Karl Alomar - Serial Entrepreneur, Investor, and Managing Partner at M13 | Building Structured Success

whatever company you're building you have to understand your customer you have to understand intimately understand what they need and what they're trying to get my biggest fears came true which was you put a melee of people into basically a mosh pit and just say go get stuff done no one has direction no one has a target no one has motivation there's no reference to who's the better engineer who's the worst engineer who's taken care of what it all tries to self-organize and the idea is oh it's a utopian world they're going to figure it out with realities they duck whatever it was that was seeding the business and creating the magic begins to fade because you are just disappointed on happy people and you're not able to really deliver culture and secondly because there was no structure the people who were true performers felt that they couldn't deliver and because that makes them unhappy they leave and you're left with the people who are lower performers who aren't necessarily as good a delivering so they're not as affected by lack of delivery being a much better always having these like big hairy audacious goals in my life I wasn't comfortable with the idea of I'm just going to go do the normal thing or approach it the normal way if we really want to participate in the next generation of business technology businesses we have to accommodate the way in which that build the way in which value is required welcome to success story I'm your host scock Larry the success story podcast is brought to you by the HubSpot podcast network HubSpot does a ton for entrepreneurs and business owners that is why I'm so proud to partner with them for over three years now if you need anything to build your business help desk software payment software email marketing tools CMS and blogging tools SEO tools deal management tracking pipeline tracking you don't need more tools to get more out of your business you just need HubSpot they're all in one customer platform is a dream come true for every member of your team with best in class campaigns and workflows to generate more leads from marketing category leading pipeline management to help with sales help them close more deals powerful AI chat bots and a knowledge base to help your service team scale and it is built to deliver results to drive revenue faster and to help you grow your business so dump the disconnected tools and the chaos that comes with them discover what HubSpots all in one platform can do to streamline your business visit HubSpot dot com to grow better today so uh yeah the original story as I actually grew up in England um I went to school there I studied engineering at Imperial College in London uh and really uh I'm gonna age myself now but in the mid 90s moved host college into Los Angeles and started really kind of trying to discover my career and I started off just you know doing working for a larger engineering uh farm um relatively larger not that large but kind of just doing business development and stuff like that in my early 20s and it's actually when I was 24 that I first realized that you know I was destined to go do something myself and it wasn't really necessarily uh excited about just following other people's orders and stuff and you know just as kind of young arrogant I guess young entrepreneurs who think they can conquer the world too and so um I started my my career my entrepreneur career back in 97 uh launching a business which was a camera networking business kind of ala nest or or ring these days but back in a time when you had dial up modems and we were just about to get DSL up and running and so did pretty well considering I had to have no idea what I was doing and so spend the next three four years making it up as I go um I took the CEO role I had three co-founders um and ultimately in in 2020 like in the whole for anybody who kind of can admit they were around at that point in time and the whole bubble bust and uh and obviously I was right in the middle of it you know in California and you know it's just usually funded and just in this place where you know you're it's not about making money it's just about getting gross it's just spend spend spend and so put me in a very precarious situation um had a round that we'd raised to fell apart because of the the bubble bursting but then luckily I had you know two or three suitors that were looking to acquire us at the time so I was able to engage with them and ultimately got the company sold stayed for another year left and uh a year later and went to do my MBA um in Columbia in New York and that's what moved me to the East Coast which is where I've been for the rest of my career um and the fighting component of that is uh you know going to do an MBA you know I'm now late 20s 28 or something and I got to start doing all these basic classes around you know accounting and statistics and marketing and all these things and every class I went to was like I know a hall moment of what people were talking about for the past three years I'm like literally right there I don't know how way easier way yeah that now it makes sense to me I want to go back and do it all again and so uh taking that new family mortgage um after that and in the 2000s I said the FinTech company was able to that was international was based on Chinese um manufacturing and and CPG buys from Europe and the US um pretty cool kind of it into structure there are a lot of things for the first time like electronic signatures uh we used a bill of cell model for the guarantees we underwrote that and marked it that paper into the uh into the banking world to kind of syndicate out our capital requirements and a lot of pretty innovative things that one really done not much in those days that have been come come come will come in place now and um and built pretty good company we grew to about 140 million in revenue sold that in early 2010 went through another financial crisis with that one which wasn't fun but I guess that was just at that point in my life I felt like it was just destined um and then uh after that a couple years later joined digital ocean right at the at the you know at the onset of digital ocean um just as they launched that first product joined a COO stuck around there for almost six years was able to build the company with a great group of co-founders up to about 250 million runner eight five hundred plus people by the time I left and then now obviously positive five hundred million runner eight public company doing doing uh very very well which is nice and so much so although I guess at this point uh it is very nice good for you yeah yeah yeah and then I jumped over to venture like two or three years ago and we were at the point where we were kind of finalizing our pure readiness uh we had a new CEO to come in and take over for the uh public offering and then I you know was giving the option to kind of extend for four years or to you know make decisions to leave and and uh I was fully kind of vested and and the likes I made the decision to leave knowing that I had this opportunity to go into venture so now I'm investing in founders that's honestly my passion I've always loved it I've always loved work of founders I love rather than being so like laser focused on a single thing I'm now in a place where I'm able to kind of see the horizon of opportunities and innovation and just really just spend great time you know um working hand in hand with with founders that are just honestly very inspirational that's like it I don't know how many minutes but two minute brief of my life I guess it's very good no it's it's incredible I guess I want to I want to understand your mindset when you when your second organization that you started exited why at that point did you not go into venture why