Lessons - The Power of Human & Social Capital | Harpaul Sambhi - Founder & CEO of Magical

The story arc of the thesis for why you do things, it makes a lot of sense and I know that now that helps me sort of put the pieces together as to why you choose to start certain businesses, right? I actually never knew the story behind a career fire and why you wanted to build out like an alternative. We just like a professional networking platform, but it was actually to leverage human capital and social capital to help people in your network, place them, find them jobs, help them improve their lives, same with like magical, that's what you're doing now. So as you go through your entrepreneurial journey, I think it would be interesting to walk through some of the things that you've done previously when you built your first company and some of the lessons that you've learned and some of the things that you're doing now, maybe a little bit differently. And I also want like you can, you know, speak to the success that you've had in terms of maybe the velocity of the success that you've had in the second venture versus the first venture coming from experience, was it easier, did it move quicker or is every time you start something as an entrepreneur, is it just as difficult as the first time you did it? Yeah, I think entrepreneurship is difficult no matter what age, how much experience you have no matter what. I think the gray hairs, a lack of hairs, in my case, start to speak volumes of like some of the experiences of what not to do and there's key lessons that you ultimately learn. I did a retrospect actually the day after I sold my business, took it linked in the first time around and I realized that six year journey could have been shrunken into two, two and a half years at most, from what I learned during those six years at year six to ultimately be able to kind of do the same outcome. Maybe it would have been not sold to LinkedIn, but it would have had the same amount of revenue, it would have had the same amount of traction. And I think that's just what experience gives you, right? It's the gray hairs and it gives you a lot. I was really naive when I started my business and I didn't know what to do. And I think I could chalk it up to probably ten key kind of like highlights that I changed from my first business career to my second business magical. So first and foremost, I'm a big fan of hiring and thinking about DEI, you know, diversity inclusion. And it really, the way that I think about it is not necessarily to have like an artificial number, because I think a lot of companies like slap something on and they're like, hey, we need to have a specific ratio of gender, of, you know, ethnicity and so on. I really think about it from like a thought, diversity perspective, and ultimately like who are you serving? So at magical, we serve the billions of people that use the internet. And as a result, you had to look at the composition and start to say, well, how do we kind of really reflect an act and start to articulate some of the needs and wants of our users? So for us as an example, we have an intro metric where we're shooting for 52% of our work composition to be female. And it's not necessarily to, again, create a number, but it's just from our perspective, we say the ratios of the world, there's more female than male, we have, we have, we have that inequal representation, when we look at our user base no matter what, and we should start to represent that because the more that we start to represent that and have a lot of different walks of lives, the better we can start to have some of the finer things and that an individual user wants, whether it is from a different country or maybe if it's a different age as an example as well. So that's something that, you know, we just didn't have a full touch on an appreciation on when we built our first company and hiring is exceptionally explicit here, where we're really trying to ensure that we're talking to not only, you know, different age groups in different ethnicities, but different diversity of like the perspective, like I want the best farmer to work at magical because the best farmer can teach us things that hopefully we can incorporate from a different industry. Awesome, man. This was really good. This was like the human side of entrepreneurship because this is, this is everything that I don't think people speak enough about and, and candidly, like when I have a lot of conversation with great people, it's either like very tactical advice on how to build a business or alternatively, there's a lot of negative sentiment towards start up and hustle culture and, you know, misalignment between what a founder wants and what a VC wants. So I appreciate this as well. Or a founder, are there things that they should be cognizant of or aware of so that they can maintain all the things that you mentioned if they're looking for external capital because that can heavily influence a lot of the items that you just mentioned? External capital is probably the one, the one item that could have the most negative impact on all those really good lessons learned. Because if you, if you take money from a VC that does not believe in a lot of the things that you just mentioned, I feel like that could be a really difficult relationship. So how do you find the right person? I think anyone who's gone through relationships knows this, you know, the easy and hard way, right? Personal relationships that is, right? It's, it's easy to, to hang out. It's provocative to think about long-term marriage and partnership, but it's exceptionally hard for the breakup. And one has to kind of think about that, you know, when we did our fundraising for Magical, we've done a couple of fundraising. We just raised one of the largest rounds into Silicon Valley history. We chose investors that had the same vision and mission of what we had. We stressed tested it. We said, and this is a course over eight to 10 months of just meeting with these people, not even pitching them to be like, what's your thought in the industry? Okay. How do you think about the best entrepreneurs? What do they do differently? What are the values? What are the, what are the things that that you have seen help? And this is key learnings that we're learning from as well, right? Like there, they have 1500 companies that are thousands of companies that they've invested in and you're getting this key extraction, but you're getting a better sense of like what makes them go. At the end of the day, we have to recognize that venture capitalists are trying to do their job, which is trying to 10X their investments for their investors. So one has to be mindful that if you're taking venture capital that revenue and evaluations are going to be the ones that they're going to be kind of indexing on, however, there's a human side of the business. And it's best to work with people like if you have a feel where, hey, investor one is giving you better terms, but investor two is more in sync with you, take the investor two because dilution at the end of the day is not going to, like one percent dilution difference is not going to be material at the end of the day if you're trying to make a meaningful outcome. So I think that's kind of like the key thoughts that I often provide to entrepreneurs is really think about the people he want to do business with is at the end of day, they're all going to try to focus on making their capital 10X and that's just part of doing the business. But the reality is is you want to have, you want to pick up the phone and call them. That is like the key thing. You don't want to pick up the phone or think about like you don't want to have a negative feeling or cringe where the experience to be like, I have to call Scott. What is he going to say? Like, you know, you want to be like, I guess call Scott because I have a problem and he's going to now share this problem with me and this is going to be awesome, right? That is like the type of feeling that you want.