Tim Guleri - Legendary VC & Tech Founder with Multiple IPO Exits | Building Billion-Dollar Tech Companies

I just want to take a second and thank Cornbread Ham for supporting today's episode. Now, Cornbread Ham CBD gummies have been this really nice addition to my wellness toolkit. I don't use them every day just when I want to win wine after those extra busy weeks, but they're perfect for those moments when you want to take the edge off and just find your balance really just shut off from work. What makes them special is how Cornbread Ham crafts them. They only use the flower of USDA organic hand plants. That's the best part for the purest most potent experience, no fillers, no artificial fluff, just clean, full spectrum goodness and delicious watermelon berry and peach flavor. I keep them in my nightstand for those moments when I just need a little extra help relaxing and I love how transparent they are too. Every batch is third party lab tests. It's you know exactly what you're getting and they put together a special offer for all success story podcast listeners. All listeners can save 30% off their first order. Just head to cornbreadhemp.com slash success and use code success at checkout. That's cornbreadhemp.com slash success code success for 30% off your first order of these amazing gummies. So when I look back at the journey from Virginia Tech where I came from my master's, I lost my scholarship and like I'm not going back to that. I'm just going to sell bookstore door. So that then led me on to my first entrepreneurial job and then I ultimately started to obtain. How does a man go from selling books door to door to selling his company for $3.2 billion? Today I sit down with someone who did just that. Tim Galeri started with hustle an engineering degree, a master's in robotics and a side gig selling books to fun school. When I started Octane in 96, shipped in the market was the internet was happening and I was confident that the internet is going to once again change the customer interaction sort of landscape. That was my insight as an entrepreneur and that's how I built the company. In the 90s he helped build scopus technology sold for $750 million before founding Octane software. Now as managing director at Sierra Ventures, he's backed billion dollar exits like source fire, shape security and treasure data. This is the Tim Galeri story. Nothing great gets built overnight. You have to have the courage as an entrepreneur to realize that and lean into the commitment and then we will be your fuck partners and capital partners to take us to that journey. Have a pretty deeply ingrained view on what a great venture partner is on the stage of the company, which is giving you the gift of time. Welcome to success story. I'm your host, Scott Clary. The success story podcast is part of the HubSpot podcast network, but HubSpot doesn't just have great podcasts. If you're an entrepreneur, if you're a builder, they've got your back. Now why is that important? Because if you're building anything, you know that marketing in 2025 is absolutely wild. Now why is that important? Because you know if you're an entrepreneur, if you're building anything marketing in 2025 is wild. Savvy customer spot fake messaging instantly. Anything AI generated, they sniff it out. Privacy changes, make ad targeting a nightmare and everyone needs more content now than ever. And that's why you have to have HubSpot's new marketing trends report. It doesn't just show you what's changing. It shows you exactly how to deal with it. Everything's backed by research, but focused on marketing plays that you can use for your business tomorrow. If you're ready to turn marketing hurdles into results for your business, go to HubSpot.com slash marketing to download it for free. A huge shout out to Lingoda for supporting today's episode. Now if you're ready to master a new language, Lingoda is the online language platform trusted by over 100,000 students worldwide. Lingoda offers live classes with real teachers available 24-7. You can choose from German, English, business English, French, Spanish, or their newest edition Italian. What sets Lingoda apart, the smallest class size in the market. It's just you and up to five other students. Or if you want, you can go one-on-one for personalized attention. Their native level teachers don't just teach language. They share culture too and you'll speak confidently from day one with Lingoda's flexible scheduling and proven curriculum. Students report being able to navigate real conversations in weeks, not years. And if you're using Lingoda for business, their CEFR aligned courses ensure that you're learning internationally recognized language standards that employers value. Between sessions, you're going to reinforce your skills with downloadable materials and bite-sized practice exercises. And all success story listeners, they put together a special deal. Try Lingoda free with three group classes or one private class. Plus, you save on any course with my link, try.lingoda.com slash success story and code Scott 25. Don't miss this chance to transform your life through language learning. Today's episode is brought to you by Vanta. Now listen up, this matters for your business. In today's digital landscape security isn't optional, it's essential. Without it, deal stall, sales cycle stretch on and scaling becomes very difficult. Now why? Because investors, customers, and partners all expect businesses to demonstrate strong security practices before they commit. If you can't prove trust, you lose opportunities. So whether you're a startup founder, trying to land that first big client or an established company, scaling your security program, Vanta helps businesses of all sizes prove that they're trustworthy by automating compliance across 35 frameworks like SOC 2, ISO 27001, and HIPAA. The exact certifications your prospects are demanding. Here's why you need to pay attention. Vanta gives you back precious time that you're currently wasting on compliance. Their platform automates up to 90% of the tedious compliance work. It helps you respond to those endless security questionnaires at the five times faster. And it connects you with experts to get your security program running immediately. The results speak for themselves. A recent IDC report found that Vanta customers achieve over $535,000 per year in benefits, and the platform pays for itself in just three months. So you're going to join over 10,000 global companies like Atlassian, Korra, and Factory who use Vanta to manage risk and prove security in real time. And don't miss this. For a limited time only, my listeners can get $1,000 off Vanta. That's real money back in your pocket. Visit vanta.com slash Scott right now before the software expires. That is V-A-N-T-A.com slash Scott. Tim, you've gone from selling books door to door to putting yourself through grad school to building billion dollar companies. So talk to me about a common threat in your journey. I think Scott the common threat I would say is that you know you as a when you're growing up as a child or whatever you have certain sets of trainings that your parents impart on you and that tends to shape you as an individual. And for me when I look back because I've reflected on this many times, I think there were two things one I got from my dad, the other from my mom. So my mom was an avid gardener and she loved literally at a patch of dirt that she'd given me. My patch of dirt and I was responsible for it. Get my hands dirty. Make sure I kind of water the plants all that good stuff. So the idea that you're constantly working if you love something and then it doesn't feel like work. And the idea that you're constantly pushing the ball forward right is one key anchoring attribute I guess I have. And the other one is my dad was named in army when I was growing up he always you know and then he was the infantry so life was pretty hard and he always had this term called boxon you know which is you know when you're boxing you fall in the ground the referee says you know once you come to down he goes boxon okay get up and you keep going again right. So point being that obviously you have to be smart at your skill set and you have a technical or other ways but once you kind of have some lift off you got to go back to your kind of core you know features as an individual work what made to you right. So when I look back at the journey from Virginia Tech where I came from my master's and then you know one supper I lost my sponsorship scholarship and so in sort of calling dad for money I'm like I'm not going back to dad I'm just going to sell bookstore door and earn you know 10 tall grand and pay my tuition for the next quarter which is the door to door selling that I did and actually and Sacramento California but it was one of those things where you fall down you know adversity happens but you just kind of pick yourself up and keep going right. And so that then you know sort of you know let me on to my first entrepreneurial job and then I ultimately started octane which is the company you're referring to which I had a great outcome. So when you think about entrepreneurship and you sort of you discovered I think that you discovered when you started selling books maybe it was earlier than that that you had this entrepreneurial mindset and I've always gone back and forth on this idea and different people at different opinions I can entrepreneurship be learned is it something that you're born with is it something that you learn what do you feel do you feel like it was something that you've always been or was it something that you had to work for. No I think I think I'm on the on the camp work can absolutely be learned so if you look at my history I didn't come from a business family I came from an army family with dad got fixed income right and even from you know work from like a very regimented like a 13th morning back at you know 4 p.m. then off to you know his evening activities. So growing up I had no business you know being talked on the table none of that right but I think going back to the