TSP029 | Ben Narasin – Transcription

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John Livesay:

Welcome to The Successful Pitch. Today’s guest is Ben Narasin who is one of the partners at Canvas Venture Fund. Ben has been a successful entrepreneur himself and had a great company called Fashionmall.com and became a seed investor at TriplePoint for eight years and tells us all kinds of stories about what he is looking for when he hears and sees a pitch. He said, most people bring him a B- pitch that he decides to help get more funding for and he takes it to an A+ by really focusing on the team. He’s a big believer of five things and the first three are people, people, people. Listen to the episode to hear what the other two things are. He also talks about the need to not necessarily pivot, but just slightly turn so that it’s not a 180 degree pivot. He’s really big on focusing on, you know, the tenacity needed to be a successful entrepreneur. Enjoy the episode.

Hi and welcome to The Successful Pitch podcast. Today’s guest is Ben Narasin who is one of the partners at Canvas Venture Fund in Silicon Valley. Ben started off as an entrepreneur himself at Fashionmall.com, which went public in 1999 then went on to become a seed investor at TriplePoint for the last eight years and recently moved to become a VC at Canvas Venture Fund. Ben, welcome to the show.

Ben Narasin:

Thanks for having me.

John:

You have so many great experiences from walking people through every stage of being an entrepreneur, really being in their shows and being an investor. The first question I’d love to ask you is how has being an entrepreneur helped you with the people you decide to fund?

Ben:

Well, I was an entrepreneur for 25 years. I started my first company when I was 12. Through that period of sort of useful entrepreneurial excitement on to the sort of lessons one learns when they’re naive on to Fashionmall.com, which I started in 1993 and took public in 1999 and then the bursting of the bubble, there were just an enormous number of lessons which either are, will be, or hopefully will not be valuable to entrepreneurs.

So, you know, there’s all these early startup stuff in terms of growing the business. There’s realities of fund raising. There’s getting your company public and then there’s things like what’s it like when things go wrong such as the bubble bursting in the entire nuclear destroyed evaluations across the entire internet sector. The last piece I’m hopeful I won’t have to spend time educating my founders on. The other stuff though, in addition to sort of 25 years as an entrepreneur where there’s a lot of operational and strategic and tactical things that I learned.

There’s additional learnings have come as being an investor where I’ve been traveling alongside with entrepreneurs helping where I can. You learn from their experiences as well when the experiences are slightly different or when they experience things that you haven’t experienced before and just I’ll close this by saying my number one agenda as an investor is always that I can help other entrepreneurs avoid hitting the rocks that I’ve hit. You know, if I can keep them from making mistakes I made or help them make a better opportunity even bigger because of something I learned, that’s an enormous value, to me, to be able to do it. It’s very fulfilling and hopefully it’s a value to them in terms of making their business that much better along the way.

John:

I’m sure. I’m imagining that one of the rocks that people can hit is giving a bad pitch. Do you have any insights you could share with our listeners on how to avoid that rock?

Ben:

Sure. I’ve spent an enormous amount of time with my entrepreneurs raising money. You know, as you mentioned, I spent eight years as a seed investor before I became a series A investor and when my entrepreneurs were ready to raise series A, you know, quick side bar, the first six years of investing, half of the companies got funded, went on to a series A and beyond pretty much exclusively from tier one firms and very often I would help with that process. Typically what will happen is, you know, they’ll get their deck ready and we’ll go through it and it takes me about four hours to go through a deck with somebody, because what I found a lot of first time entrepreneurs will build very nice B- decks and I want them to have an A+ deck.

So, there’s sort of a natural flow and progression, think of it as pattern recognition, when people see presentations all the time, which any investor will, there are certain things they’re looking for. There are certain things they’re accustomed to seeing and when they’re not there, sort of, it keeps them from moving forward to the next step. To give you an example, a lot of, there are sorts of different types of investors, but for the most part, you’ve got people that are very centric upon the individuals. They’ve got to believe in the founder and he founding team before they can truly believe in the idea.

Now, days of bubble one, people would say, we could either invest in a team or we can invest in a market or we can invest in the idea itself, but today, at least my vision and I think all the people that I respect, everybody understands that ideas themselves are of a fine item on a value. It’s all about execute and execute all boils down to the team, so you gotta have a great team.

So, I say that, because if you haven’t talked about who your team is, it’s very hard for people, it’s very hard for people to listen to the opportunity you think you can take advantage of. Do they know if you’re qualified for it or not? Do they know how you’re going to think? Do they know there’s something you have experienced or do not?

Now, in some rare instances and very rare, when your company is progressing at such a tremendous rate. Your seed money allows you to just knock out of the park, okay, you may be able to close with a team where the numbers are so strong that the proof is absolutely evident when you show everybody what you’ve delivered, but normally my preference is, you know, you tell who you are, you put your company name and logo up there and immediately the elevator pitch.

Now, you want the investor from the very first money you start that attack, be thinking about what you’re doing and whether it’s a fit for them, then you take them to the team, then you tell them what you do, how you do it, how you’re going to grow it, what it looks like now, what it’s going to look like in the future and you close it with what you want to raise.

So, that’s a pretty concise statement of a process, but look, a great deck could easily be eight pages long, because it is only a navigational lead. I think that’s another common mistake I see people making is the try to explain everything in the deck. The deck is what you put on the wall so that you can steer the conversation you have with the investor. They do have a major pet peeve. I think when you go in to present, you present off your deck.

When people sit down and they say, you know, hey, I don’t know if you want to look at the deck or just have a conversation, my response is, well, I’m pretty sure you spend an enormous amount of time and energy putting together a deck that qualifies and quantifies your business, so why don’t we use that as a navigation lead for the conversation versus just chit chatting and wondering if I missed something, wondering if you’ve covered every topic. This is your table of contents, you’re the one that’s suppose to tell me the story that is the book.

John:

Oh, that’s great. The pitch deck is the table of contents in a navigational way. We’re going to tweet that out. So, are you suggesting that, you know, there’s so many different formats of order what a pitch deck should have. Are you recommending that after the initial logo slide that the team slide be ahead of the problem solution slides?

Ben:

Yep. My preference with the rare exception of a business that is doing so well that you just close with the team. Look, in fairness, if it’s more comfortable for you, I’m not horrified if you’re going to close with the team, but it’s pretty hard for me to understand why you’re qualified to do something unless you tell me what you’ve done and who you are.

So, in my strong preference and let’s just look at it this way, pitching me, cover slide, name of the company, logo, elevator pitch, right. Second slide, the core tam, who are the founders. I don’t personally need to know about your advisers or any significant amount about people in the organization that you’ve hired unless they’re very critical to it.

Right now I want to understand the captain of the ship and the navigator that stands along side him or her and so that’s a slide where you’re probably going to put up two boxes, one for you and your co-founder, if you have a co-founder. Maybe two boxes for your other two most important people. You’re going to throw up the logos of the places you worked, maybe where you went to school, but then you’re going to talk to me a little bit about what you’ve done in the past that brought you on this journey to becoming an entrepreneur.

Maybe you were an entrepreneur in the past, maybe you worked at a big company, whatever. The story of you that I will spend as much time on that slide as I need to to understand you. That could be very short, it could be very long. Maybe it’s just a quick little understanding so we can keep going and we’re come back to the topic later.

John:

Got it.

Ben:

But that to me is personally, you know, I said this before, I’ll continue to say it. I need five things to make an investment, people, people, people, the great idea, and a huge market if it works.

John:

That’s great. We’re going to – that’s so important. I love that. People, people, people. That’s out of the top five, that’s the first three things that we can’t hear that enough, Ben. Thank you so much. I also really want to dive in to what you’ve talked about, what’s the number one quality you’re looking for in a person that’s running a company?

Ben:

Tenacity. You know, I will often say the only secret to entrepreneurial success is tenacity, because high-level of intelligence is assumed where you’d probably would have not gotten the meeting in the first place, because there’s strong filters out there between investors and the people that get to present to them. A good idea is assumed, because otherwise you wouldn’t have gotten funded, right, and a big markets assumed or I wouldn’t or someone similar to me wouldn’t fund it.

So, once you’re funded and you’re driving for success, it’s all about whether or not you’re willing to give up or whether you’re willing to die, because if you’re willing to have either of those things happen, you’re not going to succeed, because entrepreneurship is incredibly hard. People see the overnight successes, they don’t know that those things took 10-20-30 years. You know, I was talking to the guy that started Siri and he was talking about how everybody talks to him about how well and what a great and exciting success. He started that thing in the late 90s.

You know, the first sort of iteration was all the way back then and Apple bought them right after they launched or barely even born, but people didn’t pay attention to the fact that they were 20 years of work before that. The amount of energy it takes the entrepreneur, the amount of dedication, the amount of willingness to sort of, people have all kinds of quotas, break through walls, right. It’s just hard.

Now, eventually, it’s hard long enough, we would like to believe it gets easier and I think the right answer, it’s a Crossfit saying, it doesn’t get easier, you just get better.

John:

Oh. We love that.

Ben:

The more confident you become, the better you become and hopefully you break free. So, for me, it’s about is this person going to take it all the way? And that’s made up of both the tenacity in general of just being, you know, needing to win, needing to break through, not being willing to give up, not being willing to sort of walk away when times get hard and then I guess the second piece would be how big are you thinking? How big is this, important that this be for you?

