Brad Feld – What do VCs really look for?My next guest has been an early-stage investor and entrepreneur since 1987. Prior to co-founding Foundry Group, he co-founded Mobius Venture Capital and, prior to that, founded Feld Technologies. He is also a co-founder of Techstars is a writer and speaker on the topics of venture capital and entrepreneurship, and co-authored the second edition of Startup Boards. Please welcome Brad Feld.
Payback Time is a podcast for investors. The goal of this podcast is to help make investing approachable and easy to understand. We will interview beginner and experienced investors and ask them to share stories on how they got started, what challenges they faced, what mistakes they made, and what strategy works for them today. The overall objective is to provide you with a roadmap that helps you become a better investor.
(00:43) – Show intro and background history.
(01:23) -His background investing history
(06:41) – What are the red flags about leadership teams
(10:34) – How people used to react to his philosophy about the corporate world
(14:13) – Deep diving into his business psychology strategies
(19:44) – How he scales a company board
(26:45) – How he scales his own business
(33:47) – What skills does he look for in founders?
(37:44) – The importance of a broad skill set and open-minded personalities instead the traditional entrepreneur archetypes
(39:53) – Don’t be afraid to make mistakes; learn and grow with them!
(50:10) – Guest contacts
[00:00:04.090] – Show Intro
Hey, this is Sean Tepper, the host of Payback Time and Approachable and Transparent podcast on business investing in finance. I’d like to bring our guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go. My next guest has been an early-stage investor and entrepreneur since 1987. Prior to co-founding Finance Foundry Group, he co-founded Mobius Venture Capital and prior to that founded Feld Technologies. He’s also a co-founder of Tech, stars as a writer and speaker on topics of venture capital and entrepreneurship, and co-authored the second edition of Startup Awards, which you can find on Amazon. Please welcome Brad Feld. And Brad, welcome to the show.
[00:00:45.380] – Brad
Thanks for having me, Sean.
[00:00:46.710] – Sean
Good to have you here. So why don’t you kick us off and tell us a little bit about your background?
[00:00:51.190] – Brad
Sure. I am a partner at venturec capital firm called Foundry. We started Foundry in 2007. I’ve been doing VC going back to the mid 90s. Prior to that, I was a founder of a company that got bought by a public company in 1993 and I ended up being their CTO and working on their deal team. They did a bunch of acquisitions while I was there. And then I also took most of the money that I made and I invested in about 40 companies as an angel investor at the dawn of the commercial Internet between 1994 and 1996.
[00:01:22.810] – Sean
Nice. I’m going to dive into you. I like working on a timeline a little bit since 1987, roughly the time you started investing. How has your investment thesis changed over the years?
[00:01:35.700] – Brad
Yeah, and my investing really started 1984. So first company was 87. I knew nothing about investing or really running a company. When we started that company, it was me and one partner, and we didn’t raise any money, so we didn’t even have investors. And then when I sold it in 93, that’s when I started making angel investments. And then I started making VC investments in 96. When I started making investments in 94 with my own money, I was really focused on two things people and product. And that was it. I was sort of a classic, very early stage investor at the time. It was called an angel or a seed investor. Today you might call it a preced investor. My check sizes were usually $25,000. Sometimes they were $50,000. I made my decisions very quickly. Often after the first meeting that I have with somebody, sometimes a second or third meeting, I sort of invested in three different categories. I led and catalyzed financing. So a seed round back in the mid 90 might have been a half a million dollars and I would put my 25 in. But I’d also get my father and some friends and the guys about my first company and a couple of other people I’d met along the way that were now angel investors to participate.
[00:02:40.460] – Brad
So that was category one. Category number two is I would be one of those people investing in a financing that somebody else was putting together. So another angel investor that I was friends with would be writing a 50 or 25 or $100,000 check and I would participate in the investment they were driving. And then the third I just say are kind of random. Like opportunities came up from my network to toss some money into something that again, using that product and people lens was interesting to me and so I would just invest alongside it. For me, I circumscribed all my investments. Not every single one of them, but let’s say nine out of ten were software, technology, hardware, internet in that universe of tech, however you want to define it, versus I’m investing in food and I’m investing in real estate or whatever, or life sciences. I invested in this area I knew really well which was software, hardware, internet kind of things along the way through the couple of different venture firms and lots of different types of investing and scale of investing when my first check was $25,000. Now I’m very comfortable writing a $25 million check as the investment.
[00:03:50.090] – Brad
That’s the first entry point. I would say there were a lot of different processes along the way. The first venture firm I was part of had multiple processes over time that evolved. Foundry I think, has been pretty consistent with our process for making decisions. But for me personally sort of overlaying all that. The two things that I primarily focused on were the product and the people. And at some point I started describing it with a little more richness, which I’ll do here, which is if it’s outside an area I’m interested in, I just simply don’t engage. I don’t spend a lot of time even if the person is an amazing, successful, extremely well regarded entrepreneur. But the thing they’re working on or the area that they’re creating a company in is just something I don’t feel like I have a clue about or don’t have interest in. I don’t engage and just pass immediately. And so then it becomes a case of one do I have affinity for the product being created? So back to this notion of product. I don’t have to be a daily user of the product. And in fact, I invest in lots of companies where I’ve never used the product in a production sense because it’s not applicable to my life.
