How to Make a Startup Successful, Founder Mindset & Startup Operations w/ Adam Spector of Chore|EP78

Look, I'm a first-time founder. I just feel like I need to understand and learn this stuff. And I was like, that is why you're gonna fail. You should be super cheap. It was like sort of the, you know, ramen founder. You're just like eating ramen every day, making no money.

If someone's gonna try to win you over in terms of investment, how would they get your attention?

No VC cares. They do not care that you optimize your cash spend so you can live super cheaply. The most successful founders are the ones who are utterly obsessed with the problem they are solving. One of the key pet peeves of mine as maybe like, look, as a 4-time founder, investor in 200+ companies, if there's anything that I've learned, and also this happens as you start getting a little bit older in life, is you start realizing like your time is so, so, so precious in how you allocate that time and where you decide to spend it and who you decide to spend it with is maybe the most important decision you'll make in your entire life. So literally, I've decided to spend this hour with you right now, Jason. I'm never going to get this time back. So I hope it is worthwhile, but I'm never going to get this time back, right? And so that has to be a good investment of my time and hopefully a high ROI for either me personally or for my business or anything else. And if it's not, I should just say no and not do it. And what pisses me off is I come across a huge number of founders in my day-to-day work, right? So I'm the CEO and founder of Chor. do back office operations for startups. We essentially take on all the annoying, almost like admin that you need to do to run your business. You have to do HR, you have to do compliance, you have to do finance, you have to do equity, you have to do that stuff. But it is not your core competency as a business. It is not why you exist. It is not why you started your company. Um, if it is why you started your company, then you should be competing with me, which is cool. Like, we should do that then. But like, if it's not, then why the heck are you spending any time on this? I actually talked to a founder today, but it happens all the time. He's like, look, I'm a first-time founder. I just feel like I need to understand and learn this stuff. And I was like, that is why you're going to fail. I mean, I kind of just called him out. I'm kind of just like, if you think that is a good use of your time in that you think you need to learn, like I use the example of, love him or hate him, like Elon Musk is an amazing entrepreneur. And I was like, do you think Elon Musk is spending any time figuring out what payroll provider to use? Or how it should be run, or if they negotiated a good deal. I think he would probably fire the head of HR if the head of HR came to them like from Tesla and was like, so Elon, which payroll provider should we use? He'd be like, get outta my face. Like, I wanna make sure, I wanna build the better, a better battery for the car so our customers will be happy. I couldn't care less about what payroll provider we use so long as it is low cost and it gets our team paid on time. That's the rule. Go figure the rest out. And this founder's like, no, I just feel like I need to learn this stuff. I'm like, all right, cool. But like, your superpower is AI. This guy was an AI founder. Your superpower is in AI, and AI is changing so fast every day, and you think you need to figure out what payroll provider is better and how to set it up? I could go on and on, but like, to me, that is a guaranteed way to fail if you believe that is a core thing that you should be focused on.

Well, I think that's a great introduction to—

Sorry, sorry for the rant.

No, I loved it. And that's why I wanted to go straight in. And I wanna hit on this a little bit 'cause there's, there's definitely, there are some things to know how they work as a founder, but do you have to be an expert at 'em? Do you have to spend hours doing the work to figure it out? No. And that, I think that's, I'd be curious like what the founder, if this was a pattern or if it was like one particular thing like payroll provider. Yeah. It's like there, it's a, it's a commodity.

So, so I would actually even disagree with you a little bit on the, on the statement you made there, Jason, which is like, I don't actually think you need to figure out a large majority of these things as a founder. I think as a founder, your only job is to set the course of your company, and that means you need to set expectations and goals. And so you say, my goal for my HR team, if we're going to stay on that topic for a sec, my goal in the HR team is with people are we hire people really well, we do great hiring, we find great people, we get them onboarded quickly. We make sure they get paid on time and we don't spend too much money doing it, right? We don't have like the gold-plated platinum plan. Those are the things that I would set up for my team. And then my job is to make sure I hire the experts either internally or as outsourced experts to go get that done. I don't care about the details. I don't need to know the details. It does not matter to me. And the same thing applies to your marketing team, your sales team, your product team, your engineering team, right? So, you know, same thing. Like, I actually— this founder, I even asked him, I was like, well, who's running your engineering? He's like, well, it's my co-founder. I was like, so do you need to know the details what he's doing? He's like, no, I trust him. I'm like, well, why don't you hire someone that you do trust for all your back office operations, um, and just let it get done? Like, just— you don't need to know the details, you just need to know it's happening. And, and that's what good founders do. They set the guidelines and the principles and the rules for how their business needs to be run. And then they get out of the way. They need to keep people accountable and hold them accountable, and that's it. So I keep going, but I don't think you need to know the details. You just need to set the rules.

So you have a unique insight because you've backed over 200+ founders as an angel investor. And I'm curious to kind of see what drew you to that conclusion. I imagine you're seeing certain behaviors across all your investments over a decade. And looking at various different founders work out and create a unicorn versus those that don't, you know, what would you say are some of the attributes that you've recognized across all those investments that kind of adhere to that thesis?

