Tremendous

An angel investor's take on life and business

  • I finished this book in 72 hours. It was terrifying.

    Nuclear War: A Scenario describes how a nuclear war could kill 5 billion people. It begins out of the blue on a spring afternoon.

    How Nuclear War Could Happen

    In this scenario, North Korea launches a single ICBM at Washington, D.C. We never find out why.

    Our radar identifies it immediately. Our missile defenses try over and over to shoot it down.

    They fail.

    A massive warhead hits DC, destroying it completely. Soon after, another hits a nuclear power plant in California. This causes a massive explosion, firestorm, and radiation release.

    America launches a massive counterattack at North Korea. But in the way of our missiles sits Russia.

    Russian radars are less advanced than ours. So, Russian leaders think those American missiles are aimed at them.

    Russia retaliates. It launches all its nuclear missiles at the United States.

    The United States, already reeling from multiple missile strikes, sees the Russian barrage on radar. We retaliate by launching everything we have.

    And just like that, the world ends.

    Most humans are killed. Those that remain go hungry in a nuclear winter.

    Even once the earth returns to normal, the small number of remaining humans have been set back to a prehistoric society.

    How Do We Prevent This?

    There’s nothing we can do that’s more important than preventing a nuclear war like this.

    But how in the hell do we do it? So far, I have only a couple ideas.

    Our “Launch on Warning” policy needs to go, right now. This policy says the US will launch nuclear weapons just based on seeing incoming nukes on radar.

    The problem is, radar can be wrong! We could wind up launching nukes because of an attack that never happened.

    We should also reduce the number of nuclear weapons in existence worldwide.

    We did this successfully in the SALT talks. We need to do it again.

    Fewer nukes means less potential destruction. It means the survival of our species.

    Being in the technology industry my entire career, I’d also like to see us help prevent nuclear war. I don’t know how to do that.

    Can we build better radar systems less prone to false alarms? Can we create new social media platforms that further understanding between peoples that hate each other?

    I don’t know what the right answer is. But we better find some, and fast.

    Looking Towards the Election

    I don’t get political on this blog much. But reading this book, I was struck by a thought.

    “I don’t want Biden or Trump making these decisions. I don’t respect them.”

    If there’s ever a nuclear crisis — God forbid — we need a levelheaded person with excellent judgment running things. Kennedy did it successfully during the Cuban Missile Crisis.

    But I don’t think these guys can.

    Biden in particular concerns me. He is clearly senile. How can he be trusted to make these decisions?

    Wrap-Up

    I wish I had a cheerier topic for you on a Friday. But this book really hit home with me, and I thought we needed to discuss it.

    I suggest you read it and give it some thought. We don’t like to think about these things, but we need to.

    As a world, we need to talk about how we can make nuclear war less likely. Nothing else we will do in our lifetimes matters more than this.

    Moreover, reading this book reminds me how fragile life is. Let’s enjoy each day, while we have the chance.

    What are your thoughts on preventing nuclear war?

    More on books:

    Freedom’s Forge

    Elon Musk (Part 1): Overcoming the Odds

    My Favorite Books of 2023

  • This morning, I opened a deck and said “Oh, no.” They had done the unthinkable: written a 44 slide deck.

    There are 5 pitch deck mistakes that cause the big vein in my forehead to bulge. I’ll tell you what they are, so you can avoid them.

    The Forbidden Five

    1) Too long. A deck should be a short, punchy summary of your company.

    Aim for 10-12 slides. You definitely don’t want 44 — and believe it or not, I’ve seen even longer ones than that.

    This morning, I looked at 22 decks in a row. Other investors are doing the same.

    We need to find out the basics on your startup and move on to the next. Please, make it easy for us — keep it brief!

    When your deck is too long, the odds go up that the investor says “Ahh!” and just closes it. You don’t want that to happen.

    2) Too much text. I’m squinting, I’m pulling my laptop closer to my face. And I still can’t read it.

    Decks do not lend themselves to large amounts of text. The slides become crowded and unreadable.

    Leave the narrative in the deal memo. Keep the deck simple.

    Each slide should be a single thought. Aim for a single sentence, phrase, or chart.