[00:04:53.120] – Brad
But I have to have affinity for it. I have to care. And the reason I use that word is that I’ve been involved in so many companies that were successful, that had near death experiences and I’ve also been involved in a bunch of unsuccessful companies that had true death experiences. In the ones where I cared about what the product was, it was very easy to stay engaged deeply because I wanted the company to succeed in the situations where I just had no affinity for the product. It was harder to stay deeply engaged. It was harder to do the hard stuff that you’ve got to do to navigate through the dark periods. Two are the founders obsessed about what they’re doing. And I use the word obsessed very deliberately instead of passionate. I think the word passionate is grossly overused in venture. I think that anyone whose it biases very much towards extroverts, anyone who’s an extrovert can be passionate about pretty much anything. And if you’re an introvert, it’s very hard to be passionate about anything from the way other people receive you. And so I like obsessive or obsessed. That has a negative connotation for lots of people in terms of the notion of being obsessed and how that’s a negative thing.
[00:05:57.810] – Brad
I think obsessed has positive and negative characteristics. So I’m really focused on the positive part. And the simple way to explain it to people is, were you put on planet Earth to work on this problem? If you’re working on a problem that you are not put on planet Earth to do, you’re not obsessed about the problem that you’re working on. It’s the same kind of thing. You have to really care. And then the third is, do the founders want to be partners with me as much as I want to be partners with them? It has to be bi directional. There’s lots of people I really want to be partners with, and they couldn’t care about me one way or the other and vice versa. People really want to be involved with me in something, and I’m just not that interested in it. So it has to be both directions. Those are the things when I say people and product that I’m focused on.
[00:06:40.350] – Sean
Right. I love it. Regarding a leadership team, let’s say it’s a CEO and maybe their fellow suite. What are some of the red flags that really stand out to you?
[00:06:52.370] – Brad
Well, it depends on the stage to some degree. And I would say that it’s different between early, mid and late. When a company is at a later stage, that CEO and that leadership team is generally pretty robust. It’s pretty well developed, and almost by definition, there will be changes to it over time because every leadership team evolves and it’s dynamic and nothing is exactly the same forever. But it’s built out, and it’s probably been through multiple iterations. It might be through multiple CEOs even. So, when I’m looking at it from that lens, it’s very different than at the very early stages. So I’ll focus this answer on the very early stages, which is that leadership team is usually mostly founders, not exclusively, but it tends to be founder heavy. The CEOs are often founders you get to a little bit later stage or mid stage, not later, but series, a series of, of investing that often changes. You start to bring in real leadership teams. Maybe the founder is no longer the CEO maybe a founder leaves. But at the very early stage, I’m looking for, again, in this notion of people and product, I’m looking for the interaction between the founders is, there the CEO, there’s three founders, the CEO, and everything that the CEO says is I, and it’s all about the CEO.
[00:08:04.630] – Brad
Or there’s three founders, and the body language between them is one where you just know that there’s tension and it’s okay. Tension is fine, but if the tension then doesn’t surface organically, hey, we disagree on these things a lot, and it’s the way we our style, and actually that’s instruct a part of our style. And we like to argue and we like to fight, and yeah, we yell each other and maybe that’s not super healthy, and we need to learn how not to yell each other in front of all the employees. But that’s just we’ve been friends for ten years, and that’s how it works, right? That’s fine. Looking for that interaction and making sure that there’s well defined characteristics around whatever that interactive structure is versus a lot of sublimated stuff, sublimated, unhappiness, any kind of, I would say pejorative behavior between people. The classic eye rolling that happens. I’ve got five partners, and we make fun of each other and we tease each other a lot. When somebody says something that hurts somebody else, which happens, it’s usually apparent. And the mistake is, and we’ve had this problem in the past, like we’ve had to learn as partnership and work through it.
[00:09:06.740] – Brad
If somebody says something that hurts somebody else, and we don’t stop the conversation and deal with it and say, hey, Brad, the thing you said yeah, you’re trying to be jokey about it, but it was actually pretty hurtful to me. It hit a chord, like, whoa, I didn’t expect to hit a chord. Why did it hit a chord? Well, it hit a chord because of this thing that has nothing to do with you.
[00:09:25.110] – Sean
[00:09:25.730] – Brad
But the way you said it was upsetting or the way I hear you, I know you don’t mean to be doing this, but every time you do a thing or say a thing this way, here’s how I feel. He just has two touch. You feel it, get shit together, just be grown ups. Well, part of building a strong team, especially early stage in a startup, is learning how to be effectively with each other under immense stress. And if you don’t know how to do that effectively or don’t have the ability to talk about it, explore it, understand it, work through it, when the company gets bigger and there is those moments of intense stress, really bad and crazy stuff starts to happen in the interaction. And that can hurt not just the individual’s relationships, but the company very significantly, sort of always looking for that. I’m not expecting it to be a plus. I’m looking for self awareness. I’m looking for founders willingness to engage their ability to recognize that the problem is not the other person, it’s probably them. It could be the other person, but they’re contributing to it. Or maybe they’re not contributing to it, but how they interpret it and how they then react could amplify or diffuse the problem.
[00:10:33.600] – Sean
Right. I kind of look at the social awareness, the emotional IQ, how does what you say and how you act, what kind of reaction are you getting from people on your team? And not just your team, but in public if you’ve got customers? Those little details I try to extract myself.
[00:10:50.460] – Brad
Yeah, here are some other examples on that too. Right. Imagine an early stage company that’s a solo founder. And I say to the solo founder, so why is it just you? Why don’t you have a co founder? And I don’t need a co founder. Okay, why don’t you need a co founder? Because I’m smarter than everybody else. Or I don’t need a co founder because I want to have control over everything. Okay, that can work. Is that what I want in the relationship that I have with the person? Then you have five founders. I mean, one of my first angel investments, there were six founders. And I remember saying to them, why six founders? That’s a lot of founders. Well, we were all college maternity, and they were all seniors and just graduating, and we’re all good friends. I’m like, what happens two years from now and three of you aren’t here anymore? What do you mean? We’ll be here forever. Actually, another probably better was I invested in a company that was probably 20 people at the time, and there were three co founders. And the three co founders insisted on there being no vesting of their stock.
