A VC's Advice for First Time Angel Investors (that Have No Money) (#4)
When you start investing as an angel investor, let's say, you know, the focus is very often on a portfolio. It's you gotta get to about 20 investments to really have a shot of getting some kind of return because most things are still gonna fail no matter what you do. When I think about founders and what we're looking for, big part of it is the level of determination that they have to win, but not necessarily their belief in exactly what they're doing.
Speaker 2:I'm Jim Huffman, and this is if I was starting today, a collection of conversations about half baked start up ideas, growth tactics, and stories from founders, including my own journey as a business owner. All of the content is centered around 1 question. What would you do if you were starting today? In today's episode, I talk with Ben Jaskiewicz, the CEO of Highline Beta and author of Lean Analytics. In the episode, we talk about his best selling book, Lean Analytics, and how I tackled him in New York City when I met him, his startup accelerator that led to an acquisition with Airbnb, selling his company to Salesforce, and how startups and big companies can actually work together kinda leads to his company, Highline Beta.
Speaker 2:But most importantly, his advice for anyone that wants to get into angel investing, for me, was extremely helpful and very tactical. So I hope you really enjoy this episode.
Speaker 1:My name is Ben Jaskiewicz. Currently, I'm the founding partner of Highline Beta, which is a venture studio and venture capital firm. But my background in the tech and entrepreneur space is now 25 ish years. It goes back, so it's been quite a while. I started my first company in 1996 when I was at university.
Speaker 1:I was a, you know, a web services company, and I've I've done a variety of different things. I've been the CEO of a software company. I've run product for a couple of different companies. 1 was a consumer marketplace. 1 was a very r and d sort of tech heavy company that was acquired by Salesforce.
Speaker 1:I've run an accelerator program before back in the early, early days of accelerators. You know, I go back to 2, 000 and 10, so over 10 years ago now, called Year 1 Labs that invested in 5 consumer companies. Written a book called Lean Analytics that came out of that experience. So I've just done you know, I've been an angel investor as well. So it's just like a smattering of not not quite random things, but, it to me, it's all sort of strung together into a pretty interesting experience, but it sometimes it can be a little bit, crazy looking.
Speaker 2:So I I have a million questions on a few of those, especially the accelerator, but the thing I wanna call out is your book, Lean Analytics, was phenomenal. And, like, I don't know if you remember how we met, but it was in New York. There was a meetup, somewhere, and Sean Ellis was talking at this meetup. So Sean Ellis obviously, like, came up with the phrase growth hacker. He, you know, very instrumental with Dropbox with their growth plan.
Speaker 2:So, I was there. I was excited to kinda do this q and a with him, and he called out someone that just showed up. He's like, oh, there's Ben Jaskiewicz. And I was like, man, I know that name. And I was like, oh, crap.
Speaker 2:I was like, that's from lean analytics. And I was teaching a very small digital marketing class, And I literally show your book in every class, and I, like, pull out stuff from it. I think I, like, tackled you at the end of that thing. And I was like, Ben, I was like, what's up, man? I was like, love your book.
Speaker 2:And after, I was like, I I was like, I hope I didn't come off too aggressive. But no, man. Your book is so good. I literally did a little webinar this morning and mentioned it. But it's 1 of anyone that's looking to be data driven, whether you're a founder or a marketer.
Speaker 2:I think it's just, like, such a good foundation of meeting you. Yeah. You know what I do? And the book, again, it's,
Speaker 1:you know, it was published in 2013. So we're going on 7, 8 years now. So it's been a long time. I still hear from people who are just discovering it now and and benefiting from it. So, you know, honestly, like, it feels amazing when people say, got your book, read it, or read parts of it, really helped me, you know, with x or y.
Speaker 1:And and so it's great because it feels like we, Alastair Kroll and I, who's the coauthor, who also was 1 of the partners with me on year 1 Labs, the accelerator, we wrote something. It's created a lot of value for people. That always certainly feels good, and it and it's it's had staying power. I mean, some of the data in it, some of the case studies and things are gonna be a little outdated, of course, but it's had staying power, which is which is awesome.
Speaker 2:It's it's really cool, and so interesting to see the long tail on a book, because I wrote a book called The Growthmonger's Playbook, a very kind of, you know, not intro, but like a a good book to set the foundation for growth marketing, not at the scale that you've done with lean analytics, but that was in 2018. And I actually see a little bit more momentum coming from it. Like, how would you describe the tale if you launch the book, if there's, like, this immediate surge, and then it's, like, a trickle in that leads to opportunities or to networking, like, what do you think is, like, that tail or the benefits from it?
Speaker 1:Somebody once said to me or or maybe I read this, or I someone said it and then I read it or the other way around, but that a a book is still the best business card. And it that's really true. So for us, when we launched the book, there was this, you know, big spike in sales from 0 to to whatever, and the book sales typically, like, they have a big bump, and then they sort of go down. And a lot of books sort of go down to, like, a very, very small trickle. Ours has sort of you know, it leveled off and has been actually quite consistent since publication.
Speaker 1:And so just saying, you know, the 1st 6 months or so, you get a lot of sales, a lot of momentum around it. It sort of peters out, but it's actually stayed quite consistent. And I know our publisher, O'Reilly, has said that it's continued to sell and outsell other books that were published, you know, since then or or around the same time. What we saw from it, certainly early on, but we still do today, lots of opportunity came out of it. Now what's interesting is Alastair and I, when we wrote it, we had no master plan for what would come after.
Speaker 1:So we were not attempting to build a consulting business, you know, off the back of the book. Right.
Speaker 2:Yeah.
Speaker 1:We had we literally had no plan. We wrote it. We launched it. You know, we promoted the heck out of it. We got a bunch of speaking gigs and consulting gigs and that kind I was working at the time.