Because, you know, I have my needs, but you’re the one that’s out there all day doing the work, so if it’s big enough for you to have an outcome of X, well, I’m not going to differ with that, but if my outcome needs to be x times ten, then we’re probably not a good alignment, because we’re going to end up in conflict over time and when you have an opportunity you think is phenomenal for an exit of $100 million dollars and I as an investor that needs to return a fund think that both you have more opportunity ahead of you and that exit isn’t going to be adequate for what I need, that’s not a pleasant place to be, right?

So, I rather just not be there. I want to know we’re all fighting for the same goal and usually – this is funny. I was just talking to a friend of mine about this exact topic, you know, it probably takes somebody being slightly irrational, egotistical, or insane to do what it takes to be an entrepreneur at the very highest tier, because think about it what it means to somebody to say no to a $100 million outcome? $200 million outcome? Or $300 million dollar outcome? But you do not get to be golden dragon multi-billion dollar business by saying yes to any of those. You have to be able to say no and continue to believe and know that’s the journey you’re on and fight for it. It’s a pretty rare thing.

John:

It is. That’s why they’re called unicorns I guess. So, that’s the exit strategy has to be really upfront at the beginning so that you and your founders are all the same page. You know, you’re speaking about the history of Siri, which I love in that whole genre of artificial intelligence. The way I was able to connect with you is Michael at Fido Labs, which is doing some really interesting and exciting things. Can you talk about his tenacity or what it is about Fido Labs and artificial intelligence world that you’re interested in?

Ben:

Sure. Michael is great. I met him, it’s probably been almost three years now and he came from Poland. He had a time of about 22 PhDs that had been working on this project for years. They built some businesses around it and he basically wanted to go to the max level.

He was willing to sort of walk away from good, solid opportunities to be paid a reasonable amount both for business along the way in terms of customer or even the business itself, because he wanted to pursue his dream of, I would call it, NLP 3.0. Next generation of natural language processing and you know, I saw in him just an enormous amount of drive, an enormous amount of intelligence, a strong team, dedication. You know, he’s exactly the time of entrepreneur that I liked to see during those times when I was seeding people, because the beautiful thing is, you know, with seed you provide capital for an entrepreneur to prove or disprove a thesis.

If they prove a thesis adequately, they then go on to raise their series A and if they do not, well, either they decided or shown the business they thought or it can’t be the business they thought, they might sell the company, but gives them an amount of time and an amount of money to figure that out and that’s pretty rare. That didn’t used to happen. Ten years ago it was a much more depending thing to proof out technology that is today. Today, you know, there’s a little saying that a million dollars is a new cost of failure. For a million bucks and 12 months, you can figure out whether something is or isn’t going to work. If it is going to work, you can have some indication on whether it’s exciting enough that people are going to care enough to back up the trucks.

John:

Love it. That’s so great. Now, some of the other companies that you’ve invested. I’m sure there’s some great stories there. Lending Club or Enigma, I’d love to hear another story about one of those companies and those founders.

Ben:

Sure. There’s been, if you look at the ones that have exited. There’s Lending Club as you mentioned, which was the second company I invested in. We know the founder back in about 2007, invested in 2008, they went public last year. It was the fourth largest US tech IPOs since the bubble. Phenomenal company, phenomenal founder, you know, totally changing the world of banking, creating a peer-to-peer lending structure, which has now sort of defined what it is now called the FinTech and it’s grown a whole new industry.

Drop cam was my very first IPO company. It’s an IP camera. You plug it in and it instantly configured with no-real effort. They were bought by Nest as part of Google for $555 million. Greg and Aamir also great founders, great vision. You know, it’s interesting. There was no FinTech when I founded Lending Club, there was no IOT when I founded Drop Cam and there’s a company called Check, which was originally called Pageonce, which was one of the first maybe dozens of apps in the apps store, so there was no app ecosystem yet. They sold to Intuit about a year and a half ago for about $360 million dollars. You know, there are a very tenacious entrepreneur. Israeli fighter pilot, just focused, hard working, smart guy. His name is Guy, by the way. Great, great company.

The last years from the ad tech space had a beautiful outcome. So there’s, these are just smart hard workers and entrepreneur and let’s face it. We all need some luck along the way as well. Luck is definitely the combination of hard work and opportunity and the harder you will work, the lesser you get, but you do need a little bit of it.

You need the right timing, you need the right this and that and I think the best entrepreneurs make their own luck most of the time, but we all benefit from, as an example, the fact that we’re in a very nice market right now. You know, for the last several, even more than several years, you’ve seen a lot of support both from the IPO market and the tech buying market and everything else to sort of giving liquidity and opportunities to these companies. That was not true for quite a while between 2001 and 2008. So, you know, that’s part of it. That luck there is about the timing.

John:

I was just recently listening to a TED talk about the, you know, timing is everything, that’s why Uber and Airbnb has been able to be so successful. Is that something you’re looking for in the pitch is not only why you, but why now that the founder has done some thinking about why now is such a great time for this idea?

Ben:

It’s a reasonable point. I mean, I think why now is important. I tend to feel that the best venture scale opportunities are there when you’re early, when you’re a little bit too early. The difference is whether you’re a little bit too early or a lot too early and there’s nothing worse than being right at the wrong time where you’re not able to survive long enough to have being right pay off.

So, you know, there are times when you look at something and you’re shooting in front of the duck, right. If you’ve ever played a video game to shoot the duck, gone out duck hunting. You’ve got to shoot in front so the duck is flying forward. The question is how far forward. If you’re so far forward that by the time you shoot, the duck isn’t even there yet and the duck flies right by, it’s irrelevant. And if you’re too close to it, you’re right on the duck’s nose, well, the duck is already going to pass you buy and you’re going to end up on its tail.

So, you know, it’s a very tricky thing and no one is going to get it right. No one is going to get it perfect. You’re going to have to have a view. You’re going to have to have a view about when those trajectories of the duck and the sort of pellets are going to intersect and I’ve seen – I’ve been on the wrong side of this once.

I’m sure I will be on the wrong side of more, but there was one time where I knew we were too early, it just turned out we were a lot more too early than I thought and that ultimately killed the company, because it just, too many times when they went out to call, the people said we loved this, we want it, we need it, give us one more quarter and one more quarter turned into two more quarters turned into three more quarters turned into four more quarters and then we were out of money and that was the end of that.

So, timing is important, but you also don’t want to be too late, right. So, when entrepreneurs have challenges, you know, as a seed investor, sometimes people’s ideas don’t work out. It’s proven to be flawed and they come back and I say, hey, that didn’t work, we’re thinking about doing something new, okay, let’s fine. I’m not looking for people to give me my money back. I’m looking for people to keep trying and they’ll often say, what’s hot now? What should we be looking at? My point of view is, what’s hot now is too late for you, right, you need to figure out what’s going to be hot later. You need to have that unique area that because you pioneered it. Now other people think that’s super hot and they want to do something like it. You know, given there’s Uber for everything at this point and there’s probably certain niches where that’s still available, but I want sort of a more marco economic and dynamic technology change, but generally, if it’s hot, it’s cold for you. Somebody else started it three years ago.

John:

Especially when you don’t think how much time someone’s been working on something by the time it comes. I love that. If it’s hot for you, it’s hot for someone else, it’s cold for you. That’s a great Tweet. That’s fantastic. Now, let me ask you about the three main areas that you’re working on now in Canvas. I think from what I’ve read in some of your other interviews, you really like FinTech, the marketplace and mobile. Can you tell us a little bit about the kinds of investments you’re looking for in those areas?

Ben:

Sure. Those are exactly the three primary focus groups for me and there is a fourt, over riding, which I’ll mention, which is I’m always looking for the company that creates the next thesis or focus area. Just as I think entrepreneurs should be looking for what’s going to be hot next, I also want to be looking for that. It goes back to my, there was no FinTech when I funded Leading Club or no IOT when I funded Drop Cam, so I’m always for that new idea that can change the world in some category in a way that’s exciting and a specific category, FinTech, even though it’s been sort of a segment now since Lending Club came around. It’s such an enormous category that there are still white spaces. I’m somewhat surprised that on a seed level, I made two investments in FinTech companies in the last 12 months. I would have thought by now I would have exhausted the opportunity, but that’s not the case.

There’s still niches that have not been attacked. It can be enormous, because the nature of finance, you know, everything in the world runs on money in some form or another, so there’s lots and lots of categorizes that are reliant on capital and that can be part of that FinTech world. mobile, sometimes people push back and say to me, well, saying you invest in mobile is like saying you invest in the web. My response to that is, you’re correct, if it’s 1997. In 1997, saying I invested in the web is pretty much in analogous to what I’m saying today.

There’s still tremendous opportunity in mobile up and down the stack in lots of different ways and so I’m not defining mobile in some narrow manner. Branch Metrics, which is an incredibly exciting company, they provide de-blinking and attribution for mobile app developers. It’s just, I think it’s tremendous what they’re empowering. They’re basically changing the world of mobile in the same way that de-blinking and attribution changed the world with web in the early 90s. You know, without de-blinking and attribution, you had Yahoo where people submitted their websites and if they were liked they were posted and then you had de-blinking/attribution and all of a sudden you have the ability to have Google.

Well, Yahoo is a solid company, but I rather have Google. That’s what Branch empowers. It lets developers eliminate multiple clicks in the stream that allows them to pierce the install so that when I send you an invite when you install the app, you already got what I intended you to have. You don’t have to drill down three levels, anyway, that’s changing the world of mobile in an incredibly powerful way and I would argue that is something that should have existed seven years ago.