[00:11:48.860] – Brad
They’ve been at it for a couple of years, and they felt like, well, we’re going to be partners forever, and we shouldn’t have any risk. And the only way we wouldn’t get all of our stock is if the evil VCs fired one of us. And they tried to take our stock back. And I tried to convince them that actually that was not the driver. What was going to happen was that there was going to be issues between them, and then if they didn’t have any vesting, they had nothing to talk about when there were those conflicts. And then if somebody left, the other people were working just as full time, but that person had the same equity. They were all equal in what they had. And the feedback from the three of them over this lunch that we had where we sort of solidified that we wanted to work together, was they were just insistent. And I said, you know what? I really want to work with you all. It’s your choice. It’s not a big deal to me either way. I think it’s a mistake, but I’ll live with it. And here’s what’s going to happen if there’s ever any conflict.
[00:12:38.620] – Brad
What’s going to happen is the three of you are going to start feeling really bad in different ways. Because if somebody leaves, whether it’s voluntary or forced, you’re all going to have the same equity and the people working in the company are not going to feel like it’s fair. And lo and behold, in this company, one of the founders got in a huge conflict with another founder within the next twelve months. And the founder who won the conflict by being the one that remained in the company was the CEO. So the CEO essentially fired his co founder, but the other co founder was pretty upset by the whole thing. They worked through it, but eventually the other co founder kind of said, you know, I really don’t, I’m not really enjoying the dynamics of this. I just want to be an individual contributor instead of a manager, a bunch of people. And this company grew to several hundred people very quickly. And then all of a sudden, the only one of the three was the CEO founder. And he had the same shares as his departed co founder and is now sort of engaged, working on whatever he wanted in the corner co founder.
[00:13:39.420] – Brad
And there was a conversation where that founder said, hey, this doesn’t feel fair to me. I have the same equity guys. And I’m like, yeah, can I play the recording back to you? And we had that conversation alone and to his credit he remembered and he understood it was like, that is an interesting scenario. So it’s all of that stuff like looking for the, trying to get the set up at the beginning in a way that you have the best chance of success, but if things go bad for some reason between people, you haven’t put yourself in a position where the outcome is worse.
[00:14:12.430] – Sean
Right. You’re really getting into some deep psychology here with the people you want to work with and want to invest in. I’m assuming you take more than one meeting, one interview to really extract these details. Is that correct?
[00:14:27.340] – Brad
Yeah, now I do. When I started Angel Investing, I knew nothing about investing and I was an entrepreneur and I was very comfortable that I was making a bunch of investments, many of them which would be worthless. And when I made investments, everyone was the same size. And I did a lot. I did one a month over a three year period. So I did about 40 over three years. And that was extremely fast in the mid 90s. Today it’s not as crazy sounding, but in the mid ninety s, the idea that somebody would do a dozen seat investments a year was that person is a lunatic. So for me, I was saying no a lot. I didn’t invest in everything that I saw saying no a lot because I would have a lot of meetings with people and I would come out of that first meeting a lot of times, just not being interested in the product or just not really having affinity or connection with the person or not liking the set up. I had enough on the other end of the spectrum, where within 15 minutes, I’m like, I want to be an investor in this thing, so I wouldn’t feel like I’d then have to go do a bunch of handwriting for the next 17 meetings.
[00:15:30.140] – Brad
It’s not that I wouldn’t actually do any more exploration. I’d ask for some references or can you connect me to some people that you know me? But there’s so much positive bias in that. Somebody gives you their references. They’re not going to give you references for people that are going to say how horrible they are. Right. I had some of those, and then I had a lot in the middle where I came out of the first meeting, and my answer was, I think this is really cool, like, to connect you with a few other people in my network to take a look and see what they think. And they could be potentially angel investors, too, or, hey, this CEO over here is running a business that’s complementary to yours, or, hey, I want you to make sure you know me. So here’s three CEOs. Give any of them a call and just ask them what it’s like to work with me, right? So there’d be that, and then you’d see sort of what unfolded from that. So I don’t want to sort of have the false impression that I can form these views in 15 minutes or even the first meeting, but there is definitely a strong bias that comes out of that first interaction, right?
[00:16:24.570] – Brad
And I would say the bias is often the opposite. By the way, I’m wrong too. One example of one of my most successful investments is a company called Fitbit that I was an early investor in. But I invested nine months after I first met the CEO and the first time I interacted with the CEO, his two seat investors, who are both good friends of mine and knew me really well, said, you’ve got to meet with this guy James. This company, Fitbit is really cool, and it’s totally your kind of company, and you’d be great. We’ve got it started, but it’d be great to have you on board. And I had a 30 minutes phone call with him. This was back when you talked on the telephone versus video conferencing, and we were having at Snowstorm in Colorado, and he was in California. So I mostly just wanted to get off the phone because I had to go deal with stuff. I lived in the house in the mountains, and my wife Amy was saying, hey, you got to stop working because we got to go deal with this, that, and the other thing. I’m like, Just this one more call.
[00:17:17.850] – Brad
I got to do this one more call, which never plays well, just one more email and then I’ll be ready to go. Not a good strategy for a happy marriage. And sort of in that I just want to go off the phone. So I have this call with James. I’m very distracted. James has a very flat affect. It’s not emotional, it’s not effusive. He’s not a promoter. He’s very substantive, but he’s very sort of even keeled in his cadence. And he was describing the product to me, which I knew a little bit about the product. And I had just started looking at similar kinds of products. There was a thing called a Bodybug, and then Phillips had a product and there were a couple of other startups that were trying to come out with things in this category called quantified. Self, I guess, was kind of where it started. Today we call them wearables. And I was just interested in it. I didn’t really have a prepared mind, and I was distracted. And the phone call was probably the worst first type of interaction. And so I said, look, let’s stay in touch. I’m not an investor now, but I’m interested.
