Delian Asparouhov - Risk, Venture Capital and Agency

Hey folks, welcome to Narratives. Narratives is a podcast exploring the ways in which the world is better than in the past, the ways it is worse, and the paths towards a better, more definite vision of the future. I'm your host, Will Jarvis, and I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos@ narratives podcast.com well, Delian, how are you doing this morning?

Doing good. Excited to excited to chat today?

Absolutely. Thanks so much for taking the time to come on the show. I really appreciate it. Do you mind giving a brief bio in some of the big ideas you're interested in?

Sure. So sort of sped up version of my background. I was originally born in Bulgaria, moved out to the United States with my parents when I was a kid, kind of bounced around the United States. Eventually ended up at MIT thinking that I was going to become an academic. Instead, I sort of took a hard left turn and after sophomore year ended up dropping out of school to make my way off to Silicon Valley. Founded my first company, which is like an enterprise healthcare company. Went through YC Summer 14 with it, ran it for about three and a half, four years. We kind of got to ramen profitability but never grew fast enough to raise Series A and went off and became, after shutting down the company, became the VP of growth at this company called Teespring, which is another YC company, and then ended up switching over to the investor side of things. I've been an investor now for about five years or so. First two years of that over at Khosla Ventures with Vinod Khosla, and in the last three years or so over here at Founders Fund and mostly focused in those five years on investing in sort of seed Series A and mostly in what I call sort of just anything but boring software. So no consumer social, no enterprise SaaS, nothing like that. About everything from like regulated industries like healthcare tech, fintech, insurate tech, you know, as well as a lot in the world of, you know, deep tech, you know, hardware. So everything from like aerospace, industrial automation, robotics, home construction and yeah, you know, I think, you know, one of the things that I really, in some ways, you know, like about venture is that it's one of the, you know, few jobs where as an adult you actually still get paid to, you know, continue to learn. And so, you know, over the course of, you know, my time in venture, I've gotten to, you know, dive into a variety of different fascinating areas. I think partially from spending Some time with one of my primary mentors, Keith Raboy, who's also on the board of, or is one of the founders of Opendoor. Learned a lot about sort of the like, you know, real estate industry and in particular was just like fascinated with how inefficient like single family home construction was. So, you know, a couple of years back I was fascinated with the idea of like, you know, why, you know, why is sort of, you know, why single family homes inflationary. But if you look at almost every other consumer good, they're extremely deflationary, right? Phones, TVs, etc. And most the reason being that like, you know, most of the things that are deflationary have largely been produced on sort of automated, you know, assembly lines. And so why hadn't anybody taken that same approach and done it with homes? Turns out homes have a lot more SKUs in them, so it's a little more difficult. And the thing is, a home is much more difficult to deliver fully finished. And so in like an automotive line, when you're assembling a car, there's a few different sort of like sub assembly lines and then there's sort of the final assembly line known as like the general assembly line. In homes, the general assembly line has to happen on site, in the middle of the outdoors. The wild sort of conditions can't happen on a factory floor. And so there's a ton of different difficulties that come with that. And so I ended up getting fascinated with that whole field that I got to invest in, this company Cover, which is based out in la. And so it's been fun to see that as my fascinations shift over time, I'm able to then invest in the company and move on to the next fascination. So right now I spend a lot of my time in aerospace trying to think about, okay, how do you sort of take this infrastructure that honestly mostly Elon has built and that infrastructure being the equivalent of AWS in 2008. And now you've got this great infrastructure so you don't have to build your own data centers. What are the interesting applications you can do on top of it when you don't have to build your own data center that is your own rocket. And so working on that myself in the space manufacturing world at Varda, but then also excited to be investing in companies like Hadrian Impulse Space, other people sort of building on top of that infrastructure to provide those next generation use cases. One of the other areas that are particularly fascinated by right now in particular because I'm sort of in The I think of it myself as the world of sort of like ivf, fertility, surrogacy, how to sort of encourage the replacement rate of western countries not being below 2. Right now the average child rearing rate in the United States is actually below our death rate. And so really fascinated by the various companies that are working on trying to make that easier. Everything from obviously post child being born and the homeschooling world all the way back to embryonic sequencing, polygenic risk scoring, surrogacy brokers, IVF facilities. And so that's one area that I'm spending a decent amount of time on. So yeah, I'd say multivariate interests and areas that I like diving into, but I like the things that are sort of the things that actually shape society but are super inefficient. And now everything from housing costs to babies are probably the current fascinations.

