Tremendous

An angel investor's take on life and business

  • If You Want to Raise a Series A, Cut That Burn

    Series A may be the hardest round to raise. But new data shows that cutting burn can give you a huge advantage.

    Startup advisory firm Kruze Consulting released an extensive report yesterday based on data from about 100 seed stage startups. All tried to raise a Series A in 2023.

    Burn Multiple Reigns Supreme

    Kruze compared startups that raised successful Series A’s with startups that failed to raise and shut down. The most staggering difference between the two: capital efficiency.

    Average Burn Multiples
    Successful raise: 1.7
    Failed raise and shutdown: 22.0

    Wow! That’s an incredible disparity.

    Companies that closed a Series A lost just $1.70 for each additional $1 of revenue they added. Meanwhile, the failed startups incinerated a staggering $22 just to add a single dollar in revenue.

    Amazing Growth, But…

    Burn multiple was a stronger predictor of raising a Series A than growth alone. Companies in Kruze’s data set growing as fast as 10x YoY failed to raise an A and shut down.

    This wouldn’t have happened in 2021. Anything growing that fast would be swimming in VC dollars.

    Now, when VC’s look at a company, they want to know if it will be able to raise more money in the future. A capital efficient business is in a good position to raise again, despite the down market.

    But if the margins are low, the picture is much darker.

    The founder may just burn the cash quickly, be unable to raise more, and go under. Bye bye investment.

    Inside the Series A Market

    One of my companies is closing a Series A right now. Despite the down market, they’ve had no trouble lining up investors. I’m upping my bet as well.

    These folks made it look easy because their growth is strong and their burn is tight.

    Had these founders burned cash with abandon, this Series A might well have never happened. But their discipline is paying off.

    Wrap-Up

    When I’m considering a new investment, I always ask about burn rate and runway.

    These days, no one can count on getting funding. Businesses have to spend wisely and have a clear path to breakeven.

    The good news is that the startups built in today’s down market are lean and hungry. In 10 years, these companies will dominate the world.

    What are you seeing in the market today? Leave a comment and let us know!

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

    More on tech:

    You’re Not Going to Get That Dry Powder

    Look Who’s in Times Square!

    How to Build Something People Want

    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. 


  • You’re Not Going to Get That Dry Powder

    VC’s have over $300 billion of money they haven’t invested, also known as “dry powder.” But you may never get it.

    What Is Dry Powder?

    Let’s say I’m running investments for Francis University.

    I decide to invest in ABC Ventures. I promise to invest $100,000,000 — so that means I need to wire $100,000,000 right?

    Well, not exactly…

    All I’m really doing is signing an agreement. I might have to send $25,000,000, not the whole $100,000,000.

    On Day 1 before they make any investments, ABC Ventures has my whole $100,000,000 as “dry powder.” But there’s only $25,000,000 of that in their bank account.

    “Your Call Is Important to Us”

    Eventually, ABC Ventures will invest the money that I and the other investors (known as Limited Partners, or LP’s) sent. When they’re running low, ABC will put out a “capital call.”

    ABC will tell Francis University to send in the next $25,000,000. I’ll have 2 weeks to do it.

    ABC will keep investing. Eventually, there will be another capital call, until I’ve sent in the whole $100,000,000.

    “Reduce Speed”

    Keep in mind, this relationship is a two-way street. ABC can call down capital — but we can tell them to slow down.

    Francis University is their biggest LP. They hope to work with us for many funds, not just this one.

    In short, they don’t want to piss us off.

    Why Are LP’s Pulling Back?

    Why does Francis University want to slow down? Because, like many big LP’s, we have a “denominator problem.”

    Our target allocation to venture capital is 10% of the endowment. But our stock portfolio is treading water — even though our VC funds are still marked up to 2021 prices.

    Instead of being 10% of the endowment, venture capital is now 20%.

    My bosses are getting nervous. This is way too much for a risky asset class.

    If Francis U slows down on sending in more capital to ABC Ventures, we avoid pushing that 20% even higher. Given enough time, we’ll get more liquidity through IPO’s, and the denominator problem is solved.

    Cheering From the Sidelines

    Meanwhile, inside the sleek glass offices of ABC Ventures…

    “We better slow down our investments. LP’s are getting nervous. I just heard from Francis University this morning.”