Speaker 1:We were both working at the time. Right? So we we both had other jobs. But it, you know, it just opens door after door after door, and it continues to do that, less so now. And Alistair and I don't really do anything with it.
Speaker 1:You know, we had people ask us, are you gonna write a second edition? Are you gonna do other things with it? You know, now you look at, you know, new you know, paid newsletters are a big thing now. It's like, oh, shoot. Should we always go back and think, should we have done something more with it?
Speaker 1:Should we have monetized in some other way? And we always go back and think, hey. You know what? We had other things in our lives. Really happy with the value the book has created, but it did open up tons and tons of doors.
Speaker 1:I mean, Alastair, in particular, he had a bit more free time than I did after we wrote it. I mean but me as well. I mean, we we traveled all over the place, you know, the UK, Spain. He went to China a couple of times, South America. Like, we we've just been everywhere, you know, doing workshops, webinars, and all kinds of stuff and meeting all kinds of great people.
Speaker 1:So it really does open up tons and tons of doors.
Speaker 2:Yeah. I agree. I think that's the best benefit. I mean, that's insane, the travel that it's led to for you guys. Like and it's funny because I was a little unintentional with mine too.
Speaker 2:I mean, obviously, I have a consultancy, so there's a direct tie there. But if I would have been really thoughtful and smart, you do something like what scaling up does, where you have your proprietary framework within it, and then you funnel them to a website to, like, get the certification on it. And then you teach people to be experts in it, and you can go that whole path if you want.
Speaker 1:Just to jump in there on the education piece. I mean, we saw people launching lean analytics courses. You know? And at first, it was like, well, hold on. Hold on.
Speaker 1:Hold on. They're like, who's reading the book or skimming the book and then, you know, claiming to be a lean analytics expert? And, you know, initially, you you might take a little offense to that and be like, oh, man. We should've done that and, you know, built the certification. And then, like, ah, what the hell?
Speaker 1:Like, let it if it's just if it's out there and creating value for people that, you know, at the end of the day, feels feels great. A book is, by itself, not a great way of making a living unless you're, you know, you're gonna write a bunch of books and really drive the sales, but as a pathway to other things. So we definitely looked at, you know, the education and other things, and, you know, we've done some stuff, but never with the intention to build, you know, know, like, a a true business around it.
Speaker 2:Yeah. We could run the math on all the money you left on the table had you had some full blown course that was 500 or a $1, 000. Who who knows what that number would be? That's hilarious. Well, and to call it out, I was 1 of those people that stole your content and taught it mainly because I was doing that digital marketing class.
Speaker 2:I was like, crap. I need something. I read your book. I literally was taking screenshot. I'd give you credit, but I'm like, guys, here's the format right here.
Speaker 1:Yeah. And at the end of the day, for us, again, because we had no master plan around it, you know, we looked at it. Alastair had written other books before with the publisher O'Reilly on more on web analytics and some of, you know, the the tech and the infrastructure behind that. So, you know, he had a background as an author. I just loved and and still do, although I don't do it much as much as I'd like maybe writing.
Speaker 1:So, you know, again, no master plan. People, you know, take the content. As long as there's credit given, I think, in this universe, then it's fine. You know, when you see it out there so when you see the book being stolen and put online, and and that's the kind of stuff that's like, ah, guys. Come on.
Speaker 1:Like, that's annoying. Or when consultants use the content and don't give credit where credit's due, and that's true for every author. Right? Like, Sean Ellis and Eric Reese, you know, from Lean Startup and Ash Moria from Running Lean. Anybody that's written a business book, that's it's not great.
Speaker 1:Somebody takes the content, doesn't give credit where credits do, and claims it as their own. So but, otherwise, I think it's great. And and if people still get value out of the book, awesome.
Speaker 2:Yeah. And, I mean, that's how I got put on your radar. But, yeah, I I agree. I think it's a great way just to put yourself out there. I do wanna get to highland beta, but I do wanna actually start with something that I'm super interested in.
Speaker 2:So I wanna get to your startup accelerator. So tell me, like, the reason for starting that. Was that post you selling your company to Salesforce, you were able to, like, have a nice x? No. It was before.
Speaker 2:It was before. Okay. Nice. So you start your accelerator. Talk me through, like, how you started it, how you funded it, and, like, what was, like, your investment thesis for it?
Speaker 2:Because I'm gonna get into, like there's something we're trying to do at Growth Hit, my the the growth agency that I have. So I'm just super interested in, like, how you pulled that off.
Speaker 1:Yeah. So I'd come off an exit of my company called Standout Jobs, which was really an asset sale, so not a successful exit. But and that had been a number of years of sort of banging my head against the wall, and and this was 2, 007 to 2, 010. So, you know, we had gone through a recession, a housing crisis in the US, and this was a company I had started in the recruiting space, which was, you know, pretty bad timing. So I was, you know, pretty burnt out from that experience.
Speaker 1:And then 3 other people that I knew, so Raymond Locke, Ian Ray, and Alistair Kroll, who I ended up writing, Lean Analytics with, you know, we got together. And and particularly, Ray and I started just jamming on these ideas of there were a couple of accelerators out there thinking about accelerators, and lean startup was just emerging. Eric was writing a blog. The book wasn't published yet, and but we started to look at that. And then if you know, Steve Blank, and he he wrote 4 sets of the epiphany, and then I read 4 sets of the epiphany, and I was like, holy shit.
Speaker 1:Like, it was as if he had written the book for me because everything he described in there is like, oh, I made that mistake. I made that mistake and so on. So all of this, you know, we look at these these new frameworks, this new way of thinking. Eric is writing about lean startup, and we got together and said, well, let's do an accelerator that is a lean startup inspired accelerator. We'll give the companies a year to bake.