That's great. That's great. I'm curious, how do you pick problem areas to explore? Is it just you look at is like a top down approach? We look at the biggest problems facing humanity right now. We're below replacement in the west or housing prices just insane explosion in the price of housing in the U.S. do you just see a problem and then go down and try and figure out why and where people are building solutions or is it just more ad hockey? Like you see a company, okay, like wow, that's super interesting, let's go investigate. And then you go up to the broader problem.

Yeah, I think I tend to be more of like a bottoms up thinker than a top down. I think there are people in the world how people even at my firm, let's say, I think the Peter Thiels of the world are very much top down macro provide these general and overarching frameworks on how to think about the world. And I think I take a very opposite approach with just how I get fascinated with problems and where I gravitate towards in that in the world of like, you know, IVF, fertility, etc. Is mostly just like myself going through the process as a user, you know, is the fascination with, you know, home construction. It was honestly just like, you know, seeing, you know, John Jaffe from Lennar, he's the president of Lennar, which is the, you know, the largest home builder in the United States. And you know, him, you know, talking about, you know, how they construct homes, the difficulties of that. And then, you know, I think it's, you know, I sort of get these like, you know, brainworms in my head where I'm like, oh, that's like super interesting. And I end up spending like the next three weeks talking to every single, like home building, you know, expert digging into, you know, every single company. So I'd say it's a little bit more bottoms up add curiosity. I can't just help but scratch the itch. And sometimes I get a notion it's like, it's not that interesting of a solution and that interesting of a problem or something that can actually be fixed. And sometimes you ended up discovering like, oh my God, this is actually a really big problem and people are kind of talking about it, but not nearly enough. So I'd say fertility is one of those things it's been interesting to see. For example, Elon has now tweeted, I think twice in the past six months about people needing to have more kids. So it does feel like it's starting to get a little bit more attention. But even a year or two ago, it still felt like one of these topics that was under discussed, the Western fertility rate.

Absolutely. And it seems like there are a lot of problems like this that just go completely unnoticed in society. I just had an academic on from AEI yesterday who works on this crazy fact that 7 million US American men don't have a job, aren't in education, aren't doing anything, and this is completely ignored. No one's talking about this, this huge problem. I'm curious, how do you get up to speed in an area? Do you have like a systemic process where you like, call an expert first and then you like. Or is it just like trying to do research on the Internet in the beginning and then it's finding experts or is it just completely ad hoc and it just depends?

Yeah, I think I don't have an infinite set of data points on how I've succeeded in doing this. Aerospace probably being the only one thus far where I comfortably say that I have a very good understanding of the entire sort of aerospace industry ecosystem, what the upcoming business models are and if, you know, sort of reverse engineer how I came about it, it was mostly just like spending lots of time with smart people in person. Right. You know, I think, yeah, there was some amount of like, you know, reading online or, you know, some amount of like, you know, textbooks. But like, that was not where the majority of the interesting insights came from. It was ultimately just like going to a lot of aerospace conferences, practically reaching out to and speaking to a lot of different, like aerospace CEOs and just like spending time around people that thought really deeply, you know, about the industry. And it's fascinating sometimes how, like, even people within the industry don't take the time to survey their own industry. I think it was surprising to me that very rapidly I became more, well, networked in aerospace than people that were even working very practically in aerospace because it just wasn't their core focus. Their core focus was just execution versus I was very proactively going out to try and meet everyone, learn about their philosophies, how they thought about the industry, and eventually you end up amalgamating a higher level view where you've seen everybody in it. And so, yeah, I'm pretty obsessive with the fact that right now I'm diving into some of these new areas around ivf, fertility, life sciences. And like, my first thing is just like, okay, who are the experts that I can talk to? What are the conferences that I can go to? And just like, you know, start to inundate myself and learn, you know, v. Osmosis. So I think I'm much more of a, you know, I don't know what the right thing is, you know, is it verbal, is it visual, etc. Learner. I'm like a, like, you know, visual osmosis learner. Like, you know, the way that I learned the best is like having an expert walk me through their paper. Like, I can go read the paper and yes, I'll like you to absorb it some amount. But being able to like live Q and A like, basically like, you know, with the author is always much more fascinating. And I think people underappreciate if you just like, have a, like, you know, very inquisitive mind and, you know, clearly written sort of cold email that explains why you're excited to chat with them. Almost anybody in the world will like, you know, hop on the phone with you and, you know, walk you through, you know, what they're up to because they're just like, so like, you know, people love explaining their work. Right. You know, this may be being a perfect example. Right. I'm always happy to hop on a podcast and explain what I'm up to. Turns out, you know, even the, you know, top IVF researcher in the world is happy, you know, to do the same. Because people very rarely are, you know, interested and, you know, curious about their work and, you know, dig up, you know, their papers.

