Tremendous

An angel investor's take on life and business

  • Sales platform Apollo is valued at $1.6 billion. But in 2016, it was a little company called ZenProspect. This morning, I watched their YC Demo Day pitch.

    Founder Tim Zheng clearly shows us why salespeople need ZenProspect. Then, he shows us some incredible traction.

    Let’s dive in…

    A Clear Value Prop

    Tim is very clear about what his platform does and why customers need it:

    “Our product lets B2B sales people find their most lucrative potential customers, e-mail them, and close deals.”

    ZenProspect’s value proposition is clear. Pay us money, close more sales.

    An All-In-One Platform

    Tim explains that salespeople spend all day jumping between different systems. One to find prospects, another to e-mail, a CRM to track it all…I get confused just thinking about it!

    ZenProspect lets you do everything in one place. Who’s not going to at least try that for a month and see if it works?

    Financials Like I’ve Never Seen

    Tim doesn’t just tell us a great story — he’s got the numbers to back it up.

    Tim and his team have hit $1 million ARR while still in an accelerator. That is incredibly rare. GitLab did it, but I don’t know of any others.

    And believe it or not, 5x growth in a few months isn’t even the most amazing stat here.

    ZenProspect is at 70% net margins. This is so rare that Tim has to clearly explain this is net, not gross.

    In other words, of every dollar ZenProspect takes in, 70 cents hit the bottom line as profit.

    That never happens. Even Apple, notorious for high margins, clocks in at “only” about 25%.

    Best of all, Tim did all this using his own platform! If that’s not proof this thing works, I don’t know what is.

    But Can You Get an Allocation?

    Any investor who does early stage software would want to invest in this company.

    But the question is, can you get an allocation? Tim says something at the end of his pitch that’s subtle, but if you’ve been investing for a bit, you hear it…

    “If your portfolio has a company that wants to make more money, please come and find us.”

    Tim is looking for customers. But he doesn’t sound like he’s looking for investments.

    At the end of most YC Demo Day pitches I’ve seen, the founder says something like “If you want to learn more, please come and find me afterwards.”

    I suspect this company’s seed round filled up well before Demo Day. (However, I wasn’t able to find any information to confirm that.)

    This happens a lot with the best YC companies. That said, a variety of VC’s got their beak wet on this one, including All-In bestie Chamath Palihapitiya’s Social Capital.

    Wrap-Up

    Tim’s pitch is a clear winner. But it’s not so easy to recreate.

    He explains what he does and why customers want it with incredible clarity. But what will really make investors’ eyes pop out of their heads is that traction.

    Tim is great at pitching. But more importantly, he’s great at building a business.

    What do you think of Tim’s pitch? Leave a comment and let us know!

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  • DoorDash is one of the most successful startups of the last decade, with a market cap of $56 billion. This morning, I watched their YC Demo Day pitch from 2013.

    Founder Tony Xu shows us a huge problem and gives us strong evidence that he’s solving it. Let’s dig into his pitch…

    Big Potential

    Right away, Tony shows us a massive opportunity. People want food delivered, but the options are pizza…and more pizza.

    Hey, pizza’s great. But sometimes you want pad thai or eggplant parm.

    Every investor in the audience could relate to this problem. And if it’s a problem everyone has, solving it is a huge opportunity.

    That’s important because VC’s only make money if a company becomes a giant. That’s the only way to pay for all the failures!

    Rapid Growth

    Okay, Tony’s on to a huge market. But can he actually capture it?

    Tony has an innovative system that plugs directly into restaurants through an iPad. Then, he gets couriers through an app, just like Uber.

    Tony gives us strong evidence that DoorDash is catching on.

    Orders have quadrupled in the last 6 weeks, reaching nearly 100 a day. That’s a lot of business for an early stage company!

    If I were in that audience, I’d be thinking, “This guy could be on to something.”

    But What About Margins?