I’ve been investing in mobile for 8 years with the app, probably it’s probably only about eight years old. This should have been there, but it wasn’t and hasn’t been until right now. On the flip side, I invest in individual apps, I mean, I’m pretty open minded in a mobile category and market places are in some ways the next iteration of enterprise ecommerce or consumer ecommerce, depending on how you’re looking at it and so any place where supply and demand are brought together, you could argue that Fashionmall.com was one of the first market places in the world and digital space.

We brought consumers looking for products in a certain category together with vendors on the retail, wholesale, manufacturing, and editorial side that we’re providing those to them. We got paid for making the connection in the middle. So, marketplaces are becoming quite powerful putting a lot of legacy business at risk and I love that. They are taking out brokers, category by category. It’s a powerful metaphor.

John:

It is. It’s such a wonderful position to be able to answer this question, you know, I see, it used to be very defined, you know, seed money or angel investors was this amount of money and then series A was this amount of money and now series B is this amount of money. It all seems to be kind of crowd funding is changing everything, do you have a sense from, you know, your days at TriplePoint as a seed investor where you’d give, I don’t know, $500,000, a million, two million, and now do you have a different starting point at Canvas or do you see it blending too?

Ben:

Well, so you know – I have also been doing a lot of my own direct investing over the last eight years and that’s sort of my primary well-spring where I have the most detailed data, but when you look at seed versus A, in the old day; all of three to five years ago; seed was pretty much a million dollar round. On the small end it might be half a million, if you’re stretching a little, it might be a million and a half. Now seeds rounds are going to two to three million, sometimes people even raise five or six and call it a seed. To me, if it’s five or six, you’re raising an A.

Now, you didn’t raise a real A if you did a party round of a bunch of people none of which are going to take a board seat or show up or even price the thing and they do a convertible note for you, which I think is a disservice to the entrepreneur, but it’s nonsense. So, I think it’s sort of funny how the world is shaping up. There’s now this concept of the pre-seed. The pre-seed is sort of half a million dollars. I used to call it friends and family, right, anything zero to $500,000 is your friends and family round and then you go out and you raise your seed round, which is a million to a million and a half and then you go out and raise your series A, which is probably 5-8.

The numbers have all changed, but the process is the same, except with now instead of your friends and family, you’re getting sort of this institutions playing in the game called pre-seed, seed is going all the way from regular seed to what my friend Brian put it called an avocado seed where it’s at 3 million dollars. I could also argue that in between the 3-5 there’s what I would term a baby A where an institution is doing it.

You know, it’s just a smaller A and then the 5-8 million dollar sweet spot of series A are “first institutional round” and then these days you’re seeing bigger and bigger Bs and 10-15 million are not on common and sometimes far greater than that. You can even see 10-15 million As, although those are still somewhat rare. So, I do think of it as sort of either friends and family or pre-seed which is zero to $500k. Seed, let’s go with a million to three million although heavier on the smaller side and then series A is going to be 3-8.

John:

Nice. That’s so helpful. Thank you for breaking that out. One of the things I want to ask you about is, what motivates you and you gave such a great answer in a recent article about your sense of pride and wanting to stay involved with the people that you’ve fund all the way to the end whether it’s going public or being sold. Can you speak a little bit about that?

Ben:

Sure. I think your comment is harping back to a point I made once that if you want to understand what motivates somebody, you need to decide whether it’s one f four primary things. It’s fear, greed, pride, or ego and I’ve pretty much as a relatively self-analytical guy I figure ahead of time that I am heavily motivated by pride. You know, when I tell stories, they tend to be stories of places where I’ve helped or something that I did or something I exposed an entrepreneur to or a way of helping them think about something had a meaningful impact. You know, I talk about the fact that we’re no – when the CEO of Lemming Co invited to the New York Stock Exchange for the ringing of the bell and hope proud I was of that and I will probably tell that story infinitely more than the fact that it also happens to be about 100x return for me.

John:

Wow.

Ben:

So, the pride of being there. I didn’t even look at the stock price. I mean, I did when I was on the floor, but I don’t think I looked at the stock price again for 30-60 days. I did that once. I’m a long term believer in the business, I’m a long term owner, but you know, it was all about just the pride of having identified and been there from the very beginning to some aid in the very early days and to have seen that journey all the way through to this next tremendous step, you know, that’s a huge, huge motivator for me.

It’s like, you know, I talk about tenacity with entrepreneurs. You gotta dig down deep in yourself in whatever role you’re in and this is very true for entrepreneurs, but it should be and often is true for investors as well. When you have to the extra mile and do that extra thing, you know, if you’re just driven by simplistic motivations of dollar signs, I’m not convinced you’re going to do all the things it takes. It has to be more than that. It has to be apart of who you are and when it is part of who you are, then you’ll also break through walls to help your founders and to make things happen and that’s the kin of investor I’ve always wanted for me and that’s the kind of investor I want to be for my entrepreneurs. I hope I will always remain.

John:

That’s so great. I love that. You know, we are always looking for people like you who can, you know, be an inspiration, you know, make sure you get the right investor for you and you are certainty modeling that for everybody. Is there a book that you recommend or like to give founders this tenacity either about business or pitching or life in general that you’d think –

Ben:

Every once in a while someone would be grabbing a specific topic like pricing and I say hey, have you read the first couple of chapters Predictably Irrational, but the things that come up every once in a while with a bit more frequency life-wise are not even whole books, it’s just parts of books. One, there’s a book called The Road Less Traveled. I think it was, Scott Peck. It was on the New York Times bestseller list longer than any other book. It happens to be a relatively religious book. I’m not a relatively religious person, but the first quarter or so is a very compelling statement of reality of life, which boils down to if you don’t want to read the book, life’s hard for everybody, get over it, and figure out how to get past it.

John:

Exactly.

Ben:

You know, the equation is, it’s not just a marathon, it’s a hurdle race and if you come up to a hurdle and your goal is to try and find a way around it, it’s unlikely you’re going to succeed. You just need to go full force and jump over that hurdle knowing that they’ll be another one another time and embrace it. Have no choice, nobody likes conflict, nobody likes hardship. Nobody likes difficult things, but the people that succeed the best are willing to acknowledge those are the same things everybody else on the planet has to deal with and they’re going to deal with it better by dealing with them head on.

John:

So great.

Ben:

And the second is a passage from Ralph Waldo Emerson called Self-Reliance, which is sort sums to, I’ll paraphrase it. We all have our own patch of the garden to develop, but when you believe in your heart of hearts that what is true to you is true for all men that is genius and it’s a thing that took me a long time to understand my own sort of thinking about things.

We often second guess ourselves. We second guess our ideas and we think maybe one person depending isn’t enough, maybe one person’s idea, maybe it’s just too whacky. If we believe in that idea, it’s the question of how long we have to take to prove to the world that idea is right, because in retrospect, it all becomes obvious and you can be that crazy once in a while as long as you keep on pushing through and it’s that day when everybody understands it’s a brilliant idea.

That pride and that joy really kicks in for most entrepreneurs, not the dollars that come with it. Those are a natural consequence. You work hard enough, you hit it right, the measuring stick of that is financial success, but believing in your own ideas, believing in yourself and your idea and your vision and fighting relentlessly – I always say to entrepreneurs, you need a northern light. You need a northern light that you are relentlessly navigate towards and it’s okay if your ship needs to tap into the wind from time to time. I do not like pivots. I think of a pivot as a 180 degree shift of a ship to sail back to shore having given up everything you’ve achieved, but moving into the stronger wind just off your bow makes absolute sense as along as it’s part of that journey in that northern light that you believe in.

John:

Got it. That’s a great analogy. I love it. Between the northern light and shooting the duck. You just have so many great analogies. It’s really wonderful.

Ben:

I’m a ball of analogies. I use a 100 of them because one, there are simple ways to communicate what can sometimes be complex issues or sometimes just simple issues, but two, I don’t know what’s going to stick. One entrepreneur takes one analogy and says that speaks to me, great! That’s what I want. I want somebody to get some benefit at that level.

John:

That’s great. How can people follow you on social media? What’s the best way to keep track of what you’re doing and all that great stuff? What’s your Twitter and all that?

Ben:

So, I’m at Ben Narasin and I also got a link to my Venture & Venisons site on there, which is basically a place I post all of my writings. I do both writing on venture and on entrepreneurship and on food and wine and travel. So, those are all lumped together in one place. If they go to Twitter they’ll find the link and they can see it if they wish.

John:

Fantastic. You’ve been a great guest. I thank you so much. We’ve got a lot great takeaways and a lot of great insights and I love this emphasis on the team more than ever, especially coming from somebody like you with such a great track record. Thanks again for joining us.

Ben:

Thanks for having me.

TSP028 | Eric Scott – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

Today’s guest on The Successful Pitch podcast is Eric Scott who is in charge of the investment at HVF, which is Max Levchin, the co-founder of Paypal’s investment world. Eric is in charge of hearing all the pitches that Max’s company is involved with. Two huge companies have come out of HVF, which stands for Hard, Valuable and Fun, by the way, which is how the evaluate their pitches and Affirm is one and the other one is Glow, which is an app for women who are pregnant or want to get pregnant. What they’re talking about here is a whole new way of looking at pitching.

One of the things they care about most is when you pitch to show them how you think. That’s what they’re most interested in. Eric covers companies they’ve invested in that have been bought by Twitter. Companies they’ve invested in that are in their Series A and finally, companies that they have now given them their seed round and what the criteria is for each. It really all comes down to what is your defense against competition coming in and taking your idea. Enjoy the episode.