Yeah, absolutely. And, and I'll say I've learned, I've also had this honed in a little bit more because I also run something called the Entrepreneurial Excellence Podcast. So I speak with a lot of these founders. Um, in the one answer, one word answer to your question is obsession. So the most successful founders are the ones who are utterly obsessed with the problem they're solving to the detriment of everything else. So going back to this founder, this example, he's building an AI company, this founder, and yet he's worrying about what payroll provider to use or what equity platform to use and how to set it up properly and all these things. That guy isn't obsessed. I'm sorry. He's not an obsessed founder. He will get $0 from me as an investment. I'm not at all interested. He's not— it's not worth my time. He's going to fail. Now, he might come back as a second-time founder. He was like, look, I'm a first-time founder. I just feel I need to learn this stuff. Cool. Second-time founder, come back. This is why second-time founders are more successful. They realize like there's a lot of things that they can just set off to the side and not care about. It needs to be run. They need to set it up. It needs to be set up. They need to make sure it's done. but they can just ignore it to the detriment of, or not detriment, to the focus and obsession of what they care about. So those are the most successful investments I've made. The founder is utterly obsessed with their product and what they're building, and everything else is secondary.

When it comes to seeing that obsession and looking at it, do you see the consistency in terms of First-time founder versus second-time founder with that particular trait, or is it kind of a crapshoot or it's not necessarily as clear?

It's easy to say it's first-time versus second-time founder. It's actually not quite that clear though. It actually really comes down to— it sounds bad— kind of the intelligence of the founder and I think their ability to think from first principles. And so if they say to themselves, what do I care about? What is my superpower? And how do I enhance that every day? That is where they will be successful. And sometimes I come up— we have many customers and many investments of mine who are first-time founders, and they're incredibly successful. Although I will say many of the unicorn investments that I've made, the large majority of those are second-time or multi-time founders, oddly. But, um, we've met many customers who are very successful first-time founders and they just realize like, this isn't work I should be doing.

No, that's valid. And yeah, I, I wouldn't be surprised. I wouldn't say it's odd that your second-time founders have better outcomes because they did have those learnings early on and they had to kind of grind and suck it up and kind of eat dirt for, for quite some time to figure it out and not have the outcome maybe that they were hoping for, uh, or maybe it was just an outcome and then come out better.

What shocks me still a little bit is the proliferation of knowledge, right? Podcasts like your own. There's so much knowledge out there, right? This guy literally had a phone call with me, not to say like I'm someone so special, but like having a phone call, sit there and ask me questions. If nothing else, be like, all right, cool. We're not a fit for you. We don't want to pay for your product. Awesome. Ask me a ton of questions. Or here's my advice. You're getting it for free. Here's my advice. Like, don't use us, but like, just don't Don't waste your time on these things. And yet he just doesn't care. And this is where it shocked me. I mean, there's so many things I don't know about. I will try to go learn about them. I'll use AI to go learn a little bit, and then I will try to go hire an expert. And I can go tell that expert, here are the goals that I expect. Here's the outcome that I'm looking for. Can you hit it? If the expert says yes, we will pay them for that outcome. And if they don't hit it, we fire them. And it's very straightforward. It is a clear business transaction. I don't need to hire someone to do it. It's a win-win. It's like, you know, I keep going, but you get the point.

Do you think there's anything from the standpoint of like abundance mindset versus scarcity mindset with those types of founders?

Great question. So I'm a huge believer in something that I don't think people— it's maybe a little bit different perspective on the world, but yes, that is As an early-stage founder, you tend to be very cautious with your cash, understandably, right? You have very little cash, you're very frugal. It's like sort of the ramen founder. You're just eating ramen every day, making no money, trying to scrounge whatever money, dollars you can for everything. Cool. You should be super cheap and you probably should only be doing— you have your laptop, you have an internet connection, you have enough money to pay for AI credits or something, right? Cool. That's it. Go crush. Get that done. The moment you raise money though, you need to switch from a scarcity mindset on cash to an abundance mindset on cash, and then move from a scarcity mindset on— or an abundance mindset on your time, right? So when you're a founder, 2 founders, no money, but you have lots of time and you're just working 7 days a week, 90, 100 hours per week just to get it done early on. You have all the time in the world, essentially. The moment you take venture dollars, the moment that happens, you need to switch that mindset to say, I'm no longer— I don't have a scarcity of cash, I have a scarcity of time. And that is the, the big switch that most founders fail to make. The reason they— well, the reason that becomes really dangerous in that mindset is because you know this well, uh, VCs give you cash and now you have a 12 to 18— you have an 18-month runway before you need to go raise your next round of funding. On average, you have 18 months. Let's really say that's 12 months because you need to start raising money 6 months before you run out of cash. So you've, you've 12 months, a year, to go hit your key metrics before you can get more cash. No VC is ever going to say, congratulations, you are so freaking cheap. That you saved an extra $40K or $100K or whatever, but you didn't hit any of your milestones. They don't care. On the other hand, a VC will say, oh my God, you crushed your growth metrics and you hit those numbers. You blew past our expectations in 12 months. You'll get unlimited amounts of cash and you can keep your business going. So many founders fail to make that switch mentally from, from once again, cash scarcity to cash abundance. in time abundance to time scarcity. Moment you get funding, you are time scarce, which means you need to delegate and outsource everything that is not critical to your business.

I think that's a valuable lesson for a lot of founders to realize because I see a lot fail to make that transition of like not ramping up the hiring, bringing on the talent, and, you know, growing as fast as possible, um, because that's That's the cost. That's the game you play when you take venture money. And a lot of founders don't take that into consideration.