    Your ideas get lost when the slides aren’t legible.

    3) Fantasyland TAM’s. “Real estate is a $114 trillion industry!” Whenever I see something like that, I turn a sickly shade of green.

    Giant, fantasyland numbers mean nothing. And when you throw them around, it’s hard to take you seriously.

    Here’s how to do a proper TAM…

    Let’s say that the company in question is a prop tech SaaS startup. They sell a building management platform to property management companies.

    Their software costs $10,000 a year and there are around 50,000 potential customers. So, the TAM is $500 million.

    Keep your numbers rooted in reality. A smaller number with strong justification behind it is way more convincing than a huge figure plucked from nowhere.

    4) Advisors. Ick.

    Never include advisors in your slide deck. They will have little or no effect on your company. They’re just not relevant.

    When a startup puts advisors in the deck, it makes me think they don’t have anything more substantive to show.

    Keep the focus on the actual team, the product, and the customers.

    5) Word salad. Do not use any of these words: democratize, streamline, poised, line of sight, dynamic, or stakeholders.

    No jargon, ever! Instead, tell us in clear language what you do, why it matters, and how it’s going.

    Wrap-Up

    Founders, I love ya. You’re working hard and moving the world forward, bit by bit.

    That’s why I’m telling you this. I don’t want investors to pass on your company just because your deck is a mess.

    The good news is, these problems are easy to fix! Take a couple hours, sit down, and fix them!

    I guarantee you it will be worth it.

    What are your slide deck pet peeves?

    More on tech:

    Retool’s YC Demo Day Pitch

    Meet My Latest Investment: North

    How to Ace a 3 Minute Pitch

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • On September 1st 1939, Hitler attacked Poland. At the time, the US military was only about the size of Holland’s. Some of its weapons dated back to the Civil War.

    In less than 6 years, America went from having almost no military to winning WWII. This is the story of Freedom’s Forge.

    The Race to Rearm

    As Poland and France fell and Britain came under attack, President Roosevelt knew the US had to prepare for war. But who should lead the effort?

    FDR asked his contacts in industry. One name kept coming up: Bill Knudsen.

    “Big Bill” Knudsen was the president of General Motors. At GM, and earlier at Ford, he had set up the first systems of mass production.

    FDR asked him to do it again. The Danish immigrant immediately accepted, even though the government couldn’t offer him a salary.

    “This country has been good to me, and I want to pay it back.”

    Knudsen quickly put out weapons contracts to America’s leading manufacturers. GM built tanks, Ford airplanes.

    Before I read Freedom’s Forge, I always thought the government told companies what to make. But that’s not what happened.

    Knudsen merely told executives what he needed. And they put in bids.

    Most of these companies had never made weapons before. But they were experts in mass production.

    They puzzled over blueprints from the military, working backward until they had a product.

    Bit by bit, America’s free enterprise system ramped up.

    Winning the War

    Once America’s war industries began to produce, the output was staggering. By 1942, America was producing more arms than the entire Axis combined.

    Tank production reached 25,000, up from just a few hundred before the war. Planes, nearly 50,000. Factories also churned out an incredible 10 million rounds of small arms ammo.

    Some of these weapons went to our allies. Some rearmed our own forces.

    Knudsen and the administration did everything they could to remove barriers to production.

    They gave loans to manufacturers to help them convert to war production. Knudsen immersed himself in detail, making sure the right tools got to the right factories.

    Bit by bit, the tables began to turn.

    What I Learned

    Today, the business problems we face are much more prosaic. And I’m grateful for that.

    But the story of America’s rearmament shows how important it is to set crazy goals.

    Before the war, America made just a handful of new planes per year. By 1944, we produced nearly 100,000 a year.

    Almost everyone thought that growth like this was impossible. And yet, we’d need that many planes to win the war.

    So they buckled down and increased production, step by step. And sure enough, they did it.

    Freedom’s Forge also shows the value of hiring outsiders with the right expertise.

    Knudsen had 0 experience in armaments when he started. But he was an expert in mass production.

    Not knowing how the armaments industry usually worked was an advantage. Knudsen rejected traditional craftsman-style production in favor of assembly lines like those he built at GM.