you know the the the the what made me me interestingly which was kind of like this always on and so and so forth when I came to California and I you know I used to go to my friend's house on the weekend and you know the double conversation around the water cooler was always around entrepreneur X company Y and in that guy do great so like it the the fact that and that's really I think something that is the amazing Scott about America which is the can do is in the water right and it is I think for the individual that really wants to be that person for them to grab that so when I was here in the early 90s kind of you know doing my first entrepreneurial job and those were the conversation around the water cooler or with my friends in the weekend I was like I look back at my own skill set I'm like I can do this I can be that guy right that they're talking about in the in the third person and and that sort of just changed me and made me this this got the fire going inside of me man remember I was kind of in my 20s at the time right so this is not somebody that's you know 17 or 18 so I'm like already through Brad School and doing my first job so I think the long-ass fear short question is I think entrepreneurship is something that could be apps to be learned and the fire can get lit at any time in your career and it just comes down to you know if that spark happens you got to lean into it I just want to take a second and thank cornbread ham for supporting today's episode now cornbread ham CBD gummies have been this really nice addition to my wellness toolkit I don't use them every day just when I want to win wine after those extra busy weeks but they're perfect for those moments when you want to take the edge off and just find your balance really just shut off from work and what makes them special is how cornbread ham crafts them they only use a flower of USDA organic hamplants that's the best part for the purest most potent experience no fillers no artificial fluff just clean full spectrum goodness and delicious watermelon berry and peach flavor I keep them in my night stand for those moments when I just need a little extra help relaxing and I love how transparent they are too every batch is third party lab tests it's you know exactly what you're getting and they put together a special offer for all success story podcast listeners all listeners can save 30% off their first order just head to cornbread ham.com slash success and use code success at checkout that's cornbread ham.com slash success code success for 30% off your first order of these amazing gummies how do you know what to lean into because you built I think so you built two companies so scopus and octane octane was the 3.2 billion dollar exit that's massive number right so obviously you leaned into something that was working but for an entrepreneur I think that's the biggest difficulty and one there's a lot of difficulties when you're an entrepreneur but one of the biggest difficulties is there's two competing thoughts right so should I keep investing into this it's always going to take longer than I expect I know that you know maybe it's not going to be at the two or three year mark but the seven eight nine ten year mark I'm going to start to see that bell curve growth curve hockey said growth curve everything up into the right that I was hoping for or on the flip side I'm putting on my time and energy into something that I can't really validate product market fit I'm not seeing the traction maybe I should just as Kevin O'Leary says take it up behind the bar and shoot it so when you're when you're trying to invest your life and energy into something how do you validate if it's an idea that you actually want to commit yourself to I think the two two ways to think about it I was telling you my journey and not every entrepreneur journey is that way I was lucky to be you know early at scopus I was like in point number seven and this was a company that was in the customer relationship management space so I call it the granddaddy of Salesforce dot com right like the first OGs in the in the space um scopus man to then clarify and um that was my light MBA so in other words uh I joined uh in in sales engineering I rose up to the ranks in sales engineering which was what you learned all about selling and kind of you know what do the customer want and kind of and remember I was an engineer coming into the job so I had zero knowledge about sales or you know you wouldn't even know what I was or what these sales guys who for living and then I was lucky that my CEO or is a son and uh the you know my my now very close friend Aaron Oman um who ran sales gave me an opportunity to move from that into marketing and so you know I call it the live MBA because I'm in this company that is growing and getting functional cross functional training and and that sort of gave me along with my other comment earlier about just being very uh naturally inclined because of those conversations that I got to do something entrepreneurial to give me the skill set and the confidence that hey I could do this right so the point I'm trying to make is that um if you can set yourself off as a young young person in the company where you could learn those skills on somebody else's dying that actually sets you up really well that when you're doing your own company you don't make the mistakes and the beauty bot startup says that you know um I I I raise scars now for for um you know for entertainment and sort of you know um when your ass is two inches from the ground you feel a rebound right and that's different than you know being at a larger company like a snowflap or Salesforce.com but you might be just in a in a in a single department so what I tell entrepreneurs or want to be entrepreneurs is get into a well run small company because that's the easiest and the fastest way to get cross functional skills and I think that's what gonna set you up and you do your own company to really um you know execute uh and then make the most of it so and the and the second part of that is that also gives you kind of these filters that says that when you're doing your own company hey this is not working and hey should I go and shoot this idea behind you know you know behind the barn and try the next thing it also gives you contacts right like I was able to hire the handful of first engineers at octane because of my tenure at Scopus so my co-founder Kira Maccogon was now the president of Ring Central a very successful public company came from that because she and I you know got to know each other and he said okay we're gonna do octane together right so you get um you get uh venture capital contacts because I was presenting to the board and I was at Scopus you get a coworker contacts like Kira you get customer contacts so first three contracts actually came from customers that had churned from Scopus and I just went to the same guys and said hey I've just hung the shingle I'm the guy uh will you you know we did great business before will you give me a chance right so there's all this benefits of working in a really well run startup company before you do your own so it's just I mean when you do this you massively de-risk of building a company yeah because you see it because of all the the entrepreneurs that come to you and and probably pitch to you but do you feel like there's a an incorrect shift in the definite I mean I don't think it's new but an incorrect shift in the definition of entrepreneurship where people are like for going any work experience and just trying to build either right out of school to emulate like a Zuckerberg uh I want to build the next thing I'm gonna drop out a Stanford I'm gonna go build a company or even people that don't want to build a tech company uh I feel like social media propagates this idea of it's so easy to build it's so easy to you know be an entrepreneur and and you see it your front line to this do you see a lot of people sort of for going the delayed gratification and trying to get this instant entrepreneur result and then backfiring on the on the on the on the back of that because they haven't put in the reps in the work yeah so uh I think firstly um look I think it's it's super commendable whether you're right out of school and you jump into you know solo entrepreneurship because that's the fashionable thing to do and all your friends are doing it or you go the journey that I was distracted I went where I worked another company for five six years and then I started my second you know my company which I started right which was octane uh but in both cases kudos to you because you're an entrepreneur right so that's let's start for that right because it takes a special special person to you know be that okay and there's learning in both I think both paths uh I do feel that um that on the first path where you're just kind of launching yourself uh and you know you know handful of kids in a dorm or whatever I think the the the probability of success is much much lower right because you just don't know what you don't don't know and and and so a lot of these uh and we see this you know with my coordinator and other um you know incubators where um but the the team that came through the vc batch x x plus 2 x plus 3 they come back and that's the real company so so I mean if you look at the vc sort of you know alumni book they talk about Airbnb and they talk about all these like high flyers but there is 98% of the of these classes actually just train you to be an entrepreneur but you're learning that's kind of the scopus example I was giving you and then you come back next time around you know you're already for knowing what mistakes you made and and and so and so forth so I think um uh to me if you were planning it out you know and you're like a new you know grad and and and you were trying to like go hey I'm entrepreneurial I think I think going down the path where you put set yourself in a in an entrepreneurial school while you're building the idea puts you at the you know in a much higher um category of success and even then it's not easy but at least you