    Tony has less than 3 minutes here, so he can only give us so much detail. But one critical question is going to be on every investor’s mind: what are the margins like?

    DoorDash could sell you a $15 plate of pad thai for $20, then pay the driver $10. If they did that, they’d lose $5 on every order.

    Half the town would be signing up for cheap pad thai, right? So order numbers would go through the roof, just like you see on Tony’s slide.

    That would be a lot of fun for the people of Palo Alto. But it wouldn’t be a viable business.

    I’d want to know if they can make money on each order.

    Given the early stage, the business would probably still be burning cash due to fixed costs. But at least it would have a path to profitability in the future.

    We also have no information on revenue here — but again, there’s only 3 minutes.

    The Verdict

    I wouldn’t have all the info I need after this pitch. But I would know that meeting Tony is worth my time.

    I’m willing to bet investors swarmed him after this pitch, even if they still had a few questions.

    Tony frames a huge problem and gives us real evidence he’s solving it. If you can do that, raising money gets a lot easier!

    What do you think of Tony’s pitch? Leave a comment and let us know!

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  • Today, GitLab is valued at over $9 billion. But in 2015, it was a tiny startup with just a couple employees. Let’s dig into their YC Demo Day pitch.

    GitLab is a platform for software development. It lets developers collaborate, version control their code, and more.

    Who Ever Saw an Accelerator Startup Like This?

    Founder Sid Sijbrandij pitched investors that spring from a strong position. His year-old startup was already profitable and doing nearly $1 million a year in revenue.

    His customers slide is bonkers for an early stage startup. Just a year in, he has logos like Apple, Microsoft and GM. Best of all, these are paid plans.

    And no wonder! Sid explains that his product is 10x cheaper than competitors with way more features.

    I see tons of startups coming out of the top accelerators. But I’ve never once seen one like this.

    For a company still in YC to hit a nearly $1 million a year run rate is nuts. GitLab’s growth from January to March alone was 77% month over month, a staggering rate I almost never see.

    The Investor Perspective

    This shows you how easy investing can be sometimes. For anyone investing in early stage software startups in 2015, this would be an obvious bet.

    But the question is, can you get an allocation?

    For many venture funds, the answer was yes. Khosla Ventures led the $1.5 million seed round, but several other funds got a slice, including Tuesday Capital, Sound Ventures, and Liquid 2 Ventures.

    This makes me feel better about my odds of success investing. All I need to do is meet lots of founders and pick the assassins like Sid!

    What Founders Can Learn From Sid

    Sid’s pitch shows that there’s no substitute for strong business performance. He could’ve stood on that stage wearing a chicken suit, and people would’ve dumped barrels of cash on his head.

    He has a great product. He also has tons of deep pocketed customers, a profitable business and rapidly growing revenue.

    If you have all that, you don’t need much else.

    Wrap-Up

    Sid built an awesome business and pitched it well. He raised the cash he needed, got back to building, and created a major company.

    That’s the goal!

    I find it charming that Sid’s a little bit awkward, just like many founders today. And in ten years, some of the founders today will be where Sid is now.

    What do you think of the GitLab pitch? Leave a comment and let us know!

    Have a wonderful weekend, everyone!

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  • “One of the first times y’all gave me complete control over this, I actually stayed up until, geez I don’t know, like 6 A.M. playing Civilization 6.”

    That’s Noland Arbaugh, the first human to get a brain implant from Neuralink. The implant allows him to control his computer with his mind.

    Noland demonstrated this incredible tool with Neuralink engineer Bliss Chapman yesterday, live on X.

    How Noland Became Neuralink’s First Patient

    Noland, age 29, had a diving accident about 8 years ago. The accident made him a quadriplegic.

    In January, he had surgery to implant a Neuralink brain to computer interface.

    The implant lets him direct the computer’s cursor wherever he wants. All he has to do is imagine the cursor going there, and it moves!

