'm going to compete on operational excellence merits alone. And so if you don't even know what your powers are, pause and go off and have a conversation about it. It doesn't really matter if you use the powers kind of framework. It doesn't like that's just a helper. It's about understanding what are your core sort of sustainable differentiators.
41:21 Harry Stebbings? In terms of product market fit, I think the single biggest I've done now astonishingly a hundred and seventy investments over like eight years. But the single biggest determinant of companies that reach product market fit versus those that don't, I found is like speed of execution, like granular speed of execution. Do you agree with that? And how important do you think speed of execution is in terms of getting to product market fit?
41:42 Speaker 00 I think of it as iteration and I think there's almost like an element of hubris in thinking that you can get into your ivory tower, come out in a year and come out with some wondrous thing that is precisely right. It isn't really, I think, the best sort of bet for you to make. And I'm a believer and I think what you need to do is you need to iterate. I think that is the sort of the speed of delivery. How quickly do you iterate? The faster you do that, the faster you learn. The faster you learn, the faster you're going to hit product market fit. So I I agree with that. The one caveat that I would add is you need to be iterating in the right direction. I like to say that if you're good, then you optimize for the feedback you get. If you're not good, that's a different problem. And if you're if you optimize for the feedback you get, you want to set yourself up to be getting the feedback in the area that matters. And so if you want to build a product led growth company and all of the feedback you get is from a dozen design partners
42:26 Speaker 00 that you work with in a top down fashion with sort of the CTO, then you will optimize for something. But it's unlikely that you would optimize for getting a self serve, community led product. You want to iterate quickly, but you want to understand what is the the fit between your product and the go to market. And you want to put yourself in a position to get the feedback in the right direction.
42:44 Harry Stebbings? There are so many other areas I wanted to talk to you about. You've raised multiple rounds of funding from some of the best in the business. What do you think are the most common mistakes you see your angel investments make when fundraising with venture investors? And what are some of your biggest lessons from raising from some of the best in the business?
42:59 Speaker 00 I think the biggest mistake angels make investing with VCs is underappreciating the different contexts, especially if you're co investing with a VC that is primarily an A or a B VC and they're signing a seed check. For them, it's a very small bet. It's the opportunity to go ahead. For you, it might actually be as an angel, that might be your sort of primary check. I put a lot of weight into the diligence and the vetting that some of the sort of the. Venture firms that I co-invest with do. And so I do value that a lot. But I also want to contextualize it for me and to say whether that's important. And for me personally, while I expect a financial return, I invest largely for the learning, for the journey. I feel it helps me. First of all, it's fun. Second is it helps me actually in sneak helps me understand. I think it helps me be a better craftsman.
43:41 Speaker 00 And so I have all sorts of filters that the sort of the VCs don't necessarily have. My first filter is, do I want to get on a call with this person? Again, do I like them? And then is this an area that is of interest to me? Ironically, for instance, I don't invest that much in cyber. And there are exceptions to that statement. But for the most part, I'm more passionate about sort of product led and those types of systems. And cyber tends to be more top down. I think you you build your personal preferences. Don't just think of it as an asset.
44:07 Harry Stebbings? How many checks have you written?
44:09 Speaker 00 I'm close to a hundred at this point.
44:11 Harry Stebbings? Can I ask, do you like financially allocate towards angel investing? Do you look at kind of holdings and go, okay, we're going to put X amount here into angel investments?
44:19 Speaker 00 Only as a limiting factor is I don't get, don't go overboard. My primary limiting factor is time. I invest versus taking advisory roles because I want to know like the base minimum is you got my money. And hopefully that's helping you build. Now, on top of that, I want to be a value add investor and I want to learn from the journey. And so we're relevant and when where I can, I take calls and I do a fair bit of those. I probably spend, I don't know, a day a week or so on angel related stuff, maybe a little bit less. That is my primary limiting factor. Beyond that, I've veered a little bit because I do as much as I do now in direct angel investments. I mostly actually reduced my kind of LP allocation. You know, I find I do want to limit my venture exposure. And I think it's important to remember for me is most of my money is still in sneak. Most of my money is in the venture, my business, like everything around me. I am in a high risk mode.
45:04 Speaker 00 And so in theory, the wise thing for me to do with in the bank is to put all my money in some fixed income account. Instead of, you know, get it there because really it's about don't lose this, the money that I have. In practice, I just don't work that way. I'm a risk taker and I enjoy the journey and so.
45:19 Harry Stebbings? What's been your biggest investing mistake?