[00:18:17.220] – Brad
I’m going to learn about a bunch more about it. I bought a product. I bought a Fitbit, one of the very early ones. Let me play with the products he had trouble raising around. He wasn’t able to get his financing done. And the investors that he had put a little bit more money, and he and his co founder, this was their second company, they put a little bit of money and they sort of made it through the next nine months and made a lot of progress. And this time, the two co founders called me, or the two investors called me and said one of them was very polite about what he said. And the other one, longtime friend Jeff Clavier, who runs a firm called Uncork, who’s very, very French, very strong French accent, and he very lovingly called me and about this, and he says, Brad, you’re being fucking stupid in a very French accent. And I can’t imitate his accent. I can visualize it. Really? Really? With the cigarette hanging out of his fingers? Totally. And I said, all right, Jeff, I get it. Let me try again. And this time I spent real time with James and I came out of that meeting, I’m like, yeah, I totally misread this guy over the telephone when I was distracted in the middle of a snowstorm, right?
[00:19:20.930] – Brad
So it’s not just the person. It can be the environment, right? It can be the set up. It can be the other exogenous factors that are going on. And so for me, when I’m looking at something, I try to get rid of as many of those exogenous factors that could distract me, right?
[00:19:36.250] – Sean
Right. Get in earlier, no more off snowstorms. Well, you can’t go with that because you’re in Colorado, I’m in Wisconsin. So I can relate. I want to keep diving into people a little bit. I was reading on your site and you’ve got really good topics on scale. How do you scale a board?
[00:19:55.550] – Brad
Well, boards are interesting creatures because just talking about a board of directors, I think, to entrepreneurs means a spectrum of things. At one end, a very positive end, is a group of people that can be very helpful. And at the other end of a spectrum is a group of people whose job in life is to torture you, the CEO and or founders of the company, and who potentially can screw it all up. And so there’s a spectrum. And I think that the key thing to do when you start thinking about a board in general, is to view the board as another team available to the CEO to help build and scale a business. Jeff Lawson, the founder and CEO twilio says this really well, and I described it. I think the quote from him is in the or I know the quote from him is in the Startup Boards book that I wrote that recently came out. And in that he basically says, look, I get two teams. One team is my leadership team, the other team is my board. Now, my board can fire me. And so I’m aware that that’s one thing the board can do, but I view it as my responsibility to try to get the board working as an effective team to help me grow and develop and build the business.
[00:21:03.300] – Brad
So in terms of scaling board, step one, get the right philosophy around it. A lot of entrepreneurs are worried about me and my founders need to control the board. Others worry about, I don’t want to have to spend a lot of time on my board or this is going to be a waste of my time. Like, you have to change your perspective to, hey, this can be a productive thing to help me build my business. And then as you start to grow the board, the two mistakes I think, that people have when they grow their boards are, one, they let their boards default into a collection, mostly of their investors as each round unfolds. So you now have a CEO or a founder or CEO and a founder on the board. And by the way, the CEO could be a founder too. And then you have your first round investment that puts a board member that’s from the investor. And then you have your Series B Investor, and they put a partner on the board, the Series B investor, they do a Series C and maybe they put another investor on the board, right? And somewhere along the way, maybe you have an outside director, but you’re still very investor and founder heavy.
[00:22:01.970] – Brad
And the co author of the second edition of Startup Boards is a guy named Matt Blumberg, who I was on Matt’s board for 20 years of his first company called ReturnPath he now runs a company called Bolster. One of the things, they’re a marketplace for executives, both full time and fractional. So one of the things they do is they help companies using a marketplace model recruit board members. And Matt has something he calls Mats a rule of ones. And the rule of ones has three things to it. The first is start building a board from day 1. Second, only one founder should be on the board, and that should be the either only one member of management should be on the board, and that should be the CEO. And then three, every time you add an investor board member, you should add an outside board member or an independent director that’s not affiliated with the company. So that you’re building a balanced board as you go. You have a three person or five person or a seven person board. Like, by definition, you’ve got diversity on the board in terms of talent and skill set, gender, racial diversity experience, functional experience, as well as scale experience.
[00:23:03.500] – Brad
Like all those things, you want to have variety and diversity on the board rather than, okay, this is just yet another VC that happened to put money in the company and owns some amount of it through his fund and or her fund. And that’s the board member last comment is, if you treat the board as a team, you have to work with the board as a team versus individual members of the board. And the weakest boards I’m on are the ones where there’s a lot of individual conversations between board member to board member, CEO to board member versus those are fine, there’s nothing wrong with those individual conversations, but they flow in a group. There’s a lot more visibility about what’s going on, a lot more communication and coordination, and a lot more cliche transparency between all the parties. It’s not just between the CEO and the board, but it’s between individual board members. If they have different agendas or different pressures or different goals, or there’s something that’s happening that’s causing them to want a certain outcome for the company that may be different than what everybody else wants, it’s so much more helpful if you just say it yes versus try to guess or position or These funny things are happening.
[00:24:12.640] – Brad
If you lose confidence in the CEO, your first step, if you’re the only one that lost confidence in the CEO, your first step should be to try to get back to the place where you have confidence in the CEO. If you sense that somebody else is unhappy with the CEO, figuring out how to engage not that other person in a conversation to try to get them back to a happy place as a co board member, but to sort of have it be a more open discussion. Look, we’ve got some dissonance going on here between CEO and board member. What’s going on? Well, board member says it’s mostly just. That CEO never returns my emails. And all the other directors say, well, he doesn’t return my emails either. And the CEO says, I don’t return anybody’s emails. You guys aren’t special. If you want to communication, if you want to talk to me, like text me or call me, I really can’t deal with it. I’m not good at the email coming at me. And so my leadership team, we do everything on Slap now. We don’t hardly use email at all, whatever. I’m making up contrived examples.
