Organizational Efficiency Machines - Amish Jani - FirstMark - Episode #86

Get to high enough trust quickly enough that the board meeting is not a sales pitch.

Welcome to Not Another CEO Podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned and come away with actionable advice for our own journeys. Today's guest is Amish Johnny, co founder and partner at firstmark. Amish is one of the most respected investors in the venture ecosystem. He's backed some of the most iconic companies of the last two decades, including Shopify, Frame, IO, Pendo, Boomi and many more. He also co founded one of my favorite annual CEO conferences, Cloud NY, which has become the gathering place for top SaaS, Cloud and now AI CEOs. Amish has been recognized on pretty much every list of top early stage investors in the world. But most importantly, his founders say that he can get in the weeds on a product, he can see around corners, and he's willing to roll up his sleeves for his companies. Please welcome Amish Johnny.

Thanks David.

I'm very excited to be here. We are in your office.

We are.

Thank you for hosting me here.

I'm glad to do it.

I hope to do many more episodes here. So first question I ask everyone, every investor, what is the one thing that you look for in the companies that you invest in?

So I think a lot of times when you talk about companies, you're talking about founders. And so then the question is, well, what are you looking for in founders? And I think in early meetings really I'm trying to understand how well you understand the problem and why do you understand that problem so well? I think a lot of having a long duration company is about how you build product over a long arc and that means you really have to understand what it is that's broken in the market. How are you going to address it? And then what is your process to go from fixing this one problem to compounding that into something much, much bigger? So it always starts for me with what's your unique perspective on the problem? How long have you understood it? Where did you get your insight around that and then building from there? I think that's, that's, that's oftentimes where I love to start.

How quickly in that first conversation that you're having with the founder, do you.

See if they have that pretty early on? I mean, you know, one of the very things I just love to start with is what was your light bulb moment? Like, why did you decide to go pursue this? And I would also say like in general, the why behind things matters a lot in someone's journey. Why did you make this move? What drove you to this opportunity? You learn a lot about kind of the characteristics of that person. You know, did they stay with a tough situation to get it to an outcome? Did they stay in an environment that was challenging, but it created a great opportunity? Like, the why behind most things are really insightful for me. So I ask a lot of those questions. And I think, particularly when you start talking about product and why did you start this product? What compelled you so much? What did you see that was the why gets really interesting. So that's really where I start oftentimes is tell me about the origin story and tell me a little bit about your origin story. And then from there we get into, okay, well, what are you doing now? Why? You know, all of the other things, but the foundation for everything is why do you see the world differently? And where does that come from?

The why is so it's unrelated for a second, but to me, every interview that I've done recently, I'm saying when I interview people for the companies that I advise like, to join the companies, all I focus on is the why. I've actually come to a point where I'm like, if someone's why is so strong, there's not even a right answer. But if it's so strong, it matters a ton. It matters so much because that's what's gonna get them through, especially founders. Like, that's what's gonna get them through the shitty. Shitty. I mean, it's a hard. It's a terrible job, really. And that's the thing that's gonna get them through those moments.

Yeah. And I think when you're talking about people, like, a lot of times if I'm interviewing execs on behalf of our companies, they'll go from, well, I was here and then this is what I did at this company. And I almost don't care about those two. I care about the interstitial. Like, what caused you to. To move from this company to this company? What was the connection? Why did you move there? Did someone refer you? Did someone that. That, you know, leave and pull you along? It's always in the in betweens where I find the best insight. So I. I agree with you.

Yeah, I love that. And. And this is all like, right up front, right? I mean, this is like your first meeting, first couple, 10 minutes, literally founder.

We sit down, I tell you everything about me and our firm.

And.

And then I always say, I'd love to just understand A little bit about your journey and like, what was the origin story? What was the light bulb moment that told you you have to go do this? And, and I might even ask like, and why did you name the company the way you did? Like, you know, just little things that are about like that. Those initial moments tell you a whole lot about what perspective they're bringing to.

How much does the deck matter?

I do both conversational and deck. I think there are some folks that a deck provides really nice scaffolding and framing for what they're doing. And if they're trying to articulate something. Sometimes a picture is worth a thousand words. A lot of times a great conversation is good. And particularly if it's in an area that I know really, really well. Like if you're coming to me to talk about commerce, infrastructure or any of the areas where we spend a lot of time and have a lot of context, I don't necessarily need a big deck to tell me about how the market is and you know, that sort of thing. I want to get into the nuances of what's your perspective? What's happening in the market today? What's driving the customers, the why now moment. Are there competitors? There must be competitors. We're in a competitive market, everyone's getting funded. What's your unique take on it? And just getting into those specific pieces. So a lot of times we'll never actually get to a formal deck. That'll be a follow up or that might be something they sent in advance. And you're really just getting into the conversation and the folds around it.