45:21 Speaker 00 Investing in things that are obvious. And it's really because they stay small and they come back to being almost entirely focused on operational excellence. I like that there's something a little bit crazy. I try to. The leaps of faith that I have to make in making an investment. If it is too many, I don't invest, but if there are none, I also don't invest. There needs to be something a little bit out of the ordinary, like I believe that for this to actually translate into something big.
45:46 Harry Stebbings? So I always have, if we need a secondary jump, I'm out. And so a great example of that would be a neo bank for teenagers. Okay, the big question, the risk there is, can we transcend four kids or four teenagers to also converting them into just adult customers? That's the jump, really. What I don't like is for adult customers, and then there's an additional jump beyond that. But the secondary jump, then I'm out. Do you see what I mean?
46:12 Speaker 00 I do, and I do think it's easy to see how if you have too many leaps of faith, then you can't do it. I think to me, the learning was that if there are no leaps of faith, it probably means there are a dozen companies doing exactly the same thing. And if you were to do it, which I at this point typically don't, then you really are heavily betting on the operational excellence of that team. And so that's a different lens to assess for the team.
46:34 Harry Stebbings? I totally agree. Pricewise, have the best companies consistently been the highest price when you look back?
46:39 Speaker 00 No, I mean, I think there is a correlation. I think it comes back a little bit to the sort of the founder's ability to sell versus their ability to raise money, right? If you can articulate the opportunity very well, then oftentimes that translates both to your ability to sell it to investors and the ability to sell to customers. But no, I don't think it correlates heavily. I think it's like slightly, and I do think also companies can get themselves in trouble by raising too much money too early. Mostly because they end up sort of pouring fuel on areas that don't actually need to be accelerated because you don't actually know what you're doing. And so I think it's dangerous. Now we're in a slightly different reality in which some companies that have raised at a higher valuation, they need to mentally prepare. They're going to work their ass off for another sort of two years now to basically get a flat round.
47:23 Speaker 00 Because they got such a kind of overvalued round. So if you're early and you're pre-revenue and you got a hundred million dollar pre-money valuation in the previous round, you now need to get some revenue and you need to work on it. And hopefully in the next round, you've earned. That sort of a hundred million dollar valuation.
47:39 Harry Stebbings? Will you be able to retain your talent as team members who are going, wait a minute, I'm going to bust my ass off for two years and I'm going to have flat stock options when I could just go to an AI company and get boosted stock options?
47:51 Speaker 00 People should get top ups in equity and I think investors should be ready to do that. You got the higher valuation and so you raised more money at a lower price. It's a little bit easier for the valuation, for the sort of the investor that actually has paid that amount, but it's a little bit harder for them to accept it. But I think generally speaking, people should be financially incentivized in a competitive manner around that growth and they should be believers in the mission, especially early.
48:14 Harry Stebbings? Two more questions and they're really unfair, but I'm going to ask them anyway and you can't get away from it because there's a light on you. What was the best first investor meeting you had?
48:21 Speaker 00 The best first investors, someone who invested in sneak?
48:24 Harry Stebbings? Yeah, you're someone who invested in sneak or maybe didn't invest in sneak, but the first investor meeting that you had with them where it was just like this person gets it, they understand, they see the future with me, this is a mind meld.
48:35 Speaker 00 Yeah, it's tough because it goes a fair bit back. The name that comes to mind is Amit Patel, who is an angel investor who joined us in that sort of round in which like everybody was looking at it and saying, thanks, but no thanks on it. And Bolt started the top up. I think he's the only angel investor to have joined there. He's a professional angel investor and I've spins. I think he's one of, if not the most sort of impactful angel investor in sneak.
48:56 Harry Stebbings? Listen, I want to dive into a quick fire round now. So I say a short statement and you give me your immediate thoughts. Does that sound okay?
49:01 Speaker 00 Yeah.
49:02 Harry Stebbings? So what do you know for sure that others don't believe to be true?
49:06 Speaker 00 That when you have a good idea, you're not the only one that has it. Rather that you you never have as much time as you think to act. We think that we're sort of these unique creatures that just have this sort of unique insight. In practice, we're influenced by everything that happens around us and there are other smart people around. They're noticing the same thing and they're probably building the same type of solution with the same principles at the same time. So you better get going.
49:28 Harry Stebbings? What's the biggest hiring mistake you've made?
49:30 Speaker 00 Probably hiring for too big, too early. And so hiring people that are over oriented at processes or longer term status of the company, trying to sort of be ready ahead, but are not necessarily that good in today's needs.
49:45 Harry Stebbings? You can invest in one fund. An LP, obviously apart from 20 VC, which fund you invest in?
49:51 Speaker 00 I like a bunch of different phases, but bold start would probably be my pick.
49:54 Harry Stebbings? What's the most painful lesson that you're also most pleased to have learnt because of the learnings that you have from it?