did you go back as an operator and do a company yeah you know it's interesting so we did that and uh I started making um some uh you know early bets um yeah I made some personal investments rather like pre-seed you know small checks and it sounded a couple of boards um and sort of couple of founders I started kind of experiencing that but doing it on on my own back um I think that business you know although we we exited we exited in a very tough financial climate it wasn't as welcoming as the climate wasn't 2018 as it relates to expanding venture firms and so much money going into venture that didn't really exist back then I could have pursued a path into venture at that point but I think a couple of things stopped me one obviously I would have been starting at a very different position and we've had to really built myself up in venture um which was not my core skill set at the time and uh and secondly um I felt like I had more to prove um you know I it was a good company we did while we exited but you know it wasn't a public name you know the things that I achieved in digitalization was kind of validation that I felt like I so I had more to do and it was also young and full of energy compensated yeah and now we're talking about kids we're talking about life changes so yeah it was like in a state of mind where I kind of wanted to go work 12 hours a day seven days a week and kind of make something happen where I am now I feel honestly like it's different stage of my life um you know everyone thinks that that uh investor just goes play golf all day well that's not true I'm still working all day I'm probably working way harder than I should but but it's a very different position you don't have that kind of concentrated set of stresses that you deal with when you are you know that you have the world on your shoulders and and everybody's money you know betting on you and and you know have a little bit more reprieve in that regard but still get to enjoy um you know the successes bicariously through the fathers that we work with so this is the right title it makes sense but I still think that there's lessons to be learned from when you chose to join digital ocean because I I would assume that after two successful exits um you would have had a very good idea you said you wanted to prove something you wanted to prove out that you were still uh it could it could be that effective so you also probably had a very good understanding of of what type of company you want to join and I'm going to tie this to the characteristics of a company that you want to invest in because I'm assuming those things have and not they're not that different so let's let's talk about digital ocean what was the type of company that you were joining why did you bet your career and a period of your life on digital ocean what were you looking for yeah so um what is interesting is I'm off off and asked like what's the best investment you have ever made and I always say to be on a digital ocean uh the whether it's just buying my options which cost you know millions of dollars at the end of the day or whether it's um you know whether it's actually just the time commitment and the resources I committed to it it was definitely I love that you framed it that way because it definitely was a big investment decision to do it so I you know I had a lot of things coming at me back in that time frame and I was working with a lot of different companies and a lot of different founders and helping them in different ways um the nice thing that happened to me with digital ocean was that I had a good amount I had like two three months of exposure before I really had to make a commitment I actually got in there work with them and actually kind of felt how the engine worked the things that I saw was one an incredibly they had captured the imagination of their customer base that a very clear and targeted audience they knew exactly who they're marketing to they knew exactly the profiles you know the profiles of their audience for the profiles of their founders they they understood their customer intimately and so when you reflect that on how do we make investments you know whoever you whatever company building you have to understand your customer you have to understand intimately understand what they need and what they're trying to get um so that existed and as a result of that they really had captured the imagination so when you started looking at the social proof whether it's through Twitter or whatever all the means of you know the validation that this was a loved business they were building a brand that was truly loved um it was very very easy to validate that and then more importantly you could kind of immediately see the machine beginning to take effect and when I say that I mean this was honestly something that the co-founders and I are so proud of is that even after all of us left the company we could see the machine continuing to grow and build the business but you know they we built an engine that um was you know building upon itself it would bring someone in capture them and then build with them and we're gonna expand with them over time and then the referral and the organic nature of how that grew amongst an audience was really really impressive and you could kind of see it the seedlings of it in the early days what I did um when I first helped them in that kind of first two three months where I was kind of helping them get their feed under themselves I really rebuilt the kind of a whole structure financial structure organizational and kind of the full cost and projections of the whole business and my model was telling me they were going to do a hundred million at three years and so I'd only built a business that you know after a few years did just offer a hundred million dollars and and I felt like oh I need to sell this you know markets the capital markets on that for me and you know we're gonna cap out this is a business where I saw it shooting through a hundred and going well beyond so me journey for me I was like this is gonna be bigger than what I've done before there's an opportunity for this need to call a billion dollar revenue business and I could cut it see the path together so if I believed in the model I was building then I'd be an idiot not to consider you know taking the raw so it's a little different to we don't get that much exposure honestly sometimes investment decisions are unfortunately a little rushed because the market is just so aggressive that you have to make bigger bets and decisions without having the same level of information but some of the fundamentals like you know does the business model make sense you know does it make sense at scale so even if you're losing money now what does it look like when you grow is that just gonna expand and you're gonna basically just dig a deeper deeper hole for yourself or are you in a position where scale fixes that what is the realistic scalability like is this organically gonna scale or is this something you have to fight tooth and nail every day to add a customer you know how is the relationship with the customer you know do the customers love you is there a true you know relationship you know do you really understand that customer journey so a lot of these like traits that I was recognizing in digital ocean of the things I'm I'm ultimately looking for it in businesses that we invested so you you mentioned a few things there so you mentioned like is it is it scalable and you you forecasted out and the economics made sense obviously and you were working with these people for two months so you started you knew the people you were working with as well but one thing is interesting so you you modeled it out and I'm assuming like regular forecast you you figure out Tim and you do all the things you'd figure out for regular for regular model but how