The reason they don't, and I mean, I get it, it's easy to feel like you're doing your job well by being really frugal. It's sort of this easy thing to control is how much money you're spending. It's much easier to control your cash outflows than whether you get new customers or whether your product's going to hit the next milestone. So it feels like you're doing your job well, but once again, No VC cares. They do not care that you optimize your cash spend so you can live super cheaply and didn't get a— literally, if I make an investment and the founder's like, I'm going to go up to Hawaii, but I'm going to crush it and get you great, and I'm going to grow 10x in the next 6 months while living on the beach in Hawaii, I'd be like, dude, props. If you figured out your solution to get it done and that is the way you're going to go make it happen, I literally don't care. Go spend— go live at the Four Seasons in Hawaii and get it, but go crush. Dope.

So let's talk about your background as a serial entrepreneur. You obviously made tons of investments as an angel, but you've also built and sold companies. So I guess give the audience a little bit of background on your entrepreneurial journey, building and scaling companies.

Yeah, I mean, like, the short version is I actually started probably my first business back in high school. And sort of doing, selling stuff to my friends in my high school and then grew from there to have this sort of standard path after that. I was sort of the good first son, went to Vanderbilt undergrad, went to grad school for a JD/MBA, thought I was going to be a lawyer like my dad, realized really quickly I had no interest in being a lawyer. Got a job in strategy at kind of a cool mid-sized tech company in DC. And I remember though thinking, I was like the guy who was reading Wired before it was cool to do. I still get the paper version of Wired. I know I'm one of the rare people who still gets it, the paper version. I've been probably a subscriber, probably one of their longest ever subscribers. But I was like, DC's not the center of the tech space. And If you want to be at the top of your chosen profession and think you have the ego, essentially you have the ego to believe you could be one of the people at the top of your profession, you need to go put yourself in a place where you can be a part of that. And I learned that lesson. And by the way, this wasn't an original idea. I sat down with a founder backed by Sequoia, Sequoia-backed founder in DC, which is pretty rare at the time and is still pretty rare. I was in Washington, D.C., which is where I was from. Sat down with him, got introed to him, and he said this to me. Look, look, if you want to be in politics, stay in D.C. If you want to go to finance, go to New York. If you want to be in media, go to L.A. If you want to be in tech, go to the Bay Area. It's like, great, gonna go do that. Um, got a job working for a tech startup out here, and, uh, the rest is history. The company got acquired for $400 million. I made like some— I was like, made a bunch of money in my stock equity grant. I was like, oh my God, welcome to Silicon Valley. This is freaking amazing. This is what you expect. Um, and, uh, a year after we did the acquisition, um, started my first company and, uh, now on number 4, almost like 4 and a half really, but like number 4 officially.

Did you raise venture for any of your past companies?

Yeah, so the first 3 were all venture-backed. Um, I think at this point raised, uh, I know, $30, $40 million total, um, in venture dollars. Not quite at tier level. But a decent amount. And then also, but my current company, Chor, we actually decided to be bootstrapped. And so it's a bit of a different perspective on things and different take. Happy to go into why we did it this way and what we might do later on. But, and so it's, yeah, it's been a different journey in different ways.

Yeah. So let's dive into that, like launching Chor and choosing to bootstrap. What was the methodology behind that?

It was necessity. Necessity is the mother of all inventions. The thesis behind it was, so the short history essentially is, so in 2020, right before the pandemic, I started, I was a co-founder of a company called Abstract Ops. Our thesis was we were going to abstract away operations so founders could get back to doing what they do great, which is building a company. You don't need to reinvent the wheel. Like, by definition, reinventing the wheel is completely idiotic. So why would you reinvent the wheel of figuring out how to run your operations when it's already been solved? It's the same thing of like, why, why are you going to go reinvent bookkeeping or reinvent law as your own startup? You're just going to outsource, just outsource it to experts who already know how to do it. No one had done this for operations. Um, we raised about $10 million, top-tier VCs, all that other good stuff. Um, and we, uh, in 2022, so 2 years later, we went to go do our Series A. We had the right metrics for it. 2022 was not a good year to fundraise. It was a bad time, early 2022. On top of it, a lot of our revenue was services-based revenue. We had a services arm. Look, most startups, it's sort of the joke, right? It looks like it's tech, but behind the scenes, it's like all these people who are actually pressing all the buttons. We were more honest about it, frankly. And VCs are like, hey, it looks like your services. We made the really tough decision. We said, look, if we want to save Abstract Ops, we need to cut off the services from it and make it much more of a tech-based company. And so we had the opportunity decision, we had to make that choice. And it was sort of like, hey, look, I have this opportunity to go take the services-based sort of small little services-based business we had, split it off and see what that's like. I'd built 3 other companies that are venture-backed before that. Can I build a services company? What does this mean? What does this look like? where does that go? I still very much believe in the vision and mission of what we were trying to accomplish, which is that every single business in the world deserves world-class operation help because so many fail because they get that stuff wrong, or it's just like this tax on their business. You shouldn't have to pay it. Just outsource it to people who can do a great job. And sure, there's money to it, but like, once again, your time is worth way more than your money. And so that was the genesis of what was Levy at the time. We named it Levy to start with in sort of October 2022. And then 2 years later, we renamed ourselves to Shore.

So basically AbstractOps was the original company. And so that, did that continue to go off on the tech side and then Levy was the service side?