    “Right. Let’s go to Aspen!”

    And this, dear founder, is why you can’t get your deal done.

    Those VC’s “have” $300 billion they haven’t deployed. But they don’t really have it — it’s theoretical.

    Over time, a lot of that money will get invested. But VC’s are spending it slowly.

    Wrap-Up

    VC’s may be sitting on a fortune. But if you’re a founder, don’t count on getting it.

    Run your business as if you’ll never be able to raise another cent.

    Then if you can raise on decent terms, great. If not, no factor.

    What are you seeing in the market now? Leave a comment and let us know!

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

    More on tech:

    What It Takes to Raise Money Today

    Look Who’s in Times Square!

    How to Build Something People Want

    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!

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

  • Look Who’s in Times Square!

    When I first started investing, I dreamed of seeing one of my companies on a billboard in Times Square. I thought it would take 10 years. Turns out, it only took 2.

    Micro1, a startup I invested in last year, was just featured on the Nasdaq billboard in Times Square! This is a dream come true for me, founder Ali Ansari, and the whole Micro1 team.

    Micro1 is the best way to find engineers. They use AI and humans to find the top 1% of engineers, upskill them in using AI tools, and deliver them to you.

    Since I invested last summer, I’ve watched the team work like crazy, shipping product faster than I’ve ever seen.

    Building an early stage startup usually means toiling in obscurity. The wider world hasn’t heard of you, and it’s hard to make people care about what you’re working on.

    Investing in early stage companies isn’t much different.

    So when your work is recognized, it feels really good! And though we may be a long way from the finish line, we should stop and enjoy the moment.

    What I learned from this experience is that your dreams can come true. And they can come true a lot faster than you think.

    You can’t control when it happens. All you can control is the work you put in.

    But if you give it your best for long enough, you’ll start to see results!

    The next time Micro1 and Nasdaq team up, it might be for an IPO!

    What dreams do you have for your startup or your investments? Leave a comment and let us know!

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

    More on tech:

    How to Build Something People Want

    What It Takes to Raise Money Today

    Meet the New Founder, Same As the Old Founder

    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!

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

  • How to Build Something People Want

    “We did 200 user interviews before we built a thing.”

    Mike, startup founder

    Mike* is the founder of an awesome new SaaS company. The product he showed me was far better than most.

    But what really excited me was the way he built it.

    “Make Something People Want”

    Y Combinator’s slogan is “make something people want.” Adopt that slogan as your own, whether or not you’re in YC.

    These days, we can build just about any piece of software you can imagine. But how do we know anyone wants it?

    Some first-time founders spend months or even years building the perfect tool. Then they show it to potential customers — who have 0 interest.

    Mike had built a few startups before. This time, he decided to take a different route.

    Meeting the Customer

    Mike wanted to build a new project management system for construction. The solutions out there were terrible, and he was sure he could do better.

    But before he started coding, he talked to over 200 construction managers. What problems did they face? What did the existing products get wrong?

    Once he knew what they needed, Mike started building.

    Hello, Pipeline!

    When we spoke, Mike was about to launch his new product. Most startups have to cold message a ton of prospects and hope somebody responds.

    Not Mike.

    Mike already knew over 200 potential users. And he had something incredible to offer them: a new platform that addresses the problems they themselves said they had.

    Not every one of those 200 people will convert. But I’m pretty sure some will.

    Shortly after launch, I expect Mike to sign some juicy contracts. Meanwhile, other startups will still be trying to get Customer #1.

    If It’s Good Enough for Amazon…

    Working backwards from customer needs isn’t just for startups. Amazon develops new products the exact same way.

    First, Amazon teams identify a potential customer and find out what she needs. Then, they build a product to address those needs.

    Two of Amazon’s top people, Colin Byar and Bill Carr, explained Amazon’s process in the excellent book Working Backwards.

    “The Working Backwards process is all about starting from the customer perspective and following a step by step process where you question your assumptions relentlessly until you have a complete understanding of what you want to build.”

    If it works for Amazon, it can work for you!

    Wrap-Up

    So many founders pour their heart and soul into building a product, only to have it flop. Don’t let this be you.

    Instead, meet your potential customers. Find out what they need. Then build it.

    I can’t guarantee success. But I can guarantee you’ll have a lot better shot.