break the risk down and you have some skill set to uh you know to push yourself forward and when you when you sort of walk through because obviously your journey shaped how you approach investing and how you approach entrepreneurs so your experience how did it shape your investment thesis how did it shape what you look for in entrepreneurs so I think uh the first thing is that entrepreneur that I like are the ones that uh they have an insight about the future that is not consensus so you know there's this uh classic kind of you know categorization which I'm sure you heard of which is uh uh contrarian contrarian investing uh non-consensus investing and you know consensus or beta investing right and contrarian investing as a name suggests is where you get the most alpha but the most risks so this is like you know you're like you're looking so far ahead and you're taking a complete like you know flyer right yeah uh consensus is where you're just following the market and in the middle is non-consensus investing which is the one that I like because this is when you're seeing the world through the eyes of the founder so what I try to do is hang out of these founders that come through us and try to like connect the dots and what is it that this team or this founder is seeing that that the rest of the market is not seeing that I believe it because remember we're doing early stage right we are trying to be like the first and social check into these uh entrepreneurs that one of the real companies and the B2B markets so that's the Sierra Ventures ICP so I look for that and these founders and that come from my own uh you know journey as an entrepreneur because when I started um octane uh in 96 um you know CRM had happened and there was like you know scopus and seabull system that these big companies but the shift in the market was the internet was happening and I was confident that the internet is going to once again change the customer interaction um uh sort of landscape and that was my insight as an entrepreneur and that is what you know my investors graylock and sigma and backed and um and that's how I built the company so I look for the same pattern maps now when I'm meeting the founders and then my job is to agree with them that this is the road that you need to execute on to de-risk that idea such that you can get the first handful of customers and the next handful of phenomenal investors to put fuel in the tank so that I even think oh sorry I apologize now I was gonna say even your journey from operator to investor I think is a little bit uh interesting and I would say not common because okay so I have to understand this you can you can sort of walk me through this store I think it's fascinating so you had a 3.2 billion dollar exit that was Sierra was the entity that acquired octane but then there was no no no octane was acquired by Episany which uh okay okay me and then I hung out at Episany integrating uh octane and do Episany but the then CEO and a dear friend of mine Roger Saboni uh and then while I was at Episany as one of the officers and that uh Peter Bendel was a founder of Sierra and one of my good friends from uh Scopus Dave Schwab was also a partner at Sierra as a rest was a connection a big thank you to indeed for supporting success story because hiring people is one of the hardest things you're ever gonna have to do as an entrepreneur as a founder as somebody who's trying to build a business it's important to hire well and find the right person but it takes so much time and it's so labor intensive because like most entrepreneurs you have a thousand things going on and there's good chance that you just realized your business needed to hire somebody yesterday so how can you find that great amazing right fit candidate fast it's easy just use indeed because you don't have to waste time struggling to get your job post seen on all these other job sites if you're using indeed you can just use their sponsored jobs to help you stand out and hire fast your post jumps right to the top of the page for relevant candidates so you can reach out to exactly who you're looking for faster and the results really speak for themselves according to indeed data sponsored jobs posted directly on indeed have 45% more applications than non sponsored jobs and you know what I love most about indeed it really just makes hiring so fast because everything is streamlined in one place no more juggling multiple platforms or waiting weeks for the right candidate and how fast is indeed in the minute I've been talking to you 23 hires were made on indeed according to indeed data worldwide there's no need to wait any longer speed up your hiring right now with indeed and listeners of success story will get a 75 dollar sponsored job credit to get your jobs more visibility at indeed dot com slash clary terms and issues do apply just go to indeed dot com slash clary a huge thank you to net suite for supporting today's episode now what does the future hold for business if you ask nine experts you're going to get 10 answers bull market bear market inflation up inflation down honestly at this point you just need a crystal ball but until we get one over 41 thousand businesses have found the next best thing they future proof their businesses their operations with net suite by oracle which is the number one cloud ERP imagine having your accounting your financial management your inventory your HR all flowing together in one fluid platform and here's what makes net suite different it gives you one source of truth for your business you get the visibility and control to make quick confident decisions while others are guessing you're working with real-time data insights forecasting you're basically looking in the future of your business with actionable data whether your company earns a couple million or even hundreds of millions net suite helps you respond to immediate challenges and helps you grab your biggest opportunities and speaking of opportunities they put together the CFO's guide to AI and machine learning and net suite dot com slash scott clary this is the playbook for understanding how to use AI for your business the guide is free that is net suite dot com slash scott clary i was trying to figure out how you ended up running sear that i was trying to figure out the thrill okay that makes a lot more sense so that explains the interesting so i obviously new venture capital because i raised money from some of i think the best fund in the valley as an entrepreneur and that's why i knew the venture capital game you know i returned for them half a billion dollars each you know from the opt-in experience so you know she's like a half a billion reasons for each of them to make you know still be dear friends and now we co-invest together um but then i'd never quite formally thought about uh becoming a bc uh you know i was gone on my second company and i'd likely i'll do a third or a fourth or whatever yeah and then i happened to spend time with Peter and and and Dave and um sear felt like a startup at that time the firm had been around already for 20 years but the way they were thinking about and and helping early stage founders that was what my love was so i spent a few you know um a little bit of time on with the on board meetings with uh with Peter and Dave and that's when i pulled the trigger and joined seara and in 2002 okay that makes a lot more sense now i was wondering i was like yeah i was like i don't think seara had had the capital to make that kind of acquisition but then i thought i was thinking of some sort of private equity place okay so octane was acquired by pubco and then this was just relationships that led you into seara okay how has seara how has seara changed i mean why when over time what was their thesis and what was their strategy when you first started talking to Peter what has changed over time what's evolved yeah i think uh seara is uh is a phenomenal brand uh very well you know has served like some of the largest companies uh stratacomb which became the corosisco was our investment uh you look at um the beginning of uh big news of ERP uh so intuit was one of you know a signature um investment that actually Peter vandal made himself and and so and so forth so lots and lots of history before i joined the firm but in um the 2001-2002 uh you recall that this is like right after the craziness of the internet wave and the and the crash right or the market right um in the in the early 2000s and so what the firm had uh become the funded become very large and we were doing early stage and late stage and um it became clear when you rolled the clock forward kind of to you know uh uh 2010 2011 that that strategy was not something that you know i was excited by as one of the general partners and my two other partners mark Fernandez and Ben you we wanted to do early stage and we felt that sort of a split strategy would would serve neither masters right you know in good job in early state investing or mid-state investing so um that's kind of when we'd you know uh discuss with with the rest of the partnership and um you know took the firm down the direction of early state investing so in 2012 uh scada would say was the birth of what i jokingly calls here at 2.0 so we reinvented ourselves in the sense that we got clarity on mission right uh the brad had been around your firm now is over 40 years uh in business investing up 13th fund so one of the iconic uh your names and and and be to be tech investing and really lucky uh to be given that pedestrian by our limited partners and entrepreneurs that you have choose to work with us but uh what really made it clear and fun and and starting in 2012 then you know we effectively took over the management of the entire firm uh because i was an in with you general partner before then and then you know 2012 won on what's running uh the firm along in the apartment market then is now we had a very very clear not star which is you want to be the first institutional check-in uh for us a second sometimes because now these are precedes and all kind of you know fun stuff happens before we