Essentially, they actually pivoted. So they are now more state registrations and really focused on the state registration side of things. So for every founder, you need to register in every state where you have an employee. And then if you're doing business in that state, you also need to do some registration work. It's really annoying, really convoluted. State systems are, of course, not known for being technically advanced. So you need to handle that. It just needs to be maintained and dealt with if you want to pay payroll in those states, as an example. So they went off and became a company that does that, and we kept doing the service side of things. But to finish answering your previous question, you couldn't raise money for a services company in 2022. Now, the funny thing is the world has changed a lot in the past 2 years. I probably have a VC reach out once a month at least to put money into us, and it gets them even more energized when I say, hey, we're not interested in taking cash.

But no thanks.

Exactly. So, so, but yeah, there's— so Abstract Ops is still doing their thing. I'm still an equity holder in them. We split off, uh, you know, it wasn't a spin-out legally, we're a separate entity, but they essentially assigned all their customers and revenue that they had with those customers to us. Um, and, uh, we've been able to grow from a team of 7 people to over 40 today.

Nice.

Yeah.

And kind of what's been the experience for you from bootstrap— or sorry, venture-backed lifestyle of hyperscale, you know, hit these metrics, to kind of more of a service business where it's about more linear growth?

It, it, it's to me been— it's different, um, but also not that different. Maybe because I've been in startups so long, I feel this constant sense of urgency to move faster and get things done. And, and that's no different than it would be were I at a venture-backed startup. On the other hand, we're kind of building a new industry. Like, this is the idea that you can outsource, right? So going back to this where we started, this founder was like, I was like, I asked this founder, I was like, hey, look, are you outsourcing your legal work to your lawyers? Like, do you have a lawyer right now? And he was like, yeah, of course. Like, why wouldn't— of course I have a lawyer. I was like, okay, you could do your own legal work. Why aren't you doing your own legal work if you think you need to be the expert on all these things? So to him it was like obvious, of course I'm going to outsource it to my lawyers, of course I'm going to get a bookkeeper. Um, but yet he thinks he needs to do his own operations. To me, that is where we have a lot of education to do. And unfortunately, education is slow and it's long. And, and therefore, being a bootstrap company gives us the time to hit those metrics without feeling like I need to report to a board every quarter that's making— that's saying, Why haven't you accomplished this and really put on that pressure? Even though I still feel that pressure every day.

You're likely having trouble raising money or selling your company. Personally, I've had 4 exits and I've raised over $145 million. If you want a free coaching session with me, just like, subscribe, and leave a comment down below letting me know what you think of today's video for a chance to win a free coaching session with me. I'll select 3 winners every single month. You just have to like, subscribe, and leave a comment down below for a chance to win. Now onto the video. And you also mentioned about going from Levy to Chore, and I want to talk about the rebrand because a lot of companies have to face this at some point. I've done it twice, I think, 2, 3 times, um, you know, in the past. And I'm just curious, like, What was the instigator? What led you to have to go through that process? And what was that process like?

Yeah, we had a trademark issue. So trademark issue came up. I thought and still think we would've won the trademark issue, but we were looking at spending— we spent a bunch of money on legal fees to start fighting some of the early stuff, thought we'd get to a negotiated settlement. The other party was not interested, sort of shockingly. I'm still not sure to this day why they wanted to spend as much money on legal as they did, but nevertheless, they were not interested. And so we got to kind of a point with my lawyers where sort of go, no go. Are we in for another, are we in for like $20K to $100K in legal fees? Or yes, we built for 2 years, built a really good brand and brand name, and we're building this up, Or do I make the tough decision as the founder to say, no, we need to move on and maybe make a change? And I like to think I should be proud of the fact that I said, you know what, I'm not willing to spend all that money on legal fees. It's money lost. Our name is good, but it was sort of meaningless. Can we come up with something better? And so once we made that decision, we did and moved quickly and got what I think is a really good new brand name out there. who's going to name their company Chore? The company that does all the admin for you, like does all the chores. So like, that's company and hope we never are forgotten. And that helps us with this educational journey. So in a weird way, I think it's almost a blessing in disguise, as frustrating and annoying as it was, it was a blessing in disguise.

Yeah. And sometimes it's trademark issues. Sometimes it's, you know, just missing the mark with a brand name in the beginning and having to reposition or having to open up Like, so I've had some brands where they kind of pigeonholed themselves to a market based on their brand, and I have to kind of go with a broader, broader scope brand. Uh, that was my experience. And, um, yeah, so it's interesting to kind of hear. And like, when it comes to like, all right, $20K to $100K in legal costs versus, you know, what was the rebrand package? Do you guys do it all in-house? Do you guys bring in like a, uh, you know, inside, you know, outside agency or anything?

Yeah, I mean, to, to keep with the theme of Outsource essentially the most important parts of your business except for the ones that are truly core. Of course we use outside experts. I'd be crazy not to. We're going to put all this money into something. I never want to do this ever again. So yeah, we use outside experts to make sure we checked our trademark. We use outside experts to help us with the design. We use outside experts to help us figure out the brand name. We went through a huge branding and naming exercise and I interviewed 20 different branding agencies. For it, to make sure we found the right person to help go through this process with us. So yes, we did all of that. I think we did it for an incredibly low amount. I mean, I think we spent overall, all in, including the new domain, including the website, we maybe spent about $15,000 total. So very, very, I think, compared to, I know lots of other companies that spend $50K to $100K at least. Um, so I feel really good about the price we got to get it done and the quality that we achieved with it. Like, I'm— I get compliments all the time about our website and the brand and everything else. So I think we did a great job, um, for a low price. And we use experts to get it done. I mean, like, we have an internal team that helped manage it, and we set expectations for our vendors, but we didn't do a large majority of the work ourselves. Except now the launch— when we did the full brand relaunch, that was all our own team, and we crushed it. We I mean, I don't know how many number of impressions we got on social media, but it was a huge, huge number. Um, and we did a lot of work there and that was an internal task on that front.

