Tremendous

An angel investor's take on life and business

  • Why I Passed: “3L”

    They were raising $8 million at a $35 million post-money valuation. Despite a great founder and some blue chip customers, I passed. Here’s why…

    “3L” is a tool for law firms to recruit new attorneys coming out of law school. ”3L” is a composite, not a real startup, and the name is made up. But it shows why slow growth and outsourced development make it hard to raise money.

    The Good

    In just 2 years, “3L” had signed up some impressive customers. Many top law firms were using the platform to find new attorneys.

    The founder, “Tim,” knew his market inside and out. He had been a Biglaw attorney before starting “3L” and he knew what these blue chip firms wanted.

    When he demoed “3L,” I was impressed by how easy it was to browse the profiles of new law school grads. If you want a new associate who’s done a lot of coursework in securities law, you can find one in just a few clicks!

    The Bad

    “3L” had an awesome platform. But they were having a hard time finding new customers.

    Revenue had been flat for the last 6 months. Rapid growth in prior years had slowed down to a crawl.

    The founders had a plan to hire more salesmen and pump up those numbers. But whether that plan would succeed was anyone’s guess.

    “3L” also relied on a team from Bulgaria to write most of the code. This may have slowed them down — collaborating across time zones and language barriers isn’t easy.

    Decision Time

    Looking at the “3L” deal, I asked myself: “What am I buying here?”

    We’ve got a business that isn’t growing. The team doesn’t have the technical skills in-house to make a better product that would sell faster.

    Remember, “3L” is one of 100-200 deals a month I see. Many of those are highly technical teams with fast growing businesses.

    As much as I liked “Tim,” I couldn’t justify investing in “3L” over all those other companies. I passed.

    Wrap-Up

    Lots of companies are like “3L” — strong initial growth that quickly peters out. In a situation like that, fundraising is tough.

    The best solution is to get to break even, find some ways to grow a little, and then raise from a position of strength.

    For investors, we have to focus on backing technical teams that are growing fast. In an industry rife with failure, they are our best chance of success.

    Would you have invested in “3L”?

    More on tech:
    Why I Passed: “ProductPreview”

    A Peek Into My Founder Meetings

    Retool’s YC Demo Day 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. 

  • A Peek Into My Founder Meetings

    Here are some questions I asked founders at actual meetings this week. Draft some answers to these, and you’ll be better prepared for your investor meetings!

    1) “What’s your vision for [Startup]?” This is the first question I ask every founder. I put it first because it’s the most important.

    I want to hear not just about where the company is, but where it’s going. Here’s an example:

    “My vision for Uber is to make it easy for anyone to get a ride anywhere, anytime.”

    That’s ambitious. That has the potential to be a world-changing company. That’s what I want to back.

    You want to get the vision down to a single, clear sentence with zero jargon.

    2) “What made you want to start this business?” I’m gauging how deeply interested the founder is in the problem they’re solving.

    Building a startup is so hard and pays so poorly that only a nutjob would do it. A nutjob who’s obsessed with a problem they just have to solve.

    My job is to find those nutjobs and give them money.

    3) “Tell me about your team.” I’ve already done some research on this before the meeting. But I want to hear from the founder why he assembled this team and why they’re the right people to take on this problem.

    I’m especially interested in learning about his co-founders. How do they know each other? Why are these the right people to partner with?

    4) “Who writes the code for this startup?” I want at least half the founders writing code.

    It’s pretty hard to create a software company if you don’t have anyone who can build software. This is a core capacity that we cannot outsource.

    If the company runs short on cash, that hired help will be gone. Can the founders keep building and getting closer to product-market fit?

    If not, the startup is dead in the water.

    5) “How do you find customers?” I don’t expect an early stage founder to have his entire sales process worked out. But I do want to see some early success in winning customers.

    I also like seeing how the founder approaches this problem. Do they throw money at it, buying a bunch of ads? Or do they find creative ways to get in front of their users for free, like a Facebook group?

    Those creative, resourceful founders will win.