Hi and welcome to The Successful Pitch podcast. Today’s guest is Eric Scott who handles all the investments for HVF investments run by Max Levchin. You might know Max as the co-founder of Paypal. He works for a company called Slide that Google bought and now he is running a company called Affirm, which actually came out of HVF and Max handles all of those things concurrently, so he needed a wiz guy like Eric to manage all the other things that HVF is doing. So, let’s get right to it. Eric, let’s get to the show.

Eric Scott:

Thanks for having me.

John:

Eric. I am so impressed with the volume of things that you and Max are doing and the intensity. Let’s first start off with the cool acronym and what HVF stands for, which is Hard, Valuable, Fun. What a great culture description. How did you guys come up with that name and what’s it like to work at a place that’s Hard, Valuable, and Fun. Can you tell us a little bit about what that means?

Eric:

Thank you. Yes, yes absolutely. Well, first of all, I can take no credit for coming up with the name. I was hired under Max’s technical assistant at HVF around a year into its inception. The origins of the name actually date back to Paypal at some point or another, Max was working on an incredibly technically hard problem and Peter came up to him and basically said, why – Peter Thiel, the CEO of Paypal at the time basically came up to him and said why are you working on this problem. There are much more valuable things that you could be doing and Max, as a 23-year-old CTO basically said, What are you talking about? This is like an incredibly hard problem, so it’s obviously valuable. Peter then essentially explained to him why the things that are technically hard, while fun, are not necessarily the most valuable things to work on at any given time. So, HVF has essentially become the three criteria for which we evaluate whether or not we’re going to work on a product or invest in a project.

John:

Wow. That’s such a great insight. So, let’s talk about your background just a tad before you got to working with Max. I know that you – I have read some of your blogs and you’re incredibly savvy technically and so he must have an incredible trust factor for you to be his go-to guy and decide, you know what, this is something we should invest in or not invest in and I know you’ve worked at some startups, but just tell us, did you ever in a million years imagine you’d be doing this?

Eric:

You know, the weird answer yes.

John:

Oh, I love that.

Eric:

I had no idea that I would be doing it with Max and I had no idea I’d be doing it so soon and I get to be working with as great of people that I get to work with, but I always kind of knew that I would be starting companies, help start companies, and my goal is to kind of eventually be a venture capitalist that happened ten years sooner than I really thought it would and I got really lucky along the way, but yes. I sort of always had been drawn to technology and entrepreneurship.

My background, you know, it’s pretty, it starts like a lot of, sort of, you know, people new to Silicon Valley. I graduated from Claremont Mckenna, small liberal arts school down in LA. I started a company when I was there. It was an e-commerce company that let you split the cost of a gift between friends.

So, this is like slightly before Venmo and right as KickStarter was becoming a thing. I got into the 500 startups accelerator. I successfully ran that company like straight into the ground and worked for my competition, which was a company called Wantful. I got laid off from Wantful and I was more or less unemployed on my couch watching West Wing when a friend of a friend texted me and told me that Max Levchin, this guy named Max Levchin; first of all, have I heard of him? I was like, of course I’ve heard of him; was looking for a technical assistant.

So, this is an important thing to understand about HVF is that we do three things. We start companies, we run companies, and we invest in companies and the people who really do like the grunt work for starting these companies are the analysts and technical assistants. So, these are people that can get up to speed really quickly on any technology, any market, they are usually PhDs or masters in computer science. I’m neither of those. I barely got my minor in CS from Harvey Mudd. I basically texted my friend back saying, hey, thanks, but like why are you at all, you know, why do you think I’m at all qualified for this? And more or less, I decided to just go for it at his behest and so I guessed Max’s email.

John:

Your first hack. I love it.

Eric:

Yeah, yeah. Ironically unlike the second or third interview with Max, he told me about Reportive and that has like changed the way I guess people’s emails forever, but no Reportive, I just sent it into the ether and three days later he, you know, was weirded out by the fact that I knew he was hiring this strange position and I started as his technical assistant and then around three weeks it became apparently that I wasn’t great at the technical assistant thing, but I had sat in on one pitch with him and he asked for my thoughts and I wrote up three paragraphs essentially saying, I think I might have been the first person to just bluntly say like, hey, look, you can invest in this and you’ll probably like not lose your money.

In fact, you’ll probably make it back, like you’ll, I don’t know, get 20% or maybe double or triple it, but like, who cares? And he said, this is a very good analysis, would you like to do this more? It’s kind of after that the rest is history. The next big break was essentially when he decided to go run a firm full time and that sort of left this vacuum for me to step and make sure Max’s money continues to be put to work, but he still, I should clarify now that he’s still very active in helping our portfolio companies. He doesn’t have as much time to sit in on pitch meetings as he used to, but beyond that, you know, we’re definitely a team along with the rest of the HVF labs crew.

John:

Just to give the listeners a big picture, correct me if I’m wrong, from what I can gather from all the research I did, HVF; Hard, Value, Fun, Affirm and another company Glow, which is an app for women who want to get pregnant or are pregnant grew out of HVF and Max really wanted to run Affirm so that he now really spending a lot of time doing that, but there’s obviously a tremendous value of what Max is interested in and keeps his pulse very much on what’s going on at HVF and what you’re doing. Can you give our listeners a ball park of exactly, you know, how much money HVF is investing these days? You’re obviously a VC, so it’s not just seed money.

Eric:

Yes. So, we are, so we’re certainly not a traditional fund. Our investment kind of look like a, our investment portfolio or our investment strategy you could say looks like a double helix on its side. It’s kind of hard to imagine, but essentially the sort of strand , the first arm of the double helix looks like a barbell, right, so by percentage of round, we take up an enormous percentage of very, very early seed and pre-seed rounds.

Every once in a while we’ll do this like once a year, maybe this includes Affirm and Glow, includes some companies that we did not start, but we aboard seed, we’ll kind of be as close to being the founders as we can without actually being a founder, actually being involved day-to-day. Then there’s a dip where like when you look at Series As and Series Bs, we are investing a tiny percentage of the round. Like, we work very well with almost every venture capital firm in the valley or, not, I shouldn’t say almost every, but we work very well with many, many venture capital firms.

Not really a competitive for any of those Series As or Series Bs and then there’s like some later stage kind of special situations where we’ll do, again, maybe one of those a year, but take up the entire round. It’s like something a normal venture capital firm would ever do. If you look at number of investments, these are kind of like $250k investments where we’re just coming in alongside a 10 million dollar round.

It looks like just a very straight forward bell curve where, you know, we’re investing pretty much like seed Series A, Series B party round or not and as far as how much money we’re trying to put to work in a given year, like I’m not actually like a real, because we don’t sit on a real fund, we get to be very opportunistic about it. It’s like last year we did roughly 28 investments.

This year we’ve done one and I know we’re about to do another next week. It’s just a matter of mechanics. So, we sort of get to pick and choose, you know, the things are only going to make money, but also things that we can actually help with.

John:

Got it. So, in those 28 investments that you’ve made. I’m sure it’s all public knowledge, right, it’s in CrunchBase and stuff. Can you give us a ball park of how much that dollar amount was last year?

Eric:

I cannot give you the exact dollar amount, but I can tell you that around a third of those were follow on investments both from things that we have really big on ownership stakes in and also some things that we don’t have as big ownership stakes in and two thirds of those were completely new investments.

John:

Oh great. Right like you said $250,000 is sort of the average investment that you make in those situations or you do bigger ones as well, yeah?

Eric:

$250k is more like the, it is just below the average, but it’s also the minimum. So, $250k is kind of the amount where we’re like, this is a lot of money, we are highly motivated to help you succeed with this money.

John:

Got it. Let’s go back to what you said using a hard valuable fund as their criteria of which pitches you hear that you decided whether you want to recommend to Max to fund. How does that filter through when you’re hearing a pitch, since everyone listening to The Successful Pitch podcast is trying to learn how to pitch better. How would they pitch HVF making sure they’re hitting all three of those?

Eric:

Yeah. So, every VC, every angel investor kind of has their own style that they’re attracted to. Their own style of listening to a pitch, they’re own style of pitching a company themselves if they’ve been on both sides of the table. I think for us, honestly, the best thing to is to try not to pitch, just explain. Like, we kind of – we view our pitches as a search for some sort of fundamental truth about what the company is, what true the defense ability is, how, probably more important than anything, we’re just trying to get a sense of how the founder thinks, which at the ultra early stages is arguably more important than what the company is actually doing.

It’s likely that changes a few times, but what the company is doing and how the founder thinks about it, how the founder decided to attack this first is the kind of ultimate way of understanding how this person in front of you actually looks at the world and reasons through problems.

John:

I love that. We’re probably going to tweet something out about that. How a founder thinks and views the world is one of the key elements to pitch and show when you’re pitching. Can you explain a little bit about the search for truth being defensible? Are you talking about, what are you defending? The barrier to entry with competitors or the numbers, what are we defending here?

Eric:

It’s all about competition. Let me rephrase that. When I refer to understanding how something is defensible that means how do you prevent a competitor from coming in and taking away your revenue. There are many ways of defending the business, there are some that we understand better than others, certainly, but the sort of arching like, search for a fundamental truth, it’s much more holistic and abstract than like, we’re looking for truly how is this defensible. Usually you can reason through that pretty quickly, but there’s lots of nuances around how they’re pitching what they’re saying.

John:

Can you give us an example of a pitch you heard that had a great defensible barrier to entry from competitors.

Eric:

Yes, yes. So, probably my favorite type of defensibility is a network affected data. So, this is a specific network affect in which basically a central brain makes all the decisions for these like customer nodes out in a network and the more nodes the central brain has connecting to it feeding it data, the smarter it gets. So, what the heck does that mean?