No, it's good to know. And I appreciate you sharing that story and being candid there. And with kind of your, yeah, we've talked a lot about kind of outsourcing ops. You talked about payroll as an example, but like, what are some of the things that you guys are actually taking over for, from like a founder perspective, having built multiple companies and Just kind of having my playbook of the past and just running that playbook. What are the actual things that you guys are taking over from founders?

Yeah, good question. So with Chor, at a high level, in a sense, you're almost hiring a fractional chief of staff. So most companies don't need a full-time chief of staff, and if you do, they're very expensive. A really good chief of staff is very expensive, and a good chief of staff Um, won't want to do a lot of the day-to-day admin. They want to do strategic work, big picture stuff, which is great. Like, that's what you should be paying them big dollars to go do to really make massive differences for your business. Um, we take on all the, all the nitty-gritty in-between work. So everything HR, onboarding to offboarding teammates, all the small things, running your payroll issues that might come up, you name it, run all of that. Compliance, all the things around compliance. So the state registration stuff, we use our partner AbstractOps to go do the compliance, but we manage them. That's another vendor that needs to be managed. There's the back and forth that happens with that vendor about what to do. We build a full diligence folder for our customers. Like, I'm sure you know this yourself, Jason, like when you have to go find a file, you're like, what is it? Is it in my Gmail? Is it in Google Drive? Where is it stored? Oh, and then I'm doing a fundraise. And so now I need to like spend $20,000 on my lawyers to build a diligence folder. No, just have it all ready to go from day one. We literally will build a full diligence folder, fully renamed, every document listed. You can easily find it ready to go. We'll manage checking all of your mail, right? You probably have a stack of mail sitting next to you at your house. You're like, I don't want to open it right now. Exactly.

As I look at the mail.

Exactly. So as a founder, I don't want to open any of this mail. Literally, we have lots of mail that comes in as a business. My team opens it. We get it virtually. They open it, they look at it, they take action on it. I never even have to think about it. It doesn't even rise to my level to have a discussion in most cases. So it's compliance, finance. We're not bookkeepers and accountants, but we partner with them and we're the main point of contact. You also know this. Bookkeepers love to ping the CEO of like, hey, what's this bill for? What's this charge for?

Yeah. Every month I get the Going to the Excel sheet and, you know, it's like, what are these 13 things that we can't figure out on our own?

Right. What if you had someone who would do all that for you and be that point person and get that done? We also do accounts payable and accounts receivable. So those are things that once again, you need to pay your vendors, you need to charge, bill your customers. Bookkeepers don't do that work. Usually we do. And the last one is equity. We will run your equity for you. So it is highway robbery. No offense to all the lawyers who are listening to this. It's highway robbery when a first-year law associate is your manager of your Carta account. Like, give me a break. I mean, like, I went to law school myself. I did not go to law school to do spreadsheets and manage equity for a startup. It's not legal work. 99% of equity is not legal work. Why are you paying a first-year law associate $500 an hour to hit their billables for the year? That's insane. Um, so we do all that too, and, and it's also all tied together from my perspective, right? If you hire a new person, you got to add them to payroll and you need to issue them equity. So those 2 all are tied.

You know, it's, it's great that you bring this up because I feel like I could see why founders maybe get hung up and like, no, I want you to learn, or I, you know, feel like, oh, it's not that much work. The problem is mindshare and like what's consuming your mind as a founder Of that little thing like, oh yeah, I got to pay these people. I got to do that thing. I'm like, oh wait, we had that one billing issue I never really figured out. I got to, got to go deal with that. And then it's like, just, but the problem is you never do it, but it's still in your mind.

Correct.

And it sure, it only really takes an hour if you're really going to like go and do that one task, might only take an hour, but most founders procrastinate it because it's not core. It's not their priority. But it has to get done. Um, and they know it doesn't take that much time, but it's just that mind— they probably spend 4 times as much time having it interrupt their day than they do actually getting it done or just handing it off and having it be someone else's priority where they don't even have to think about it.

Um, I mean, it's the opportunity cost of your time, it's the context switching, and then you have to make the— and then it's like, what, Friday night you're gonna go spend time figuring out like this payroll issue when Gusto and Rippling support is closed, and now you have to be like, oh crap, I now need to do this Monday morning when they're open again. Like, give me a break. What if I could just hit forward? I get this email from them saying something's wrong with your payroll, hit forward to my team, take care of it, let me know when it's done. Great.

And what, what size of companies do you see yourselves kind of like being a best use case for?