Speaker 1:We'll start from idea stage. So the earliest, earliest stage will give them a very small amount of capital, and we'll be very hands on and try to get them to a subsequent, financing round. So we raised a very, very small amount of money from angel investors. So no institutional investors put money in. So a very, very small amount of money.
Speaker 1:We didn't pay ourselves anything. And we ended up, and we were gonna invest up to $50, 000 per start up, so a relatively small amount. And we ended up, you know, investing in 5 companies that happened to be all consumer companies, and we actually put them through, you know, this lean start up methodology of, let's first go validate what the problem is, then let's figure out who has the problem, then let's build an MVP, then let's get a little bit of traction, and we try to sort of guide them through that process. You know, we called it year 1 labs intentionally because it was a 1 year experiment. And, you know, we realized after that in order to do it, and I I'm gonna say properly, but, really, to do it at scale was gonna require a lot more capital.
Speaker 1:So you'd have to, first of all, pay the people running the program, ourselves, and other people. You would have to invest in a much bigger portfolio of start ups and do it, you know, let's say, do that every year for a few years to build up a big enough portfolio. So the math just didn't make a ton of sense, and we couldn't really crack the nut at the time on how do we make this thing self sustaining, financially stable, and make money. Now so we we did it for 1 year, and then we didn't do it again. It's sort of the end of the story.
Speaker 1:You know, out of the 5 investments, 3 of them failed. 1 of them is still still going, and another 1 was a company that was acquired by Airbnb. And then, you know, Airbnb recently went public, and so at the end, you know, the return was really quite good, but still very, you know, relatively speaking, small because you started with a small amount of money.
Speaker 2:Wait. Hold hold on. Let me back. So you basically I mean, it's a sample size of 5, but we could say 20%, like, went on to essentially IPO. Like, percentage wise, that's phenomenal, granted it's only 5.
Speaker 2:Yeah. I see.
Speaker 1:No. Agreed. I mean, overall, from a you know, we proved that you could help very, very early stage companies, you know, from idea stage. We took a a lot of accelerators these days are sort of a 3 month program. They take, call it, 5 to 7 points or or thereabouts.
Speaker 1:We took more than that because we were, you know, starting from from literally nothing, from the idea, helping them incorporate their companies, I mean, really from from point 0, and trying to roll up our sleeves and create as much value as possible. So we took we took more equity. And from a success ratio perspective, yes, we were from a portfolio perspective, it was quite I mean, it was very, very successful because of 1 exit out of the 5. As a model, that worked. It's just the challenge is is how do you scale that model?
Speaker 1:Because, again, you need more capital, and then you think about a typical, you know, venture capital fund where you have a management fee that helps pay salaries and operational expenses. We didn't have that. So, again, at the time, we couldn't figure out how to scale the model properly and make it, you know, financially stable and successful, but it worked in terms of I don't have a multiple in terms of return,
Speaker 2:but it it worked. No. That's super interesting. I love the the first principles of, like, very early idea stage, going through the lean startup kind of methodology, like and I think you have a lot of reps in this with Highline Beta. But as you're, like, evaluating something that's so early in the idea phase, like, how do you even use a filter to determine what's gonna work?
Speaker 2:Because it's like you've got different levers to think through. It's like, is it the person that you're investing in? Is it the market the idea is attached to attached to, or is it like or maybe just the idea? Like
Speaker 1:Yeah. At the stage we were at with year 1 Labs, it was almost 100% the people that you were betting on. So and I would argue, you know, we were even you know, there's you know, people say, like, there's precede and seed and maybe seed plus and series a and so forth. You know, we were even, you know, earlier than pre seed. We were really at the formation of these companies.
Speaker 1:At the end of the day, you're making a bet almost entirely on the people. You're looking a little bit at, okay. What's the idea? You're looking a little bit at what's the market and what's the potential. But, I mean, you really have no you have no clue.
Speaker 1:And as you move up the you know, as the companies, the start ups mature, they get pre seed, they get to seed, and so on. I still think early investing that we do now with Highline Beta as well, a big chunk of that bet is on the on the people and the founders, but you are able to start evaluating the problem, the solution, of course, the traction, the market. And, again, now with year 1 Labs, we also tranched the money. And so it's, you know, up to 50 k, and and then we were sort of establishing these milestones along the way. So there were scenarios where people couldn't get through those milestones.
Speaker 1:And so, you know, that's how we were betting on the people up front and sort of roughly what we thought the idea would look like, and then they'd have to go through those milestones, which, by the way, that whole exercise of doing that is a big part of what led to writing lean analytics because we were putting lean startup into real practice. At at that point in time, Eric Reese was doing it with his own with IMVU, but most people were not really practicing LEAN start methodology. It it was the exercise of doing that with 5, companies and about 10 10 founders or so that really led us to trying to systematize lean startup into a more analytical framework.
Speaker 2:Oh, that's so cool to see the connection with with lean analytic. So as you're so you're investing in people, like, any advice you'd give as far as, like, the traits that you would look for in a founder or executive team or or founding team that would lead to success?
Speaker 1:Yes. So, I mean, it is hard. It it's 1 of these things that I think you not surprisingly, I suppose you get better the more you invest. It's also why when you start investing as an angel investor, let's say, you know, the focus is very often on a portfolio. It's you gotta get to about 20 investments to really have a shot of getting some kind of return because most things are still gonna fail no matter what you do.
Speaker 1:When I think about founders and what we're looking for, big part of it is the level of determination that they have to win, but not necessarily their belief in exactly what they're doing. And so you need somebody that when the going gets tough, which it will, that they're gonna fight through it, but not in a way where they're not open minded to, adapting and pivoting. So, ideally, you find somebody that has a vision of what the future will look like, and you can get excited about that vision, but they're not terribly rigid about how to achieve the vision. If they're too rigid about that, what that means is they're gonna be determined no matter what to execute what they think is right, and you're not really making a bet on what they think is right today. You're making a bet on ultimately what the market is gonna tell them.