John:

AI.

Eric:

Uh, not really. It doesn’t need to be…

John:

Really?

Eric:

Yeah, like it definitely, part of the defensibility, part of the mote or at least initially getting there can certainly be machine learning as it is for one of our portfolio companies, Sift Science, but it doesn’t need to be. So, Sift Science is a great example to kind of understand this. They started out and I believe still are really leading the charge in fighting fraud, fighting fraud online, and basically the way it works is your company that come up to you, let’s say your Twitter, and they come up to you and they say, hey, you have all these people buying ads with credit cards. Give us a whole bunch of your data and we will tell you when somebody is about to fraud you.

You Twitter and you say, okay, that’s great, how are you going to do that? The answer is, well, we’ve got Uber’s data or we’ve got Facebook’s data or we’ve got these restaurants’ data or we have like these people who have no relationship to you. If Twitter succeeds or fails that has really no impact on whether or not Walmart is going to, I should be clear, I have no idea who their actual customers are.

John:

Right, it’s just an example.

Eric:

So, these are just an example. These two like popular Silicon Valley companies, Twitter and Uber, like they don’t seem competitive. So, as soon as let’s say Twitter’s data, you can look at someone who is swiping their credit card on Twitter and say, oh, they’re a fraudster and alter everyone else on the network. Hey, we have this fraudster on an unrelated website, you should watch out for the transactions. That’s like a really strong network effect on data, because if a competitor pops up the next day, all of the customers are already on one website. They already have all the transactional data on Sift Science, there’s no reason to switch.

John:

Right. It’s almost like if you Uber you don’t need Lyft. How many apps do you need to get a car to pick you up, right?

Eric:

Yes, yes. Most market places have these types of network effects. Our favorite, like you said, a network effect that is dependent on some form of somewhat intense machine learning to actually get off the ground.

John:

Got it. I want to ask you about three different kinds of investments that you’re marking it Hard, Valuable, Fun. One is you got a couple of companies that have actually been bought. Another that is in Series A and then ones in a seed. So, I think it’s fascinating, I love to just have you touch on each of those three topics. So, I saw that you have a company called Cover that got bought by Twitter and something called SmartThings that got bought by Samsung. Let’s just, can you take a minute and pick one of those companies and describe how you guys invested in them and how long it was before they got bought by Twitter or Samsung?

Eric:

Sure. So, I can – trying to think of what I can and can’t say. There’s definitely things I can say.

John:

Just top line. You know, this is what the company did. This is why we liked it and then it got bought x numbers of months or years later because, so obviously that was a successful investment.

Eric:

So, for your listeners, there’s not going to be too much that’s new or surprising here. I mean, both had excellent founding teams, both had visions that fit really well in line with sort of the thesis of the year for HPV investments, both had pretty good traction and decided to take acquisition offers within two years for both cases, because things were going well, somebody offered a price the founders found really attractive and we are certainly not the types of VCs to prevent any sort of acquisition nor are we big enough investors in either deal to have prevented that if it was the case. So, I think both of them were really good outcomes for all the investors and the founders and really good situations. The SmartThings was -…

John:

Yes, please, tell us what they were. For those who don’t know, what is SmartThings and what is Cover? What do they do?

Eric:

Sure, sure. So, SmartThings is, excuse me, was basically the first sort of internet of things platform for your home. They launched on KickStarter I believe several years ago. They come with a central hub and a package of devices and sensors that let you know when a door is opened, motion sensor, all sorts of things like that.

John:

Kind of like Nest, right? Monitoring your temperature and all that?

Eric:

Nest except for just one device, they have many sensors that weren’t necessarily push and pull. Like, you could just read data from it, so you can see that the temperature is raising, you couldn’t necessarily raise the cost, but you could also see like, oh, your front door is open and things that Nest couldn’t tell for you. So, that was SmartThings. The second company Cover, really cool idea, basically it was a plug-in to Android that would predict what you were doing given the sensors on our phone and show you the relevant apps. So, it would detect that you’re driving and have the see immediately on your cover scene show Google Maps and Pandora, because those are probably the two things that you want to use when you’re driving in a car. It would detect that you’re running, again, probably put up Pandora and automatically open up Strava so you can track your run.

John:

Fascinating that Twitter wants that, yeah. Those are great. So, the only one I want to ask you about is in a Series A is ZenPayroll. I love the name,, what are they doing with Payroll that makes it zen and what can you share about their process to be in the Series A.

Eric:

Man, this is one of those deals that we are so lucky to be apart of, the founder, Joshua Reeves came and pitched me and I was extremely skeptical when he walked in to the pitch and I was like incredibly fired up when he left.

John:

Wow. This is what, a year ago, two years ago? How long ago?

Eric:

I think a year and a half ago maybe sounds right. It was a year ago.

John:

I love to get people a framework. A year and a half ago they came in to pitch you and now they’re in Series A, just the frame work. What was it that made you go from skeptical to excited?

Eric:

So, I went from skeptical to excited in maybe like 22 minutes. That’s – that sounds about right, around 20 minutes. So, on the surface, you know, the way these things work is we had email intro, we rarely take cold meetings just because our network is pretty strong. The email address says, hey, look, there’s this guy in his team and they have a bunch of already pretty famous Silicon Valley investors in and they’re working on payroll and I’m like, alright.

We already invested in a lot of thin tech, so we know this space really well, payroll has super thin margins, it’s not like preventing aging or any of the like crazy biotech stuff we’re investing in, like why should I really care? And kind of took the intro because it was a warm intro and the way that Joshua really, like genuinely cared about this problem is just infectious and it sort of like, alright.

At first, we were extremely skeptical kind of anyone that walks in with a bunch of like who touts their existing investors and anyone who like pretends to be more excited than they are about their current problem, but the sense that I got and this is after listening to thousands of people kind of try to sell me their BS is like, this guy really cares and he is really smart. Like, if nothing else, this will be the world’s best payroll solution and I don’t think anyone can do it as well as him.

John:

Wow, I love that. We’re going to tweet that out. When you show that you care about the problem, it is infectious to the investors.

Eric:

Absolutely, but here’s the warning. If you try to make it seem like you care and you don’t actually care, a good investor will pick up on that in four and a half seconds.

John:

Authentic has to be part of that. It’s not acting, it’s actually really caring. Can you tell us what the problem is that he’s so passionate about solving?

Eric:

Yeah. I think he views payroll as something that should theoretically be used by companies to be the life line of the relationship between the employer and employee. Like, when somebody does really well, the payroll is the mechanism that delivers this like, the most – excuse me, the payroll is the mechanism that deliver this great news. Like, you’ve done well, you get a bonus. You’re doing well. We care about you. A check will show up every two weeks and provide sustenance, provide opportunity, provide everything else that money provides, and yet today it’s been twisted into this like terribly complicated, decrepit system run by these giants who have no attention of innovating any time soon.

They’re like trying to take down Silicon Valley startups by reneging on contracts. I mean, it’s just a pain. I remember running my startup setting up payroll and I was like why the hell am I spending three hours figuring out like who to call and then paying hundreds of dollars a month when I should be spending that money on rum and I’m ultimately just like sending these like really small checks to the few employees I have, like these are just numbers moving from one account to another, why am I stuck in this old system? So, that is the problem Zen Payroll is solving.

John:

I love it. It seems to me that he connecting money to the whole spirituality zen, if you will, of there’s a person behind the check and it’s not just some automated thing that’s coming to you and therefore there’s a connection between your performance and payroll that’s more than just numbers and data. I love it and so you guys invested in that or heard it and said we want in and you gave them some seed money and now you’re going for Series A, is that sort of the snapshot of it?

Eric:

No, no, no. He had already raised his seed money and already had a lead for his Series A. We were participants in the Series A. So, we’re not major investors in that from his perspective at least. We’re just glad to support him in his journey.

John:

Got it. Alright and then I picked one, but you can certainly talk about another one. You have BlockStream as a seed investor. Is that a good one to talk about?

Eric:

Yeah.

John:

Tell me what that is? What was that pitch like?

Eric:

So, that was a super impressive pitch, especially for us because we are mega crypto nerds. Well, I should rephrase that. I like to pretend I’m a mega crypto nerd, but everyone else at HVF actually is. So, this thing called Bitcoin really hit the scene so to speak a few years ago. We read all the papers and basically were just taken a back by the math. Economically, politically, business perspective like the actual asset of Bitcoin has a lot of debatable positives and negatives.

We could probably talk for three hours about that, but what is not debatable is the math behind it. It’s elegant, it’s powerful, it is like a true peer crypto innovation and BlockStream was the first or at least, maybe not the first, but the most serious attempt that we had seen at fundamentally innovating, again, on the block chain. Founders are very serious, they’re all extremely well known in the Bitcoin and security communities. So, we decided to basically take a bet both on the really cool math they were pitching us as well as just knowing that these are great founders that we want to bet with and we want to play with, so to speak.

John:

But, what problem are they solving with this whole Bitcoin world?

Eric:

They are the high level, they ultra, ultra high level and I’m going to purposely avoid some of the technical details, because I’ll just talk over myself.

John:

Please dumb it down. Like you’re talking to a 7th grader.

Eric:

So, today a Bitcoin is this digital asset and the way that you record that it is transferred from person A to person B is via the block chain. The block chain is basically what makes Bitcoin what it is. It’s this huge public ledge where stuff is going. What you can not do today is you can’t transfer other goods and services, because other goods and services are more complicated. The deed to a house needs third party approval, fine art has all sorts of implications with it, you can imagine; other things that require somewhat more complicated contracts. So, the technology BlockStream is building is essentially helping turn the block chain into more of a platform so that people can build complex contract on top of this trust-less system.