That's great. That's great. And that is my motivation for starting the podcast in the beginning. I'm curious. Does that experience make you bearish on remote?

Oh, yeah, extremely so. I mean, I think it's just hard. Some of these conversations require some level of meandering and just spontaneous connections. And I think it's just really hard. If I were to recreate that aerospace thing, aerospace, let's say osmosis, period, and I did it entirely remotely, it's not the same. It feels so much more artificial where it's like, hey, I would like to like hop on a like 30 minute Zoom call with you. But then the zoom call like needs to have a particular topic or something versus like just sitting down at a conference and like you know, grabbing lunch and then this person comes over, then this person comes over and you just kind of, you know, absorb and you know, listen. I think it's just like really, really hard to create that sort of experience. It's actually why I think in particular the like, you know, world of remote actually hampers people earlier in their career the most because like if you're sort of mid stage and you're like a VP of product at like XYZ Co. At that point, like, you know, you may not be actually interested in like building up your skillset anymore. You're just like pure execution mode. And so yeah, it's great for like the, you know, VP of product that's 32, married, has two kids, like remote. I totally understand why somebody like that would absolutely love remote. But like the hyper ambitious 24 year old that like really wants to learn from them, man, it kind of sucks reporting to that VP of product because like you don't get as much of the spontaneous interaction and you know, if you're the hyper curious, you know, whatever, you know, 20, whatever I am, you know, nine year old or I don't remember how old I am, 28 year old venture capitalists that want to keep learning via these types of spontaneous osmosis interactions, I think it's tough to do that remotely. To speak of the devil. I am in an in person office right now at Ramp in New York and surrounded by a bunch of 20, my brother's 21 to 28 year old, hyper ambitious software engineers, product managers, product operations folks that are just outside of this office. And I can tell you these folks are moving a lot faster and learning a lot more than people that are trying to do the same thing over zoom.

Definitely. Well, it absolutely seems like there's a lot of legibility problems, right? You know, like the problems you're working on often are difficult to describe and much easier to kind of understand in person. It seems like. I'm curious with Varda, was it a top down Approach as in. Or was it like, you know, I want to build a company, a space company, and then I'm going to go out and figure out what, you know, what's the best problem I can solve? Or was it, you know, I know manufacturing space is this huge $20 bill on the sidewalk. I just need to go vet that idea.

No, yeah, it's very much the latter. And it wasn't even like, let's say, a vetting of the idea. I'd been thinking of the idea for almost a decade before pulling the trigger on it. It was actually in Q4, 20, 19, Q1 20, before even starting Varda. I was so convinced that there was an opportunity here that actually spent most of those two quarters talking to everybody that was working on the problem. There were a variety of different, what I'd call more academic type groups that had been either publishing papers on it, doing small scale experiments on the iss. And I was actually hoping to invest in one of those groups and ideally help them scale their work beyond the ISS in a much more sort of commercial, venture, scalable fashion. But unfortunately just could not find a team that I was excited by, a team that was excited to actually take that sort of ambitious, more risky approach of moving off of the ISS and potentially not necessarily just relying on NASA for funding. And so I actually originally put the idea back on the shelf once Covid hit. And then as we were sort of in the summer Post Covid, summer 2020, was realizing, man, I still am like really excited about this idea and I honestly more had, I had zero interest in starting a company again. Like, I had a lot of PTSD and frustrations from my first go round realizing that maybe I wasn't the best suited to be the CEO of a company. And so if anything, it was extreme. It was definitely not like, I want to start a company and let me go figure out what to work on. It was more like, man, I'm so obsessed with this idea and it bugs me that nobody's doing it correctly. And like, fuck, the one thing in the world that I really don't want to do is start a company. But like, if this is the only way to solve it, then like, you know, maybe I will, but only if I like put together the perfect founding team, the perfect financing and cap table and like have it ready to go. And I remember thinking at the beginning of the summer, like, you know, you know, June, July 2020, I was like, there's just no way that like I line all these things up. Like it's Covid it's going to be impossible to do this. And then by like, you know, December, I had the perfect founding team, I had the perfect financing lined up, etc. And I just remember thinking I was like, it feels like I am like looking down the double barrel of a shotgun and I know how painful it is to blow my brains out because I've blown my brains out before. And yet again, I'm choosing to pull the trigger and say, yeah, here I am a year and a half later with my brain splattered against the wall and like, why the fuck did I do it? But some problems are worth splatting your brain against the wall for.