Speaker 1:And so they need to be really, really determined to win, but flexible on how they get there.
Speaker 2:Yeah. That's really well so I I totally agree. It's like they're gonna get it done, but they're open minded and down to experiment to to, like, follow the north star signs. That's really cool. 1 thing so I'd love your advice.
Speaker 2:Like, so with growth head or, you know, growth marketing firm, 1 thing, like, that we say is, like, okay. For such a good growth team, why can't we grow our own things? So we're, like, setting aside a small bit of money to invest in our own ideas, which could be, like, ideas we have where we could get partners to help start it from scratch. It could be looking at things that have some traction to try and acquire them, but essentially, like, doing in our own, like, idea lab, but, like, our core strength is obviously, like, being a growth team where we have weaknesses in other avenues. Like, if you were us thinking through that, having this experience, working with startups and idea labs, like, any thoughts on how to approach that?
Speaker 2:And just to, like, give you like, let's just act like you have a $100 to play with to invest in ideas on our own. It's like, do you do a scattershot approach? Do you do do less? Like, really hone in on the investment thesis of find companies we could attach to, where growth could help. That I kinda, like, threw 20 questions in 1, but just any thoughts?
Speaker 1:So I think, for starters, you do need to put some guardrails around what you're going to do and what you're not gonna do. To some extent, I think that needs to start with a thesis of again, not that I'm, like, some futuristic prognosticator because I'm not at all, but some thesis of of the future world that you believe is true. If you're wrong, you're wrong. If you're right, then you have a certainly a better chance of winning. But you need some guardrails.
Speaker 1:Right? So, again, what businesses should we be going into? What businesses should we be creating or investing in? And so you do need some something there because, otherwise, you can find yourself chasing a whole bunch of things or getting excited. I can get easily excited about founders and what they're doing, and then I always have to sort of peel back and say, okay.
Speaker 1:But does this fit, you know, our current thesis at Highline Beta, for example, or my thesis as an angel investor, I was doing that before? So I think that's the first step is, what is our thesis? What are the areas that we, you know, see immense potential in that we would want to invest in? Then I think you get down to a level more of practicality, which is, okay. What are we good at?
Speaker 1:Where do we have gaps? And how would we invest in in filling those gaps? So, for example, you know, your expertise is growth marketing, maybe it's not product development. So do you then go and invest in, you know, entrepreneurs in residence, EIRs, or CEOs that already have companies that are experts at product, inventors, creators, whatever the case may be, not great marketers necessarily. And then you can sort of pseudo cofound those businesses together.
Speaker 1:So I think there's a lot of different things you have to think about from an execution standpoint. But from a but you have to start with, you know, what are the guardrails? What do we believe to be true? What will the future look like? And how can we then, you know, benefit from what we believe is going to happen in the future.
Speaker 1:I think, generally speaking, you have to commit to a portfolio approach. Again, that's something we talk a lot about at Highline Beta. That's something we talk to our clients about, which is, you know, if you if you have 1 idea and you hope you're gonna win off that 1 thing, you know, the odds are what they are, but they're they're pretty small. If you have 10 bets in market, you have a better chance of winning. You also have a better chance of learning more, going through the cycle more, refining your thesis more, so on and so forth.
Speaker 1:So now you don't have to do that all in 1 year, but you do have to put yourself in a position where you could develop a portfolio. And, again, if I go back to year 1 Labs, we couldn't figure out the economics around that, so we made 5 bets. Again, it worked out okay, but we could just as easily have made 5 bets and and gotten, you know, 1 you know, 4 failures and 1 little win and think, jeez, 10 years later because Airbnb again now went public 10 years after the company was acquired or 9 years after. So, you know, imagine, you know, the return is, like, 1 x or 2 x your money, and you've been waiting 10 years. That's not good.
Speaker 1:So you have to think about how you could put yourself in a position to build a portfolio, but you can also start small. You don't have to go and say, well, I need to raise $10, 000, 000 so I can go make 20 bets. You make a bet. You learn from it. You go to the next 1.
Speaker 1:But if there aren't if there isn't an opportunity to try to scale the model even a little bit, then I think you you'll get gun shy pretty quick and sort of abandon it even though it could be really fun.
Speaker 2:That's a really good framework you just laid out. It's like identify your investment thesis, then you can get into the practicality of it. I love the entrepreneur in residence idea, findings because, exactly, we we're we're very capable in growth and and operations and execution product. We have not proven that, and I think finding people that could take us to the next level there is a really good idea.
Speaker 1:Especially if you, through your work, start to see opportunities in the market. So, again, you you're doing a whole bunch of work for a whole bunch of different clients. You have an opportunity to, you know, connect different dots, see different things in the market. You you know? So if you identify a gap in the market and say, wow.
Speaker 1:The world could really use x. Now we're not necessarily the ones able to build x, but could we go find somebody who, with our assets and our resources, would be great at building that thing? And then we could suddenly have a business. And so that's where I think the the leverages with EIRs is once you have that thesis, especially if you have identified a consumer problem or a customer problem that you think could be solved with a business, you find somebody that cares about that space because they're probably gonna be responsible for it for the next 5 to 10 years. And that's a good way of of looking for EIRs once you've identified opportunities in the market that you think are there for the for the taking that you could create value for, but you don't have all the resources to pull it off on
Speaker 2:your own. Yeah. Especially if you wanna do the portfolio approach where you can have owners take things to the next level. It's obviously, like, limited on time and bandwidth. That's really cool.