find a great investment and then you have fun and fun stuffs in in air quotes so yeah i agree you know friends and family rounds and pre-preseeds and all kinds of stuff right but you know sort of this come early stay late mentality right that nothing great gets built overnight okay and you have to have the courage as an entrepreneur to to realize that and and lean into that commitment and then we will be your fuck partners and capital partners to kind of take us to that journey and i think what really helps us that you know i've personally been on the road multiple times taken several companies public you know we've kind of have all the arrows in our back so it's like hey i really suggest you don't walk down that alley because it's gonna it's gonna hurt right go keep been there and i think it's that all kinds of city of brand and love for entrepreneurs and everything that go through and deep deep respect is what i think you know Sierra has come to become and then obviously we do a lot of all the stuff for uh you know we have all CIO advisory board and all kinds of uh infrastructure to help these guys get the first 10 15 20 customers but that's a little bit i think a back story yeah i know i mean i love it and i think that again if you've if you've played this game before and you've built companies multiple times then this may not be a surprise but for our first time founder maybe just describe the importance of i love this philosophy come or at least stay late i think that's i think there's an incredible philosophy and i and i want to sort of reinforce how important that is as a first time founder what that's gonna mean to you in your journey and just having somebody who's really in it for the long haul so maybe talk about the importance of that but also i think it is important without naming names because that's not cool but talk about some of the traps that founders can fall into when they work with other types of firms yeah i think um look i think it's ultimately uh uh founders have to be very thoughtful about the kind of journey they're going to embark on right so are you sprinting and you're you're building muscle memory to be a sprinter or or a marathon runner right because you know the way you train you know the way you eat uh your regimen is very different right so if you're trying to be you know instagram and kind of trying to get to a billion dollar outcome and you get bought by meta you know that's uh you know consumer compete different looking you know that's like you know what what uh i think the industry charts are called bit scaling which is like just pour a bunch of gas and you know good stuff happens we don't believe in that philosophy of incinerating cash uh we like to build solid foundations so that you can build the tallest building in downtown right like at a distance you know very very thoughtful and thoughtful execution understanding also that along the way there'll be a lot of like discovery and and and and your decision that have to be made that might be painful you know for the entrepreneur because you letting people go or you're you know moving strategies but again somebody that has been that done that as a steady hand on the till and you know really work entrepreneur hours i mean you should talk to some of the entrepreneurs that i'm involved with the mark my partner Ben Shashank etc i mean last night i was on a phone call to like 10 30 right but there's some guy and we're texting right and the guy like hey Tim Irouek i just finished dinner i'm watching you know the game yesterday uh the playoffs and bang you know he just calls me we have a quick like half an hour conversation and it doesn't feel like work to me because honestly i don't think i've ever worked since 2001 honestly Scott like and i you know don't tell an apartment this i shouldn't get paid a dollar for doing this right i'm having i have so much fun because you know i love these entrepreneurs i love what they're building and we're invested in it not just writing the check is the easy part can you give them the time that's the hard part so i'll answer your question which is when you're choosing um a VC partner don't worry about the cash with much is worried about the time are they going to give you the time and really be there be a thought partner as you're navigating these these these holds and alleys i was talking about before and i think if they cannot give you the time uh which is what happens when you're you know multi-stage and multi-billion dollar fun because look you're you cannot possibly have time because you know you have 300 people in your organization you have seven billion dollars to invest you're writing like 150 million dollar checks a piece that's a different beast right and those GPs also make great money for the investors but that is not the game that we play and i don't think that's a game that all you say don't know should be looking to play so i have a pretty you know like deeply ingrained view on what a great venture partner is at the stage or the stage of a company which is giving you the gift of time and um and you can only do that if if you're if you're making these concentrated bets right like i write like one check maybe one and a half check a year um you know and so do my partners so we're not spray and pray we're not like doing you know 70 companies it's a very conviction-based um investment strategy um and then you know i think that's paying paying us very well and uh LPs and funds are really great because of that i know i think it's smart and i think it's a healthier strategy for the entrepreneur because this spray and pray blitz scaling oh it's okay if nine companies fail at least one will be a unicorn i think these are very toxic ideas and i don't love these ideas and sometimes entrepreneurs just see money and they get excited and they they jump at the money and they don't realize that like listen your your life is not going to be as great as you think it is just because you take uh take some money from an investor so yeah i think it's important i i i love it you're you're so focused and you're so careful and thoughtful with your checks because that means that and another idea like money is relatively cheap but time is very expensive very expensive so to get time from a managing partner is yeah i don't think that happens that often yep i i really don't i mean what your risk is that you make the wrong bets so maybe just talk about how you make sure that that one one and a half checks that you write per year is not is not betting on the wrong company or the or the wrong person i think that's a that's a great great question and you know the interesting thing about venture is uh scopt and the reason i love this this you know job that i do is that um you cannot rest only laurels because the market and the and the and the and the and the technology trends keep changing so you always have to keep reporting yourself so 20 years doing this i could still tell you that i'm still learning and i still have that you know that that lures mindset personally at that you know because it's just like and i love a lot from entrepreneur because it teaches me a lot and i'm constantly looking for that right constantly spending time like today i have lunch with the tutor's law officer of GSK um you know we're gonna spend an hour together and you know i mean she sits on top of a massive budget so you know both on the industry side entrepreneur side and then senior execs right so we're constantly learning um i think for for me what uh what i think is super important is that uh these learnings are the stuff that you transfer over to these entrepreneurs so that you know the transfer learning on the osmosis is happening and they're just like figuring this out and and not you know again going in wrong directions or or making the most efficient use of the capital that you've given them right and so um we do uh six optimizations in the seed through series aid journey and the six optimizations are there's product marketing or you have a product positioning optimization there's team optimization so how do you structure your team there is company positioning optimization so the whole series of exercises we take the entrepreneur through like okay what is the category what should you really call it right there's a financial model optimization there's a whole series of exercises there there's a captable optimization which is like okay captable is a is a is a you know is it very much like cash there's only so much of it to go around so there's a whole notion of okay how do we how should we think through seed to A to B to C because ultimately we're on the same comp land as the founders we're working for equity and equity value right uh and the final is you know funding a fundraising optimization so these are the sub pillars if you may or building a great foundation of a startup company and uh it's that's what we spend time on and I think that's what makes great great great companies happen the mistakes are when um and we make it and I make them personally as well where um uh and most of these have to do with the individual CEO uh that we took a bet on and that bet ends up being wrong so the a read of the CEO the reading CEO or on the market right uh was not like on the nose and I'll I'll give you a couple of examples so in one instance um it was a seed check uh it was a company that was based in in the Rockies and uh it was a very very aggressive and a very fundamentally disruptive idea uh so we she did this company along with another small seed fund adapting the raised maybe 3.5 million bucks or so uh and then the year into it the CEO was not seeing the not star B the not star so the market had shifted quickly openly I had done something different than what expected them to do and suddenly that market idea disappeared and the CEO just you know called me one day and said hey I'm gonna do something else right so that's an example of uh two things going wrong that actually one is the CEO's resolve to work through a knot right uh I I didn't read it correctly I thought that that that particular gentleman