    Noland uses it to play chess, read, and even learn Japanese. すごいですね!

    A Repeatable Process?

    Implanting the Neuralink device requires surgery. Noland found the process to be smooth and brief:

    “The surgery was super easy. I literally was released from the hospital a day after.”

    Neuralink is not the only organization to create a brain to computer interface. A group of Stanford researchers did something similar in 2021, allowing a paralyzed man to type.

    If multiple groups can pull off a brain to computer interface, these things are really starting to work. We’re homing in on a repeatable process that can be used on more patients.

    Every year, about 12,500 people injure their spinal cords in the United States alone. I can’t even imagine what this must be like.

    Anything that can help these patients is a wonderful thing. Implants like Neuralink could make it easier for them to work, have fun and be a bigger part of society.

    The Neuralink in 2034

    What Neuralink has done today is amazing. But let’s imagine where this could be in ten years…

    Last week, we saw an incredible demo of the new Figure robot. What if we could give Noland a robotic suit that he could control with his brain implant?

    He could walk around, pick things up, and do a lot of what the rest of us take for granted.

    Some day, Neuralink implants could spread far beyond people with traumatic injuries. These implants could let the non-disabled control computers with our minds, just like Noland does.

    What’s more, the computers we’d be controlling are becoming more powerful by the day. In the future, we may dispatch autonomous AI agents using nothing but our brain.

    Let’s say you’re trying to create a new software product.

    We would no longer need to sit in a meeting with an engineer and a product manager. Instead, we would just think about what we want to build.

    Then, we’d dispatch the Engineer Agent to talk to the Product Agent, using nothing but our minds. They’d build something and present it to us.

    Wrap-Up

    I’m delighted to see Noland doing so well with his Neuralink!

    I look forward to a future where every disabled person has the same options Noland does. And in time, those of us without disabilities could also accomplish amazing things with nothing more than our brains.

    What do you think of Neuralink’s new implant? Leave a comment and let us know!

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  • In 2008, Airbnb was near death. Founders Brian Chesky and Joe Gebbia were living off dry cereal. If they didn’t raise this $500,000, it was probably over.

    This morning, I dug into the pitch deck Brian and his team used to raise that crucial round of funding.

    Framing the Problem

    Brian does a great job of explaining what Airbnb does and why you need it.

    For travelers, it’s cheaper and more fun. For hosts, it’s an income stream.

    Many startups aren’t clear about what they do and why. But “We save people money on travel,” that I get.

    Be sure to clearly say what you do and why it matters.

    How Big Is This Market?

    The market for crashing in people’s spare rooms was pretty tiny in 2008. Airbnb basically created it.

    Some investors would look at that market and say “this is niche, no thanks.”

    But Brian shows them an adjacent market that’s huge — travel in general.

    One thing I’d change here: make that slide “dollars,” not “trips.” It’s not easy to translate between a number of trips and an actual dollar figure.

    Today, the global market for budget hotels is $276 billion. Put numbers like that in front of VC’s, and watch the drool dribble down their chins.

    But How’s the Product?

    Brian shows us the product in the deck and points out some of its great features. This is genius — every startup should do this.

    I especially liked the dual posting feature with Craigslist. This is an easy way to get a lot more eyes on those Airbnb listings.

    Brian doesn’t show every screen, just a few key features. That’s the right approach.

    A Team of Builders

    For a company this early stage, the team slide is critical. Airbnb is strong here, with two designers and a developer.

    YC’s rule is teams of 2-4, at least half technical. I think that’s as good a rule as any, and Airbnb fits the bill.

    Fanatical Users: The Trump Card

    Airbnb had a great team operating in a giant market. But what really drew me in were the customer testimonials.

    People just loved using Airbnb!

    I strongly suggest every startup include a slide like this.

    What’s Missing?

    One really important slide is missing here: traction.

    Brian didn’t include anything about revenue. That’s probably because at this time, Airbnb didn’t really have any.