    Hope you guys had a great weekend. Glad to be back! 🙂

    How do you build new products? Leave a comment and let us know!

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

    *Mike is a composite, not an actual person, in order to protect privacy.

    More on tech:

    What It Takes to Raise Money Today

    Why Cloud Platforms Will Win the LLM Race

    Forget Founder Friendly. Be Founder Focused.

    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. 

  • FTC Investigates Big Tech’s AI Investments

    The FTC has launched an investigation of several big tech companies’ AI investments and partnerships. The investigation could spell trouble for big tech and cut AI off from a major source of funding.

    From a new report by CNBC:

    The Federal Trade Commission said Thursday it will conduct an extensive study on the artificial intelligence field’s biggest heavyweights, including Amazon, Alphabet, Microsoft, Anthropic and OpenAI.

    FTC Chair Lina Khan announced the inquiry during the agency’s tech summit on AI, describing it as a “market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers.”

    Restraint of Trade

    Microsoft has invested billions in OpenAI. Amazon and Google are backing Anthropic.

    So OpenAI and Anthropic must be sitting on a ton of cash, right? Well, it’s a little more complicated than that…

    Much of the tech giants’ “investments” in OpenAI and Anthropic came in the form of compute credits. This means that OpenAI and Anthropic have to use their partner’s cloud service.

    In a truly competitive market, OpenAI would compare the price and service of AWS, Azure, Google’s GCP and others. Then, Sam Altman would give his business to whoever offered the best deal.

    But because of the Microsoft partnership, Azure wins by default.

    I’m not a lawyer. But if this isn’t restraint of trade, I don’t know what is.

    Widening the Moat

    AI partnerships make Azure, Amazon’s AWS, and GCP better cloud platforms. Smaller cloud companies will find it hard to compete.

    They not only need to set up data centers. Now they have to find billions to invest in an AI startup and form a similar partnership.

    AI partnerships expand the moat for the big cloud providers. The FTC may find that this qualifies as anticompetitive behavior.

    Who Will Fund AI?

    It can cost billions of dollars to train a new AI model. If the FTC unwinds big tech’s AI partnerships, who will fund this research?

    Microsoft gave OpenAI $13 billion in cash and compute credits. No venture firm in the world can afford to do that.

    If regulators do reverse these partnerships, startups like OpenAI will need to make huge changes.

    They can try to use smaller models that require less compute. Or, they can go public and hope to raise billions.

    Wrap-Up

    The FTC probe is just getting started. But if Lina Khan finds that Microsoft, Amazon and Google restrained competition with their AI partnerships, expect a major shake-up.

    OpenAI and others will have to find a new funding source. And Big Tech’s AI strategy is back to square one.

    What do you think the FTC will do? Leave a comment and let us know!

    Have a great weekend, everyone!

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

    More on tech:

    Why Cloud Platforms Will Win the LLM Race

    What It Takes to Raise Money Today

    Forget Founder Friendly. Be Founder Focused.

    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.

    Report this ad

    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. 

    Photo: “Lina M. Khan, Chair – Federal Trade Commission” by BrookingsInst is licensed under CC BY-NC-ND 2.0.

  • What It Takes to Raise Money Today

    What does it take to raise money right now? Here’s what I’m seeing in the market for pre-seed, seed, and Series A:

    Pre-Seed: $100k ARR or less

    Pre-seed deals usually have a trickle of revenue, but not much more.

    I did a pre-seed deal recently at $75k ARR — on the higher side for this stage. Revenue is typically growing 10-20% MoM or more.

    The amount raised is usually $500k to $1 million. Valuations are generally under $10 million post-money.

    Some pre-seed companies raise money with just an MVP. Those founders tend to have impressive backgrounds and big networks of angels and VC’s.

    Seed: $200k to $2 million ARR

    In 2021, many companies raised a seed round with no revenue and sometimes no product either. Today, that’s not going to fly.

    Most companies I see successfully raising seed today have significant revenue. Many would’ve easily met the benchmark for a Series A in the hot market.

    Today, you can get them at seed prices. You can bet I’m loading up my cart with these!

    The amount raised is usually $2-4 million. The valuation is around $10-15 million post-money.

    Not only do you need a lot of revenue to raise seed right now, you need solid growth. The hurdle is usually around 10% MoM.