and vigil would actually go through that wall but he chose not to and the second is we didn't expect the market of shift so no harm no foul you know I'm still you know very friendly with with that CEO but that's what seed bets are all about you know you you you make the best um sort of bet based on the information you have at hand at that particular point and and you know you truly understand what you have once you're six nine months in the journey with the ultimate market in a situation like that is there something that you could do to or or that you try and do to help the founder CEO see a line on the same vision like real line because from every person that I've spoken to who does venture investing the the individual is the most important component like yes the market can shift but the individual is the x factor like if that person goes rogue you're done so what what are what are the as let's talk to investors in the audience they they put money into an early stage company what can you do in that case is there is there strategy is there tactic or is that right off yeah I think so the first thing is that um do as much work uh as you possibly can for you write the check and I really mean this with all the this is why I'm not a fan of you know these party rounds that happen over the weekend and I breathe out in a 300k check and then nobody shows up for work right so because there's no ownership to the project right yeah you know the the founders raised you know four million bucks but everybody's put in 200k like okay and then there's no um you know there's no nobody to challenge your ideas or give you new ones and it's a very lonely place to be so if I was advising for you know entrepreneurs I would say don't do that right investors which is a question you asked I think um I now have a much more rigorous process on understanding the individual behind the CEO right like what is this personal about and doing like you know blind references and other calls now one of the benefits we have as a 40 year plus bench capital firm as we have were one call away uh for almost any entrepreneur to find out like you know what are they all about because you know we've got such a massive network right so unless you're a UFO you know one of these uh kids from college that doesn't have a history in the valley uh if you've done five seven ten years of work in the valley we know one person that you know will give you yeah so I do a lot of work in advance I also spend a lot of time with them um sort of off-cycle picking up a dinner or go for a walk before we write the check there's ready to unpack the person dying the person um but I think having said all that um uh still then it's I think it's still go wrong uh because people are people and so the answer to that is for the the you know the listeners are investors is uh surround them with a highly skilled set of either co-founders or advisors early on and I think um because you know CEOs tend to learn about osmosis the best of that they have a learning mindset and a great example of this is one of my favorite CEOs uh my had been ready to use you're running now a very very large company uh investment discomfort based in Philly it's a company called phenom in the HR tech space and just a rocket ship company profitable while you know all the other competitors that burnt and Scott incinerated hundreds of billion dollars of cash here in the valley this guy's kind of uh you know raised less money than the ARR that he's putting on to you know on his top in every year right now just a phenomenal company and the big big thing that I respect about my is that he surrounded himself with he's only seeking out that next great idea from the next great person right so the job of the early sage aunt the norris given capital doing all your work for you right the check as much as you can but still can think think think and still go wrong and then surrounding the CEO with but you know what I'd call experts or people that can really get them um sort of additional ideas once you've identified what their soft spot might be so one of you know early sage CEOs happens to be uh this phenomenal founder from PayPal technical guy had to learn go to market on the job right so I've like inserted like this guy um uh whose company I've invested in that you know worked at a very very great company on the GTM side called act dynamics and that person is now advising uh Sir Ash who's the CEO in question that this company I've done called Sir Die on GTM so again that's a great you know sort of a fit and and you know he's learning a lot from them and I think that brings down the risk of these founders going um you know off the off the trip I think that's very wise I also think that it's it's sometimes uncomfortable for a first time founder to ask for help yeah and understanding that there's like a mental block there for them to put you know put them in that a little bit of a position of I'm sort of saying I don't know what I don't know and and please like I want the advice but I think there's an evil involved in that too that a lot of people have a tough time asking for so if you're putting those people around them you're just it's just a very great environment that's going to allow that person to thrive the other thing and you remind me of something Scott when you said that the other thing I've kind of noticed is that uh these founders talk to other peers and and you know get go to go to advice and you know lock into that advice uh which might be different but maybe a few degrees sometimes completely opposite to the way I would advise them on that particular point so I've been thinking about that because um you know one of my CEOs does a lot of this where you'll go and talk to another CEOs 28 and try to get advice from fundraising or timing of fundraising and so and so forth and I'm like that is not that guy at personal gal is not giving you the right advice right so the point here is not that don't talk to your peers you should but filter what you're getting based on the experience that somebody has right because it's more likely I'm not saying I'm all this right it's more likely that somebody that's going on a pack that has a perspective and does this professionally it'll probably give you a better advice than uh than a buddy you have in a beer with right yeah and sometimes I've actually found this a lot and I I think that it's also very damaging so if somebody achieves some early success and they haven't been in the game long enough to understand that their early success is not the the way that they achieve their early success is not the only way to achieve success they become almost like there's like a like a religious conviction about how they achieve success and that's the only way to do it and that's the only advice they give and they speak with such conviction and such charisma that you know that they're receiving the recipient of that advice starts to believe that yeah that must be the only way to do it or that must be the only way to operate through this specific and they're only like you know they're 25 26 and they're giving they're giving this advice that serve them well for the first you know four years of their life but they don't realize it multiple things can be true at the same time and that what worked in one industry or one instance it doesn't always carry over and this is bias towards this you know they're they're short lived experience and I think that's also damaging and that yeah probably get that few peers the balancing comment is right that's not a yeah age thing or an experience thing right because I think that I met 22 year old that are that are very very insightful and there were different set of experiences so I think the point I think we're both trying to make is as uh as a first-time founder understand the source put a filter on top of it okay figure out you know based on a lot of life is all about having a gut instinct right so when you've had enough wraps you just know right and so they need to get enough wraps and you know if you're if you're taking feedback from founders go talk to 10 not one if you're trying to take get feedback on a particular point from like 10 year VCs or whatever talk to fight not one right and then you balance it and you'll get the right and then I'll comply all own intuition so um uh this is just kind of having one conversation over a cocktail doesn't uh make a strategy a quick shout out to the HubSpot podcast network for supporting success story now if you like success story you're going to love other podcasts in their network one of my favorites is create like the greats it's hosted by Ross Simmons obviously brought to you by the HubSpot podcast network you're gonna join Ross on create like the greats Ross dissect the genius behind histories most remarkable creators and their legendary work so you're gonna get this blend of history and business and creativity his great voice always good for a podcast and he has a decade of practical experience he's gonna break down some of the best creative processes that built influential companies brands and stories in a way that anyone can apply so whether or not you're fascinated by history creative thinking or you simply want to improve and systematize your own creativity without sacrificing productivity this podcast is your perfect listen go listen to create like the greats wherever you get your podcasts a huge shout out to Lingoda for supporting today's episode now if you're ready to master a new language Lingoda is the online language platform trusted by over 100,000 students worldwide Lingoda offers live classes with real teachers available 24-7 you can choose from German English business English French Spanish or their newest edition Italian what sets Lingoda apart the smallest class size in the market it's just you and up to five other students or if you want you can go one-on-one for personalized attention their native level teachers don't just teach language they share culture too and you'll speak confidently from day one with Lingoda's flexible scheduling and proven curriculum students