    6) “What are your early customers telling you?” I’m judging how close the founder is to their customers and how well they listen.

    If you look at any great startup like Mercury, Superhuman, or Intercom, they know their users inside and out. They talk to them constantly. And they continuously ship new features that make those customers happy!

    I want to see the founder doing that. They should know what their first customers like about the product and what they don’t. And they need a plan for addressing the latter.

    7) “Can we run through a demo of your product?” I’m always flabbergasted when an investor doesn’t ask for a demo. How would you know what you’re even discussing when you haven’t seen the product?

    I’m looking for how well it solves a user’s problem. I also want to see how good the design is. Pretty products sell.

    The founder should know every inch of that thing as if it were his own living room.

    Sometimes a founder is unable to give me a demo. Whenever that happens, I start to wonder…

    “They told me this thing is live. Is that really true? Is this vaporware? Or does the founder of the company not even know how to log into their own product?”

    In any case, no demo, no check.

    Wrap-Up

    Try to draft an answer to each of these. The answer should be brief, concise and specific. Take about as much time to answer the question as it takes me to ask it.

    The questions every investor asks you will be a little different. But if you can answer some of these common ones, you’re a lot closer to getting a check!

    What do you ask founders?

    Have a great weekend, everyone!

    More on tech:
    The Question No Founder Asks
    My Top 5 Pitch Deck Pet Peeves

    Meet My Latest Investment: North

    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. 

  • The Question No Founder Asks

    “How can I make this pitch better?” A founder asked me that this week. It’s something I almost never hear — and something every founder needs to ask.

    When you raise a round of funding, you might meet 100 investors. You have two choices:

    A) Give the same pitch to everyone and wonder why people keep passing.
    B) Improve the pitch each time, making fundraising easier every day.

    At the end of every pitch, ask for feedback. As each investor gives you ideas to make the pitch better, you get closer and closer to a perfect pitch.

    How This Played Out In a Real Meeting

    Let’s go back to my meeting this week.

    On Tuesday, I met with a great SaaS founder. We talked about his vision for the company and the awesome team he’d built. Next, I asked for a demo.

    Instead of taking me into the product itself, he showed me a Figma. I asked if we could see the live system, but he wasn’t able to show me that.

    I furrowed my brow a bit, made a note to myself, and we moved on…

    At the end of the meeting, this canny founder asked, “How can I make this pitch better?” So I told him…

    “I think you guys have a great start. But I’d like to see a demo of the live system. Seeing a Figma isn’t the same. When investors can see the platform in action, it helps them build conviction that you’ve got something awesome here.”

    And let me tell ya, this guy was smart. He didn’t argue with me. He thought about what I said and thanked me for my candid input.

    This is a fella who is going to improve fast.

    Making Those Moneybags Work for You

    I don’t care who you are, most of the investors you meet with are going to pass on your company. So you may as well get something out of the meeting, right?

    At the end, ask them this question, in exactly these words:

    “Can you please give me your most unfiltered feedback on this pitch? I want to step up my game.”

    Even if you ask for feedback, investors will default to polite platitudes. We don’t want to make anyone mad and hurt our reputation.

    By asking the question exactly this way, you’re giving them permission to be brutal. And brutal is what you want.

    Brutal helps you learn.

    Take note of every piece of feedback. Try to work it into your pitch to make it better.

    Wrap-Up

    Lets say you do 100 investor meetings.

    Meeting #1 might suck. But if you keep triangulating toward a better pitch each time, pitch #10 will be a lot better. #50 will be a banger.

    And before you know it, you’ll have millions in the bank.

    It’s hard to hear negative feedback. And for investors, it’s hard to give it.

    But it’s necessary. Happy talk doesn’t help anyone get better.

    Embrace that criticism. Every ounce of it helps you!

    What have you learned from your investor meetings?

    More on tech:

    My Top 5 Pitch Deck Pet Peeves

    Retool’s YC Demo Day Pitch

    Meet My Latest Investment: North

    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. 