    This let America produce weapons like never before.

    Wrap-Up

    Knudsen took a defenseless country and made us a military powerhouse. In him, I recognize some of the traits I see in the best startup founders today.

    He worked tirelessly for free. He knew the big picture, but immersed himself in the tiniest details as well. He came from outside the industry, but brought with him unique insights.

    In our more peaceful times, we still need Bill Knudsens. People who don’t care what’s impossible.

    People who will not be stopped.

    “All of us have a duty to perform in this world.”

    Bill Knudsen

    More on books:

    Poor Charlie’s Almanack

    My Favorite Books of 2023

    Elon Musk (Part 1): Overcoming the Odds

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • $3.2 billion. That’s the valuation Retool hit in just 5 years. Today, I watched their YC Demo Day pitch.

    Even on Demo Day, Retool was a clear winner.

    What Retool Does

    Retool makes it easy to build internal software tools using no-code. That lets companies build the tools they need quickly and cheaply.

    Founder David Hsu makes Retool’s value prop very clear.

    He shares a story of a customer who spent $200k and 6 months building a sales forecasting tool. Retool rebuilt it in 20 minutes on a sales call and closed the deal.

    Who wouldn’t want to give Retool some money and save 6 months of work?

    My Reaction

    A clear value proposition is one of the most important things I look for in a startup.

    If the founder can make it clear to me why his product is valuable, he can make it clear to customers. David does that beautifully.

    He also shows us that Retool is addressing a giant market.

    Internal tools are half of all code. If Retool can make that build fast and easy, that’s a huge opportunity.

    Retool’s product sounds incredible, and David shows us the traction to back it up. He’s already at $11k MRR.

    Most startups in an accelerator get to a couple thousand a month in revenue, if that. With traction like this, Retool was probably one of the strongest companies in the YC W17 batch.

    Would I Have Invested?

    I definitely would’ve tried to invest in this company. Strong traction, a killer value proposition, and builder founders make Retool a no brainer for me.

    The question is, could I have gotten an allocation?

    Retool pulled in a Who’s Who of Silicon Valley for its seed round. Elad Gil, Nat Friedman, and the Collisons were in, with Joe Montana coming along just for good measure.

    This was clearly a hot company at the time. Allocations were probably hard to get.

    That said, 2017 was not a feverish year in the market. I may have been able to wrangle a spot, especially if I met them early. That’s something I always aim to do with great companies!

    Even if I couldn’t have gotten a spot, Retool shows us the potential of meeting great startups early. Meet enough companies like Retool, and you’ll find a seat on one of these rocket ships sooner or later.

    And one is all it takes.

    Wrap-Up

    Retool’s pitch on Demo Day is as good as it gets.

    Unmistakable value prop, strong traction, big market, builder founders. Sign me up!

    Would you have invested in Retool?

    More on tech:

    Lattice’s YC Demo Day Pitch

    Meet My Latest Investment: North

    Show Me the Money!

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Remember those story problems in math class where the choices are A, B, C, or D – Not Enough Information? Half the time I read a deck, I find myself choosing D.

    That means I’m moving on to the next. After all, there’s 20 pitches in my inbox!

    Here’s how to make sure this doesn’t happen to your company…

    The Details That Matter

    These are the key numbers you want to include:

    1) Current revenue. If you don’t tell me your revenue, I’m going to assume you don’t have any. And at that point, it probably doesn’t make sense to meet.

    If your revenue isn’t that much, don’t be ashamed! Be proud you have any at all! So many startups don’t.

    Here’s what a company that’s just getting started could say: “3 paying customers at $120/mo.” Nice and clear!

    2) Month by month revenue numbers.

    My pet peeve with decks and deal memos is not breaking out revenue monthly. Way too often, companies just put “$500k ARR” in the deck.

    That tells me practically nothing.

    Did you go from $100k to $500k ARR in the last year? Or did you go from $400k to $500k?

    Those are two very different companies on two very different trajectories.

    If your growth is strong, show it off! And if it’s not, there’s no point in hiding that fact — it’s going to come out in diligence anyway.

    Showing your growth trend helps everyone understand where your startup is at. That’s how we all best use our time.