50:00 Speaker 00 I think that when someone isn't working out in the company consistently, letting them go is not only in the company's favour, but also in their favour. You're really doing them no favour, keeping them in a failed position. That's doubly correct when the company is growing, when you're in hypergrowth, when someone starts to fall behind, especially in a leadership position. They need to be twice as good to be able to catch up and keep accelerating to the twice in size that you're going to be in a short order of time. And oftentimes you're just setting them up for failure.
50:28 Harry Stebbings? You brought in a CEO who sat on the board for many years and you worked closely with for many years, but you handed over the role of CEO. Was that hard?
50:35 Speaker 00 It was hard. It was also one of the better decisions that I've made. I think you have to understand what is it that you want to do? If you want to be a big company CEO, then as a founder, as long as you're executing well, you have the right to do it. Otherwise, you want to ask what the company needs from me most and what do I want to do? And for me, I felt like the thing I was most valuable thing that I could give the company was around my ability to see around quarters, my ability to understand where this is going. And I basically didn't have time to give that to the company because I was spending all my time trying to scale the organisation. And the flip side, I had this opportunity to bring Peter, who was amazing and my relationship with him is unique. And he could basically come on, do that better and focus me on the other piece. And that was also where my passion was. And just because something is working doesn't mean it can't be better.
51:20 Speaker 00 So it wasn't from a point of failure. It was another step that made it even better. And it was very hard and it continues to be hard, like any kind of a partnership is.
51:27 Harry Stebbings? How has being a father changed the way you operate and lead?
51:31 Speaker 00 I find that the analogy of the company is your baby, your startup is your baby, very apt. And I think one of the things you learn, I have two kids, is when you have one child and you want to accommodate their needs, then it's really about, you know, they want whatever. And you need to either absorb it and give them or not. When you have two children, you realise you're in a position in which you have to. One child desires might come at the expense of the other and you have to actually teach them to do the balance and do what you think is communally best. And I think it's the same kind of. In the company, clearly it's adults and not kids. But you learn over time that you can't please everyone and I want everybody to love me. And I think many people do, but at some point, when you have enough people, there's going to be some people that are unpleased. And you need to do the things that is in the kind of the greater good and the good of the broader family. Even when you still think about it as a family and even when those are hard moves to make.
52:16 Harry Stebbings? Do you agree with we're a family, not a team? Or do you think it's a team, not a family?
52:21 Speaker 00 I think it's a team, but I think teams can get awfully intimate. I think it's okay. It's a team that is on a mission. And what type of team is it? Is it a commander unit stuck in some format? Is it a set of explorers going to Antarctica and doing it? It's not a team as in a group of friends who met for a basketball game on the courts and went back home. It's a team that is all in together. And I think that's sometimes that's a more intimate and close knit group than a family. And so making moves like letting someone go or quitting if you're the one that goes, they can be awfully emotional and awfully personal. I do think it is a team because you can't fire a child and you can't fire an employee. You can't quit from your family. I know many would want to. And so I think it is a team, but it doesn't make it any less intimate.
53:02 Harry Stebbings? What's the single best performing angel investment? When you think about cash back D P I or T V P I, but potential to return or return cash. What's the best one?
53:11 Speaker 00 Yeah, I think there's a time horizon element to it. Probably for me right now, it's a security scorecard, which is not very well. And I was invested all the way back at $6 million valuation. But a bunch of others are doing quite well. Cloudinary maybe is the other contender, maybe even better. Cloudinary is an image management company that's been bootstrapped that I was an advisor in early on. Yeah, I've got a few of them. I do think Synthesia is an amazing company. I'm invested in now. Lightdash, there's a bunch of like great companies that I'm excited to be investors in.
53:38 Harry Stebbings? Penultimate one, what would you like to change about the world of venture?
53:41 Speaker 00 Venture companies would never invest in venture companies. There's nothing scalable, there's no tech, there's no real kind of scalable assets in venture today. Most of it is like law firm style, a bunch of smart people that are relying on hiring additional smart people. And the little tech that does get built is all about deal flow. It's all about finding investment companies. And I would love to see venture investing in tech that makes their companies more successful, that makes them more scalable. In general, kind of make it a bit more systematic. And I believe, I don't know for sure that there are sort of inklings of this that are happening. But I think that can be a disruptive force in the world of venture.
54:16 Harry Stebbings? A final one for you, Guy. Twenty thirty-three, ten years. Okay, where's Guy then?
54:21 Speaker 00 Yeah, I don't really believe myself if I talk about past the five-year horizon. But what I would like to think is that I focus on our family foundation. So we started a charity focusing on social inequality. So it's a learning journey right now. It's a pilot, a few years. I've got a couple of people in the UK, a couple in Israel, and learning how to give away my money. And it's fascinating and it's humbling and a lot more sobering than the sort of, at the end of the day, posh world of tech. And I would like to think that in ten years, that would be a more lion's share of my time.