Absolutely. Absolutely they are. Do you think on the margin, more founders should wait until it's like, man, I just have to do this instead of trying to put a square peg in a round hole.

Yeah. I mean, this is the, you know, classic feedback that I give, you know, especially to, like, younger founders that are like, ah, you know, I've got. They have this like, you know, and I had this too. I had this like, mental image of, like, oh, I need to be a founder because of, like, the, like, status or respect or like, you know, the access that you got to, you know, certain individuals or being able to, like, you know, talk about, you know, the fact you fundraised. And it's just like, you know, that was partially why my first company failed, is it was like ultimately a problem that I wasn't sort of deeply, deeply, you know, passionate about. And that was sort of the promise that I made to myself after my first company was, you know, the only, you know, if I were to ever do this again in the future, it needs to be a problem that is like, so brainwormed in my head that I know that no matter what happens, if you chop my, like, you know, feet off, you know, make it so that, like, you know, I have to spend every damn dollar in my bank account. I'm going to care about this problem so much that I will, like, still do it. And for a long time I just, I thought I was like, it's no such problem exists. You know what I mean? But it was that, like, exploration of space manufacturing as an investment thesis and then noodling on it over the summer. And I remember there's actually, you know, funnily enough, the way that it sort of transitioned from, you know, idea in my head to, oh, fuck, I might need to start a company to do this was it was actually like, probably like May or June 2020. And I can like, dig up the tweet. But it was effectively like, you know, drawing this correlation between, like, you know, the, you know, government is printing shit, tons of money. That means, you know, interest rates are going like, you know, crazy, crazy. Low cost of capital is effectively, you know, zero. Now is probably the best time in human history, effectively, to like, start a deeply, you know, capital intensive, deep tech company, especially in aerospace. I remember I tweeted that and I was like, oh, fuck, I got to go do this idea. Because it's both, like, the right time to do the idea. Because Falcon 9 is reusable and starship is coming online and the capital environments are perfect right now to basically start this type of idea. I think more founders should take this approach of you should be begging yourself to find a solution to the problem that you want to solve that isn't starting a company. And if, and only if the only way to solve that problem is to start a company, then once you do it and the people that take this approach of like, oh, man, I got to start a company for starting a company's sake. Those people all end up, like, you know, depressed three years in because it's like, even if your company's, like, successful, you're working on like some boring enterprise SaaS thing you could give like zero shits about. The problem is like, the moment you hit any single moment of like, adversity, you just, you know, you, you know, surrender at the, at the first, you know, you know, you know, fire from the enemy. And so, yeah, there's just so many examples of this of just like, you know, even if the first three years, four years are easy because you chose the, like, hot new web, three SaaS, social, blah, blah, blah, no company is smooth sailing all the way through. And so then you're Ryan Breslow quitting at the 12 billion valuation just when the going gets tough. And that's not what ends up making you a top tier entrepreneur in the long term. You got to stick it out.

Absolutely.

And it's only fun to stick it out if it's a problem you really believe in.

That's right. That's great. I'm curious, what do you see as the biggest bottleneck? You work in venture, so you get a good view on this. What's the biggest bottleneck to getting more breakout companies? Is it capital? Is it smart founders working on the right problems? What's your sense of that?

I actually believe, and I think this was Sam Altman that's tweeting about this a lot lately. But I'd have to go back and look, but it's basically just a lack of people who have been trained with high agency. I think there is a significant under appreciation by, you know, call it with some level of like intellect, network, you know, access to capital, et cetera, under appreciation of like how much agency that gives you in the ability to like manipulate the world to the future that you want to, you know, see. And I think that's what's mostly lacking like it's not for a lack of like Stanford educated computer science grads. There's like a semi infinite number of those. I could probably throw a dart off like this office building here and I'd probably hit a Stanford CS grad. There's definitely not a lack of that. It's definitely not a lack of capital. There's still like, even with, you know, the current public markets, they're still semi infinite capital if you have the right ideas. And so I think it mostly comes to just this sense of agency, of tackling a hyper ambitious problem with just the right skill set, founding team approach that to me is sort of like the lacking founders. The lacking factor is these sort of high agency founders that are tackling something truly, truly ambitious. Not an incremental, whatever SaaS for plumbers type thing.

And do you think that's something we can perhaps modify, encourage people to have more agency, give them some kind of hero license? Because you found one right with Varda. So maybe there's some process or maybe this could just be inbuilt, you could just be a high agency person or something.