    3) Monthly burn. Fast growth is great, but it’s only impressive if the burn stays reasonable.

    So tell me what you burned last month. If you’re capital efficient, here’s your time to show off!

    And if you’re not, hiding that fact won’t stop you from running out of cash.

    Wrap-Up

    Maybe you don’t want to put all these details in a deck or deal memo. You’re afraid to share information.

    That’s your prerogative. But keep in mind that if you don’t show investors enough to get them interested, you may not get a meeting.

    From what I’ve seen, the best founders are very open with information.

    They want everyone to have all the info they need. And they don’t want to waste the investor’s time, or their own.

    Give us enough info to get us excited! If you do that, your odds of getting a check go way up.

    What info do you include in your materials? Leave a comment and let us know!

    Great to be back!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Lattice’s YC Demo Day Pitch

    Meet My Latest Investment: North

    How I Made My Founder Meetings Twice as Efficient

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • I kept having the same problem in my founder meetings. We’re 23 minutes into a 30 minute call. I have nine questions and I’ve only had a chance to ask two. Ahh!

    I was taking a walk recently, thinking of how I could fix this problem. Then, it came to me…

    Setting Expectations

    “Founders are doing this because they think I want a presentation,” I realized. “But that’s not actually what I’m looking for. I need to communicate better with them.”

    So now, I say this at the beginning of meetings:

    “I usually run these as a Q&A, back-and-forth, if that’s okay with you.”

    Simple phrase. Totally changes the meeting.

    We have more of a real conversation, with me lobbing questions at the founder and him shooting answers back at me. I easily get the information I want.

    Meetings that took 35-40 minutes are down to 20. And I actually know more about the startup than I would’ve from the longer meeting.

    Making Meetings More Efficient

    If your meetings go from 40 minutes to 20, that means you can do twice as many. And meeting a lot of founders is the name of the game.

    Take my latest investment, North. I had to look at around 150 companies and meet around 75 until I ran into Matt, the founder of North.

    It takes a lot of reps to find a great startup. Anything that can help us gather info more efficiently is a huge help.

    Different Investors, Different Styles

    Founders tend to spend the whole meeting presenting because that’s what a lot of investors want. I’m told that many say nothing throughout the pitch and just have a question or two at the end.

    So, it makes sense that founders have tailored their pitch to this format.

    I prefer Q&A because before we meet, I’ve already reviewed the deck and other materials. Now, I have a bunch of questions on team, sales strategy, product direction, etc.

    If you’re a founder, keep in mind that different investors have different styles. Ask at the beginning of a meeting whether the investor prefers to just hear a pitch or would rather do more Q&A.

    If you tailor the meeting to each investor, your odds of getting a check are a lot higher.

    Wrap-Up

    People think investing in startups is glamorous. The reality is, you do a LOT of Zooms. 🙂

    Those meetings can be pretty darn interesting. You see the future before most people do!

    But anything you can do to make them more efficient is huge. For me, telling founders the format I prefer has made learning about their startup dramatically easier.

    Whether you’re a founder or an investor, try setting expectations about how the meeting will work at the beginning. You’ll both get more out of your time together!

    How do your founder/investor meetings work?

    This will be the only blog for this week. I have some friends coming in from out of town!

    See you on Monday, July 8th!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Meet My Latest Investment: North

    Lattice’s YC Demo Day Pitch
    Why Credentials are Overrated

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Lattice is valued at $3 billion and is one of the most successful SaaS startups of the last decade. But in 2016, it was a tiny company with just 2 employees.

    Today, I watched their YC Demo Day pitch from 2016. I’d love to tell you I would’ve seen it then, but I’m not so sure I would’ve.

    Jack’s Pitch

    Jack explains that companies need to set goals in order to perform well. But it’s hard for employees to know how their work fits into those big goals.

    Jack’s platform makes it easy for companies to set goals and measure how each employee contributes to them.

    Jack shows us that his early customers are getting a ton of use out of the platform. The number of goals customers are putting onto Lattice is growing 80% MoM.

    What I Like

    For me, the team was the most impressive thing in Jack’s presentation.