do you scale at that how what's the playbook to scale at that at that velocity when you've never done it yourself before how do you forecast out a model it this is still early days like now digital ocean compete with like AWS and and it's like a very it's at that now compete at that level but when you're building out a competitor to AWS I don't know how you would model out a similar growth trajectory when there's nothing else out there that has really achieved that scale before yeah yeah um it's on the stage of the business so again we do two tips and types of investment we'll invest in our core deals that actually have validation which means they have data they have history and in those situations which is probably you know we were in the earlier stages of that there's which one I started working but I could see it in real time like it see patterns being created do you recognize the patterns you know where are you sourcing your customers from how much of it is organic how can you drive those you know organic channels and ultimately all the model is as a set of assumptions set of growth assumptions so if you if you just set up if you just have an understanding of you know every customer bring in for every one customer bring in I'm going to get point one referral or whatever that number is um for every um you know every customer that comes in this is the average price thing in a star spending this is the growth rate of that spend over time based upon what I've seen what I've experienced and you start kind of just putting those little piece together with some companies where they have you know market growth strategies and they're like market by market you look at what's the trend of a market launch and then how can you layer new markets on top to see how that grows out of the time so there's just different mechanism just got to be creative from from a perspective of how you imagine the business is going to grow and translate that into a set of assumptions that drive the numbers and then you just roll the numbers out and so it's ironic you know you could get one assumption wrong and your numbers will be way off I want to give it a discussion for the first three years of business we hit our number literally within one or two percent I don't know how it happened wasn't so easy very impressive fix but years one through three it was so spot on it was it was um it was incredible and so um it's just I guess I was lucky that in that business specifically those assumptions were really obvious we're really clear for me at least and so documenting those and building model against them turned out to be very very real um and you know there's always a difficult and new businesses way you've never done it before but you know it is it's an odd as much as it is a skill like you have to actually build the ability to kind of predict what's going to happen how customers will react and know what those assumptions are later going to drive your business but I will say from from an investment standpoint when I look at somebody's model I'm more focused on how they're thinking than what the model's telling me because I understand that a model could be way off and they could be completely wrong but if you actually look at the numbers and look at the assumptions and you say okay so this is how you see your business you think these are the key drivers you think these are the things going to affect your business it allows me to understand the entrepreneur better and for me the question is is this person thinking about the business correctly like do they have the right head on that shoulders to think correctly iterate and adjust those assumptions as needed you know build a real kind of business you got to feed into the true assumptions that are going to really drive that business so so walk me through like some of the because I want to I want to understand some of the things that M13 is working on on now with organizations but walk me through some of like pick a pick a few key lessons as you grew digital ocean because that was probably that was the largest organization that you were you were an operator in so the key lessons that now you bring over to some of the portfolio companies in terms of growth scaling we already spoke about how to project that's fine but as you actually deploy the strategy what are some of those lessons yeah so many I know there's a lie that's why I was like do we have now I you know if I try and encapsulate it into some key things I think the first thing I really love was growth is not all about just growing revenue it's about so much of it and being a CLO role was this was key for me how do you actually manage the growth of the organization to support it and there's plenty of examples of companies that just outgrew their ability to actually execute and so definitely in an organization like digital ocean which was highly complex we had to think about infrastructure DevOps data supports the you know talent organizational structure culture all these different competitors that all have individually the ability to implode a business if they're not executed correct and so probably the biggest piece that has the most immediate effect when you really start seeing that growth one thing that we we talked about a lot back in those days was a quote that I think came from from Mark Andreessen which was the software is eating the world and also this whole concept that software easy well was the driver for white people need to cloud and then the concept that when you have product markets fit then it's you know you're not trying to find growth you're trying to keep up with it it's you're just basically running as fast as you can to keep up with the growth because you have product market that's all we had and so what do you do you have to build quicker you have to hire quicker you have to do you know a lot of things to build an organization that can support it we in the space of the second year I was there so I joined in 2013 early 2013 in 2014 we added a hundred people to organization 80% of which were engineers just in a completely flat disorganized way I will say that it was not my choice to do it that way we had lots of battles about how to do it but the ultimate you know understanding was we need as much resources we can and and you know different powers and that be you were kind of driving to say let's just hire hire hire we just need people at the table and my biggest fears came true which was you put a melee of people into a basically a mosh pit and just say go get stuff done no one has direction no one has a target no one has motivation there's no reference to who's the better engineer who's the West engineer who's taking care of what it all tries to self-organize and the idea is oh it's a utopian world they're going to figure it out but reality is they don't and there's two things that happen one because now you're in a situation where you have so many people you cannot create a human connection with every one of them culture gets lost so whatever it was that was seeding the business and creating the magic begins to fade because you got just disappointed unhappy people and you're not able to really deliver culture and what culture is designed to do is to optimize the performance of the team and secondly because there was no structure the people who were true performers felt that they couldn't deliver and because that makes them unhappy they leave and you're left with the people who were lower performers who aren't necessarily as good a delivering so they're not as affected by lack of delivery so it became a really like we got into like this what we would call a cultural crisis by the end of 2014 and we had like a you know like an intervention of sorts in the very beginning of 2015 and said this needs to all change and so at that point we totally restructured the organization