So one of the things, as I've been interviewing more investors even for myself, it's becoming so clear how the business you're in, you have to find the companies that are going to be the shopify of the world. When do you figure that out in the conversation and how do you. Because, because at least for me as a founder, I found it really hard to. To pitch such a big vision.

Yeah.

Because I was like, who am I to pitch? I don't know if I'm ever going to get there.

Yeah.

You know, so where do you find that in the conversation?

Yeah, I mean, look, there are some entrepreneurs who are ready to talk about the vision before, you know, the today, and they're very happy to live in that world. You know, I sort of think of this journey as one that unfolds over time. And the question is how far you can see in the chess board. Right. Like if you think about starting a game of chess and you've got, nobody's moved any pieces. Like there's an infinite way in which you can go, but you know, by the time you get to the board, a couple of the pieces have moved out, maybe some of the backline pieces have been moved. And most great chess players are thinking five, 10 moves ahead. Like, now that this, the board looks this way. This is the likely set of opportunities and probabilities of where things go. So for me, it's like, first help me understand why the board is the way it is as it's laid out with the pieces as they are. And how does that, how does that make sense? How does that solve a problem? How does that tie to a customer pain point? But now let's start building from there. Let's assume you start pressing your advantage. Let's assume this starts scaling. How does this tie from one thing to the next to ultimately something that's really big, where the fact that you're a bigger player means you have network effects and you have a moat that two people from YC aren't going to try and commoditize the next day. And so for me, it really starts with understand the foundation today, then talk about the intermediate step. Where's your product roadmap taking you? And if you execute well on that product roadmap, what unfair advantages does that give you in scale and data, in whatever workflow, in lock in stickiness that gives you a third act that is really exciting and big. But, you know, like, you still got to live today. You got to sell today. You got to do all of those things today as well. So I like someone with a really tight mission early. You know, they say most companies don't die of starvation. It's indigestion to too many different things at once. It's that focus really matters, but the sequencing of then what you do next and how you layer on those resources really matters. And that's, that's the strategy of when do I use my capital, how do I use my capital? When do I press my hand? You know, all of those things that, that's really interesting. And what makes great companies great over.

The long term, you've invested obviously in some amazing companies. You, the firm has those companies. When you look at them today, are they on the path that they told you when they pitched you? You know what I mean? Did it actually play through that?

Yeah, I mean, there are some that, that do play out that way. There are a lot that don't. I would say Shopify is a great example, I think. You know, Toby Harley, the team there had a very clear vision from the early days and many respects their job was to keep, you know, the, the pressures from the outside to drift from that because of the conviction around the democratization of entrepreneurship and the role that they can play in creating a bigger pool of entrepreneurs in the first place. You know, in a time where people would say, if you're going to sell software, you got to sell it to the biggest retailers, you got to do other things, there's a lot of temptation to drift or, quote, move up market or do other things. And they were extraordinarily disciplined about their vision. And it just turned out that it was a way bigger market than anybody understood. And they were able to compound and have still continued to compound on that basic idea and mission. It took a long time for the markets to come around and sort of recognize that. So that's like one end of the spectrum. I think the other end of the spectrum are companies who kind of go out with their initial hypothesis, but they're extraordinarily good listeners to the market, to their customers, and they figure out the thing that is working out of this bigger motion. You know, you might have a longer sales cycle and you're working through it and you're trying to figure out, well, why is this? I have this value proposition. But eventually they're getting there, like, what is the thing that they're focused on? And then you really begin to coalesce around that particular, particular product and vision. And so there's also a lot of the world that's filled with listening to your customers and actually pivoting into what is the opportunity. And you see kind of both of those.

How do you. How many companies you see on like a weekly basis? I mean, it must be. Yeah, dozens.

Yeah. I mean, like, if you look at anything that comes in the inbox, you're talking hundreds. But like, you know, what do you tend to reasonably, like, look, read through, think about, talk about with your colleagues. It's probably dozens. And then, you know, actually meeting in a week, maybe it's, you know, single dozen type of thing. Right. You're really trying to filter that down so you can spend time with the.

What do you think that founders who come in. Because you do have, I can imagine, especially now with the brand that you have, and like, you have a lot of people coming in. What do you think the founders who are reaching out or coming in to pitch, you don't under. Fully understand about your side of the table or missing?