report being able to navigate real conversations in weeks not years and if you're using Lingoda for business their CEFR align courses ensure that you're learning internationally recognized language standards that employers value between sessions you're gonna reinforce your skills with downloadable materials and bite-sized practice exercises and all success story listeners they put together a special deal try Lingoda free with three group classes or one private class plus you save on any course with my link try dot Lingoda dot com slash success story and code Scott 25 don't miss this chance to transform your life through language learning you know you mentioned six six pillars correct the you the you work through to help the entrepreneur optimize their business first time founders which pillar do they have the most trouble with what's the biggest issue they have I think first time founders have the biggest challenges with positioning like what's the how do you position the company and they don't understand the importance of positioning on a relative basis because positioning is needed not for you know tech crunch or whatever but it's needed to to clearly deliver your 30 second pitch or two minute pitch when you talk to a prospect right that's why positioning and positioning is a relative exercise is some natural exercise right so we could chat about that maybe later so I think that's one thing to be struggled with a lot and the other obviously is the the product the GTM side right because a typical art type Scott for our founders is that they're technical deeply technical tongue from a deeply technical background don't quite know GTM and that's the muscle that they have to learn the rest of the stuff is I think relatively easy you know like finance cap table and and so and so forth but those two are the ones that they are the least sort of knowledgeable about and have to learn and the next thing I'd say is once they've been in seat for a while they the successful ones figure out how to build teams the the CEOs that sort of power through the learning curve and continue to grow are the ones that actually are like have this amazing instinct to find the best position players in the market for what they're looking for before becoming necessary so before you need that amazing VP of marketing you've already been talking to and had dinners with you know a bunch of people that point you towards that they're all over six to nine months ahead right and again building the team like I guess is the point the putting in the work to build a great team is the ones that you have great entrepreneurs to so I'd say those two and then the team building being sort of the the next one out of the six you mentioned a new once is to have we look at positioning yeah can you go deeper on that yeah so I think the position exercise is and you know I'm a big fan and I'm sure you obviously read and heard Simon Seneca you know the onions right the three circles I think for me what I try to educate and I the discussion and the white boarding that I do with these founders is like how do you relatively position your product or your offering and what I mean by that is in technology everything moves and waves right yeah and so if you're innovating now in wave number three you have to have a narrative and a story that talks about wave one and wave two and this notion of by this why now right that's a question you've got to be able to answer that why does this company deserve to exist now and once you answer that and that answer to that is based in a in a trend that's going to happen whether that company existed or not you know what I mean so for instance I have a great company that is doing some incredible early-state work in e-commerce search that came out of MIT and they've invented something called the customer GPT so it's basically a transformer that can detect customer behavior automatically without looking at log files and all that stuff it is what every other technology company before that is based on so there why this why now is this customer GPT which is anchored in generative AI which is happening now right so when that CEO talks to the market says hey this could not have been done before 2022 because now is when this this technology got built so we're like part of that generation right but to be able to articulate that becomes important and then the second thing is okay relative to what which is the question the point I was making which is like okay if indeed you are innovating on that technical curve relative to which companies are you better and how so that's a relative positioning that that you know I think entrepreneurs sometimes struggle with and and we help them unpack that in a way that the narrative and the story and the two-minute pitch to the Chief Digital Officer of GSK who I'm going to go see today if they were sitting in the room you got two minutes to tell her what your company does and it just needs to be very crisp so it needs to come out anchored in a tech trend why this why now and the next thing you have to talk about is relative to the other options you have why would this be better and then the third is heavy combustible so it's that narrative which is super critical two thoughts on that actually I'll go into the first idea quickly but is it always required I would say for Sierra obviously it seems to be a requirement but to have entrepreneurial success to find true product market fit to have some sort of hyperscale opportunity yeah is it always required to find some sort of tech trend or wave to piggyback off of or have you seen entrepreneurs that truly find novel ideas that have not been explored but are not sort of time bound I think that's a great question I think there's plenty of examples where the innovation was not anchored in a tech break true but was anchored in a distribution breakthrough right for instance I'll give you a great example one of my first investments was the company called source fire which was in the information security space so this this category called IPS intrusion prevention system so the notion that you put these devices on a network and it does any intrusion happening on the network we're able to detect it and you know water right so yeah we wrote the first check into this company I think five pre-reasoned three million dollars something you know and you know took us a decade but you know took the company public and Cisco systems bottom for 2.7 billion now that company and Marty Rosh who was the founder was not based on a technical innovation or discontinuity in the market right checkpoint was already in the market selling the product and a whole bunch of other people what Marty did which was masterful was that he it was an open source company and he built an open source space piece of software called snort and snort just got insane adoption in the market right and because of the distribution when we met him first my partner Mark Fernandez and I went and met him he was kind of building appliances for Honeywell and for all these enterprise companies out of his garage and the reason was that they love the open source products so much and they were saying hey can you put this in an appliance and give us SLA and we'll buy it here's 150k here's 100k intel etc etc so that was a great example of a distribution advantage that he was able to sort of ride the wave on and that became one of the most successful companies I still remember the board meeting right before we went public there were only three deals Scott and that and that board meeting that were above 500k every other deal was like sub 100k give or take right which means that just the power of the distribution right and the fact that you had these 50k 100k deals that are being bought all over the world is what you know they exploited and became a great company do you think that there is a playbook for understanding potential distribution that has not been discovered yet something that you would recommend other entrepreneurs look for that you saw with Marty yeah so I'm a big fan of open source obviously you know we've made a ton of money using open source as a distribution channel and a source of competitive advantage so I have a very successful company based on New York called astronomer which is building data pipelining software so data orchestration how do you how do you connect a snowflake you know to some other you know a system that you were trying to move data to a data breaks or something else and that's based on open source product company called airflow um so open source is very well understood and that's something that is you know certainly it's got to cut you to kind of I think pay dividends in fact Dave McJanet was a CEO of hashi corp which got sold to IBM recently and I were at a football game he's a good friend of mine and he said in one of my interviews I did for with him that in his opinion they will not be an infrastructure software company what consequence being built in the future that is not open source so he's like that black and white on that point right and there's some truth true to that because if you look at the cost of distribution as the companies get to 500 million ARR you take 40% of 500 mill right you know that's a lot of money right and then double like what you're spending in sales and marketing so if you can shave off like 15 20 points on that that just drops to the bottom line so that's where distribution becomes important but the other angles are I think consumer and enterprise are becoming you know they're coming closer more and more customers are discovering what enterprise product does or doesn't do sort of themselves on top of the funnel so a lot of the techniques that you know we've used traditionally in consumer marketing which has dried before you buy or paywalling or information you've lost certain information and people come through these social channels like LinkedIn happens to be a very effective channel for all of my startup companies you can law them actually use TikTok as well and we'll see what happens with that which you know what's going on with the with