built layering and organization around the the engineering team is built management structures and they're brought in Matt Hoffman who's still watching out at m13 to run talent and start building a culture program and literally a year later I think we were voted best place to work in New York or like one of those ratings so we were from cultural you know a bis to best place to work and it was all very very structured and planned and you know we we did we totally changed our communication strategy we created biweekly what we called AMAs which will ask me anything which the idea of it was you know put the executives in front of the whole company and just also whatever question they have and how how how how it is and just being vulnerable and opening up just creates that bond and even though you've got a bigger organization and so what I learned was that you know the growing pains are the things that can kill at least at minimum hold back your company and so think about your head of talent higher early think about them as someone that's going to optimize the performance of your team not just higher people or not just give people things that they like it's how do I optimize for it's how do I hide the best people on board them as as good as possible and keep them so engaged and tied into the culture and the mission of the business that they are delivering at 110% every day and that's the ultimate you know talent leader and most most y'all entrepreneurs were like out with 30 40 people we don't need a talent leader now we can grow a double triple before we need anyone or maybe we just hire a recruiter we don't need a talent person but ultimately everybody that we've invested in that tired a talent leader has come back three six mosaiders have that's the best how we could ever make because it just increases before and there's a handful of other roles and other structural things like technical program managers is another thing that most people don't realize that they need but I learned about all the little nuances in an organization that make an organization perform better than that I think that's probably the single greatest lesson that I'm on in that in that always very I've never heard that before and I think that that's it's industry and category agnostic so that's a very interesting point I guess just to double to double down on that quickly and I mean you can move over to m13 and what you're working on and now and why you even started m13 but that's great I understand the rationale and the logic behind it for a first time founder or even a serial founder um how do you hire that individual because I think a founder is either like an engineer or product focused individual or a sales and marketing background but I I've worked a start-ups and I don't know a lot of founders that come from HR leadership so how do you even find that right person who can recognize the beauty as you don't you you don't have to take the art with talent to be able to figure out that role um I think it's a hard role to hire for but it's a very puzzle higher you know you're talking about the person it's going to carry your culture and your brand into the organization it's going to represent you know if call is starting a company or a squad is starting company um it's going to be a thousand people but how's everybody going to still be that kind of representing that that brand or that representation of the squad wants to represent who is the person that can deliver that message and I think it's it's a very um it's a very personal uh connection and role where you really feel like the reflection of what you want to see in your company coming through this one person you know the tactical way of hiring this person as just the usual routes whether it's a LinkedIn poster whether you're getting a recruiter or or through network or connections like you'll see people you'll create a pipeline but the way you select the person is just really trying to make sure that first of all they can represent you effectively and secondly they have like the EQ um and and the emotional taverns to you know carry in and build energy in the organization you know and then behind the scenes all of the organizational and kind of capabilities program management capabilities are actually organizing a team of a hundred two hundred three hundred people I mean obviously that team's going to grow time team's going to grow as your as your organization grows but um yeah it's a very puzzle high I think it's it's difficult if I was walking with you hand in hand and I go to know you then I could probably help you figure out what that person looks like but I think it's different for for every sound very good no it's it's it's great advice just to be cognizant of as you're as you're growing your business I just I've never heard that advice before but it just it makes really good sense um okay let's let's pivot into M13 because I know we can probably go into like you said there's a lot of stuff that you've learned to do but um it could be a thought do it a part three we'll figure that out we could do that we could do that I listen I just found it here in Miami I'll I won't do like I know how every day it's all good yeah I'd love it man I'd love it all right um okay M13 so what was the what was the concept so yeah you you you made some money that's great and you want to invest in companies also that makes sense but um there's a lot of incubators there's a lot of uh private equity firms PE firms VC so what's what's the difference that M13 what are you what are you bringing to the table that that Y-combinator wouldn't yeah so um it you've mixed in a lot of different types of stuff that's true I was really unfair that was that was really important I'm sorry you're in other rate uh you know peony it's a whole other end of the scale venture sits in the middle somewhere uh then there's these studios that you know uh that incubate from the ground up so there's the different types of models we're purely we are truly an investor we're a venture firm at the stage of investor um really the you know I started actually I connected with the two founders I came in for fun to fund one was much more of a family office type fund it wasn't as much of a institutional fund but there were lots of incredible investments made out of that I think they've they seeded seven or eight unicorns out of that fund so just really really incredible performance and that's allowed us to build fun too and beyond but in uh the beginning I left dishwasher at the end of 2018 but at the beginning of 2018 I kind of took on an advisory role with culture and cornyry and my partners at M13 to help them devise what does if we really wanted to make a mark in venture if we really wanted to like progress venture where it needed to go and and really help founders be successful what is it that we need to do how do we need to structure this to make them all um being an entrepreneur and always having these like big hairy audacious goals in my life I wasn't comfortable with the idea of I'm just gonna go you know do the normal thing or approach it the normal way most first time funds are gonna be either a pre-seed 20 million or maybe they'll do a 60 or 80 million dollar fund um and and you know they'll they'll be very traditional very tidy thin team and they'll focus purely on like let's just go use our relationships to find the best investments prove ourselves an overtime perhaps build to the next level of investment we really came in strong you know the culture corny and I all agreed that we needed enough capital to really allow us to build an operation that was going to differentiate us so we built our first fund around 190 million dollars uh or fund two rather fun three now that we're in is 400 million so we've doubled since then but 190 million dollars and with that we all what we did