Yeah, yeah. You know, it's always A. It's a dangerous question because, you know, it's the world's smallest violin for venture capitalists. But, but that being said, like I would say, the one thing that is least well understood is that like any business, you tend to wear your perspective going into a room, not necessarily standing in the other person's shoes. And so an entrepreneur comes in and they have been working so hard on their problem, their place in the world, why they're going to climb the mountain, why they're going to displace a bunch of competitors. And it's hard to imagine on the flip side, like, you know, we're seeing lots of people like that, right? And so there is very much a having to kind of figure out in rapid fire across a broad range of wonderful entrepreneurs, incredibly talented entrepreneurs who are coming in, like, you know, how do these things relatively stack? And so sometimes you might make decisions that are unrelated to whether you think their opportunity is great or not. It might be great, but it might be for some reason, whether it's because of portfolio construction or you actually will prioritize something else that is not about their business per se, but how that business stacks against others. And a lot of times that's. That's really what it is. So, you know, sometimes I'll meet with entrepreneurs that are earlier in their journey, but they're like, look at, you know, my customers. And of course I'm going to go from one to three over the next couple of months. And so I'm doing great. And I see that's awesome. But if someone comes in with the same amount of capital, but they're already at three, like, that's someone who stands out a bit more. So, like where they are on the traction spectrum, you know, can be different, even if they might be on the same arc. So, like, I think that's the hard part to understand is the volume and the velocity at which all of this stuff is happening on our end. Which, you know, look, it takes real discipline to be able to get back to the market, to get back to entrepreneurs, to do all the things that, that VCs ultimately get, you know, become a trope for. You know, I think that's the part that, that people don't.

Yeah, it's a good point. When you walk in as a founder, all you're thinking about, obviously all you're thinking about every day is your company and your product and your view of the market and your unique, you know, and it's a, it's actually a really. No one, I think, has said that yet in these interviews and it's a, it is a good point because you don't know, maybe you just, you're working on a deal right now that looks exactly like their company. You're not going to tell them that you're doing that deal right now. Maybe it's not done yet, maybe. But they don't know that. And they.

So interestingly on that one, I do believe in operating the business in very high integrity. I don't say that I will tell them, you know, very specifically or I won't take the meeting or, you know.

So there are some firms that don't do that.

Yeah, I mean that I've experienced. Yeah. And I think, well, if you're, if you're down the path with something like that, you know, we know how hard it is to be entrepreneurs and how difficult that journey is. So, you know, we want to conduct it not in a very high integrity way. But I think what you may not appreciate is, hey, this company that's in this area of vertical SaaS is super interesting. And I've just done two or three deals that are horizontal software plays. So I'm kind of more interested in that. Not because this opportunity isn't as good as this one. It just adds to diversification in my portfolio and it adds a different complexion. And like, rather than doubling or tripling down in the same space, I get exposure to a slightly different space. And that's the kind of like piece that an entrepreneur may not understand. It's that your opportunity could be exciting. I just happen to meet someone who's doing something in a different area, but that's more compelling. And in a world where everyone's got limitations on their time, that's going to be where I allocate my resources.

How about the dynamics of partner by partner? It feels to me like partners in my experience are very different. At even the same firm, you can have five partners and they're all completely different stylistically, everything. How does that work for you? Do you have specifically you, do you have an area that you focus on companies that you gravitate towards, whereas your partners gravitate towards something completely different?

Yeah, well, I definitely think there's an investor founder fit thing that, that isn't talked about as much. And as I look across our firm, you know, there's definitely an archetype that I have that tends to be around engineering or product oriented founders. Many of my, my CEOs built their first version of the product, like Toby, great example. But there's you go down the list I mean, Emory at Frame, like then some of the names you mentioned, Rick Nucci at boomi, they're technical folks, they were product oriented folks. They actually could build the stuff that they shipped. And so, and that that Persona tends to have other characteristics and archetypes to them. My other partners are drawn to different things. And so I think there is definitely a founder investor fit that happens. And especially at the early stage in where we play at the series A, where you want to go on this journey for the next 12, 15 years. Like, they're more than a CEO or a founder. They are someone that you're going to go on a life journey with. So you want to know that there's some basic compatibility because you're going to be talking all the time. When someone calls me at 10 o' clock on a Saturday, I don't want to be rolling my eyes. I want to be excited about picking up the phone and saying, all right, what do we got? What do we got to deal with? Right. And so, and so I think there's that founder investor fit. And then. But I will say as a firm, we tend to have very similar sort of process or philosophy. Like, so it's matching the founder to what's the firm trying to accomplish, what is it that we do and when do we come in and what do we do that is probably much more consistent across all of us. And then we all collectively come together to think about and talk about these opportunities.

And so how much time do you feel like you need to spend with a. You're going on a decade, at least decade long journey if it's going to be successful. Yeah. How much time do you need to spend with that founder for you to feel like you want to go on that journey? Because my assumption, we've never worked together on a company, but my assumption as you knowing you and hearing about it, it's like you put yourself into the comfort. So then now you're gonna do that for a decade with the founder. Like, how long does it take for you to get comfortable to do that?