the controversy there and the decision on screen court but I think consumer coming closer with enterprise and the techniques that they're using to the consumer marketing are going to bleed into what are called traditional selling in the enterprise and I think that's where there's lots of innovation to be. Thank you NetSuite for supporting today's episode now what does the future hold for business if you ask nine experts you're going to get 10 answers bull market bear market inflation up inflation down honestly I just need a crystal ball but until we get one over 41,000 businesses have found the next best thing they future proved their operations with NetSuite by Oracle which is the number one cloud ERP imagine having your accounting your financial management your inventory your HR all flowing together in one fluid platform here's what makes NetSuite different it gives you one source of truth for your business you get the visibility and control to make quick confident decisions while others are guessing you're working with real-time data insights forecasting you're basically looking into the future of your business with actionable data whether your company is earning millions or even hundreds of millions NetSuite helps you respond to immediate challenges and helps you grab your biggest opportunities and speaking of opportunities they put together the CFO's guide to AI and machine learning at NetSuite.com slash Scott Clary this is the playbook for understanding how to use AI for your business the guide is free go to NetSuite.com slash Scott Clary that is NetSuite.com slash Scott Clary compact lots of opportunity the second the second sort of thought or question I had about when things hit this massive growth when a company is this massive growth curve and everything's working out obviously that's every entrepreneur's dream but I do know that that's also when a lot of things can break yeah so when a company is scaling and you have product market fit obviously this is great but what should founders or entrepreneurs look for or pay attention to so it doesn't blow up in their face yeah yeah that's so that's a great great question and you know I'm lucky enough to have been board members and these companies that have gone from like 50 to 115 ARR and that's exactly when the kind of that stress starts to shake the up leg right and you don't want to see the Revit flank you go up right midair right so I think the most common issue that occurs is the two things that occur one could be the cost of sales and distribution right so the point being that let's assume for a second you have a very deep balance sheet you've raised like two 300 million dollars so you've got unlimited fuel you can hire per sales guys or you can hire 80 sales guys or gals I think what traditionally happens is of typically happens in something that founders need to watch out for is what is the cost of every incremental ARR dollar that you get back based on you know what you're putting into sale in marketing and there's lots and lots of metrics we measure this there's magic numbers and then there's you know kind of the overall efficiency of the PNL which is called the burn burn number or burn ratio so I think that's a culprit number one which is the inefficiency of the selling unit whether that happens in with a ease or account execs it right I think what production are you getting per account exec because there's many ways to hide the inefficiency in that in that group right because now you could be losing reps you're not training them well I mean there's all this bleeding that happens so your top line is drawing but you know it's coming at a incremental expense and the problem is if you don't fix it when you're doing 50 it's going to be so expensive when you're doing 150 that it's just kind of the company is going to just kind of keel over all the growth rates are going to come down so the efficiency of the sales and marketing engine at 50 mil an ARR is the most important thing to focus on and you know something that trips up entrepreneurs the most that's number one and number two is like tech trends like you know what's what's happened with chat GPT and LLM where a technological wave comes at you so fast and you don't sort of pivot the company right fast enough and I'll I was hearing a podcast from one of my favorite CEOs you know Mark Benioff or just on the Saturday and Benioff talks about the fact where I think he was talking to Steve Jobs and you know Jobs sort of pivoted the whole company on the iPhone and the iPad right like you just went boom in one direction and uh in that particular podcast he calls it the Steve Jobs moment right where you just like have so much conviction as a CEO just you say hey if you were going here Ben we're just going to go there and he himself talks about how he's done that at Salesforce with this agent force uh change in architecture and I what I didn't know when I was uh when I heard the podcast is he actually did made that call two weeks before dream force okay which is like crazy to me right two weeks before dream force he he Benioff probably is marketing at PM and all the people hey everything is agent force now okay go rip up those PPT build them again you know like signage all that stuff right wild and I'm sitting you're going okay but so much conviction now so much good it is and we're taking that hill so I think that is uh culprit number two which is what I'll call the slow boil and the and the and the frog in the slow boiling water right where entrepreneurs just they know it's happening but don't have the the confidence and the koana is to say hey let's burn the bridges behind us where we are going and there's a lesson to be learned about that from Benioff and I'll be jobs have you found in in your life as an entrepreneur as an investor and some of the entrepreneurs you've invested in there is a decision making framework that works very well for which which of these uh so no for for for making such like a drastic high conviction decision what is I guess the question is like what's the signal that's I mean maybe it's just intuitive maybe it's an unfair question but somebody's listening to this being like shit I don't know if I should if I shouldn't be pivoting or not like it just seems like overnight all my work could blow up if I make the wrong decision no I think that's right that's a great question I think there's there's there's what my companies do is we first recognize this uh rapid shift at the board uh just in a board meeting setting and then then we do an internal exercise which is can we do a little tiger team like take three people in engineering and and let's prove that the tech actually dramatically works to you know give because the customer is looking for the same outcome they just want it better right um cheaper faster so there's an internal exercise that we do and the other exercise is an external exercise where we go and talk to our uh talk 10 customers and and run this idea past them all almost like they were as part of the company and with those two signals uh you have enough data internal and external to make the call and the call might be here let's wait for six months but that work has to be done and unfortunately there's no framework like a MBA sort of framework that you were talking about which is uh which can be applied to this right it just has to be this inside look outside look quick call and the call could be go or wait or we'll wait for six months and we'll read rest this and you also need to look at what competition is doing because competition is not just sitting around and that's sort of the third axis that might have you move faster or sooner than you initially plan I think that's very very smart very wise and I think that also just a caveat having these customer focus groups and speaking to your customers at any stage even if it's not a major pivot decision is probably one of the best practices you can do regardless absolutely I think any CEO that's not spending you know close to 50% of the time in front of customers or at some customer facing activity once you've got to got the meat and potatoes going in your company which comes down to that third pillar I talked about it's a job team so I call it does got the no past team the no look past team right like and again we're in playoff season right so you know like these quarterbacks that you know are looking here but the throw there yeah and the ball gets caught so once you built the no past team no look past team and you're confident that the lights are gonna stay on and and kings are optimal back at the shop your job the CEO is to be part of the customers because that's the best signal on where to take the company where the competition is going and all the street getting your numbers exactly I use okay yeah I know that yeah no I think that's I think that's such a missed opportunity for founders one of my favorite stories I have a friend Aaron Spivak and he sold a company hush blankets for I think 50 million to sleep country candidates of canate I'm we're both Canadians and he would jump on customer calls and ask them after they purchase and just ask them obviously not an enterprise be to be a consumer product but still same concept you jump on calls and he'd ask them if they like their purchase what he could do better and obviously he got massive feedback and he'd be doing this up until the day when he actually sold he jumped on say 10 customer calls a week and I thought it was a great idea and he also noticed outside of the fact that he built rapport he got you know he got this great data from his customers as to what he was doing right and wrong he also noticed that the the lifetime value of the customer increased dramatically because they felt this personal connection with the CEO so usually blankets are like a one-time purchase he noticed after he jumped on a call with them on a zoom with them they'd be buying blankets for all their friends and their family so like the LTV of the customer so it's just small things but it makes a huge difference it really makes a huge difference um last idea that