54:47 Harry Stebbings? I have to ask this. You mentioned giving away money. How do you think about your relationship to money?
54:52 Speaker 00 I'm very uncomfortable with it. I like my kind of creature comforts. I like my sort of larger house and posh vacations, and I enjoy those. I like premium, even super premium. I really dislike luxury. I really dislike sort of status symbols and wearing something because it is to show that you're doing it. I, those are negative value to me. And so I'm learning it. I'm enjoying the ability to help family members, to help friends. And I think those are the things that give me the most pleasure. And eventually, it's a bit of a burden. And I talk about giving it away. I think all the money that I have at Sneak, my wife and I were planning to give that away. But when you give away larger amounts of money, suddenly that becomes a burden, which it's not donating fifty bucks to UNICEF. It's a burden. I, I accept those moments where I get annoyed with it. And I don't pretend to be miserable for it. It's first-class problems by definition.
55:37 Speaker 00 But I think it's an effort, not just a joy.
55:39 Harry Stebbings? Listen, for larger amounts, we'd be happy to relieve you of it for twenty VC donations. Listen, I've loved doing this. This has been such a broad discussion, but thank you so much. And this has been so much fun, my friend.
55:50 Speaker 00 Thanks for having me and thanks for putting this on. I always enjoy the episodes. Yeah, that was fun.
55:56 Harry Stebbings? I mean, some real mythbusters there. Defensibility on day one doesn't matter. Being first to market doesn't matter. Absolute myth-busting episode. Guy was fantastic. If you want to see more from us, of course you can by searching for twenty VC on YouTube. But before we leave you today, you've heard me talk about how Coda is the doc that brings it all together and how it can help your team run smoother and be more efficient. I know this because Coda helps me. We have many researchers in the team who bring all the content together for the show. And they need a single place to work, collaborate and collect notes, data and information in any format. And that's why Coda comes in. They can help your team run smoother and be more efficient. Coda allows your team to operate on the same information and collaborate in one place by putting data in one centralized location,
56:40 Harry Stebbings? regardless of format, eliminating roadblocks that can already stop your team in their tracks. And that's what slows down productivity and collaboration. It's time to get projects across the finish line faster. So help your team run smoothly, more efficiently with Coda. Get started today for free by heading over to coda.io/20vc. That's coda.io/20vc. And speaking of tools we cannot live without like Coda, we have to talk about Brex, the all-in-one financial stack trusted by founders. Founders have to think globally in order to open new markets, unlock cost savings and gain access to new talent. That's why having the right financial stack is more important than ever. And that's where Brex comes in.
57:19 Harry Stebbings? With Brex, you get a high-limit corporate card, a high-yield business account with up to $6 million in FDIC protection, and bill pay, all built with a global-first mindset. Brex enables you to operate in more countries and currencies than any other provider. So you can pay vendors, run payroll and make international payments faster. We all know that's a must-have for startups at any stage of growth. So are you ready to learn more about Brex's global-first solution? Visit brex.com/20vc. That's B-R-E-X dot com slash two zero V C. And finally, AngelList is fast becoming the center of the venture ecosystem. The startup world is just buzzing about how fast they've been shipping products that meaningfully improve the lives of both startups and fund managers and their investors.
58:04 Harry Stebbings? For startups, AngelList reduces the friction of cap table management, banking and fundraising all in one place. Teams can focus on scaling and let AngelList handle the rest. Thousands of startups have moved their cap tables to AngelList in the past year. AngelList also supports large venture funds and their teams with an automated, software-first approach, and the best customer service in the industry. Fund managers can focus on making great deals. While AngelList handles reporting, taxes, compliance and more. So if you're ready to scale your startup or fund with the platform at the centre of it all, visit angellist.com/20vc to get started. As always, I so appreciate all your support and stay tuned for an incredible 20 product episode on Friday with Tomah Cohen, CPO at LinkedIn.
Previous 20VC: Why Your Fund Model Should Not Rely on $10BN+ Outcomes, Why the Large Funds Got Too Large, The Rise of Solo GP's; The Pros and Cons & Is Consumer Subscription Even a Good Sector to Invest in with Nico Wittenborn @ Adjacent Next 20Product: How Linkedin Does Product Reviews, A Post-Mortem on Stories, Linkedin Messenger and Spam & Why the Data Advantage in AI is Diminishing with Tomer Cohen, CPO @ Linkedin Page updated September 29, 2026 · transcript and summary are machine-generated