    Series A: $2-5 million ARR

    Of all the rounds you’ll ever raise, Series A might be the hardest.

    In 2021, $500k ARR or less might have been enough to raise a Series A. Today, it takes a lot more.

    You’re going to need several million a year in revenue. And it better be growing quickly — aim for 10% MoM.

    The amount raised is usually between $5-12 million. That comes at a post-money valuation of around $30-50 million.

    The Outliers

    There is no dictionary definition of a Series A or any other stage in a startup’s life. And for every normal round, there’s an outlier.

    Last year, I invested in two pre-seeds that each had over $2 million ARR. That’s very unusual.

    But the companies hadn’t raised any real money before, so that first round was known as a “pre-seed.”

    Then there are the LLM startups. These folks are playing a different game than the average company.

    They need to spend many millions on compute. The investors are often strategics like Nvidia or Microsoft that don’t care about making a financial return.

    This results in crazy rounds like Mistral AI’s $111 million seed raise.

    The average startup should ignore these rounds. They don’t mean anything for you.

    Wrap-Up

    It’s a heck of a lot harder to raise money than it was a couple years ago. I don’t see that changing any time soon.

    Build a great product, get paying customers, and keep your burn to a minimum. That gives you the best chance to raise.

    And remember that raising money is a means to an end. It’s customers that make or break you — not investors.

    What has raising money been like for you? Leave a comment and let us know!

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

    More on tech:

    Why Cloud Platforms Will Win the LLM Race

    Forget Founder Friendly. Be Founder Focused.

    Meet the New Founder, Same As the Old Founder

    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!

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

  • Why Cloud Platforms Will Win the LLM Race

    Just about every day, a startup raises hundreds of millions to build an LLM. But the real winner in the LLM race won’t be a startup.

    LLM’s Are Becoming Commoditized

    Every morning, I launch a browser set to open to 3 tabs: GPT-4, Bard, and a model from a startup called Phind. I play them off each other, working toward the best result.

    Turns out, they’re pretty similar.

    Phind is a little more concise, Bard is better with video, and ChatGPT is good at finding sources. But the differences are small.

    The LLM itself is starting to feel like a commodity.

    That doesn’t mean LLM’s aren’t awesome. But it does mean that in themselves, they’re not defensible.

    Cloud Computing + LLM’s Is the Product

    LLM’s may not be a defensible product in themselves. But Big Tech is hard at work turning them into a complete product.

    Satya Nadella has poured $13 billion into OpenAI. Microsoft quickly integrated OpenAI’s tech into Azure, Microsoft’s cloud computing platform.

    If Azure offers an easier and better way to give your app AI features, you’re going to use Azure. This is the chance Nadella’s been looking for to dethrone AWS and become the top dog in cloud computing.

    Even small startups have created LLM’s. But starting a cloud computing platform takes massive resources. Building a single AWS data center can cost over $2 billion.

    The costs and complexity of running a cloud platform mean that only a handful of tech giants can do it.

    The End Game for LLM Startups

    If LLM’s are becoming a commodity, the price will approach the cost of doing a query. With margins cut to zero, LLM companies need a different offering in order to stay alive.

    A big licensing agreement with a cloud computing provider is perfect. Acquisition is probably the best exit available, if the FTC will allow it.

    Expect to see LLM startups racing to ink a partnership with a big cloud company. The problem is, most already have a partner.

    Microsoft has OpenAI, Google is using its own models, and AWS has a close relationship with Anthropic. This leaves most LLM startups out in the cold.

    Wrap-Up

    When ChatGPT came out last year, I was visiting family back home in Wisconsin. I’m embarrassed to admit I spent half the trip playing with it.

    It was one of the most incredible pieces of technology I’ve ever seen. But although ChatGPT is as good as ever, it now has tons of competition.

    Expect tough times ahead for most LLM startups. They may have incredible tech — but so does everyone else.

    Who do you think will win in AI? Leave a comment and let us know!

    There will be no blog tomorrow. See you on Thursday!

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

    More on tech:

    When Will a Robot Make My T-Shirt?

    Meet the New Founder, Same As the Old Founder

    Forget Founder Friendly. Be Founder Focused.

    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!