John:

That’s so clear and easy to understand and I can see why you got excited about it. Thanks. Before I let you go, I want to ask you about your recent blog. This whole concept that one person could – the race for one person to create a one billion dollar company as oppose to – because of technology, can you give us another one or two sentences about how did you come up with that idea to even write a blog about that?

Eric:

Oh, so I was sitting eating lunch with two of Max’s technical assistants at the time and one of them came up with the idea. I actually don’t remember which one it was, so it was certainly, it was certainly not my original idea. I’m just the guy that dug into the data and wrote the blog about it. I’m not sure if it was Derek or Elliot, neither of whom are currently technical assistants anymore. They’ve all moved on to awesome things within the HVF family, but yeah. I wish I could take more credit for it. It’s become a pretty well known concept. I’m the first person I know to have blogged about it. I did digging to make sure I was, but since then people from other reputable parts of the venture capital community have realized this very well might happen and might happen in the next decade.

John:

I love it. Eric. Is there a book that you think is really helpful for startups when they’re coming to pitch or just about life that you think is useful to know, especially when you’re talking about – if you’re evaluating how a founder thinks, is there a book that you think would help a founder present that or really be attractive to you when you’re thinking about, you know what, I can tell that guy read this book because he thinks like I think or he looks at the world like I do.

Eric:

That is a good question. I don’t think there’s a single book.

John:

Whatever comes off the top of your head that you like, you found useful.

Eric:

So, here is, I think there’s, so there’s two, there’s one and a half. There’s one book I’d read and there’s one message that I would leave you with and there’s probably a book out there that describes it really well. So, the book that I just finished that I really should have read a long time ago is Barbarians at the Gate. It’s about the hostile take over of RJR Nabisco, the biggest transaction of all time, at the time at least, and it is really interesting because the transaction that we do are in order of magnitude, maybe – sometimes two orders of magnitude simpler than an LBO.

Like, somebody comes in, they pitch us, we get fired up, we do two weeks of research, we do four weeks of research, we invest, we help them, it’s done, but even with that simple of a transaction, the number of moving of parts, the number of incentives that need to align; the number of different types of incentives for different research, the number of different parties you need to corral is enormous at the smallest level and if nothing else, Barbarians at the Gate does a really good job of showing you how everyone you’re talking to may or may not be talking to each other, may or may not have different reasons for talking to each other, and may or may not have different reasons; in fact almost certainly does have different reasons for talking to you.

So, with that in mind, I would say the most important thing when you walk into a pitch, into any pitch, is to just understand exactly or as close to exactly as you can what that investor is looking for. What gets them excited, what type of personality are they drawn to. What type of company are they excited about.

John:

Great. We’ll tweet that out. Know the investor before you pitch them. That’s the tweet. I love it.

Eric:

That’s it — for us, for us that thing, you know, we want someone who is thinking is just as clear as day.

John:

Got it. Don’t confuse people. I always say the confused mind says no and it’s very true. You have to explain yourself clearly.

Eric:

They’re hard concepts really. A lot of these things are complicated. So, if you can explain a really complicated thing very clearly in a way that doesn’t dumb it down. That’s great.

John:

Yep. I love it. How can our listeners follow you and follow HVF and what’s the best way to keep in touch and follow your blogs, etc?

Eric:

So, probably the best way to follow HVF and myself is through Twitter. So, my handle is TweetOfEric. HVF’s handle is HVFLabs. Anytime we write a new blog, launch a new company, invest in something that we can publicly talk about, one or both of those will be active.

John:

Fantastic. Eric, it’s been a pleasure having you on the show. Thank you for sharing your insights and your wisdom across companies that have been bought, Series A and seeds and all the important things that really jump out when people come to pitch someone like you. It’s been great having you on.

Eric:

John, thank you so much for having me.

TSP027 | Chris Camillo – Transcription

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John Livesay:

Today’s guest, Chris Camillo is the CEO and Co-Founder of TickerTags. Chris wrote a book called Laughing at Wall Street and tells a story of investing $20,000 in three years making it into $2 million. All about analysis of meaningful information before the main street knows what’s going on. So, if you get information on trends like the hot new Christmas toy, for example, then you would know to invest in that company before the stock would go up.

He has an exciting new company, TickerTags, which helps monitor conversations. He, himself, looks at 15,000 tweets a day to see what the trends are, if you can imagine, so he’s automated this process and anyone who listens to the podcast can be invited to use it for free as a beta customer this year, so that’s an incredible takeaway. I think you’re really going to be entertained and inspired by Chris’s success and he said, you know, most investors today are entrepreneurs like myself, not bankers, and we really want you to be upfront in your pitch about the hurdles you’re facing. Enjoy the interview.

Welcome to The Successful Pitch podcast. Today’s guest is Chris Camillo who is the CEO and Co-Founder at TickerTags. Chris has an amazing story starting with writing a wonderful book called Laughing at Wall Street. In 2006, he was able to leverage social media analysis to invest $20,000 in the stock market and in just three years grew it to more than $2 million. That’s an amazing story of success. Obviously he’s been covered in Forbes, in Business Week. Besides doing that, Chris was involved with eCarList and TrueLinkswear. He really is an expert in turning social conversations into market insights. Chris, welcome to the show.

Chris Camillo:

Thanks. I appreciate having me on.

John:

I just want to take a minute and take our readers back to what inspired you even before you wrote the book to get involved with high-tech and your first startup?

Chris:

Well, I guess you have to go way back, way, way back. I was actually, I graduated from college, moved to LA, I was in the film business for a little while and that didn’t go as well as I had hoped. It was 1999 and all these people were starting dot com, what we called them back then, right. Dot com businesses and I just wanted to be part of that, so I kind of said goodbye to my kind of aspirations to be a film producer and I got involved in a startup at age 21, I think it was, and I never left.

I got the bug. I think my entire career has been in startups and each startup I’ve had more accountability, responsibility, and a great equity piece, right, leading up to my last startup, which is eCarList where me and my co-founders own the entire platform and now TickerTag, which is again a new startup of mine where me and my co-founder started the platform, so it was a 20+ year experience, but we’re finally there doing it for ourselves now instead of doing it for others.

John:

How great. I love that your first pivot was before you were 21.

Chris:

Yeah. I’ve been like an entrepreneur since I was 11, so it seems like I’m way – I feel way older than I am.

John:

Well, tell us a little bit about this fantastic title, Laughing at Wall Street. What were you able to do with data that allowed you to take $20,000 and grow it into $2 million?

Chris:

Yeah, so when I was a kid, I had read a book by Peter Lynch called One Up On Wall Street and it was all about, he was one of the most famous, I guess you can say, mutual fund managers of all time who ran the Magellan Fund and a lot of his investing was based on hanging out at the mall with his wife and seeing which stores were crowded, which products were moving. I realized early on that on Wall Street or investing in general, it’s all about information.

So much in life is about information and capturing meaningful information early and doing something with it. Wall Street, that’s certainty the case on Wall Street, so if you were able to identify information that’s meaningful to a publicly traded company before the general public or Wall Street is able to identify that information, that’s the best way for ordinary person like myself or anyone else that’s not necessarily a financial analyst to do well in the market, right, because we can’t really compete in turns of fundamental analysis, there are thousands of intelligence analysts out there that crunch numbers everyday.

If you think you can do that slightly better than someone who’s been doing it for 25 years, you know, Harvard, Wharton graduates, these are smart people, right. I mean, how much better could you possibly do that. The one thing that you can do better is learning how to see things in your life and then associate those things to investment opportunities, because Wall Street spends a lot of time researching ordinary people, right, conducting market research. We’re living the research, right. They’re trying to get inside our heads, so the research that they conduct, there’s a lag in how long it takes them to understand if a product is trending or if there’s a cultural movement that can impact one or more stops.

I realized early on that I can do that myself and where Peter Lynch had to actually see physical people walking in and out of stores, because our generation has Facebook and Instagram and Twitter, I have access to all the world’s conversations in a way and I can read into them in real time, so it’s limitless as to what we can detect if we know what to look for, so I developed a methodology around that.

I called it social arbitrage investing and I just try to find things that would be important, either positive or negative, to publicly traded companies that haven’t yet been digested by Wall Street. I read 15,000 tweets a night. People don’t really believe that, but for the past three or four years I’ve been reading or scanning, I guess you could say, 15,000 a night just trying to get a sense of what’s happening that could be impactful for companies.

I developed a great methodology around that. It’s actually very easy. It’s something anybody can do. In 2010, I became the world’s topped ranked self-directed investors for $20,000 to $2 million. It was audited and being tracked by a portfolio monitoring service, that’s when I got a little bit of publicity and I had an opportunity to write a book about it. I did, it’s called Laughing at Wall Street and it’s about how any ordinary person can overachieve and really do things that even professional can’t in Wall Street.

John:

Chris, can you give us an example of monitoring either the tweets or the trends, positive or negative, of a specific company and how you were able to buy that stock low before it went high or sell it when it was high?