    They’d been grinding away on the business since October 2007, but had only made a couple thousand dollars. They’d actually made far more selling cereal than renting rooms!

    So Brian led with what he had! He had some happy customers, a cool product, and a great team.

    You work with what you’ve got. And in Brian’s case, it was enough.

    Wrap-Up

    Airbnb’s deck is a great example for early stage startups.

    Brian frames a big problem. Then, he shows us how he’ll solve it. Finally, he gives us some early signs it’s working.

    That’s exactly what you want to do. Big problem, solution, traction.

    Give us that, and your chances of raising money will skyrocket.

    What do you think of the Airbnb deck? Leave a comment and let us know!

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  • “In Cuba, families get one dozen eggs per month,” my friend said. “So what do they eat?” I asked. “They starve.”

    I was in New York recently talking with a friend who left Cuba in 2021. She first moved to Uruguay, then made her way to the United States two years ago.

    There are still a few lefties in America that idealize Cuba. But they don’t know anything about it — she does.

    So this morning, I was fascinated to read that a revolution may be brewing in Cuba. From Bloomberg:

    Almost unnoticed amid the drama and crisis that hit Latin America every week, in the last days of February the Cuban government asked the United Nations for aid to address a growing food shortage.

    The unprecedented cry for help from a communist regime that has always prided itself on its social welfare model captures Cuba’s dire economic straits. Hurt by tightened US restrictions, decaying domestic production, a weak post-Covid tourism industry and indifference from its allies, the island is living through its worst economic days since the collapse of the Soviet Union more than three decades ago. A string of blackouts brought people into the streets last weekend, shouting for “food and power” — a rare display of social unrest since the turmoil that shook the island in July 2021, which the regime contained with crushing force.

    “I’m Hungry”

    You can watch actual video from the protests posted on Twitter, below.

    It’s hard not to be moved by the Cuban people’s plight. Their chant, “I’m hungry,” is the most basic of human needs.

    Here in the United States, we have everything. Sadly, we probably throw away enough food to feed Cuba and several other countries.

    So I hope that our government comes through in a major way for Cuba, despite our political differences.

    Toppling the Regime is Harder Than You Think

    But as bad as the situation in Cuba is, I doubt the government will fall any time soon.

    “No one has guns,” my friend explained when I asked her if the government would fall. And despite my serious concerns on US gun policy, I have to admit — she was making sense.

    Perhaps there is some middle ground between a disarmed, powerless populace and the violence we see in America today.

    What Would It Take to Get Rid of the Regime?

    What it would take to get rid of the Communists in Cuba would be somebody with guns turning against the government. That means the military and police.

    To my knowledge, there is no indication of the military or police turning against the regime. I’m guessing they’re better fed than those poor people protesting.

    We often think that if a society becomes poor and desperate enough, a revolution happens. But that’s not really true.

    How Revolutions Really Work

    Around Christmas in 2022, I read a fascinating little book. It’s called Revolutions: A Very Short Introduction.

    In this book, Professor Jack Goldstone of George Mason University traces countless revolutions from Ancient Greece to the present. The upshot: poverty alone won’t get rid of a bad government.

    You also need the elites to turn against the regime. Those elites have the power, the money, and the weapons.

    And it’s going to take a lot of all 3 to get rid of a dictator as brutal as Cuba’s Miguel Diaz-Canel.

    Wrap-Up

    If we start to see Cuban elites openly criticize the regime, and police and military start to disobey orders from Diaz-Canel, a revolution could happen. But until then, I’m afraid the Cuban people are in for more of the same.

    What do you think of the situation in Cuba? Leave a comment and let us know!

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    I wrote a detailed review of Misfits here.

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    Photo: “Cuba” by szeke is licensed under CC BY-SA 2.0.

  • I’m 38 years old. Of all my friends, only one has a child, a little boy. So if I had to lay a bet, I’d say our generation is going to use a lot of IVF.