is we we started to think about in my experience and in their experience and in all our friends who have found this experience what is the thing that everybody was sell like lacking in their relationship with investors however great the investor is there's definitely investors out there that are a backseat investors but there's also investors out there that'll sit in the driving seat with you but the key thing that was consistently missing was that you you never had a true partnership and an investor it was it was usually very however helpful they were it was kind of always at a distance it was always kind of like a um you know more of a guidance or a directional and a very reactive sensibility toward how investors help you like you get into a problem okay then they might help rather than being proactive so what we said is you know what we really need a more uh some that's built more I cannot pray for where we have the skill sets and the capabilities to really go in and become like this extended team or this this bench that you know that your founder team can mean on and pull in as needed to get key things don't make decisions better you know I've spent that cultural crisis I talked about we spent a year spending our wheels minimal advancement of the company trying to deal with that if I had the right partners with me uh at the beginning they would have said to us you are about to go into a cultural crisis you need to build structure and we would have fixed it right up front when we would have bought ourselves a year of growth and so how do we do that for other founders whereby they don't have to face all of the challenges and all the problems we face because they're just they're basically being given the guidance and the support and the strategic direction needed to solve that and it's not just in one function it's in multiple function that all relates growth so there's the pieces that drive growth whether it's brand products um you know formats marketing things like that or the pieces that that support growth which is like your data or your finance your operations the things that you need to manage growth rather uh and so what we did is we on top of the fund we actually invested you know an initial amount of money three years worth of operational money to build a team of these executives I brought in my Hoffman and Rob Olson from dishwasher with me there were the two best people that worked for me at dissolution uh one ran talent one built a whole data organization that uh we brought in you know Christine Choi who had been running brand and comms for Richard Branson at uh virgin for 12 years we brought in um you know uh Lizzie Farsis who was CMO at guild group CMO at go group so just this caliber of people that was just so beyond anything an early stage company could get and we we trained it to be the ideal kind of executive team of of a growth company and all of them had been in the very early stage mid stage and even through the public company stage they'd all been through that whole experience and and we decided we wanted to build a true partnership with our founders our thesis was not to be capitalistic but rather to say if we can focus on just making our founders as successful as they can be partnering with them and helping them become as successful as possible the economics will follow the economics will take care of themselves and so that team has oriented over the last three years to build a set of programs and an approach where we truly truly partner with our founders and truly help them along that path and do as much as we can to really help them become successful as possible and the results of that you know I think our NPS with our founders is somewhere like 88 which is obviously incredibly high um I think if you asked most of our founders whether we were the largest investor or not like in terms of value most of them would tell you that we're most valuable investor they had and and we just built such great bonds and relationships with our founders and not just because we're nice people but because we truly have been there with them through the tough times and the good times and help them make better day-to-day decisions along their journey to all to a result and kind of better outcomes and so that's how we differentiate and what's interesting is you hear our every VC is going to say the same thing and stuff but I don't think any other VC has taken their own economics put it in on the table purely for operational reasons to basically over deliver at at these early stages of investment most other firms really are just much more heavily focused on investing and the ones that have built platforms more recently have done so but again it's not as hands on it's not it hasn't taken as much external investment as what we've committed to to kind of create this differentiated experience success story is part of the HubSpot podcast network in the network there are other incredible podcasts like the ops authority hosted by Natalie Gingrich every week on the ops authority Natalie discovers actionable strategies to move your business forward and transformational stories of powerhouse business owners who value operations you can't ignore backend pieces that have to work together and flow smoothly in order to build a brand grow a movement or disrupt an industry if the operation side of your business is a mess putting out fires will always take priority leaving no room for creative innovation visibility or networking with powerhouse peers or even wannabe powerhouse peers you got to get your house in order and to do that you have to listen to the ops authority wherever you get your podcast I completely respect that I think it's incredibly valuable and that's why I didn't want to just label you as an investor because I think that somebody who invests so heavily in operations and even the fact that I didn't know that you invested so much of your budget in in building this executive team out but even the fact that you are an operator and you are moving into this you it's not like you're just a bunch of like that's a just a bunch of but you know a bunch of people that have access to capital who wanted to play like you've actually been an operator I find that's always the best kind of investors because the worst thing you can have is an investor that doesn't doesn't have any experience being in the trenches and and trying to understand what a founder's dealing with and they've just never done it themselves so I think there's merit to that so I you know you you call yourself just an investor but at the end of the day what does a founder need whether or not it's with an incubator or with the PE or VCE or investment it's it's it's help it's it's it's help because you don't know what you don't know yeah I mean we think of ventures ventures of service is kind of the next generation of venture it's not just gonna ask is this like what everybody's moving to like is it almost like it's necessary to have that operational experience in in venture now is that that's starting to be the de facto or the norm I we feel like I mean we've invested in that right I think we if not we were very early if not the first to kind of truly throw ourselves in the ring like how hard it me in that you can say the Andrew since the world started it you know 15 years ago when they started building platforms but I think we've taken it to another level hopefully even beyond that but what I would say is now when you know money has become a commodity we find that the best opportunities and the best deals are looking for partnership you know they're looking for that support mechanism and they know they can get the money from pretty much anyone they want it from and it's more of a question of you know what do you you know what's the relationship we're going to have how we're going to you know we're going to