Chris:

Yeah, one of my favorite examples I think anyone can relate to and it’s not necessarily just tweets, but just monitoring the web and blogs and what people are talking about. In 2011, the top selling Christmas toy of the year was called the LeapPad, it was like an iPad for kids and it was made by a company called LeapFrog, an educational toy company that really hadn’t produced a hit product in 10 or 15 years, so in the fall of that year. I think it was late September or October, a lot of the Wall Street analysts and journalists had discovered that this was going to be the hot selling product of the year called the LeapPad and they all wrote articles and analyst reports talking about how it was going to be huge for the publicly traded company LeapFrog that made this product.

So, over the course of about a month, the stock doubled, so that’s great, but what’s interesting is a full month before anyone on Wall Street started talking about this investment thesis, there were a couple hundred mommy bloggers who were the first people in the world to actually receive the product. Well, those mommy bloggers were the people that started the conversation of this is going to be the hot selling Christmas toy of the year.

So, if you were able to come across that information when mommy bloggers were talking about it, three to four weeks before anyone on Wall Street had even knew what a LeapPad was, right, you could have purchased that stock well in advanced of that 100% move when the street started talking about it, right. So, it’s all about figuring out when the kids or the mommy bloggers or just the ordinary people are starting to talk about something before the financial analysts and journalists and researchers catch wind to it, right. That’s one of my favorites.

John:

That’s a great example and it really goes back to what you said earlier. Compiling meaningful information before anybody else gets it is what gives you the leg up. I think that’s a great tweet. Compile meaningful information before anybody else.

Chris:

Yeah and listen, I like to say that, you know, all change is detectable, right.

John:

Oh, that’s even better.

Chris:

All change is detectable, you just have to learn to see things that are happening and you have to know where to look, right, so that’s way now we’re working on this great, this is really the most exciting project of my life. We’ve been working on it for two years and we literally launched it this week. It’s called TickerTags and we have built a database of three hundred, we call the taxonomy of 350,000 tags. A tag could be a product, a brand, a person, a place, a cultural movement, like gluten-free is a tag, right. So, gluten-free is a tag for every company that either makes gluten-free products or makes products that could be harmed by the acceleration of the gluten-free movement. So, in the case of gluten-free, that’s one of 350,000 tags that we track on Twitter. So, we allow investors to monitor social conversations around that tag.

So, you can monitor, are more people talking about that tag today than today a month ago or three months ago or six months ago? Are the level of conversations accelerating or decelerating and are people talking about this thing in a more positive or more negative than they were in the past, that’s what TickerTags is. So, TickerTags essentially allows you to do what I’ve been doing for ten years manually and what Peter Lynch did 25 years ago manually. It allows you to actually automate it and see more, right, rather than doing a one off here or there.

You can actually look at hundreds of thousands of products or brands and people, literally, Kevin Spacey is a tag for Netflix, right. So, he’s the lead actor of House of Cards and God forbid if Kevin Spacey were to get hit by a bus tomorrow, how are we going to find out about that as investors, because that’s certainty a negative thing for Netflix. We could also wait until CNBC announces that and then Netflix stocks start to drop. In our world at TickerTags, since we monitor Kevin Spacey, we know what the normal level of tweets is every minute for the word Kevin Spacey.

So, the word Kevin Spacey starts to accelerate within 60 seconds of people tweeting he got hit by a bus, I just saw it, here’s a picture of it, and people are going crazy on Twitter. We will actually capture that acceleration and social chatter and within a minute, investors of Netflix can see something just happened to Kevin Spacey. I don’t know if it’s good or bad, let me look into it, but something is happening here. Rather than waiting for humans, journalists in this case, to connect dots, curate that into a journalistic story, blog, news report on CNBC, whatever, which takes as we know 10-15-20 minutes, right, for that to happen

John:

Sure, because they have to make sure that he is in fact hurt or dead before they go online. They need confirmation and in the world of stock investing, seconds, let alone minutes, are huge, because stocks go up and down based on rumors and all kinds of stuff, so if you have that information even 30 seconds before it hits the main stream media, you can adjust your investments accordingly. Is that accurate?

Chris:

That’s right and you know, sometimes it’s a few minutes and sometimes you have weeks in the case LeapPad, right? Literally the mommy bloggers were talking about it for weeks and weeks before the first financial journalist saw that and then was smart enough to connect the dots and write a story for the investment community saying that this was going to be a big deal for LeapFrog, right.

So, we try to build those associations in advance so when things happen, you’re able to see it in real time. So, when the Cuba embargo gets lifted, we had the word Cuba in the tag library for a South American airline called Copa Airlines and so in real time, you saw the world Cuba accelerating on Twitter and we showed you the companies that would be positively or negatively impacted by Cuba. So, it’s such a fun time to be an investor, because for the first time, information, we’re really democratizing information for ordinary people. It’s no longer, you know, Wall Street that has this information. I have to wait for them to give it to me after they’ve already traded on it. Now, ordinary people like us can see things on Twitter and Facebook and Instagram in real-time and in many cases beat the professionals to trading on it.

John:

You gotta love that. One of the things that’s interesting to me listening to you talk about TickerTags and this whole phenomenon is it’s very similar metaphor, because angel investors and VCs are trying to anticipate the next big trend on how they decide which startup to fund or invest in. They want to find that little needle in the haystack of I think this is going to be big and this founder has figured out something and if they have it based on any kind of research that validates their premise, then I want to jump on that, whether it’s something disruptive like Uber or just tweaking something to make it better. It’s…

Chris:

You just talked about TickerTags 2.0. It can monitor cultural trends and the startups that are positioned to benefit from those cultural trends or trending topics or whatever it is that people are talking about that’s happening in our world. They can see the companies that can benefit or be harmed by those things that are private, not necessarily public, but that’s until next year.

John:

When is 2.0 come out? I’m so excited for you.

Chris:

In the fall. We’re going to be announcing that probably right around the September time range. We’re working on it. We’re working on it.

John:

I’m sure. It’s fascinating to me that just was organic analysis and then you’re working on it. See, there’s a great example of something making sense when you do product extensions.

Chris:

Absolutely.

John:

Who is your ideal target for TickerTags now? Is it the investment community that wants to or is it other people, individuals? What, I see you’re solving your own problem of having to analyze 15,000 tags a night, is that who you’re solving the problem for? The investment community?

Chris:

Yeah. I’m a self-directed investors. I built TickerTags for myself. So, self-investors, we certainty can benefit from using TickerTags. At the same time, we’re talking to large investment bank institutions, quant funds, hedge funds, professionals, anyone that, any investor of publicly traded securities and in the future private companies as well will have to live on TickerTags. I mean, you can’t ignore the social data that’s impacting these companies, so one thing that’s interesting about TickerTags is we’re building it as an open public free taxonomy and it’s crowd sourced, so anyone can contribute to the taxonomy. So, if you’re on our platform and you’re like, this is great, but you guys should really add this tag for this company. You can suggest tag additions and we’re curate them into the tag libraries, but it’s completely free for the world to use. The only thing we charge for are private tags.

So, we have a tag library for Disney and one of the things I’m trying to figure out this summer, because I’m a Disney investor, is theme park traffic up or down at Disneyland, Disney World, Epcot. So, I’m tracking those conversations around those words. Disneyland, Epcot, Disney World, but those are public tags.

Anybody can see that and anybody can monitor that through our platform for free, but there are some private tags that I thought of that are more intricate than public tags that I’ve added like Disneyland in association with the world crowd or line. That would be Disneyland + crowd would be the tag and that’s proprietary to me. I guess no more because I’m talking about it, but proprietary to me and anytime somebody tweets, “God, the lines are so long today at Disneyland.” Or “Wow, Disneyland is really crowded this morning.” We could see those conversations with those words are happening more often this summer than last summer or less often, right, which is a great social signal to help us try to figure out is Disneyland having a good summer, is it more, are they selling more tickets?

So, we charge for private tags, but the public taxonomy, which is huge, is completely free. The more people that use it, the more people that contribute to it, like Wikipedia, the smarter it gets and the better it is for everyone. The cool thing is we’re in beta all year. So, anyone that signs up for our beta actually gets private tags for free too this year. So, really, the whole thing is free this year.

John:

Wow. So, eventually that’s how you’re going to make your money, you’re going to monetize it through the private tags, is that what you’re..?

Chris:

Yeah. As you can imagine, the quant funds and the institutional users really want to develop these private libraries that are proprietary to their firm or their fund and they’ll think of their own things like Disneyland + Line, they’ll have lots of their own private tags and that’s how we’ll monetize the platform.

John:

Fantastic. Have you had to pitch this concept to get users or to pitch this concept to get investors? Where are you in that stage?

Chris:

Yeah, so I think one of the, we have, we’ve raised a million and a half in a seed round recently. We self-funded the company initially. We just raised a million and a half seed round.

John:

Congrats.

Chris:

Thank you. I had never done that before. Our last company was founder financed. We exited through a publicly traded company. It was interesting to have a real bootstrap company that we never had to deal with outside investors, but TickerTags, we’re trying to do this a big larger. We’re doing a very large A round right now that we’re in the middle of. My process for TickerTags has really been first establishing myself as a thought leader in this niche that we’re in. Social investment analysis.

This is my life, right, and I think that’s been a big part of my success in being able to raise capital. I did this for myself. I had a big track record in social arbitrage investing. I wrote a book about it. I speak about it regularly. Every few weeks I’m speaking at a conference. So, TickerTags for me was the natural extension of my thought leadership on the subject and what I thought the industry needed. So, there’s a huge degree of trust there and that’s helped a lot.