Speaker 2:You're making me rethink how we're approaching this. Super helpful. Yeah. The investment thesis is something we go pretty deep on. Before you go to Highline Beta, I'd love to know, like, what are, like, either industries or verticals that you're excited about?
Speaker 2:Because what's cool with Highline Beta, you work across so many different sectors. Just looking at some of your investments, you're getting exposure to a lot of things. Like, what are things you're excited about? Are any half baked ideas that you're, like, seeing or wanting to see?
Speaker 1:Yeah. I mean, so highland beta does we do have the benefit of working across a lot of industries. We sort of say that we're we're, for the most part, industry agnostic because we're working with big companies to help them identify areas of opportunity outside of their core. You know, there are a few for me that jump out. You know, we made an investment in a company called ChargeLab, which is in the electric vehicle space.
Speaker 1:So, I mean, this is not terribly shocking that electric vehicles are on the rise. So it's not it's not radical by any stretch of the imagination, but, you know, they're nowhere near their tipping point, and the electrification of mobility is you know, it's here. It's happening. It's gonna accelerate. And we've seen how ChargeLab has just gotten more and more traction momentum, and I think that's pretty exciting.
Speaker 1:That also connects to other work we do, for example, with AB InBev, which is the largest brewer in the world around sustainability. And you see the amount of effort, genuine effort, by some enormous companies going into sustainability, whether it's energy, water. Circular economy, I think, is is 1 of the most interesting ones, which in the work we do often means trying to take something that historically would have been thrown away or not leveraged and turning it into something of more value or, you know, getting glass bottles returned from bars as an example and bringing them back into reuse to make a circular economy. So I'm rambling a bit, but there's there's a number of areas in that sustainability space. You're seeing now some some really, really well known successful VCs launching climate change funds or sustainability funds, and that's a recognition that, a, it's incredibly important that we we don't completely blow up the planet, but that you can also make money in that space.
Speaker 1:So I think there those are some areas that I we're pretty excited about. I'm pretty excited about. Highland Beta's pretty excited about. We've done some work in and seen some really cool things happen that I think is gonna just continue for, you know, for a while.
Speaker 2:The theme I see there that I think makes a lot of sense is, like, if you look at, like, a 30, 000 foot view and you pick a category that if you had to bet your life savings and tenure, it's still gonna be going up into the right, like electric vehicles, a no brainer, Sustainability, a no brainer. Like, 1 that's super obvious and lame. But for us, it's like ecommerce. I mean, the pandemic, if anything, has accelerated, you know, the laggards and and late adopters to ecommerce even more. And it's something that, like, I don't think is going away.
Speaker 2:It's going up. Right? So it's I like having those as the overarching themes and then getting into, okay, what what are the the potential winners in this space as far as, like, kinda reading through some of the stuff you're saying?
Speaker 1:And I think, you know, ecommerce being a good example. It's it's, again, 1 of those macro trends that is fairly easy for everybody to see. Where the challenge lies is, okay. Well, we get it. People buy stuff online and have it shipped to their house.
Speaker 1:Where are the gaps in that experience that need to be still solved that could be enormous? And so I think that's where it becomes interesting because macro trends are pretty easy to see. You know, again, sustainability, a macro trend. Electrification and mobility, a macro trend. It's what you do underneath that that becomes harder, right, which is can you find an actual problem that matters to enough people to build a business around?
Speaker 1:But I agree. I mean, ecommerce is here to to stay. As it scales, it creates all kinds of problems, and and I think maybe some unintended consequences as well of people having a bajillion packages delivered to their homes every 5 seconds. Just the other day, I ordered 2 shirts. Same order, and they came in 2 separate packages on the same day.
Speaker 1:That could be route optimization. It could be. Legitimately could be route optimization. I don't know. Or it could just be completely messed up shipping.
Speaker 1:But you know? And then the the double packaging and that kind of stuff. And that's where some of these themes are gonna are gonna converge as well, sustainability and the growth of ecommerce. So I think there's a lot of interesting opportunities there.
Speaker 2:Yeah. Totally. And, got, like, virtual health care, the work from home remote world that's popped up in the past year. It's gonna be so interesting to see, like, how what plays out over the the next 10 years. 1 thing I wanna hit on with Highline Beta so, like, I would actually say Highline Beta in itself is 1 of those big trends that that I was seeing that you capitalize on.
Speaker 2:And I say it from the perspective of I was a part of a startup where we were gonna be successful or not dependent on 1 thing, and it's these big companies that will make or break us. It's that partnership deal. And we and our CEO at the time, phenomenal at biz dev and sales, and I never have seen close times take so long. And I think with Highline Beta and it's funny. Every big company, we'd meet with the chief innovation officer, and they just got this fancy new title.
Speaker 2:They're working with startups, but I was constantly underwhelmed at how uninformed they were with it. And it was just such a pain point, startups and big companies working together that I experienced firsthand. And then I saw what you were doing, and I was like, that is a brilliant idea. So there's kinda 2 ways I wanna go about this. Like, if you're a startup trying to get that big partnership deal, you're trying to, like, you know, work with Samsung.
Speaker 2:You're trying to work with AB InBev. Like, can you talk through, like, what are the common mistakes, or how should they even approach that?
Speaker 1:Yeah. So I think start ups and big companies really don't speak the same language, but they really can benefit from working together. You know, the irony of it is that big companies really do wanna move faster and figure out how to do that, so they wanna be more like start ups. And start ups, really, you know, winning by definition is become a big company. Okay.
Speaker 1:Yeah. They naturally just have you know, they're just jealous of what the other 1 has, basically, which is which is just the way it works. Now I think startups, when they approach big companies, they you know, first of all, networking in can be difficult, of course. Getting the right person to care about you and your start up at that time can be very hard. I think they often underestimate, you know, the things like the constraints that exist inside of big companies.