Yeah, so we are, are sort of ICP in a sense is anywhere from 5 to about 75 FTEs, so full-time equivalents all over the world. Um, you know, most companies have to have raised or are making at least like $500K plus a year, right? I mean, like, what if you're below that? You're probably still figuring out product-market fit, and you should spend your money and time on that. Great, go do that. The moment though you start getting above that number and you have at least $500K in funding, your VCs are saying, hey, you need to move fast here, start using us. Like, that is the time to start using us. We will get you. I mean, we have 60 plus testimonials on our website. I ask every single one of our customers, how much time do you think we've saved you? Invariably, they say 5 to 10 hours a week, so 20 to 40 hours a month, which is about 500 hours a year. So that's three months extra of time. So as a founder, if I can get an extra, I don't know what, 20%, 30% of time just to focus on building my product and get customers. Oh my God. Oh, and then on top of it, we're going to help you do some other stuff financially. We're going to get you $150K extra in cash that you never— speaking of this founder I spoke to this morning again, he literally told me the bank he has his money in, and I won't call it out here. They make no interest in the bank account. I'm like, okay, do you know that? He's like, he doesn't know and he doesn't have the time. He also doesn't have the time to move it over because if you move it, you got to switch where your payroll is getting taken out of. It is a process to do it. which is why these banks make this money. But you know, if you have $1 million in a, in a checking account that pays you zero interest, you're essentially effectively paying that bank $40K a year for their bank, for their bank. Whereas you can move it to another bank that will pay you 4% APY, that's $40K in free money to you as a business. But you might not know it, or you might not want to deal with the hassle of it. So I know, so what we try to tell people is we're going to save you, we're going to give you $500 Extra hours a year and $150K in cash to not have this be a problem in your mind. Some people get it. Some people want to be stubborn and waste their time and have their company fail.

So that's— Well, I was just like, you're off the cliff. If you don't do it, you're off a cliff.

You probably are. I mean, you probably are off a cliff. Like, it just, it is what it is. Like, it just, you probably are. Like, this is just, you don't need to use us if you want to go hire a full-time person. to go do it, you can do that too. I tend to believe the more people you have to hire and manage, the harder your life is. But hire someone or use us, just don't do it yourself. Life is too short.

No, I've run across that myself. So I have a real estate portfolio that I run and I run Thunder full-time and I was just like, I'm spending— I get texts in the middle of the night like, oh, this feels like Cannot be dealing with these issues. Like, it's, you know, so I finally got like an assistant that just full-time runs that business for me now. And it's just like the mindshare out of my brain of just like, I get a note, I get like a debrief, or maybe there's like this one thing of like, oh, should we do that or this? Okay, sure. It's a quick answer, but I didn't have to do any of the research, didn't have to call anyone or contact anyone. I'm like, oh, thank God. And especially, you know, as, as a father with a 3-year-old and a new child on the way, probably in the next 48 hours.

Wow.

Congratulations. I was like, oh, my wife could call me at any moment. Um, but, uh, yeah, it's the, the time aspect really kind of nails it. And I think that's something that a lot of founders don't, don't realize. And I think you also mentioned you, you have kids, correct?

Yeah, I have 2 kids. I have a, a 3-year-old and a 6-year-old.

Nice. So, you know, you get the importance of time and availability and being able to not be up at 9 o'clock or, you know, like a, on a Friday night doing ops.

Correct. I mean, what, what would I rather— like, this is, this is— yes, I mean, founders, anybody really, but, but where and how you spend your time is so critical. And so like, look, I could be doing ops work, right? You know, at 7:00 PM on a Friday or spending the time with my kids. Um, I will not remember the ops work that I did that Friday night. I might remember the time I spent with my kids, and I know they will really remember it. And so that is hugely valuable to me, but also it means that when I can go do work, I'm going to go focus in on the things where I can make a massive difference. And that my future teammates, employees, and if we ever go raise money, my future investors will care about That man, you did some really cool work, Adam, to go hit these key numbers and key metrics. Or, you know, being on this podcast while I'm able to be on this podcast because I have other people who are helping me out with my business right now. If I didn't and I had to run every single aspect myself, I wouldn't have time to go help. Yeah, first of all, shoot myself. But like, second of all, I wouldn't have time for it. So it is a critical thing to figure out how and where you spend your time. And being really thoughtful about those decisions.

And you, one, you're running Chor, but you're also a prolific investor. I'm curious, like, walk us through kind of how you split up your time when it comes to analyzing deal flow and sale, running Chor and things of that sort, like, and then ultimately like picking companies to back. How do

you balance? It's a funny question in the sense that I had a call earlier today. I'm going to a conference in Nashville for Vanderbilt where I went to undergrad. And so, the question sparked an idea in my mind, which is I actually kind of have always been this way where I want to double dip on things. And what I mean by that is basically I want to get sort of a 2-for-1 special always. It always feels good to do that. In college, I did that. I did 2 majors and a minor. when I graduated. So I had 2 majors and a minor. Yeah, people like, you're spread so— oh my God, wow, that's impressive. No, it wasn't. I just took all the courses that gave me double credit for everything. So like, I got every course, it gave me credit for one major and another at the same time. And I was really thoughtful about doing that. I mean, I was able to pull it off and not have to work any harder, I don't think. Maybe other people thought so, but I don't think a lot harder than anyone else. And it's sort of the same thing that I do with My life and work now. So, for investing, like sure, we work with early-stage startups. That means I get to talk to all these startups every day. And guess what? I'm talking to them not about whether they should I should invest in them, but what their business is doing. How good are they doing? What are they raising next? What are they excited about? It's not a pitch; it's a conversation between two founders. So that's awesome. So then I can already make decisions. So once again, using the same guy as an example from earlier today, like there's no chance in hell I'd ever give him any money. It wasn't a pitch either, right? He wasn't trying to pitch me.