  • Sacks at the RNC

    “We need strength and savviness in the White House Situation Room, even if the crisis hits after Biden’s bedtime.”

    David Sacks

    I didn’t expect to giggle during the RNC. But along with a strong argument against President Biden, David Sacks brought a great sense of humor.

    Biden, the Spender in Chief

    Sacks hits Biden hard, pointing out his record of wild spending.

    A $1.9 trillion stimulus even as the country was already reopening. A trillion for infrastructure. And $400 billion for an “Inflation Reduction Act.”

    Since when does pumping massive amounts of money into the economy reduce inflation?

    It certainly hasn’t at my grocery store. Prices are through the roof there, along with everywhere else.

    I’m lucky. I have more than most. So for me, inflation is just an annoyance.

    But for many Americans, it’s existential.

    Keeping Us Safe

    Sacks also emphasized the need to bring the war in Ukraine to an end.

    America has spent over $100 billion and counting on this war. Whatever the merits of Ukraine’s position, no war can go on forever.

    What’s more, continuously escalating a conflict with Russia is incredibly dangerous. As Sacks puts it:

    “…the world looks on in horror as Joe Biden’s demented policy takes us to the brink of World War III.”

    Where I Disagree with Sacks

    Sacks is right that Biden spends way too much money. But he lets the GOP off the hook too easily — they’re spendy spenders as well.

    In fact, wasting taxpayer money seems to be the one thing both parties agree on.

    Every dollar we add to the debt puts our country at greater risk. I haven’t seen a detailed plan from Trump on how he’ll reduce the national debt.

    Wrap-Up

    Overall, I thought Sacks did a great job at the RNC this week.

    Too often, folks in our industry have shied away from politics. We can see the results in the cities where technologists cluster, places like SF and New York. They’re filled with disorder, drugs and crime.

    We just don’t have the luxury of staying out of the fray anymore.

    In 2020, I voted for Biden. I’ve come to regret it, big time.

    This time, I don’t plan to vote for Biden or Trump. I’ll be writing someone in. I’m sick of picking between the lesser of two evils. And here in New Jersey, the outcome is a foregone conclusion anyhow.

    That said, Sacks makes a powerful argument. And he does it with the flair we’ve come to expect on All-In.

    What did Sacks get right? Where do you disagree?

    More from the blog:

    114 Days

    The Coming M&A Wave

    Nuclear War: A Scenario

    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. 

  • The Coming M&A Wave

    I’d like to see every startup I invest in get to IPO. But realistically, an acquisition is the best case outcome for most.

    If Trump wins in November, we could see a massive wave of M&A in tech. This M&A flood will put a lot of money in investors’ pockets, whatever their political leanings may be.

    Pent-Up Demand

    Since Biden became president, tech companies have had a pretty hard time buying anything.

    The hardline FTC chair, Lina Khan, has blocked most acquisitions in tech. The FTC was even against Amazon buying the Roomba vacuum company!

    This means that for almost 4 years, tech companies haven’t been able to buy the products and teams they want. If a friendlier administration takes office in January, there will be enormous pent-up demand for M&A.

    Big companies like Uber are growing revenue 20% a year. Meanwhile, headcount has been basically flat since 2021.

    Growing revenue and flat headcount means tech giants are piling up cash. Big tech wants to use that cash to grow their businesses.

    An easy way to do that is to buy some startups! Uber could buy Gopuff and offer 15 minute delivery to Uber’s 150 million users overnight.

    Praying for Exits

    It’s really hard for VC’s to raise money right now. I’ve heard some say it’s the worst since the dot com crash in 2000.

    With few IPO’s and M&A blocked by the government, there have been very few exits since 2021. This means LP’s just don’t have the money to invest in the next venture fund.

    If a friendly administration comes in and M&A starts cooking, that picture changes considerably.

    Once we see a couple big M&A transactions push through, LP’s will have more cash to play with. Many will re-invest that in another venture fund, hoping for more juicy returns.

    The European Gadflies

    Ahh, the Europeans. Love the croissants, don’t love the politics.