Speaker 1:So we can all sort of appreciate, well, big companies move slower. That's totally fair. Sometimes that can be really slow, sometimes less so. But budget would be a good example. You know, if you don't if you're in a start up and you don't really understand how big companies budget, you know, they typically, on an annual basis, at a department level, it might be less than you realize.
Speaker 1:You know, you look at these big companies and say, well, they're enormous. They have 1, 000, 000, 000 and 1, 000, 000, 000 of dollars. You know, why can't they buy my my solution? And, you know but the person you're talking to has a very small budget that they had to lock in for a whole year that is already 80% committed to other things. And so you really do, as a start up, have to understand how big companies operate, how decisions get made, how budgeting is done so that you can, to some extent, try to time the way that you build a relationship with them, which can take time.
Speaker 1:Right? It can take years sometimes, unfortunately, to pull that off. So I think it's just about each side understanding how the other side functions and what each side really needs in order to make a relationship work.
Speaker 2:Yeah. I mean, we were talking beforehand about 1 company we were working with where had we been able to be a part of a budget a month before, it could have been a massive engagement. But it's just these big publicly traded companies. They it's, you know, very regimented with how how they do things. It's super eye opening.
Speaker 2:And, like, with on the reverse side with big companies working with startups, is it about them having, like, a right entry point? Like, should they be starting their own accelerators or their their own demo days or or whatever it would be? Like, I don't necessarily know, like, what's the right formula.
Speaker 1:Yeah. I think every so, I mean, every big company works with start ups in some ad hoc way. Obviously, I don't work with every big company, but it's safe to assume they all work with start ups in some way. It's generally from from our experience, it's and this is not surprising. It's it's you know, can be a little bit clumsy.
Speaker 1:Sometimes you can have different groups inside a large organization trying to solve the same problem, and they're working with different start ups or trying to solve it in different ways. That can be quite common. You know, it they're not big companies are not necessarily fully integrated to streamline things. So, you know, what we found to work quite well are, in fact, accelerators. An accelerator program, we call them at Highland Beta, we call them pilot program accelerators, and we do that because they're really intended to secure pilots for start ups with big companies, streamline some of that initial onboarding process.
Speaker 1:Think of vendor management, procurement, and all of, you know, legal compliance, all of those things. Try to streamline that, get to executing sometimes what could be a relatively small pilot, but in an effort to validate that the big company and the and the start up can work together, and then they are able to figure out what kind of commercial deal, if if any, that they wanna continue with. So we found that to be very successful. And I think for big companies, what it allows them to do is create, in effect, an interface to the start up ecosystem. So they're able to say, hey.
Speaker 1:Don't don't go through, you know, the door on the left or the door on the right or try to come through 3 separate doors to get to us. If you're solving problems, you know, a, b, and c, and you're a startup that fits these criteria, this is the door to come through. So it it creates a structure to things. It creates a brand and an interface to the start up ecosystem, which we found to be really works to generate more successful pilots and more successful commercial relationships.
Speaker 2:That's awesome. That makes total sense. I remember, like, we would be LinkedIn stalking a company trying to find the right person, the right entry point, and it's just this this game of, just trying to, like, cast this wide net. Hey. Hopefully, someone will respond that actually cares about this problem we're trying to solve, but I think your approach makes a lot more sense.
Speaker 1:Yeah. No. And and, again, I think it's not to say that start ups shouldn't be chasing down opportunities within large organizations. Sometimes it's a bit of a shot in the dark. Right?
Speaker 1:It's a bit haphazard. And, you know, the funny thing is it's the exact same on the other side. Right? The big companies, they're looking for start ups everywhere. They're working with a whole bunch of, you know, investors or or different types of accelerator programs.
Speaker 1:And so sometimes you need somebody in the middle that's genuinely committed to helping everybody solve their problems. Big companies have a bunch of of things that they wanna do for often for their customers or their partners. Start ups have the solutions. Start ups need customers and partners to help validate their technology and their solutions and their businesses. Somebody in the middle who, can help both sides and and then can benefit from both sides can really connect those dots in a in a meaningful way.
Speaker 2:That makes total sense. I wanna get to, like, the the end of this with a few a few little kinda quick questions. But, like, with Highline Beta, what's ahead for you guys? Because I also saw that you you have a fund that you're investing in. Like, what's, like, the thing you're the most excited about this year?
Speaker 1:I mean, Highline Beta is interesting business because it has a it has a few moving parts, and we built it based off of all of our disparate experience in the past. Marcus, my cofounder, and Lauren, you know, we started companies. We've worked at start ups. We've run accelerator programs. We've been investors.
Speaker 1:And so we're trying to piece all those things together into, you know, not some chaotic crazy business, but something that makes logical sense. And those you know, we've been at it for 4 and a half years, those pieces. So the thing I'm the most excited about is those pieces are genuinely starting to come together. We have, you know, corporate clients that we're helping identify new opportunities for outside of their core business. We're helping them build new ventures internally.
Speaker 1:We're also helping them through pilot programs, accelerators, find startups to work with. Those startups become investable opportunities for our fund. And then the other piece of the business is our venture studio, which is building companies from scratch. And then, again, those become investable opportunities for our fund. And so these pieces are really starting to come together.
Speaker 1:And, again, you know, we talked about a portfolio before where we're gonna have, you know, a number of investments we make in existing start ups that we've helped partner with corporates. We're gonna build from scratch, almost like the year 1 labs, sort of model. We're gonna build start ups from scratch, and we're gonna have, you know, a portfolio of those, and we're gonna have a portfolio of corporate clients that we're continuing to work with to uncover these net new growth opportunities for. So that's the part I'm most excited about is connecting those dots and seeing that portfolio of of of ventures materialize.