I hope he watches this episode.

Zero chance. I mean, he may or may not. I hope he does. I hope he'll learn from it. We left on a good note. Of course, I'm being a little bit too harsh, but he should. That's a lot of how I make my investing decisions, but I'm also able to do both. And even the same thing with family stuff. I mean, I pay extra and have a smaller house to live in the middle of San Francisco. Guess what? That means I don't have a commute. If I need to go to a meeting, most of my in-person meetings are a few blocks away from my house walking, or I get on my bike to go to have those meetings. I don't need to get on an airplane very often because 99% of founders end up making it to San Francisco at some point. So I don't need to travel. So I've done a lot of things to optimize how I, how I can spend my life and make sure the people and the things that matter the most are getting the large majority of my focus to the detriment of other things, right? I don't have a lot of hobbies. I don't have a lot of friends that I spend a lot of time with right now. So there are trade-offs. Absolutely.

I think that's warranted. I think anyone that's high-performing, there's always the, the things that kind of get left behind or not as much of a priority, but You know, you get to pick your lane. Like for me, hobbies, eh, not really. You know, work's a hobby. My family's a hobby. Those things bring me joy and I love spending time on those, those 2 things more than anything.

Exactly.

Um, so I don't think it's a, it's a loss, but you know, from other people or maybe society's perception of what a person should or should not do, maybe. But that's the beauty of today's society. You kind of get to do whatever you want and chart your own path. So yeah, I was looking you up and saw also you're involved with the Autopilot Fund. So I'm seeing a general theme of efficiency and operations and things of that sort. And so what's that experience like for you, not just making your own individual investments, but also being participating in a fund?

Yeah, so the Autopilot Fund is actually my third fund. The other ones are not really publicized or public, but it's my third fund. And the idea, of course, with that is like, hey, like we want to have dry powder to invest in the best companies. And I actually put that together with my former co-founder. So when we split up Abstract Ops, we both liked to do investing. We both enjoyed doing it. And it was a tough time. Like, don't get me wrong, like we had a sort of a co-founder split. Like it's a tough discussion to say like we need to split the company up. We need to kind of shut down a lot of the money we're spending. We need to fire a lot of people. and make a bunch of changes. Like, that is a tough decision. But to his credit, he and I, I like to think, both really play long-term games. And so we had already had a fund at that point and we wanted to keep it going. And so we did. It was the Autopilot Fund. And so we do investments together, mostly focused on sort of underlying datasets for AI, but a lot of general things too. And it's really like, does a company meet our standards? And what we're looking for is the founder targeting a market that makes sense. Do they have the right level of energy for what they're focused on? Do they have an obsession for why they're focused on it? Um, and, and those are the sorts of things that get us excited and, and move the needle. And we like to think we'll have great returns for our LPs.

So that's what I was going to ask, is it just you and your partner, or do you guys raise, uh, outside money from, from LPs and you have that kind of fiduciary responsibility to those LPs as well?

Yes, we have and we do. And that brings its own level of responsibility, but it's good in its own way. I mean, I said, like, I think for them, and this is where I started, like when I started investing, it was, I started my first investments for 2011. So that's a year after I moved to San Francisco. And the lesson learned was basically there are so many opportunities out here. And so many people don't have access to them. And, and so essentially I could arbitrage the fact that like I was going to events every— I didn't have kids, so I would go to events like every single night and meet people and shake hands and get to know founders. And you could sit down with people and have a coffee with them in a one-on-one conversation and say, why are you building what you're building? What excites you? Um, it may be an example of that briefly, of this obsession. One of my better investments is, uh, a bunch we can talk about, but Um, one company called Human Interest. So they're a 401 company. Um, Human Interest, uh, I sat down with Roger Lee, the founder, at a coffee shop, and he was telling me about his idea. Like, we met at some other startup event, we sat down for coffee, and he was like, oh yeah, like, I took the— I don't know if it's the Series 7 or whatever, but it's some major finance test you need to take to be registered to sell 401s, essentially, or to be a 401 broker. Um, and you have to do it in every state that you want to offer your, your product. And he was like, oh yeah, I've taken 7, like 7 different ones in 7 different states I passed. And I was like, oh my God, like that's— these tests are tests that people fail a lot of the time. You're also running another company at this point. I think he had maybe still not fully left his other company, and you've taken this test to pass it and are building this new company and just got into YC. Talk about obsession.

Yeah, no, that's clear. And what are some of the other companies that you're kind of proud of in terms of your investment track record and kind of what made them stand out in those early days?

Yeah, I mean, one interesting one is a company called Diamond Foundry. They're doing some really cool stuff. They were kind of the first synthetic diamond company out there and are building a ton of really cool stuff even today. Not as publicly known, but Their founder was somebody who had built a solar company, got killed by the Chinese because Chinese kind of flooded the market with solar. But he really knew his stuff, was really smart, was an incredible, incredible just like founder and focus. And he had a really clear vision for where some of this stuff could go. And it was very exciting. So that's an example. Another one's BetterUp. Alexei, the founder, couldn't raise. I mean, like we were, I think like the second check-in. And to me though, Alexi was so focused and even more important, the idea was really clear to me, right? When someone says to you, there's executive coaching for executives, why isn't there coaching for everyone else? Like, if executives think that coaching is worthwhile for them, wouldn't it be worthwhile for everyone else? Yeah. Like, obviously in retrospect, of course it seems obvious. There's lots of companies that do this now.