be 10 year ponders in this is this the right partnership to make and so we found ourselves being invited into great deals we found not only from founders but also from you know other venture firms that have found you know have enjoyed working with us and then seeing the value we provide and so it's just made it easier and easier over the past three years to just build a better and better portfolio is we get more and more access to kind of really exciting opportunities throughout the let I'd be curious to know like what some stories from some of the portfolio companies so what are some of the companies that you've worked with and what are some of the things that they've had to overcome as they've grown so like let's let's talk about some success stories in your portfolio yeah I mean it's probably the companies that are kind of the pinnacle of success um capsule is probably the biggest company that's in our existing portfolio and I'm not including one one has a bunch of unicorns but again that was pre-model the throw from two rainy um capsule is digital pharmacy based out of New York it's now in multiple markets um they were you know obviously on a later stage for what we usually invest but uh but again just kind of helping them think about their market launches and stuff I think we've probably had more of an effect on the layer that sits right under them so companies like chef which is the home cook uh kind of grab hub solution uh we you know we help them navigate they start in San Francisco we help them get into New York the main launch Los Angeles and they've begun to kind of build out the different components of um of the market you know they built a really incredible relationship with Christine our brand of comms person who really helped them shape a lot of their messaging a lot of how they've gone to market so they've had kind of the most you know highest level support from a true comms um you know skill set to kind of build a message that is really resonated in market and you know they just did around I think a few months ago at around a five hundred million dollar valuation so that we came in I think eleven million dollar valuations where we started with them so you know we've really seen them rise through that all the couple come we call road banking it's an SMB banking solution um uh great founders Alex and Everett um and uh they were building you know they are building again they did around it about a five hundred million dollar valuation too they are building uh kind of the most integrated banking solution integrates with all of SMB's financial systems whether it's QuickWorks or NetSuite and kind of into great all the services and to our platform to make it really easy um and again similar thing when we joined them when we started working with them they were really kind of nascent in their development of the product of the market um you know they had a small team we helped them kind of organize a structure how they want to build their team they're a great example of kind of um getting them to focus on that talent higher they're one of the you know ever it's taught me the CEO's taught me a bunch of times that that's possibly one of the best highs he could have made like he totally ceased the value of it and so just really guiding them through how to think about building the organization um has been really really helpful um it's kind of called lightning lightning labs anybody that's in the web 3 or crypto world would know them uh lightning is the second layer platform it's an open source platform it sits on bitcoin um and allows for transactions real time inexpensive transactions on bitcoin and uh lightning labs you know has built all the kind of the infrastructures to support that and 90% of the lightning market is sitting on lightning labs at nd nodes as they're called um and uh with them we you know the incredibly talented team but kind of very raw in building that product put it out that you know we help them navigate thinking about data how data plays a role help them kind of structure how they want to think about um kind of the data stack and and how they want to use data to basically make decisions and build that whole component around their business which is another key learning I got from digital ocean in terms of the power of data and how influences companies uh since then I think they raised the most recent need around a 600 million dollar valuation again another company we came in very early on so there's there's like a list of the success stories I think what's really interesting is the next generation that haven't quite gotten there yet that are just now growing um couple of really exciting ones uh there's one um uh uh guy called guy from Yale who actually left Yale on a on a teal fellowship um called Mike Chiang started coming called prepared which is really this massive disruptor of the 911 system uh really built full multimedia solution around 911 where you know now dispatches can handle multiple incoming inputs on a particular event with video audio all potentially NLP to kind of reduce to a core set of information that's truly valuable so that when you get to the first responders of vehicle that information is delivered in in an incredibly valuable way and you don't get situations where you know you can see just from the news of the last few years where you know first responders have gone the wrong understanding of the situation they're going into and mistakes that we made so this allows from much smarter um first responder strategy across the board and just uh I started we made a small investor in him right being discussed we believed in him so much and over the past year or two he's just built out an incredible machine helped him the whole way alarm like figuring out the strategy of you know the business the customers who are the customers how are you going to charge them what's the pricing model who are the different stakeholders really mapping out the whole organization we just worked hand in hand with him the whole way to get to a place where he's really now gotten to a rhythm with his part where his co-founders are building this business and in the last month or so it's just in the midst of an incredibly um incredible round of investment he's doing where just he's being essentially bombarded by incoming interest it's just so much interest in the market around what he's doing and that that's a real exciting I think there's an exciting opportunity for him going forward in terms of uh where that's going to go um but just very very tightly integrated in terms of helping him get from where he was to where he is now and I'll finish with one more which is an okay then I have another I have one more I have a follow-up please you mentioned some successes I want to speak about some missed opportunities to because I'm sure you've seen so okay so this one is leaning I'm digressing towards missed opportunity so let me first of all talk about um one more really interesting story which is a company that was presumed to have sailed because of COVID that um so it's a basically it started as a platform to manage field marketing field marketing activities mainly for the liquor and beverage brands so you can imagine COVID comes along everything shuts down there's no fuel activity so they went from a high-flying growth trajectory into like nothingness overnight and we had a situation where even within our own thumb we were debating like is this does this company have a future or not is there anything there I was on uh I was observed on the board and Rob was was the board member and we worked very closely with the team to navigate how they managed their COVID period and establishing the predictions of what happens coming out of COVID and then it says you restructuring their business from what was this field marketing tool to a full remote task force