[00:25:08.700] – Brad
Right? But sure, those sort of situations, if you can get everybody communicating, that helps you build a team and scale a team, no different than what you need to do to build your leadership team and scale your leadership.
[00:25:19.570] – Sean
I really appreciate your context there on boards. There’s a lot of people in the tech space I’ve talked to, they become afraid of their board because they want to say the right thing or do the right thing. And there’s this constant fear. And I almost look at it as they are there because they want to be like they didn’t just like, okay.
[00:25:37.760] – Brad
I got to do this.
[00:25:38.650] – Sean
I got to help the start up. It’s like they want to be there, put them to work. I need your help with this. How can I help you, how can I lead you and how can you help me? More of a collaborative approach?
[00:25:51.750] – Brad
[00:25:52.480] – Sean
[00:25:53.140] – Brad
[00:25:53.480] – Sean
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[00:26:51.570] – Brad
We have a finite amount of time on planet Earth. We’re all big bags of chemicals, and we’re all different bags of chemicals. And everybody gets to decide how much energy they want to put into themselves in growing and developing. And there’s enormous industries around self improvement, whether it’s physical or emotional or mental health or skill sets or leadership or whatever. I think the best and most interesting people I know continually are exploring themselves. For most people, not everyone, but for most people, the most interesting person on the planet is themselves, whether they acknowledge it or not. I think that’s my wife’s name is Amy Bachelor. And we joke back and forth to each other, you’re the most interesting person that I know. And actually you’re the most interesting person I know. It’s like, you know what? I’m the most interesting person I know. You happen to be second most interesting person I know. Right. Just figuring out where you sit on that in your own exploration. There’s a lot of people who repress that. There’s a lot of people who feel like cliche from my childhood. A tiger can’t change its stripes, right? Or a cheetah can’t change its spots.
[00:28:09.110] – Brad
It’s animal cliche. So like, the notion that whatever you are, by the time you’re a certain age, that’s what you are, I think that’s nonsense. Like, we can continue to grow and develop. Now it gets harder. I’m 57, right? There’s a whole bunch of things that are hard for me to change or I have to put real effort into them. It doesn’t mean I can’t. And then there’s plenty of things I’m just never going to be good at. When you’re a kid, you’re told you can do anything you want. At least in my family, you can do anything you want. Actually, I don’t think I’m going to be a very good NFL football player. I’m a skinny, scrawny, Jewish kid. I don’t think that when I was a kid. Now I’m a little bit heavier. The chance of me being a great football player and I don’t really like to touch other people and I really don’t like physical contact all that much. Yeah, probably not. That’s not going to be what I’m going to be. Could I be a football player? Maybe, right? But Amy likes to say that her counter example is she could never be an NBA basketball player because she’s, you know, she’s a woman and she’s short and she doesn’t play basketball and like she could do a whole bunch of things at in her mid fifty s and she’s not going to be coming and be a professional basketball player.
[00:29:17.850] – Brad
So separate that kind of logic from what I’m saying, which is, hey, here you are. What do you want to be from this point forward based on what you experienced going backwards? And we all experience positive stimuli and negative stimuli. Everybody has things that are good for them and bad for them. Most human beings have some type of trauma on a spectrum from a little bit of psychological trauma to a lot of physical trauma as they’re growing up. We all have different environmental experiences from one end of the spectrum, growing up with no money in a single parent household, with very difficult environment to concentrate and work in at one end to the other end of the spectrum, sort of helping, lots of resources, lots of privilege loving family. All of these things are the fabric of what we turn into as young adults. And from that point forward, it’s kind of our problem to evolve and scale ourselves. And a lot of the negative characteristics tend to stimulate growth and development, but others inhibit growth and development. So the idea that whatever you are, those things that torture you, make you great, is a fallacy.
[00:30:35.220] – Brad
Some of them might, but some of them are going to really undermine you, hurt you, destroy you, or cause you, after you’ve had some success, to blow yourself up. And so if you’re trying to continue to scale yourself, it’s an endless process of introspection, of work on yourself, continuous self improvement in whatever that definition of what self improvement is. Also recognizing that we are mortal and we have an expiration date. And I’m a serious long distance runner. I love to run. I still run. When I was in, you know, junior high school and high school, I could run, you know, six minute miles for five, 6 miles. I never could run a ten. I could run a ten K 36 minutes, but I couldn’t run a half marathon at that pace. Maybe seven minute miles, right? But I was fast today. I didn’t even think about what that is. I could do that for about ten yards. And I’m really happy when I see a twelve on my watch. Twelve something per mile. And I’ve taken up trail running because in trail running, it doesn’t matter how fast you run per mile because you walk some and it’s uphill and it’s over rocks and, you know, 15, 1617, 1820 minutes a mile, like, whatever, right?
[00:31:44.210] – Brad
So you have to adjust against what your physical, emotional, mental characteristics are at whatever point in life you are. And then the last layer of this is just being very aware of how you’re doing, what your physiology is, whether it’s internal what you’re eating, what you’re drinking, how fit you are, what stress you’re under, what stress your family is creating, whether you’ve had big dislocations in your life, a parent die, a child die, a divorce, a move. Like all those things that really create additional stress that’s directly under your influence or exogenous. Right? You’re a person who loves the sunshine, and now it’s winter and it’s dark. You’re a person that has one political orientation and you care a lot about it, and the other party is in power, and you feel really oppressed by whatever’s going on. You find yourself in a place where you have thought you had a certain amount of pick your type of resource, financial resources. Then you find yourself fired from your job or your company fails and you don’t have those resources. You thought, like, all of those things impact you. And they’re all opportunities to either continue to grow, evolve, scale, or retreat.