Speaker 2:Gotcha. Yeah. That's awesome. I mean, you're you're coming at it from every side, which is super fun to be a part of that. And just to call out, like, I mean, you're literally working with some of the biggest and best companies like AB InBev.
Speaker 2:You talked about Intuit, Craft, RBD. It's it's beyond impressive, the portfolio you've built in, like, such a small amount of time. I know I'm sure at times it doesn't feel like that. I mean, 4 years, you could say that's not a lot of time where it is, but that's quite impressive, man.
Speaker 1:Well, it feels like it feels like both. I mean, feel like it feels like overnight, and it feels like I can't believe it's been 4 years. But, no, we have we have great clients, you know, many global companies, which is which is pretty interesting when you start to look at opportunities in markets outside of North America because there's a whole bunch of things that are different. The the customers can be different. The needs can be different.
Speaker 1:Regulation compliance, legal can be different. So it really is interesting when you see the view that companies like AB InBev and global other global companies have on the world. It's just enormous. And what that usually means is that there are tons and tons of opportunities to build new things that create value for end users or or customers in creative ways. And so that's when you start to really understand how these big companies operate and, you know, work very deeply with them, which is how our model becomes successful, because we can again build portfolios with each individual corporate customer.
Speaker 1:So it it's it's quite something to see the the world through their eyes. And then, again, you you flip that around, and then you look at the world through a start up's eyes And same world, just a very different different view of it.
Speaker 2:Yeah. And you don't have to answer this. I'm just interested to understand, like, so people understand, like, the scale. Like, if I'm 1 of these big companies working with Highline Beta where you're literally standing up these pilot accelerator programs, like, what does that look like as far as cost to them? Is that, like, 6 figures, 7 figures?
Speaker 2:That sounds like such a massive project.
Speaker 1:So, you know, accelerators are a decent size endeavor, and, ideally, they are multiyear, I will say, because they actually get better over the years because everybody gets more comfortable and familiar with the model. And, okay, we now get how what it looks like to find great start ups and partner with them. Alright. Let's do that a second time or let's do that a third time. We tend to run our our pilot program accelerators on those yearly cycles.
Speaker 1:So but they're you know, we engage with clients at a couple of different levels. We're often doing, you know, 100 day sprints is how we think about them. You know, what can we go figure out in the market in a 100 days to uncover pain points that your customers may have or new areas of opportunity that might link to things that a big company wants to build in house, might link to start up partnership opportunities, or who knows what. So there are sort of various ways that we engage with, corporate partners and clients from, you know, fairly short sprints to longer term commitments like a pilot program accelerator.
Speaker 2:Very cool. I'm yeah. So many different ways to, like, get in business with you guys. So, I know we're running up on time. I I wanna do some kind of, like, quick questions as far as, like, the whole premise is, like, if you were starting today, like, advice you'd give.
Speaker 2:Like, so first off, like, if you were starting today, like, getting into, like, the start up or tech world, like, what would you do? Or and the other way you can approach is, like, if you're starting Highline Beta today, like, what would you do differently, or what'd you do well that you'd definitely do again?
Speaker 1:Yeah. So I think if I was starting a a company today, and I won't use Hailiang Beta as my example necessarily, but if I was starting, you know, any startup today, I mean, it's the same principles that that I've learned over the years from lean start up, from design thinking, from jobs to be done. They all sort of overlap in different ways. At the end of the day, you have to find a problem worth solving, genuinely worth solving, and and then you have to figure out how to solve it. And and it sounds really easy, but, you know, the step 1 that I think most people still tend to skip is, does this problem really matter?
Speaker 1:And then if I abstract above that, if you will, I see a lot of people starting companies, and I you know, when I ask them, you know, why did you start this company? The answer isn't I wanna dedicate the next 5 to 10 years of my life to solving this thing. And so if you're gonna start a company and you, because it that's how long it takes. Right? I mean, Airbnb, we use that as an example, 10 years to go public.
Speaker 1:Most companies, it's 7 to 10 years to call it, you know, whatever you define as winning, getting acquired or or going public, it that's how long it takes. And so, you know, you have to find a real problem worth solving, and that's sort of at a granular level. But at a at a higher level, if you don't wanna dedicate the, you know, the rest of your life to something, why are you doing it when you can do anything in the world? So I think that's something that I think people still start companies because they think it's cool or they think it's gonna be fun or they think it's, you know, a great way to make money. And all of those things can be true, but 10 years of your life is a long time, and that's how long it's gonna take to persevere.
Speaker 1:So that's you know, again, you just think, are you ready? Are you ready for the next 10 years? Is this something because if you're not dedicated to this thing, find something else you really care about. And that would be my advice overall when you look at you know, I'm about to start a company. Do I really care?
Speaker 1:No. I just think it's an easy way to make a living. Well, that's maybe not the reason to start a company.
Speaker 2:It's so true. And if you think about your working life, it's 40, 50 years or whatever, and it's like 10 years is a quarter of that. Right? And it's so true. My my partner asked me that the other day because we were looking at these ideas.
Speaker 2:He's like, we need to ask ourselves, do we wanna put 4 to 5 years into this? And it totally makes you reset the way you look at at taking on something. So III think that's really good advice. The next question, like, if you were getting started in angel investing because you and I talked about, like, I I made my first angel investment. You've been doing that for quite a while.
Speaker 2:How would you think about that? And let's just, like, throw out a number. It's like, okay. Because, obviously, I'm not, like, rolling in any, like, money from a a previous business or anything. But let's say you have, like, $100, 000, like, how how would you think about deploying that?