    A fascinating startup called Alife might make that process a lot easier.

    How AI Is Helping Families Grow

    Alife uses AI to improve the success rate of IVF. Alife tells the doctor which embryos are most likely to produce a healthy baby, calculates optimal medication dosage per patient, and a lot more. From Fortune:

    Alife’s suite of AI-enabled tools is designed to cover every step of the fertility process. Its Stim Assist tool uses a machine-learning algorithm trained on 40,000 cycles to analyze a woman’s data. It then delivers recommendations, such as the dosage of Follicle-Stimulating Hormone (FSH) a woman should take to optimize the number of healthy eggs before a retrieval cycle, and predicts the best day for retrieval. The idea is, by relying on the data and finding what worked for a similar patient, women can potentially save money on medicine and unnecessary future rounds.

    IVF is expensive, time-consuming and often fails. A cycle costs around $23,000 on average. Many women require numerous cycles in order to deliver a baby.

    All in, it could cost $50,000, $100,000 or more to start a family. How many families can afford this?

    Making IVF Cheaper and More Effective

    If we could improve the success rate of each IVF cycle, we’d drive down costs dramatically. That’s where Alife’s approach makes a lot of sense.

    Alife has a giant data set of IVF cycles. It can tag each cycle with metadata, like “resulted in pregnancy” or “mother over 35.”

    Once the Alife models have enough training data, they should be able to tell which embryos give the woman the best chance of pregnancy.

    Today, Alife has 40,000 IVF cycles to train on. What happens when it has 40 million?

    Worldwide, women are having kids older. At the same time, people are getting richer.

    That’s the target market for IVF. So I expect that the available datasets will grow enormously in the coming years.

    Eventually, Alife may be able to target the right embryo, med dosing, and retrieval day with incredible precision. That could mean women need fewer IVF cycles in order to get pregnant, which would drastically lower costs.

    Wrap-Up

    Cheaper, more effective IVF means more babies. And in a nation with a fertility rate of just 1.7 children per woman, that would be wonderful news!

    In my work investing in startups, I’ve seen a ton of AI sales tools and coding assistants. I love those — super useful!

    But I think AI will impact every part of our lives, not just our work. Massive amounts of intelligence crunching giant data sets should be able to solve just about any problem on earth.

    What do you think families will look like in the future? Leave a comment and let us know!

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  • “Can I have something to eat?” “Sure thing.” The man’s friend hands him an apple. His friend is not human — it is a robot.

    This is the latest demo from Figure. Figure is developing an android, with the goal to produce one for every human on the planet.

    This video is truly one of the most amazing things I’ve seen in my entire life.

    “Indistinguishable From Magic”

    The man speaks to the robot the same way you would to a person. The entire conversation is very natural and smooth, although the robot’s responses are slightly delayed as it processes information.

    Note that the man, Figure AI engineer Corey Lynch, didn’t tell the robot to give him an apple. He just said he was hungry.

    The robot took that information and went to the next logical step — hand the man an apple!

    This robot can reason like we do. That makes it a very powerful tool.

    But what amazed me the most was the hands. Look how perfectly Figure grips things, and how gently it places them where they’re supposed to be!

    Incredible.

    How Figure Works

    Figure robots are using a multimodal model developed in partnership with OpenAI. It takes in images and sound. Then, it gives responses with a voice and certain movements it knows.

    This video isn’t faked.

    The robot was not operated by remote control. It’s shown at 1x speed, and not edited. The voice from the robot isn’t a human one — it’s Figure’s own voice.

    I’m writing this on Friday morning. Just yesterday, I thought, “How long until someone puts something like ChatGPT Voice into one of these Figure robots?”

    Turns out Figure had already done it the day before.

    That’s how fast things are moving. What is Figure working on right now that they’ll demo next month and blow us all away?

    What Will Figure Do Next?