    Photo: “LE WEB PARIS 2013 – CONFERENCES – PLENARY 1 – SATYA NADELLA” by LeWeb14 is licensed under CC BY 2.0.

  • Forget Founder Friendly. Be Founder Focused.

    “I love this team and your product is amazing! I just couldn’t get my partners there. We’ll be cheering from the sidelines!” How many times have you heard that?

    Well, you won’t hear it from me.

    “They Never Give a Reason”

    I recently spoke with Mike*, the founder of a very interesting new fintech startup. He seemed like a solid entrepreneur and I loved the market — but there were some problems.

    “This is a great market and you know a lot about it. But I need you to get a technical co-founder or it will be really hard for you to build this business. I also need you to get into market and start making some revenue before we go further,” I explained.

    I was afraid this candid feedback might upset him. But Mike was delighted.

    “Whenever someone passes, they never give a reason. You’re lucky to even hear from them at all!”

    This leaves Mike with no idea how to improve. For once, he was getting some actionable feedback.

    Investor as Yes Man

    So, why do investors give BS feedback and then pass?

    In startupland, investors live or die based on their reputation. If your rep is good, the best deals come to you. If it’s not, you’re out in the cold.

    If you’re candid with a founder, he might get offended. Then, he tells anyone who will listen that you’re a jerk and best avoided.

    If you spew platitudes, maybe the founder never figures out how to improve his business.

    But who cares? You’re passing anyway!

    Even if a VC gives you a check, you still get Mr. Yes Man. He’s nodding and telling you you’re killing it — even when you know the company is in trouble.

    And why wouldn’t he? After all, this isn’t one of his winners. No sense risking a bad reputation.

    Founder Focused, Not Founder Friendly

    At the peak of the market, investors fell all over themselves trying to be the most “founder friendly.” But we forgot what entrepreneurs actually need.

    They don’t need a friend. They already have those.

    They need a business partner. And while a partner shouldn’t meddle, he does need to give candid feedback when asked.

    That’s why I strive to be “founder focused,” a phrase I first heard from Doug Leone at Sequoia.

    Leone is obsessed with helping founders he invests in. But sometimes, that means telling them the difficult truth.

    The new product isn’t so great. The company is running out of money.

    Leone’s approach might not be warm and fuzzy. But it helped build Google, ServiceNow and DoorDash.

    Wrap-Up

    To be great at our jobs, we investors have to take the risk of pissing someone off.

    I always try to be polite. But I also try to be honest.

    Founders pour their lives into their startups. Jobs are on the line.

    We owe them nothing less.

    What do you think of founder friendliness? Leave a comment and let us know!

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

    More on tech:

    Meet the New Founder, Same As the Old Founder

    Robots May Make Your Next Car

    The Default-International Startup

    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. 

    *Name changed to protect privacy.

  • Meet the New Founder, Same As the Old Founder

    Travis Kalanick’s first company got him sued for $250 billion. Time to quit the startup game, right?

    Wrong.

    Third Time’s a Charm

    Travis is known as the brilliant founder of Uber and CloudKitchens. But his first company, a file sharing service called Scour, was a disaster.

    Angry about music being pirated on Scour, the recording industry sued Travis’ company for a quarter trillion dollars, forcing it into bankruptcy.

    If anyone sued me for a quarter of a trillion, I’d beg for forgiveness and go burrow into some corporate bureaucracy for the rest of my days.

    But that’s why I’m not Travis.

    His second company was a modest success. Red Swoosh, which helped companies transfer media files, was acquired by Akamai for $18.7 million.

    It wasn’t until company number 3 that Travis really hit.

    Backing a Founder Again

    If you were an investor in Scour, you might put Travis on your “Never invest again” list.

    But you would be wrong. With each company, Travis was learning…

    A great investor will look not just at the outcomes, but at Travis as a person. He worked incredibly hard, and failure never deterred him.

    An entrepreneur like that, you want to back again and again. Had you done so, you’d be sitting on a mountain of Uber shares today.

    If At First You Don’t Succeed…

    On a summer afternoon last year, I sat at a cafe near Bryant Park. I was enjoying coffee and pastries with Justin*, a great entrepreneur I had backed in 2021.

    His company had recently been acquired for a modest sum. We got our money back, but nothing more.

    In startupland, this is actually an incredible outcome. Usually, you lose the whole investment!