Yeah, I don't think that I had some sort of natural predisposition to agency. I do think that this was something that was either coached into me, encouraged into me, or just the fact that I got to spend time early in my career with very high agency people. And I don't know what the right way to scale that approach is because by default the whole point of this is that there's a lack or a scarcity in high agency people. And so if the only way to scale it is osmosis with other hygienic people, that obviously it's like a relatively limited function. But as an example, I kind of skimmed over this in my original sort of bio introduction. But actually my very first job in Silicon Valley was the summer of 2012 being an intern at Square. And part of why I even prioritized Square was it's not that I was particularly passionate about mobile payments for cafes. I was particularly passionate about just working with Jack Dorsey. And this was in 2012 before Jack is who Jack is today. You know, back then it was clear that he was like a top tier entrepreneur, but a much more controversial figure. But I was just so fascinated by the idea of like I wanted to work with somebody like him, right? And at the time there wasn't like, you know, Elon was still under the radar a bit slash, like, you know, maybe I just wasn't as fascinated with him at the time, but I was like, I want to work with this like magnetic, clearly super high agency, you know, individual. And so I guess like I was, you know, attracted to agency. And so maybe the way that we would like, you know, scale it is making, you know, if anything like maybe people criticize the glorification of like, you know, founders in today's day and age. And I do agree that it's like, okay, yeah, maybe people over glorify the Dom Hollands of the world that like, you know, are phenomenal fundraisers. But you know, I wouldn't necessarily say they're phenomenal, you know, operators. How do you maybe make it so that like young people glorify high agency? You know, people that would be like the way to scale it up because then more of them will want to go work near those high agency people and then they themselves will become high agency via osmosis. But I think a like alternate, you know, path dalliant that maybe was just as smart, had just as much access to capital, you know, was still in Silicon Valley but was not exposed to like Jack Dorsey and then Keith Rabboy and then you know, Sam Altman, etc. These people that I would describe as like super high aging people that were like extremely influential, you know, all three of them in my career from ages, like literally like, you know, I was working at Square when I had like just barely turned 18. I was like, you know, 18 in five months or whatever, right? You know, old all the way through to starting Barda at age whatever, roughly 26, 26 and a half. Those eight years I had semi constant exposure to those three individuals, all of whom I would describe as extremely high agency. And so when you have these mentors that you clearly see are able to will something into the world, maybe Keith being obviously my closest mentor, I got to know him basically summer of 2012 when I was working at Square and he was the COO when, when I was an intern at Square and he was the COO at Square. And so I got to know him from literally like the like ideation moment of open door through now obviously, you know, open Door being a, you know, in my opinion, very successful, you know, you know, public company, I think maybe underappreciated by the public markets, but I think that will shift over time. And that was literally just like completely like, you know, there was no happenstance. There was no like, oh, these two founders accidentally like, you know, met, et cetera. It was like, no, he like literally was like, this is the thing. I need to construct this into existence and literally will it into existence and force it into existence when it may not have. There's zero chance that it would have existed or succeeded otherwise. It's not like there were other people working on things like opendoor when Opendoor came together. And so you see that you're like, okay, I think I could do that. It's not easy for sure, but follow the formula. It's just like, yeah, you know, truly believe in an idea. Think about what the ideal founding team needs to be. Hunt those people down, convince them that they should work on this. Like he spent, you know, almost like, I think like four or five years sort of, you know, well, one he worked on like the original idea of Opendoor, like 2003 called Home Run, realized at the time the cost of capital is too expensive, couldn't actually approach it. But then even the ultimate CEO of Open Door, Eric Wu, he'd actually like tried to recruit for the CEO of Open Door role three or four years prior to and didn't actually succeed. And then it was only the second time around of recruiting Eric that he actually managed to convince him to work on Open Doors. It was one of these things that he clearly just persisted on just trying to will it into reality. And so it's like when you experience that upfront and up close, you're just like, it is very possible to will things into the world through again, sheer sort of willpower. And so I just made me very convinced that I was like, I can do the same thing with Varda. I'm going to will this in existence and it's going to be painful and take a lot of effort. I'm going to have to hunt down the exact right people, but it is definitely not impossible. Anyways, very long winded answer to I think osmosis to other high aging people is probably the right way to convince the youngins that they can do the same.

So perhaps difficult to solve it at the macro level, at the micro level. In your career, if you're a young person, should you try and select the people you're going to work for? Agency less than trying to select whether this company is going to be successful in the long term. Do you think that's an easier metric to select on?

Yeah, I think, like, you know, I think if there's one mistake that I sometimes see people make early in their career is that they, like, over optimize for what is sort of the hot new thing or the status.