SaaS platform the now facilitates services across multiple different categories of activity so kind of like a um you know uh like I want to say I don't want to say a Salesforce but like service now type platform but for remote task management so like a big SaaS solution and and and since they have made all that transition rebranded repositioned everything is this kind of task force SaaS platform they have uh reconstituted growth they've exceeded their pre-COVID numbers pretty significant they're accelerating in a pace faster than they ever have and after a year of everybody thinking this company has a future now they look like they could potentially be a real high-flier at the market and we were so heavily involved in the process of helping them navigate not panic but navigate from we're in trouble to where in a position where we've actually used this time to just both stop the business in the incredible way and so those are the types of things that that we've gone through from true success stories to suffering companies that we've helped kind of turn into central success stories so to follow up on that I'm just curious I and you don't have to go through like an an entire list but you can if you want it's going to be caught a set of time but for you but um miss opportunities but also I'm curious about largest failures like a large failure and why what was what what happened in a large failure that you went into but also a missed opportunity that's always fun to hear too yeah lucky today we haven't had many large failures keep it up yeah I also got missed up I talk about one missed opportunity which was um maybe short-sightedness on our part um so we had an opportunity to invest in data labs which um you know uh launched in the atop shot and kind of has become this NFT hub for our priority um kind of talent and opportunities um and we had an opportunity to come in and invest in them that it was a token play they wanted us to buy tokens our fun too was not structured to take all terms of assets we kind of were trying to play it by the book and we you know it was a million dollar investment and we thought you know it just not really doesn't fit like we we want to invest in the platform we'll give you money directly but they want selling equity they wanted to sell tokens fast for 12 months that one million dollars would have been 360 million dollars so add economic decision what we've done since that is realized that you know not only is the model of the companies where investing in the services would not only of those evolving but the underlying structure of these companies are like web three is totally changing the the concept of investing and structural structure investing and so what we've done with fun three of really structured ourselves to be able to do these more kind of uh non-stand deal structures like tokens and things like that where it makes sense knowing that if we really want to participate in the next generation of business and technology businesses we have to accommodate the way in which that build the way in which value is the quiet and so adding that was a big learning from that but that's the you know that's an obvious miss where you know we could have you know paid twice the fun back in 12 months would be a pretty good IRR but it didn't quite go down that way with which of me you living you learn you living you learn um I want to do a few rapid fire to close this out but just just to to give you you know just one last uh if you want to speak about where you want M13 to go in the future some of the companies you would love to look at in the future as well as you know open call to people to want to connect with you where should they go should they find you on social should they email you what's the website all of that so what where's where's the future of M13 going so I think a you know as I said like our holy thought is about the relationship with the founder and driving for founder team success that's the goal right so we've been thinking about what does that mean for us and where do we invest and where do we establish those relationships and I think we're looking at the full life cycle of of the founder journey it starts earlier than where we put us bait now and it goes later from where we can be effective so thinking about allocating a component of our of our funds towards a preceded strategy where we can kind of really go and work from the ground up and identify opportunities and really great talent and support them at the the earlier stages but then also looking at opportunity funds where we can actually be impactful in future rounds and and you know the true life cycle of you know the private company until it gets to its exit point so from a structural standpoint we're thinking about kind of expanding rather than just purely be focused on seed an A it kind of gives us the opportunity to play on on the full life cycle of of the business in terms of where we want to invest you know we've got four core categories that we kind of think about at least for fun three obviously it always changes fun to fun but everything is centered around two key themes one is you know the future in the from the perspective of a consumer and the second is how does what are the opportunities of web 3.0 type integration into these futures and so the four key categories are future of money which is fintech but also crypto or so prop tech things like that the future of health and wellness which we think about telemedicine we think about mental health you know we think about you know a lot of aspects of how consumers are going to experience health and wellness longevity things like that in the future the future e-con which is not you know CPG but it's much more platforms and solutions that are centered around e-con video integration social integration like a lot of the different ways in which consumers again are going to experience e-commerce and the tools and systems that support that and then so we do health money e-con and the fourth one is you might need to edit this part out no not I it's going to come to me one second but basically ideas we have these four key categories and they're all about the consideration of the future of how you know how people think about how people think about those categories so that's where we want to apply our money that's where we want to invest that's how we think that technology is going to change consumer behavior over the next decade the future of m13 and then where to reach you and then we can go right into rat the fire yeah so the future m13 is really you know as I said we you know we focus on really working with founders and kind of being part as to founders so the idea is we're thinking about extending that that life of the founder because the founder begins their journey well before they come into where we invest today and they continue well after our investment you know investment kind of period or period of most value so from a fun standpoint structural standpoint we're thinking about you know advocating funds towards precede kind of getting into kind of the earlier germination of the ideas with with great founders that we really believe in and also building opportunity funds kind of extend down parts of Spain be part of the journey beyond kind of our core focus that exists right now but in terms of what we want to invest in it's pretty simple you know obviously this evolves from fun to fun but for fun three specifically the way we've defined it is everything centers around two core themes one is how does the consumer look at the world and the other one is you know are there opportunities for web three integration and kind of crypto blockchain type technology integration into some of these different categories but there are four main areas that we focus on what is the future of work which is basically everything related to