    The one problem with this rosy M&A story is Europe. Regulators in the EU and UK are rabidly anti-tech.

    They helped block the Adobe-Figma deal even though Figma doesn’t compete with Adobe. They also had a hand in squashing the Amazon-iRobot acquisition.

    You may see some tech companies pull out of the UK entirely to avoid regulation. For most companies, it’s not a significant market anyway.

    The EU is a tougher cookie. But acquirers may be able to spin off certain units or make commitments to share platform access with competitors. This worked for Google’s acquisition of Fitbit in 2020.

    Wrap-Up

    For America’s system of entrepreneurship to work, people have to make a return on their investment. For the last 3 years, that’s been nigh impossible.

    If Trump wins, he’ll get rid of Lina Khan and M&A will get much easier. Cash-rich tech giants will go on a shopping spree.

    And hey, I’m willing to part with my shares — for a reasonable price.😁

    What do you think the future holds for M&A?

    More on tech:

    114 Days

    My Top 5 Pitch Deck Pet Peeves

    Retool’s YC Demo Day 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. 

  • 114 Days

    My very best wishes to President Trump after the cowardly attempt on his life on Saturday. 🇺🇸

    He showed incredible presence of mind, ducking down instantly as shots rang out. And far from killing him, the would-be assassin didn’t even delay Trump’s schedule — he’s at the RNC today.

    He’s a tough old SOB, isn’t he?

    On Sunday afternoon, once it was clear President Trump was okay, I was sitting outside with my coffee. I got to thinking…what will the world look like after the election?

    We vote for president on Tuesday, November 5. By November 6th, we should know the winner.

    That’s 114 days from today.

    Heavy inflation and Biden’s pathetic debate performance meant Trump was already favored to win. Now, after the attempt on his life, a second term for Trump seems highly likely.

    Under Trump 2.0, I expect a major rally in markets. Here’s why…

    Lower Taxes

    Trump cut corporate and individual taxes in his first term. In a second term, he plans to cut taxes even more. The corporate rate could reach just 18%.

    Stocks exploded when Trump became president in 2017, in large part because of his tax cuts. Lower corporate taxes mean more profits for public companies.

    More money in the hands of individuals could also spur economic growth. That pushes up stocks.

    Firing Lina Khan

    If there’s one human being that those of us in the tech industry can’t stand, it’s Lina Khan. The FTC chair is blocking almost all acquisitions, even piddly ones like Amazon’s attempt to buy the Roomba vacuum guys!

    Lina Khan is anti-tech, anti-business, and anti-capitalism. So is the entire Biden administration.

    Getting these people out of government will be a huge positive for business.

    Public companies can get the people and tech they need by buying other companies, as they have for decades. VC’s can get desperately needed liquidity by selling startups to the bigger players.

    And it’s not just Lina Khan. The Biden administration looks for any opportunity to hit business with a stick. Trump, meanwhile, repealed numerous regulations in his first term and will surely axe many more in his second.

    Lower Interest Rates

    The odds of a cut in September are already high, given lower recent inflation readings.

    Trump doesn’t control this, nor can he take credit for it. But he will benefit from it.

    An environment of lower taxes, less regulation, and declining rates — that’s a great combination.

    Wrap-Up

    When we sit here 114 days from today, we could be looking at a new president-elect and a major market rally.

    You might be thinking, “Wow Francis, you sure are a big Trumper!”

    To tell you the truth, I’m not happy with either of the candidates. I think Trump is a better choice than Biden, but I’m actually planning to write someone in.

    Still, I can see which way the wind’s blowing. Trump is well on his way to a second term.

    And whatever his imperfections, business is going to love it.

    What do you think of the election?

    More from the blog:

    My Ten Year Angel Investing Plan

    Meet My Latest Investment: North

    Poor Charlie’s Almanack

    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. 

  • Nuclear War: A Scenario

    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

  • My Top 5 Pitch Deck Pet Peeves

    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. 

  • Freedom’s Forge

    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. 

  • Retool’s YC Demo Day Pitch

    $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.