John:

I just need to pause for a second, because that is extremely valuable to the listeners. If you want to get a million and a half in the seed round, you must, must establish yourself as the thought leader of why you, why are you uniquely qualified to take this idea and run with it. That’s what the investors want to know more so than even the idea, because you might end up pivoting. They need to know why you and you’ve done an excellent job from your book and speaking and all those social media things that you do to really establish why you as a thought leader and, I love your insight on this, does that give the investors confidence when they’re looking at the barrier to entry to any potential competition that might come for TickerTags is, well, they don’t have you.

Chris:

Yeah, it absolutely does. I think, by the way, I’m an angel investor as well, so I kind of play both sides. I think most early stage investors will tell you, they’re investing in two things. They’re investing a concept that they believe in, but they’re also investing people they believe can execute on their vision, right, and that’s almost most important, because usually there will be competitors and you’re really investing in the team that can execute on the vision and also the team they believe will have the ability to continue to raise money as the company needs to raise funds because they will be the a-list time for whatever that niche is, whatever that product category is.

You know, we like to believe we are that team for this niche. You know, when we’re raising money for a large A round now, we’re going to our potential customers and/or partner companies. So, the larger Wall Street firms that are talking about patterning with us, the larger funds that are going to be our first clients.

They are also our investors. If you have a product that truly makes sense and I’m a huge fan, just a huge proponent of crowdfunding in general. I don’t know that we’ll crowd fund TickerTags necessarily, but we kind of are in a mini way by taking these institutional clients and partners of ours and they’re the ones that understand our story better than traditional VC firm, because they get the value, they see the value in it. Obviously, they should want to invest. I think that’s really important.

I truly believe that when you have a concept that truly makes sense and you have the right team and you’re executing, the investment piece flows so naturally, people will push you. You know, we’re having people inquire to invest in us daily, because the story resonates with them and they’ve taken meetings with us and they believe that we’re the right team to execute and then the investment, you don’t even have to ask for investment. I think the investment comes up naturally in those conversations.

John:

I use the analogy of landing an airplane. You know where you’re going to go and it’s natural as well. Now it’s time to land. It’s time, the fact that you’re able to get your new customers to also be your investors, that’s the most proof of concept that anybody could hope to get.

Chris:

I think it’s important and I think every entrepreneur should go into, should plan to raise money from their customers, whether they do or not is ultimately – because a VC could always step in or a big investor can step in and make things easier for them, but in the back in my head I always knew that worst case I would have thousands to tens of thousands of self-directed investors like me who would see the value in our platform and if I have to, I would just crowd fund this.

I will crowd fund it with people putting in $500 to $2000 and I’ll raise 2-3-4-5 million that way if I have to, because if you have a product that resonates, someone has to buy it, right, whether it’s a service, platform. Someone has to use it or buy it, so those people should be willing and fortunately, now the laws have changed the last couple of years. We’re not quite there, but we’re getting close to crowdfunding. It’s not as easy or as inexpensive as we like it to be, but certainty over the next few years crowdfunding is an actual option for entrepreneurs and is long as you can get a 1,000, 2, 3, 4,000 customers or theoretical supporters of your product or brand, go with them. Go to them.

Here’s the funny thing. You don’t have to raise 2-3 million from those people. If you can raise a decent amount of money from a couple thousands perspective customers or users, take that to an angel investor. Take that to an early stage angel investor. Take that to an early stage VC firm and go hey – because we’re always trying to figure out, well, is your product really going to resonate? I mean, are you going to be able to get traction? If you can show us that you have hundreds or thousands of customers who have invested $2-3-4-500 each in your platform that does the vetting for us as early stage investors. That’s what the real investors want to see.

John:

It’s the ultimate traction, isn’t it? It’s the ultimate proof of concept. I think the ideal tweet is, when you customers become your investors, you’ve got traction.

Chris:

That’s right, then you really have customers, you have more than customers, you have investors for your product and that’s what we want.

John:

Right, it’s like the people who first started falling in love with Starbucks, for example, and said, oh my God, I love Starbucks. I see a line. I go everyday, I’m going to buy the stock, right. They become the customers and investors on a much bigger scale. Let me ask you Chris since you’re also an angel investor, did you get asked any questions during your pitch for the seed round that you weren’t anticipating or that you thought, oh thank God, I have an answer prepared for that?

Chris:

You know, it was a fairly easy seed round, because all of my investors knew me and knew my track record, so it was fairly easier, but a lot of them, you know, a lot of them did ask barriers to entry competition. Listen, my investors send me articles every two days with another social, I just read this company in the journal. They’re a threat to us. You know, in most cases, those are our potential clients and I know the founders.

So, investors are constantly worried that there’s someone else out there that’s already doing what you’re telling me you want to do, whether we know them or not and they’re better and they’re bigger, they have more money behind them, they’re smarter. Whether they say it or not, that’s what they’re thinking, that’s what I think, right, when I’m investing, of like, I invested in a real estate startup and I started betting on the technology and there were like 600 real estate technology companies and startups. It’s just amazing how many startups there are today versus five, six, seven years ago. It’s so easy to start a company, right, that’s why execution is so important.

John:

Execution. Well, I love what you said, because that unspoken question that an investor has is key for founders to have in their head, so answer it during your pitch. If you only have ten slides in ten minutes, address that issue so that they don’t leave with that question or don’t feel comfortable asking you the question or certainty be prepared to address what the barrier to entry is a very key factor, because everyone is assuming in their head, well, TickerTags is going to be Uber versus Lyft, right?

Chris:

Yeah, exactly. Address your hurdles and I’d say, you know, transparency is key. When I have someone who is pitching me and they’re very upfront about the hurdles the company has and the competitors and they’re like, these are all of our competitors and I always tell someone if I find a competitor that you haven’t told me about that you don’t even know about, that’s a huge red flag for me, because it tells me that you truly are not the thought leader expert in your space.

You should know everyone in your space, right, you should know them backwards and forwards. Not necessarily to do what they’re doing, but you should be so intrenched in whatever your little vertical is that you’re building that you’re living and dying that vertical. I’m so intrenched in my world, if I find out about a conference that I haven’t been invited to be on a panel. I’m calling up, I’m like hey, you know, I’d love to be a panel. I’d love to be part of this.

I want to be on everyone’s radar that is touching the space that I am in and I want to know about everything. If there’s a new startup in my space, I want to know who they are, what they’re doing, and I pride myself on that and I expect that out of other entrepreneurs and I think as an entrepreneur today, you have to understand that most early stage investors were not bankers like it used to be 15-20 years ago.

John:

That’s great.

Chris:

We’re not like financiers. Most of us are entrepreneurs ourselves that have had one or more exits. Now we’re still entrepreneurs, but we’re also investing in other entrepreneurs. Why? Because it’s all we know and we love it and enjoy it and it’s just our world, but we have high expectations for what we expect out of others, because you know, we’ve done it and we’re probably still doing it in the case of me. I’m doing it all over again and I expect to do all the stuff I do.

John:

I mean, you’ve given us so may great takeaways. Most investors today are entrepreneurs, not bankers. We’re going to tweet that out. Be the expert in identifying all of your competitors and certainty be upfront in your pitch on all the hurdles you’re facing. Those are such great takeaways. One quick last question about do you anticipate being very different from the seed round to the series A that you’re going into? Are you preparing any differently? Do you anticipate more people who maybe don’t know you as well or more competition?

Chris:

Yes, totally different. Totally different. This will be my first A-round, so I’m still learning, but it is much different, it’s a larger A round, the vetting process is different. I’m only half way through it. So, I’m still learning, but certainty it’s still ultimately about those two things. It’s about proving that you have the right concept and proving that you have the right team to execute on your vision. I think those two things don’t change. A lot of the ancillary stuff, you know, the pain in the butt stuff.

A lot more paper work, a lot more people, a lot more conversations, but those don’t change and I would like to mention for TickerTags anyone can go on TickerTags.com and sign up for early beta access. If you mention the podcast, we do have a wait list, but if you mention the podcast, you know, we’ll get you in on one of our first, next couple of beta invites that we send out over the next couple of weeks and then also Laughing at Wall Street is a book that I wrote a few years ago that anyone, I don’t care what your background is, what your financial attitude is, you can become an amazing investor.

Laughing at Wall Street. I tell you the stories. It’s a book that’s very easy to read. I tell you the stories from the time I was 11-12-years-old and how I learned to identify trends on the street and how I was able to associate those trends with investable opportunities and I think it’s a bout that people will really enjoy no matter what place in life you’re at.

John:

Well, we’re definitely going to put the link to your book in the show notes and a link to TickerTags and thank you for your generous offer to let our listeners be investing for the beta. I know the listeners do as well. Is there any other book besides Laughing at Wall Street that you would recommend to startups – someone in the pitch world to read?

Chris:

Yeah, I mean, there are so many. I think rather than books, I would really just regularly read kind of blogs and just keep in tune with the startup finance space. You know, whether it’s reading VentureBeat. Just really understanding what type of companies are getting financed. Who’s financing them, you know, I just love Googling everything from how to pitch to how to answer certain types of questions, what to expect, deal terms. I mean, it’s changing all the time, right, so books get updated almost immediately. So, I Google everything. I’m constantly reading the most current blogs on every little subject to raising capital.

John:

So, how can our listeners follow you? Do they just go to TickerTags.com to be invited?

Chris:

Yeah. They can follow me @ChrisCamillo on Twitter or @TickerTags if they want to follow TickerTags, but either me Chris Camillo or TickerTags on Twitter is really the best way to follow us and I would say sign up for TickerTags. It’s open and it’s free, so just join the community.

John:

Fantastic. Chris, you’ve been a great guest. Thank you so much for joining us today.

Chris:

Thank you. Appreciate it.