Yeah.

But at the time, it was really revolutionary. And they had to figure out how to make that viable from an expense perspective for everyone else. There's a company called EvenUp, a legal company. Checkr is another one, background checks, on and on and on that just made sense at the time, even if they seemed kind of crazy to most people. To me, I was like, oh yeah, this is a no-brainer and pretty obvious.

It's a lot of fun, especially being kind of the thick of it. out in San Francisco and kind of feeding off that energy and getting access to those opportunities. It's, you know, if that's the place you want to be and those are the opportunities you want to create for yourself, like San Francisco, it sounds like it's back actually. Yeah. Let's ask, how is San Francisco right now? Is the news covering it appropriately?

No. I mean, the news is meant to shock everyone and get interest, right? The news is not actually to tell you the facts. The news is to tell you what will get you to watch more of their TV programming and watch advertising. I think San Francisco, look, there are parts of San Francisco that are challenged. They've always been challenged. They maybe always will be. I hope not, but maybe always will be challenged. That is unfortunate. That is in some touristy areas, so people see it a lot. But guess what? The neighborhoods are crushing it. They're a ton of fun. The food's amazing. This is the center of AI, which depending on your perspective on things, AI is the future, uh, on almost every single product vertical out there.

Hard to disagree with that statement.

It is. So, so if that's true, then wouldn't you rather be around— I mean, like, I go walking in my neighborhood and you walk by all these people having walking meetings, and I'm pretty sure almost all of them are from like major AI companies. Um, that's all happening and it's all here. And then you add on top, just for my own biases, like, I've been here 15 years, but like The weather's perfect in my mind. I bike everywhere. I walk everywhere. I have great food. Yeah, it's expensive, but that's because a lot of people want to be here. And because it's— I can bike to the beach, I can drive to the mountains, I can go up to wine country, and I go on and on. But it's, to me, a wonderful place to be. I feel really privileged and lucky that I'm able to be a member of this community.

It's great to finally hear some positive words about San Francisco. Unfortunately, every time I was going, um, really like heavily in like 2018 to 2020, it was, it was not great because I was going to the tourist areas. I was like always in the thick of the tourist areas.

Correct. That's the problem. Don't, don't stay in the Tenderloin. Kind of probably avoid Union Square a little bit, which is close to the Tenderloin. That sort of area where a lot of the hotels are, unfortunately. Um, it's, it's been an issue, but it's been an issue for 30, 40, 50 years. And yeah, but it's very shocking when you come here and you see that. And every city has places like that. They just are usually in the outskirts of the city for historical reasons. It's just in the middle of San Francisco, and it gives San Francisco a bad name because people— it gets put in people's faces and they're not used to it.

Yeah. LA and San Diego are not far off. Very similar.

And I don't live near it. I don't see it. And you kind of get used to it, unfortunately.

Nah, that's fair. Adam, it's been an absolute pleasure having you on the show and just talking about how founders should be prioritizing their time. And I appreciate you sharing more about Chore. For founders that might be interested in Chore, just your background, what would be the best way for people to learn more?

Yeah, go to hirechore.com to reach out, learn more about what we're building. Feel free to follow me or get in touch on LinkedIn. Um, I think it's, uh, Adam Spector 2, um, at LinkedIn, but you'll find me. It's Adam Spector. I'm on LinkedIn, pretty prolific out there, uh, so easy to find. Um, and, uh, follow some of the content. We try to produce really high-quality stuff to help founders be more successful, since in the end, if every founder can be a success, like, a rising tide does lift all boats. And the more successful startups in the world, the more successful the entire world will be, which is a win for all of us.

I completely agree. And actually, I want to, I want I want to end with one more question. Please. If someone's going to try to get you to take a look at their deck and try to win you over in terms of investment, how would they get your attention?

I do sometimes appreciate really well-crafted intro emails, but those are tough because I get a lot of emails, so I don't always see them. I think probably the way to get my attention is be willing to have a conversation with one of my teammates first, because now a lot of the stuff that comes in, Cold outbound. I send it over to one of my teammates, and you have to be super super open to that. So blow away my my partner and teammates about why you think we should chat. And if you blow them away because you're good at pitching, you're good at storytelling, which is a critical skill for founders, then yeah, I look forward to having a chat with you. Even better, if you want to become a customer, I'm open to all of my customers to always chat. They are always. I'm a resource for all of my customers. So if you really want. Um, do you have a longer— become a customer. I'll talk to you all day long.

Fair enough. Well said, Adam. Thanks so much for being on the show. I look forward to getting this out to our audience.

My pleasure, Jason. Thanks for having me.

Thank you for watching today's episode. As a reminder, I'm your host, Jason Kirby. I have built and sold multiple companies with over $135 million in transactions as either a founder, operator, investor across multiple industries. I'm currently the managing director and founder of thunder.vc, where we help companies and founders at all stages navigate what capital to raise and who to raise it from, and help improve companies' odds of raising capital. If you need help, reach out to us at help.thunder.vc. If you like today's show, please share with your friends, give us a like or comment down below. And as a reminder, this show is published weekly, and to get notified of new episodes and our newsletter, be sure to go to our website at join.thunder.vc. And if you sign up today, I'll send you a few freebies on how to negotiate a term sheet, how to get a free list of relevant VCs, and much more. That's it, no more shameless plugs. Thank you and see you next week.