Speaker 1:So there's a couple of things that that come to mind. People think angel invest first of all, people think you need, you know, really large amounts of you know, let's call it 1, 000, 000 of dollars, and that's not true at all. And people also think that check size has to be, you know, 25, 50 k, if not more. And I've I know lots of angel investors that invest 5 k, 10 KII don't angel invest now because Highline Beta has a fund, but before, you know, the check sizes were not enormous. And so what that means is angel investing is actually more accessible to people than they might realize.
Speaker 1:So if I had a 100 k to invest and I and I was comfortable losing all the money, so I think that's the first thing. It's like you really have to be comfortable losing the money. If I had that, I would probably make 10 investments of 10 k each. 10 investments, it's not it's maybe not you know, ideally, you get to, you know, 15, 20 investments in a portfolio, but 10 investments is a is a pretty decent number. And in, you know, every investment you make, you're gonna learn something from.
Speaker 1:And the next 1, you know, you'll get a little bit smarter about it and so on and so forth. So you you have enough kicks at the can. So I would say I would make 10 investments, yeah, 10 investments, 10 k each. I wouldn't change the number. You know, I did that when I was angel investing.
Speaker 1:Sometimes I write this, you know, this size check or that size check, and it was kind of willy nilly. There was no sometimes it was the founders like, Ben, I really need the check to be bigger. So I would be rigorous about it, and I would it's similar to what we were talking about before. Have a thesis that you're investing in and try to stay true to the thesis, and don't do it, you know, willy nilly. When I started Angel Investing, the first thing I did was I invested in some in start ups that friends were starting.
Speaker 1:And that's fine. Right? There's nothing wrong with investing in friends, but it it's not as if I necessarily went through this rigorous, like, okay. Do I believe in in what they're doing? Do I believe in the future of this industry?
Speaker 1:You know? Do they have the right team? You know, the due diligence was not super rigorous. And I'm not suggesting rigorous due diligence necessarily, but you should at least have a thesis because you need ways of saying yes, no pretty quickly. So I think have a thesis.
Speaker 1:Just pick an amount, 10 k. It could even be 5 k, and then you make 20 investments with a 100 k. Don't expect huge returns. Right? So be prepared to lose the money.
Speaker 1:Try to get involved in some of those investments. You know, the more you can get involved helping the founders, creating value, seeing under the hood, the more you learn, and then that helps you become a better investor over time as well.
Speaker 2:So good. I think that advice of being okay losing the money, but having that investment thesis to say yes or no is is like everything before you just start throwing money out. That's awesome. 2 more things. So I'm I've been on the board of this company for a year, and it's been so interesting being a board member.
Speaker 2:And, honestly, I'm trying to figure out where I talk and where I shut up, where I add value, and where I, you know, know my place. Like, I see that you're on the board, like, Proposify and some others. Like, what advice would you give to people that are joining boards?
Speaker 1:So when you're joining a board, I I sit on the board of Proposify, which is a great company, and I've known those guys for years. And I I'm the independent. I I'm not an investor in Proposify. I had a relationship with the founders. They asked me to be the independent board member, which is great.
Speaker 1:And I create value wherever I can on the things that I know something about. You know? So product would be a good example of that. The thing you do have to appreciate about sitting on a board is you it's next level over being an adviser. You actually have a fiduciary and legal responsibility to the company.
Speaker 1:And so what that means is you have to do things like approve budgets, and you have to look at legal documents. And there's a sort of there's a whole host of administrative things that you are obligated to do on a board that when everything is going well and and the company is crushing it, can seem sort of not that important. It's only when things are going a little sideways when those things start to become really, really important. And so you have to be prepared for that commitment. Again, the legal and fiduciary responsibility you have to the company because you're actually putting yourself on the line, for that company.
Speaker 1:If you're an adviser, less so. Right? You you do not have the same legal and fiduciary responsibility as a board member. So it's just 1 of those caveats to add. I think also if you're playing the role of independent board member, you know, there will there's often a point in time where the the company scales to a certain level or whatever the case may be where your value starts to diminish.
Speaker 1:It's like, you know what? I've never built a 1, 000 person company. Why should I sit on the board of a 1, 000 person company? Then we might just you're better off sort of taking just getting off the board and letting somebody else step in and fill your shoes. So, you know, figure out where you can create the most value.
Speaker 1:But I would say just, you know, be aware of the responsibilities you're taking on because they can be pretty serious.
Speaker 2:Yeah. Totally. I've definitely seen that in the past couple quarters. It's yeah. When things can get sideways, it you have to step in a little bit more.
Speaker 2:That's super helpful. And then the the last thing, like, what is the nicest thing anyone has done for you in your professional career?
Speaker 1:Wow. The nicest thing somebody has ever done for me. The first thing that comes into my mind is connecting me to other people where we've been able you know, connecting me to cofounders, connecting me to investors, you know, people who are willing to, I'll say, give up. Give up is maybe not the right word, but give up some of their social capital to connect me to somebody else because they believed in me. They trusted me.
Speaker 1:They thought I could create value. So I to me, that all you know, sometimes people make intros, you know, quite flippantly and it's pretty easy to do, but sometimes it isn't. And sometimes it is 1 of those, do I really believe this person is gonna create value for the person on the other side of the introduction? So to me, being open to connecting me to people, that have then opened up subsequent doors for me, I think, is something that comes to mind right away.
Speaker 2:Yeah. I mean, yeah, it's it's sometimes that nudge, that person that, like, opens the door that can change everything. They're very cool, especially in the kind of startup world. Well, Ben, thank you, man. This was, beyond helpful.
Speaker 2:I actually have, like, a page full of notes here. I mean, holy smokes. This was really good. So you should turn all of this into a blog post or something. It's very helpful.
Speaker 1:I appreciate the time, dude. Thanks thanks for having me.
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