    Jack and Eric, his CTO, both worked together at Teespring. The fact that they’ve worked together before and want to again proves they can get along.

    I’ve seen companies fall apart because the founders start arguing. But seeing Jack and Eric’s history together gives me confidence that won’t happen here.

    I also like that they worked at a startup, not a big tech company.

    This means they have an appetite for risk. They also know how a company is built from the ground up.

    What I Don’t

    Jack’s presentation is really abstract. I’d like to see him tell us how an actual customer used the platform.

    What’s a real goal that a company put into Lattice? Then, how did managing that goal in Lattice help the company?

    In any pitch, rip out everything vague. Replace it with something concrete.

    If you can show investors the real value that a customer got from your product, you’re a lot closer to raising money.

    But the biggest negative in this pitch for me is the lack of revenue.

    Jack shows us that the number of goals managed on the platform is growing fast. But as far as we can tell, there’s no cash coming in the door.

    Would I Have Invested?

    Given what a huge success Lattice has become, I want to tell you I would’ve seen it then. But truthfully, I would not have invested in Lattice at this stage.

    The lack of revenue is a dealbreaker for me. Unfortunately, that would’ve meant missing out on a multibillion dollar outcome here.

    But we don’t know the future. All we can do is build a process that gives us the best chance of success.

    If I made a habit of investing in pre-revenue companies, I’m pretty sure my results would be a lot worse. So requiring revenue still makes sense, even if it leads us to miss some winners.

    Wrap-Up

    Jack wound up raising a healthy $2.8 million seed round that spring, led by Thrive Capital. In January 2022, it raised $175 million at a $3 billion valuation.

    I would’ve missed this one, no question about it. But missing some great companies is inevitable.

    And so long as we hit one outlier, our misses don’t matter.

    Would you have invested in Lattice?

    Have a great weekend everybody!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Why I Passed: “WorkerIQ”

    Meet My Latest Investment: North
    Why Credentials are Overrated

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • They were raising $1 million on an $11 million post-money SAFE. The product was awesome, but I passed. Here’s why…

    WorkerIQ is a composite, not a real startup, and the name is made up. But it shows why a great product alone doesn’t get you funded.

    The Good

    “WorkerIQ” makes it easy to track where industrial workers are and whether they’re safe. Workers wear a bracelet that tracks location and can tell if a worker has fallen.

    “WorkerIQ’s” customers are mostly in heavy industry: oil refineries, mines, shipbuilding, etc. These jobs require coordination by big teams. They can also be very dangerous.

    The bracelet is comfortable to wear and does a great job of telling you if everyone is where they’re supposed to be. Even more importantly, it can help you find an injured worker ASAP.

    The founder, “John,” had a great background in industry, having worked in management at several oil refineries. I knew he’d be able to speak his customers’ language.

    Revenue was substantial, at over $1.4 million a year. That put the pre-money valuation of this round at just 7x annual revenue, which is low for a company at this stage.

    The Bad

    “WorkerIQ” had a lot of revenue, but it wasn’t growing much. Over the last year, the company had grown just 5% month over month (MoM), or 80% year-over-year (YoY).

    I like to see a company at this stage at least triple year over year. We need to get to $100 million in revenue to become a unicorn. It’s hard to get there growing only 5% MoM.

    What’s more, nearly half that revenue came from hardware. That revenue was non-recurring and had much lower margins.

    Decision Time

    “John” had developed an awesome product and knew his customers inside and out. But unfortunately, the product wasn’t selling that well.

    In a normal business, nearly doubling revenue in a year would be amazing. But in the funhouse mirror world of VC, it wasn’t a top performer.

    I was also concerned about the quality of the revenue. Much of it was non-recurring and low margin.

    Despite loving the “WorkerIQ” product, I passed.

    Wrap-Up

    Every year, thousands of startups are founded. Only a few will ever matter.

    To have any chance of making money, we have to invest in the strongest performers. And “WorkerIQ” just hadn’t reached that level yet.

    But if they can get that growth cooking, I’d be glad to take another look!

    Would you have invested in “WorkerIQ”?