    Imagine if I said “Hey Figure, put together this Ikea desk for me” and it fully assembled a desk. That would be truly incredible, proving its ability to reason and manipulate the physical world better than most of us!

    If Figure could do that, it could probably do most manufacturing jobs. At that point, it’s just a question of building lots of them at a reasonable price.

    Figure could also go places we’ve never been.

    Fast Forward to 2050

    Don’t forget, Figure wasn’t the only incredible demo this week. SpaceX’s Starship hit orbit for the first time yesterday!

    Imagine 2050…

    Starship is headed to Mars, with a crew of both Figure robots and humans. After 6 months, they land in New New York.

    Throughout the city, more Figures are building houses and parks. Let’s go to the new park…

    I can hear the children laugh. I can see the robots in the distance, growing food.

    When those children grow old, they could get a new robotic knee, or even a new leg. Perhaps they’d augment their arms too to make them stronger.

    Humans and robots will coexist. And in time, it may be hard to tell which is which.

    Some day, I will shake Figure’s hand. When I do, I will know the world is different.

    What do you think of the Figure robot? Leave a comment and let us know!

    Have a wonderful weekend, everybody!

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  • Is this place open? I went around to a side door, down a few steps, and entered the dimly lit restaurant. Inside: the best noodles in town.

    This is Bangkok City, a Thai restaurant in Hoboken, NJ. This homey spot has served up pad thai, drunken noodles, and more since 1989.

    I stopped in last Saturday during a rainstorm. Coming out of the gale into this quiet, calm atmosphere felt really good.

    I perused the lengthy menu, unsure what to choose. An embarrassment of riches!

    Mee grob
    Pad thai

    Ah, there’s Tim*! Tim and I are on a food tour of Hudson County, with a new spot or two every weekend. We hadn’t been to Bangkok City in a while, and the noodles were calling our names.

    I settled on the pad thai, a classic. Tim ordered drunken noodles with chicken.

    In an act of depraved gluttony, we also ordered the fried noodle appetizer. It’s Tim’s favorite.

    If we didn’t get it, what kind of friend would I be? 🙂

    We caught up on each other’s weeks and enjoyed the calm atmosphere. After a whirlwind of meetings and errands, this was the right place to unwind.

    Ooh, noodles!

    These fried noodles, served with shrimp and tamarind sauce, are called mee grob in Thai. Mee grob quite a few. 🙂

    Almost as soon as they appeared, the fried noodles were gone. Well, I guess I can eat light tomorrow!

    Tofu

    A good friend of ours, Matt*, actually lives in rural Thailand for most of the year. To think, he gets to eat like this all the time!

    Perhaps when he comes back this summer, we’ll take him here.

    Pad thai time. I boldly dumped sriracha all over my entree — caution to the wind!

    Holy moly, that’s hot!

    This isn’t grocery store sriracha. This is the real deal.

    The noodles were supple, the bean sprouts crispy and fresh. There was also a vegetable I couldn’t identify — it was a little like daikon, the Japanese radish. I’m not sure what it was, but it was delicious!

    What really makes the pad thai is the peanuts. I would never have thought of that. But then I didn’t need to — the good people of Thailand already did.

    Tim made serious inroads on the drunken noodles, and I cadged a few for myself.

    They were perfectly cooked, neither too soft nor too firm. Not easy to do!

    Oof, I’m stuffed. Time to get the bill.

    As we were about to leave, the waitress asked if I wanted one more glass of water. After all that sriracha, I gladly accepted!

    Little things like that, that’s what makes great service. Noticing what a guest might need, and offering it before they even think to ask.

    And you won’t find nicer service than Bangkok City.

    Bangkok City is located on lively Washington Street in the heart of Hoboken. It’s open every day but Monday for lunch and dinner.

    Pop in for some delicious Thai in a friendly, happy atmosphere.

    What are your favorite Thai restaurants? Leave a comment and let us know!

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    *Names are changed to protect privacy.

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