I just want to sort of just touch on because obviously this is something that a first-time founder will eventually have to think about be the exit so obviously you can uh private equity you can go to strategic you can IPO tell me just some wisdom or some insight around uh what the founder should be thinking about when they should be thinking about it um should they think about it when he raised their pre-seed should they think about it much later on what do you recommend founders ideate around exit yeah I think the way to approach this question is to always remember uh that the best companies get bought and not sold that's sort of the first point and that is true for actually even going public because the public uh investors also buying right and they they have an opportunity if you're putting them and you're trying to deploy a hundred million dollars in like pack you you have options right should I put it in power out on networks or should I put it in z-scaler or like whatever right so you have to the best companies are bought they're not sold that's point number one second is that um uh sort of mass matters so in other words your outcome would be disproportionately higher if you're at a higher ARR number of customers number of blankets what the case might be right so so uh you have to kind of be heads down uh till you get to some mark and in my opinion you know and so neither work that I do would be to be that's maybe you become a serious company when you're like 25 to 30 in ARR before that you're in and quote unquote the value of death where a little sneeze from here and I'm competitive move from there and bang your over right so everything else before that is an experiment um now giving that given that framing I think that um uh as an entrepreneur you're always looking at technology trends right like is the wave gonna come to you to kind of keep rising the wave that I'm writing okay what is competition doing these are the little guys that are other startups relative to you and what are the big guys doing right constantly being six eight months ahead what is this going doing what's data dog doing if you happen to be in that particular space and then realizing that um M&A and opportunities to sell it's like I give this example to my CEOs it's like uh in the in the solar system it's like less hill objects that are moving in you know in different orbits and what happens is so you're here spinning away as a small company and here's IBM on its you know big swing and if you get they get close to you and my buddy Rob Palmer's runs all of product and all GTM for IBM gets interested in you and and you want to pick you up for 300 mil or 400 mil that likely is stupid that that is likely to be in a very very short wind of time because when IBM wins past that apex they have other priorities and other things so you have a short wind of time to get that bid or hit that call it that's what happened with me so you know when when octane got purchased for 3.2 billion if I'd not hit that window and I was very lucky and got good good advice and obviously right place right time but the market crash right it like you know six months after that so if I'd not hit that window it would have been a very different story now uh obviously that is not it's not true for every single company some companies are running so well and so fast that they might have other options but I think that's again in like single digit uh sort of probability and ultimately I think the market is big enough and I think you have a CEO that's got juice and performance is happening like this company phenon I think then the world you're always sure because if you ask Mahi he's just gonna he's on a mission to build a multi-billion dollar company and and you know and we're very supportive of that and because he's producing the results the competition is falling off and the market is getting just even more interesting so um but you also always have to have a constant to you uh sort of a a very mindset on what's happening around and then you know craft your eggs at based on that what would be I mean we've gone through almost the full life cycle of a of an entrepreneur but it would be a question that I didn't ask you that I should have or maybe some last words of wisdom or insight or an idea that's even like floating around your head right now that you're dealing with I think the the thing that I always I'm thinking of is um again you know again I do early stage work and I'm obsessed with this uh personally I just want to be associated with the best entrepreneur building the most well-beating company so I'm like constant to look out for that right and my advice like what the hell are you reading at 11 30 at night when I get the tap on my head under the blanket you know and or or you know I wake up in the morning at 5 30 or whatever I think um I've been obsessed with this idea of the 100x uh multiple and first check which um you know which is like as an early stage investor you write a check into an entrepreneur uh and that that check hundred x's right because the entrepreneur is produced like tremendous value and run and that's a combination of the idea the entrepreneur and and the very few companies that they're able to achieve that for a seed stage investor so I'm just uh it's not a direct answer to your question on like a new idea I'm thinking about but I'm thinking about the framework or what are the commonalities between uh those projects that hit that hundred x mark um and and you know like uh just also in a in a way for us it's here to be able to find more of those and that's where you found it so we always going to say have you found and have you found the commonalities uh we have we have uh we're doing a lot of back testing we have so much of data now um and also looking at external markets I think one thing is this is founded that sees the future before the rest of the world sees it um that just gives them a escape velocity before the rest of market wakes up uh and the other is really a trend uh that is uh not obvious today but it's going to be the big wave that's going to break so this is like the the Uber example the 100x thing is something that my friend uh Mike Naples talks a lot about also at floodgate that he's also an early state investor investor I respect a lot but the prototypical uh what's the archetype of that perfect founder and perfect idea uh to get you that hundred x because I think if that happens the company's going to be insanely successful and and uh so we're trying to constantly wall-up playbook and I think God that's what makes uh you know my job is a military state investor working on behalf of my LPs that are kind enough to give us their confidence and money um super exciting because um you know there is no ceiling at the time I'm here I'll be talking about the 150x hopefully you know it's like you can do better come on there's no as I say there's no a grade in venture capital exactly it's listen the space you play minus no I was going to say the space you play in is so much fun it's so much fun because you you work with some of the best most innovative people in the world that the best ideas most innovative ideas you see the future before it happens which is incredible absolutely incredible but just correct that Scott we don't the entrepreneurs do and what the art to others or our job is to look through the eyes of the entrepreneur and see the art of the possible so the reason that you know so we have these startup ideas entrepreneurs come and pitch us on write this room right behind me and we have this discussion and all my guys are like with this we'll go right I'm like okay this is all great but tell me what could go right right that producer the massive company let's talk about that that's the discussion what happened and then like trying to figure out whether the soundtrack or the steam is the one that levels that right and to me that's that's the exciting it's like you have to be glass half full and obviously you manage risk at the fun level you don't manage risk at the individual company level disorderly if you if you want to connect with some listeners if they're interested about a work with Sierra yep and who do you serve and where should they read you so if you're building you know thoughtfully building a company in the B2B space globally so I don't care whether you're in the US or you know you're in Europe or have you could be a best all of the world and you're looking for you know thoughtful stable partner and firm and this is not just me you get the entire Sierra family and the 80 CIOs that you have on our advisory board and in the power of that then you should reach out to me and the way easiest way to get to me is just write me an email I'm pretty I have an SLA of reporting responding in 24 hours so um and it's uh Tim at Sierra Venturers dot com that's super easy okay I love it I last question I always like to finish up with so this has obviously been a very um a very business heavy podcast which is incredible but the last question it ties back to a little bit more of um it could be a personal professional growth and development because the question is really simple out of all of your you know your experience or success um if you can take all the lessons and they can be entrepreneurial or not and you can only pass on one lesson to your kids to your children out of all the things you've learned what would that lesson be wake up burly and make a bed it's it's it's it's it's the only thing that matters uh over time because uh press separation all those beats inspiration uh and uh the best companies take time and uh so I think people that are uh that are you know that are um that have the juice to go at it day by day because some days are great some are not right and um and then so you give yourself the time to be successful and the second is you know do the dirty work you know make sure that you're you know learning the skills uh calling on your customers talking to investors that's the make a bed part um but you know that that's that's the that's the easiest that's a good start to your morning