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Why Credentials are Overrated

    Meet My Latest Investment: North
    My Ten Year Angel Investing Plan

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • A lot of early stage investors are obsessed with credentials. I think that’s a big mistake.

    There’s nothing wrong with going to Harvard or working at Google. But when you look at the best founders, they don’t look like that.

    Instead, you see people with a strong entrepreneurial bent that rose from obscurity.

    Let’s look at the three most valuable companies to come out of the last cycle: Uber, Airbnb, and ByteDance. What can we learn from these special founders?

    Travis Kalanick

    Travis Kalanick of Uber definitely didn’t have a Big Tech pedigree. In fact, his first startup got him sued for $250 billion — nice, huh?

    His next startup, Red Swoosh, gave him a modest exit and a little cash to play with. But it wasn’t until his third that he hit the big time.

    Travis did go to a good school, UCLA. But of course, that’s not Stanford or MIT (nor is my alma mater, Wisconsin).

    What stands out about Travis isn’t any particular line on his resume. It’s his persistent desire to create and sell, all the way back to when he sold pancake breakfasts for the YMCA as a kid.

    Brian Chesky and Joe Gebbia

    Brian Chesky and Joe Gebbia were even more obscure than Travis.

    Brian called his team the “bad news bears of Silicon Valley.” Hardly anyone wanted to meet with them. They were lucky if they could get an e-mail returned.

    And no wonder! They came out of the Rhode Island School of Design, not Stanford CS. Neither had ever worked in tech in any capacity — they were industrial designers.

    But to one man who was paying close attention, there was a tell. That man was Paul Graham.

    Brian and Joe had sold Obama and McCain themed cereal during the 2008 election. It gave them just enough money to keep the company alive.

    These were founders with a burning desire to succeed. How many people would have gone to these lengths to keep a company going?

    PG made the bet.

    Zhang Yiming

    Not a lot of people in America have heard of Zhang Yiming. Until this morning, I hadn’t either!

    Yiming is the founder of ByteDance, the parent company of TikTok. Of all the companies we’re looking at today, ByteDance is by far the most valuable — $268 billion.

    Like Travis, Brian and Joe, Yiming didn’t come from Big Tech.

    Nor did he go to Harvard, MIT, or even Tsinghua. Instead, he studied at the more modest Nankai University in Tianjin.

    Yiming worked for a travel startup called Kuxun out of school. Later, he founded a property search site called 99fang.com.

    He quit after a couple of years and founded his next company: ByteDance.

    Yiming didn’t have much of a pedigree. But like the other founders we’ve looked at today, he had a strong entrepreneurial bent.

    He went to a startup after college, not a major company. And soon, he was off on his own starting businesses.

    Wrap-Up

    Among accelerators and early stage investors, the focus on pedigree seems to get stronger every day.

    Investors are looking for a shortcut. An easy way to tell who will succeed.

    But they’re focused on the wrong things.

    If we look at the biggest successes in tech, they’re short on pedigree. But they’re long on entrepreneurial nerve.

    So I don’t look for an Ivy degree or a track record at Facebook. Instead, I want to know what you’ve started, and how many times you’ve failed.

    I’ll take a gritty entrepreneur over a gleaming resume any day.

    What do you look for in founders?

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    Misfits Market

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  • $60 billion a year in global cloud spend. A lot of that is wasted. But my latest investment, North, is changing that.

    “Plug it in and if you don’t see savings in 5 minutes, fire us.”

    That’s founder Matt Biringer on a recent podcast.

    North really is that fast. And it can save you 50% or more on your cloud bills.

    Best of all, there’s nothing for you to manage. It all happens automatically!

    North makes sure you’re not paying for resources you’re not using. It also lets you buy compute in bulk with other customers, lowering your costs.

    When I meet startups, I look for an unbeatable value proposition. North has one of the best value props I’ve ever seen among the thousands of startups I’ve met with.

    Matt is also incredibly hard working. He’s in Slack answering customer messages at midnight on the weekends.

    With an incredible value prop and deep concern for customers, it’s no surprise North is growing really fast. I’m super excited to be a small investor in their recent seed round!

    Check out North and save your startup some money!

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    My Ten Year Angel Investing Plan

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    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order.