how consumers how you know the future generations are thinking about work like balance you know remote working gig working shift working you know just controlling your choices way more than people have done historically and all the different ways of that manifest and in how people optimize their lives around work as well as the tools and the capabilities that are out there that support you know SMBs and the like and future of health multi-talented medicine mental wellness things of that nature future of money which is not just fintech but also crypto and then also we think about prop tech and that category is kind of an investment vehicle and finally future of econ which is really how to consumers think about shopping in the future it's not CPG but it's much more the platforms and the solutions that facilitate you know shopping whether it's video social things like that so that that kind of encompasses the full gambit of the areas that we're interested in and what we want to invest in it's kind of all centered around you know the changing consumer behavior of the next 10 years and the technologies that are kind of feeding that and and then if people want to reach out and they can just chat with you or they want to yeah I'm sure you get a lot of pitches but they want to pitch M13 where do they go? So M13 website is easy M13.co as that's always easy to kind of just look us up but for me plus in the at a LinkedIn is probably the best way to find me call out more in LinkedIn also have twitter, calmore and yc but but I tend to be more active on on LinkedIn and then obviously with M13 M13 has LinkedIn page 2 so feel free to reach us out reach out to us there and then you know we can clear perfect okay let's do a couple rapid fires pull out some some career insights life insights biggest challenge you've overcome in your professional life yeah I'd say the biggest challenge I ever came up professional life was probably the financial crisis of 2008 so I was in a fintech business and the whole financial world seized up on me so I was just in a really really precarious situation and you can ask my my current wife who was you know not my wife at that point but definitely stood by me and supported me as I kind of went through the daily struggles of dealing with the next you know big you know pin to drop I guess on this whole thing so the real the real way the thing that I really none from that is my ability to get through that and kind of actually come out of that with a growth business was centered around two things on a personal side the support mechers was ahead around with my wife and the people that was supporting me personally but more importantly or not more importantly but equally as importantly it was that the on the business side the board we did established the mentors that I'd established around me I'd built a really really good set of people around me that were just incredibly influential and capable and and just very supportive throughout the kind of difficult journey that we had to go through over those six months or so until we started to reset to the business and so we've really just learned that you know it is so much about the people you put around you and the support mechanisms you have around you because it's in those tough times have become hugely valuable one person obviously there's been many but one person who's been highly impactful influential in your life who was that and what do they teach you very interesting there's been yeah there's been kind of an evolution of different people and different times in my life that have been you know really really impactful and really really helpful to me I think you know when I was building the FinTech business my partner at the time actually someone I went to school with was obviously had built a pretty big farm he was running a business there was at the time that I started working with him doing about a billion in revenue and about two billion by the time that I'd finished totally separate to traditional finance but really kind of gave me some good insights on you know just thinking about growth thinking about scale you know really helped me to kind of navigate the way I was I was you know we were building that farm and definitely not a lot from him on that but I think that in every juncture of my life all my learnings have come from kind of key people in those moments I haven't had a single mentor that it's bound through the entirety of my career but I've kind of always identified key people in each of those key moments that that have just been the the best guidance point for me in terms of figuring out how to how to deal and address that part of my career it had a pretty eclectic career so it's interesting to kind of very different industries so kind of you know meaning on different people at different times to really grow in that a book podcast source that you recommend people go check out yeah definitely lots of books out there that are really really interesting if I go to a couple of old school ones you know Eric Reese's need startup is just that kind of changed the way I thought about business building but you know obviously it's a very common book at this point and if I look at myself I've got let's see never split the difference it's a great book about a negotiation it's actually an FBI negotiator who who you know kind of tells all and all the strategies and things around negotiation you know there's there's a zero to one is a great book the hot thing about hot things is is a great book about kind of building businesses and going through you know lots of struggles there's some really interesting books out there that definitely kind of give a good story for you to look those are all pretty damn good suggestions so can't can't fault you if you if you check those out those are those are good places to start for sure if you haven't read them if you could tell your 20-year-old self one thing what would it be figure out what you're doing before you start your first company so you can understand you can you can you can you can understand with this yeah get an education now I think actually the best thing I would do at you know what I would actually probably do is I'd say be very critical about the quality people you hire and learn from them because I think that's probably the best way to get an education at that age you know the MBA was hugely helpful for me but I think there's a lot I could have learned on the job if I had the right people around me that brought that knowledge to me so and I definitely learned later in my career that the quality of people you put it around you is really the recipe for success that's what makes things work so at the age of 20 I would have said just make sure you pay attention to the team and make sure you learn from everybody you you you bring on board I think that would be the best advice they're very good advice and last question what does the success mean to you success is interesting for me it's really just about the quality of life that I can live but more importantly the quality of life that I can give to my family and I'm not talking about opulence I'm talking about you know just experience comfort is a baseline but then experiences and the ability to really you know choose your own adventure so all the things all the things that we achieve in life and everything that we we you know get more you know gain monetarily to me it doesn't you know but the financial component of it doesn't matter other than the fact that it gives me the option to experience more to learn more to do more to give that ultimate family and to kind of see that that grow so success is living the life that you would choose if they will know the myths to your options and and you know very few people get to do that unfortunately but it's a it's a very very fulfilling you know life to live for sure