    We chatted about his company, what’s new in tech, and ideas for the future. I left the meeting with a big smile on my face, full of energy.

    I know Justin gave his startup everything he had. And for a first company, it actually did pretty well!

    He needed some time to rest and vest. But I could hardly wait for Justin’s revenge startup.

    My Strategy for Backing Founders Again

    Every six months, I shoot Justin a message and see how he’s doing. Some day, he’ll be ready to start his next company.

    When he does, I want to be the first to know.

    When I back a founder, all I expect is for him to do his best and keep us updated. If he does that, I want to back him over and over.

    Throughout Justin’s career, he might start 3 or 4 companies. I plan to be an investor in every one of them.

    Sooner or later, with his tenacity and technical skills, he’ll strike gold.

    Wrap-Up

    Creating a billion dollar company out of nothing is really hard. Not many founders make it on the first try.

    When I make an investment, I’m starting what can be a lifelong relationship. Even if Company 1 or 2 fails, I’ll have the inside track for 3 and 4.

    When you back great founders over and over, sooner or later you’re going to hit.

    Do you like repeat founders? Leave a comment and let us know!

    Have a great weekend, everyone!

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

    More on tech:

    Super Pumped (Part One)

    Robots May Make Your Next Car

    The Default-International Startup

    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!

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

    *Names are changed to protect privacy.

    Photo: “LE WEB PARIS 2013 – CONFERENCES – PLENARY 1 – TRAVIS KALANICK” by LeWeb14 is licensed under CC BY 2.0.

  • Robots May Make Your Next Car

    Your next car could be made by a robot. Humanoid robots from startup Figure will begin working in BMW factories over the next two years in a major step for robotics.

    From Reuters:

    Robotics startup Figure said it has signed a partnership with BMW Manufacturing to deploy its humanoid robots in the car maker’s facility in the U.S., as more companies turn to human-like robots to take on certain physical tasks.

    Figure’s humanoids will be deployed in BMW’s manufacturing facility in Spartanburg, South Carolina, the largest automotive exporter in the U.S., which currently employees 11,000 people. They will be integrated into the manufacturing processes including the body shop, sheet metal and warehouse in the next 12-24 months, after being trained to perform specific tasks.

    A General Purpose Robot

    This is one of the first implementations of humanoid robots in a factory. For now, its roles will be limited.

    But Figure’s robots are designed to look like humans for a reason. It lets them operate easily in an environment designed for us.

    Figure’s goal is for its robots to be flexible enough to perform a wide variety of tasks.

    Already, it can make coffee. Engineers never told Figure how to do it — they just showed it a bunch of videos of people making coffee.

    Figure learned how to do it in just 10 hours.

    Learning in a New Way

    Robots learning on their own is a gamechanger. YouTube contains a video of someone doing basically anything. If the robot watches millions of YouTube videos, it will have countless capabilities.

    BMW can provide videos of human workers cutting, stamping, and bending sheet metal. Soon, Figure will be able to do it too.

    Figure isn’t the only company using videos to train a robot. Last summer, Elon Musk released a demo of Tesla’s new autopilot, which learns to drive by watching videos of humans driving.

    When Musk did the demo, I wrote about how it could be applied to robotics on this blog. Now, it’s happened — a lot sooner than I ever predicted.

    Where Will Humans Fit In?

    As Figure masters more and more skills, BMW may need fewer workers. In time, it may not need any.

    The UAW has tried to organize Spartanburg before. Seeing the first Figure robots on the line may make workers desperate to unionize and stop them.

    But more robots mean the humans’ bargaining power is weaker. Robots have no problem crossing picket lines.

    Over time, humans will move to jobs where being human remains a distinct advantage. When we get therapy or go to yoga, we want to connect with another human, not a robot.

    Our jobs will be less about moving objects and more about connecting with each other. That’s a much more fulfilling way to spend our days.

    Wrap-Up

    From Figure to Tesla, we’re seeing a new age in robotics. These robots are general purpose and learn on their own.

    Today, they’re making coffee, a little awkwardly. Tomorrow, they’ll be doing things we can hardly imagine.

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

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

    More on tech:

    Let’s Double the Human Population

    Watch Elon Drive Tesla’s Amazing New Autopilot

    When Will a Robot Make My T-Shirt?

    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!