[00:32:54.830] – Brad
And I think from an entrepreneurial perspective, the best entrepreneurs use those experiences to grow and develop, not necessarily in real time, because a lot of that stuff needs processing time. If your company suddenly fails or you get booted out of your company by the board, the evil VCs decide to fire you, or you have a conflict with your co founder and you decide, fuck, I can’t do this anymore, and you voluntarily leave. I just don’t want to work with this person. In all of those situations, whatever’s happening in real time, you’re not getting. You’re simply reacting to that. So you still have to process what just happened. And that could take a day, a week, a month, a year. The best founders do process that versus shove it down into their toes and pay no attention to it, or avoid it, or ignore it, or react against it, or dismiss it.
[00:33:47.290] – Sean
When you’re talking to a potential founder or founders you’re investing in, do you try to bring to the surface some of these things? Like what are your interests? What are you doing to create balance? Or what are you doing to expand yourself, improve yourself? Do you ask those questions? Because a lot of people are looking at VCs and saying, hey, you’re probably wanting to know the hard skills, sales skills, marketing skills, all that stuff. But do you look past that and get into some of these health and wellness type things?
[00:34:16.530] – Brad
Yeah, I do, but I don’t do it as clinically or socratically. It’s not like a series of questions. Probably there’s a couple of things that come out of it. One is I don’t think that there’s an archetype of successful founder. I think there are lots of different archetypes. And so I try not to limit myself by a perspective on oh, I’m looking for this set of characteristics, but instead go back to the more vague. Is this person obsessed about what they’re doing? Do they want to work with me as much as I want to work with them? Kind of dynamic. I am looking for people that have some semblance of emotional intelligence. I’m attracted to people that have emotional intelligence. I’m not turned off by people who don’t, but I’m attracted to people who do. And again, it comes down to archetypes. So for example, I went to MIT as an undergraduate and there’s a very particular type archetype of MIT undergrad from the 1980s and 1990s. I think it’s evolved some in the last 20 years because of the change of some of the things at MIT. But in the maybe even before, certainly when I was around, that archetype was one that had wasn’t 100% of the MIT founders or MIT graduates, but it was a lot of them.
[00:35:30.750] – Brad
And it was an archetype that wasn’t consistent. But you can kind of say, oh, that’s an MIT person versus a Harvard person, right? And you’re laughing, but we can make up our own stories about it. But even just modern culture, right? Watch a movie like what was a Card County movie? 21. It’s not o. And these are nerds but it’s kind of like a particular type of smart, but whatever. Now it’s a movie. So they tried they’re all good looking nerds, but whatever. Of course I’m interested in different archetypes, but I’m interested in archetypes that have some self awareness, that know that they can improve, that are interested in working with others and both learning from others but also helping others. I think the best relationships are ones where both parties learn from each other versus ones where one person is just the dominant and the other is the subordinate, especially in entrepreneurial context. So I’m not looking for somebody who’s going to argue with me about everything. But I don’t mind somebody who pushes back on me about whatever, especially if it’s substantive. And if it’s somebody who really wants me to argue with them about everything, they’re going to be disappointed, because they may say some things I disagree with, but I don’t view them as that important.
[00:36:40.130] – Brad
Right. So I don’t try to correct them and try to win the argument. Because in my relationship with Amy, I a long time ago decided that being right was not important to me. Winning the argument was not what was important to me. Because a lot of times you think you’re right or you win the argument, but you’re actually wrong. So it’s that kind of again, I’m describing rather than questions. It’s sort of playing around with all of that different behavior and ebbing and flowing with the person around things. The only real way you get to know somebody is to do stuff with them.
[00:37:09.980] – Sean
[00:37:10.700] – Brad
Interviewing people gives you a very surface level of them. And most people are pretty good at responding to interviews, even if they’re not practiced at it. And very few people are particularly good at interviewing anyway. So what you get from that is very limited signal in terms of what’s happening. It’s the work that you then go do and the time that you spend together. So I just try to engage on things, and from that I learn how to think about the person and how to for them. It’s bi directional for them to learn how to work with me and me to learn how to work with them.
[00:37:44.310] – Sean
Right. I really like your approach there. You’re not looking for that. Like, this is the specific archetype. I’m looking for an MIT, five foot eleven, dark hair. I’m being obnoxious here, but that exact mold. It’s like you have an open mind to different personalities and different interests and different skill sets across the board.
[00:38:05.930] – Brad
And it comes back to this notion of their obsession about the product they’re building and my affinity for that product. If somebody you can have a PhD level education or you can have no college education and be incredibly obsessed about something that’s highly technical, if I say, well, no, I’m only investing in people who have a master’s degree or a PhD degree, that’s such an incredible bias towards a particular thing. The other direction is the same bias. Right. I’m only investing in founders who didn’t graduate college. Well, there’s plenty of examples. Not plenty. There’s some examples of incredibly successful entrepreneurs. I say I calibrate the plenty because the ones that everybody thinks about are Bill Gates, Mark Zuckerberg, Steve Jobs, a couple of others. But there’s no question that those three people are both incredibly innately intelligent and outliers in terms of dynamics. That’s why I get rid of the word plenty, right? Like, you know, you can name name ten other entrepreneurs who have been wildly successful that didn’t graduate college. Probably most people listening could name another one or two or three. I doubt you could list another 50 right off top, maybe with Wikipedia’s help, but not by yourself.
[00:39:13.740] – Brad
So, you know, so that’s what I mean. Like just letting the filter be very broad versus saying, oh, no, this is the archetype of what makes for a successful founder.
[00:39:25.910] – Sean
Yes, right on.
[00:39:27.590] – Brad
By the way, for me, it’s way more interesting because I’ve ended up meeting lots of different people I’ve invested with, people that had very different life experiences with me. I’ve helped them build companies, and I’ve learned a lot from them in terms of their own perspectives and life experiences. And I’ve also had completely different understandings of what creates stress or what creates anxiety than what comes from the environment that I came from. So those things are very helpful too, I think, for an investor. Sure.
[00:39:53.700] – Sean
We got one more fun question for you. So 20 minutes, VC. Harry Steppings, you mentioned you won’t make that mistake a fourth time. Can you give us an example?
[00:40:05.570] – Brad
Well, Harry is a wonderful friend. I got to know him one of his very early interviews, like a first 50 or 60 interview of when he didn’t have any idea how to interview people. And we’ve done a bunch of back and forth over the years. And I was in London with my parents for a trip before COVID maybe a year or two before COVID and we got together for dinner with him, and I think it was the second time I’d ever been in person with him. It’s just such a wonderful time watching him embody the way he is that you hear him on the podcast and his sort of personality and enthusiasm. And watching him with my parents who like, why am I eating with these guys parents? Like, what a pain in the ass. Like, his relating to them was so delightful because it was in that same way of him. Like, he really is that for me. I made a comment like that. I mean, I probably have a bunch of throwaway lines maybe when I die and somebody does the eulogy they’ll have. Yeah, here’s some feldisms that were good ones. I’m not afraid to make the same mistake multiple times.
[00:41:05.110] – Brad
I try to learn from my mistakes, but I recognize that as people, we do make the same mistakes multiple times. And I think it’s an error not to be willing to try something again that didn’t work before. Where that comment came from was by the time you’ve made the mistake three times, you should start to learn from it. Like, I’m going to make a different mistake. It might be a cousin of the last mistake, but I need to modify some of the things by the time I get to the fourth try versus really being afraid to try again after that first mistake. And so it’s sort of that combination of being willing to take risks and do something again, but each time you make a mistake, try to learn something from it. And when you reflect and realize that you’re just trying the same thing over and over again, don’t give up, but modify the path and make a different mistake next time if you’re going to.
[00:41:52.320] – Sean
Make a mistake, right on. Love it. Let’s take a quick commercial break. Hey, this is Sean. I’d like to say thank you for taking the time to listen to this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for taking the time to listen to this one. I have a quick request, if you have a moment. Could you please head over to Apple podcasts and leave a five star review? The reason is the more ratings we get and the higher those ratings are, the more Apple will share us with the world. So thanks in advance for doing that. And then I have a quick comment. If there are any questions you want me to ask the guest, please head over to our Tykr Facebook group. You could drop a question right there. I’ll go ahead and make a note, and I’ll do my best to ask that question on the podcast. All right, back to the show. I’m going to hit two rapid fire questions.
[00:42:39.430] – Brad
Hi, Harry. Have a fan? And Sean, I’d love to be in.
[00:42:43.270] – Sean
The show, by the way. He’s got such a great personality. But all right, so what is what is a podcast you’re really listening to and love right now?
[00:42:53.190] – Brad
Well, I don’t listen to podcasts anymore, really. It’s funny, I went through a phase where I listened to a lot of podcasts before podcasts became a thing, and I really enjoyed a bunch of podcasts about technology. Obviously, Harry’s podcast was a go to for me, but a number of others were. And then I really liked all the books that Ryan Holiday had written. He’s written a bunch of books about stoicism. So I would listen to Ryan’s podcast kind of on regular rotation. And then Tim Ferriss and I have been friends forever, and so I like to listen to Tim’s because he had a pretty broad variety of people on the podcast versus just people. Either I knew one degree or two degrees of separation and then I got into history podcasts and listened to a bunch of history podcasts. There was one about all the presidents where each podcast was for each of the presidents of the US. Things like that. But I think the podcast that I enjoyed the most, I realized this is rapid fire, so you just got to read. It was a podcast called Anthropocene, and I’ve forgotten the name of the guy who did it, but it was about maybe a couple of seasons, 30, 40 podcasts.
[00:44:03.000] – Brad
And I think he’s doing a book now where he would take two topics that were unrelated and he would sort of in one podcast, weave them together and sort of talk about each one of them but separately. One of them was like Piggy Wiggly, which was a grocery store from my childhood and Dr. Pepper, the first part of it would be about Piggy Wiggly and the absurdity of that and the second half of it, and he rated them all from one to five. So was Piggy Wiggly, he gave it a two stars and then Dr. Pepper and he talked about Dr. Pepper and a bunch of stuff. Give it four stars or three stars, die Dr. Pepper let’s say, which is more interesting, I think, than Dr. Pepper. And he did a good job because they were so unrelated, the two topics. And yet you sort of got through the 20 or 30 minutes episode and it didn’t feel like part one and part two. It just sort of felt like this flow into these two topics. So that was one of my go to. But I’ll end where I started, I learn a lot more from reading than listening.
[00:45:03.540] – Brad
And I realized a lot of people learn more from listening than reading. And so when I say I don’t listen to podcasts now, I do read podcast transcripts when I come across something that’s interesting, which I know is kind of counterintuitive to somebody like, well, the whole point of podcast is you can just listen to it. It’s like, well actually I can read a lot faster than I can listen to something, and I can decide on a podcast somebody’s having to listen to me for 50 minutes with you. There’s probably, if there’s 50 minutes in the podcast, is there 50 minutes of signal that they’re really interested in? There might have been a couple of sections that you get bored of and so you can skim. I’m a huge Instant Paper user, so when I see a podcast and somebody has the transcript and it’s something that looks like a topic that’s interesting that I stumble upon on the web, I just save it to Instant Paper and I lay down on the couch and read a bunch of snipped articles. Sometimes I do that.
[00:45:53.980] – Sean
That is so good to hear. We actually been doing transcripts because a few people have been asking that’s. Why do you say that?
[00:46:00.240] – Brad
Yeah, anybody that has a podcast. If you don’t do a transcript, you’re missing you’re missing it. There’s people like me that I’m a 50 minutes podcast. I can get through in five or ten minutes on paper.
[00:46:11.080] – Sean
Incredible. That’s awesome. All right, so you like reading. What is a recent book you read and would recommend?
[00:46:16.710] – Brad
Well, I can’t ever do one. It’s just impossible for me. And I read a wide variety of things. All my books that I read, I put up on Goodreads and I do them in reverse order. So if anybody’s a reader and you feel like seeing some books, just go to Goodreads and look for a befelled. Recently I rediscovered an author guy named David Walton who’s writes near term Sci-Fi. And he had just come out with a new book called Living Memory. And he sent me an email about it. And I realized I’d missed a couple of his other books. I’d read a few of them and had sent him notes and became friends. And he had a book called The Genius Plague which came out a couple of years ago, which I thought was fantastic. His book living Memory. Also really good. I’m a big Ben Mezrich fan. I read all of Ben’s books when they come out. His book, The Antisocial Network, which is about GameStop, was great. I was reading one of Ryan Holiday’s books and he referred to a classic book by Paul Gallico on Lou Gehrig called Pride of the Yankees, which was a book and a movie.
[00:47:17.440] – Brad
And I had never read or watched either watched. I never watched the movie. I never read the book, so I watched them both. The book was much better than the movie, but they were both really enjoyable. So give you a sense of it. I probably read 100 books a year. We don’t have kids, so entertainment for Amy and I is either watching TV or reading. And we both love to read, so I just cover a wide range. And whenever a friend recommends something, I usually toss it on my Kindle. And now I have, I don’t know, two or 3000 books on red on Kindle that I’ll never get to Living Memory.
[00:47:47.660] – Sean
I just added to my cart here. Thanks for the recommendation.
[00:47:50.560] – Brad
Genius Plague was really good. That’s the one I would if somebody because it has virus stuff, but atypical not like the COVID stuff we just had. It has hive mind. It has political theater and sort of government stuff and how government intersects with this quasi alien like thing. That’s not really an alien like thing because it’s of human origin and it’s really well done.
[00:48:20.910] – Sean
I have to break the rule here. I want to ask you one more. You mentioned TV shows. What are you watching right now?
[00:48:28.370] – Brad
Let’s see. I’m a big Yellowstone fan. I’m enjoying watching the new governor of Montana. We’re watching, not Expanse. Peripheral. Yes, that’s been fun. I’m another writer I love is William Gibson we’ve been watching Alaska Daily, which is its first season. It’s about a New York newspaper writer who gets sideways with some political stuff in the first episode and basically gets fired and moves to Alaska, gets hired by an old boss of her in Alaska and is like this super high octane reporter that’s now covering stuff in Anchorage. My wife, Amy’s from Fairbanks. We spent a lot of time in Alaska together, so it’s really true. So that sort of stuff. And then I would say the movies in our house range at one end of the spectrum from things where there’s lots of car crashes and explosions at one end to things that have English subtitles at the other end.
[00:49:27.990] – Sean
[00:49:29.350] – Brad
Those are the two categories that are on regular rotation in our house. Not sports, not that many documentaries, not that much like Romcoms. Amy doesn’t have a really good sense of humor. So Romcoms don’t work out the window. Yeah, it doesn’t work.
[00:49:43.770] – Sean
I got one for you, 1899 on Netflix. I’ve got what languages. It could be Swedish, but it’s like a Sci-Fi thriller from the creators of Dark. If you saw that show on Netflix, really out there, you sound like the.
[00:49:58.300] – Brad
Type that really likes I haven’t watched it yet, but I for sure watch that. The Expanse is a good example. I’ll give it a type of Sci-Fi. I remember that well.
[00:50:11.170] – Sean
Cool. I really appreciate your time. We’re a little over the top of the hour, so thanks for hanging on, but where’s the best place people can reach you?
[00:50:17.990] – Brad
Best place is just email. Brad@feldfeld.com I still have a Twitter account, but I don’t use it much. Several years ago, I got rid of my Facebook account and then unfollowed everyone on Twitter. So for the last three years, I’ve had zero followers, which means when I go to my Twitter feed, there’s nothing in it, which is our man. It actually results in you not ever going to your Twitter feed. So but I’m at befeld on Twitter. If somebody DMs me up, probably eventually we’ll see it, but email is best. Brad atfeld.com.
[00:50:48.750] – Sean
Cool. Awesome. Well, Brad, thank you so much for your time. I appreciate it.
[00:50:52.640] – Brad
My pleasure, Sean. Thanks.
[00:50:53.980] – Sean
We’ll see you. Hey, I’d like to say thank you for checking out this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for spending some time with me. Also, if you have a moment, could you please head over to Apple podcast and leave a review? The more reviews we get, the more Apple will share this podcast with the world. So thanks for doing that. And last thing, if you do hear any stocks mentioned on this podcast, please keep in mind this podcast is for entertainment purposes only. Please do not make a buy or sell decision based solely on what you hear. All right, thanks for your time. Talk to you later. See you.