Yeah. So this isn't, you know, sometimes, you know, when you think about dating as a, as a paradigm, like, you know, when, when you meet the one, like you kind of feel it, you kind of know it. Right. And, and so I think that chemistry compatibility becomes apparent pretty early. And you know, you want to build from there. And then as you're building like the chemistry with a founder, you're also understanding how they think and that's validating their, how they think about the problems and where they want to go after. One of the things I find very insightful is when you take what is in people's heads and you see it as pixels on a page. So I love seeing the product because people can use the same words. But how that manifests in products, I call it neuron to pixels. Right. Like how that manifests on a page really tells you a lot about how deeply they think about the problem. Are there elements of delight in the product? Have they shortcut the number of clicks to do something? And it'd be shocking if you were to take look at lots of different pieces of software. It's very clear which ones have been really thoughtfully well designed versus others. So I care a lot about that in the journey as well. So I think there is that compatibility that you begin to see early, you begin to build these other elements and then it can happen over in the span of a few days if you're spending enough time and you're getting to press the flesh. I'm a big believer in meeting in person. So it's like I want to have met you in person multiple times. Again, this isn't about having a long process. We've done things in days, as I said, but it's really about getting the texture. And I also want to know you value what you're getting in me. I think a lot of founders sometimes don't know what they're shopping for. They're just going around, up and down the aisle and just tossing things in the cart. And I think it's really important to think about what type of partner do I want on this journey. Do I want someone that's passive, someone that's active? We very much fall into, not in a push way, but we're going to wind up having great relationships and we will help, we will care to be involved. And I think that's very different in a world that's becoming increasingly passive and is thinking about deploying capital and moving on. And so we have a very specific way in which we approach the market. It's good for them to know that. It's good for us to know that.

I think especially first time founders, I don't think they know what they're getting. I actually don't think they know what they're getting into about building a company in the first place. But even then they don't know what it's. They don't really fully appreciate that they're going to be working with someone for a decade. When I talk to founders, it's like, yeah, this one gave me a great term sheet, great price, great. I'm like, do you even know the per, like, you know? And it's like, well, no, but it was a great price. I'm like, yeah, but that's, you're going to be working with them for a decade and it's actually hard, even founders who I think, trust me, it's hard to get them to understand, like, no, the person who's going to be on that board with you, who's going to have to now be with the next board member and the next, like that person, like that. That's a, it is a, it is like getting married actually more for the founder, I would argue, because they only have one company. So like for them it's even more important. Important. But people don't at least first time founders, I don't think second time founders will be like, oh yeah, I took that term sheet at half the valuation because I really want that, that person, you know.

Well, and that's, I, I, I agree with you. And that's one of the things we try and talk about early when we're getting no founders is what is it that they're looking for and how they think about the world. And it is very different. I mean, you know, I like to say like, if a company's gonna be made, it's gonna be made and that's great, but what we can do is help maybe avoid some pitfalls along the way. And I've heard plenty of stories and I've seen plenty of environments where just bad advice can take a company way off the rails. And the other thing I find dangerous is just taking a rote learning from one company and saying you should do this because they're great. And I just, every company is so built in a founder's image and likeness. And I was having this conversation with a very, very successful entrepreneur in one of our interviews and he was talking about how, yeah, he can now reflect back and see 10 years from now they're a big public company. You know, how something they did 10 years ago is still part of the fabric of the company today in a way that they wouldn't have even thought about. So that the founder's DNA lives on in a company. And your job is to think about, you know, how can you expose people to the right ideas and the right constructs without pushing them. Because if it's non native, it just won't graft the right way. And so how you give advice, what you share with founders and entrepreneurs really matters. But you have to appreciate. At the end of the day, my experience has been every company is just so fingerprinted with the founders. So your job is to kind of create opportunities for them to absorb and then translate it into their own native sort of mechanic or way.

I have had conversations with investors much earlier in their career who have told me that they don't feel comfortable voicing their opinions about touchy subjects, let's say, with the founders, because they feel like if they do that then they won't be seen as founder friendly when the next round comes around. They won't get their super pro rata, they won't even. Do you understand that? Have you had that challenge? I don't think you have that challenge now, but.

I do understand that I'm on boards with folks that may not have seen as many cycles or I'm going on 70 plus boards over my career. So I've seen a lot of different things. And I think self awareness is a really important attribute for myself and for others. And so I will be very considered in how I think about things and talk about things. But avoiding hard discussions is also not a great thing. Some of the best relationships are actually forged through challenges and difficulties. Think about friendships or bonds between people. They're oftentimes forged through the tough circumstances, not just the great ones. So I think there is an art to having hard conversations and preparing both sides for it and then walking people through it in a way that is a skill and it's something that I feel very comfortable with. But I've also had enough experiences to think about what are the implications of it, both directions. Because I've certainly seen people go way too hard and they lose the ear of the founder. Like, we're not in a control business, we're in an influence business. And if you lose someone's ears, that's just as bad as not saying something at all. So you have to be able to find interesting, stand in their shoes, know how they're thinking about it, meet them there and then begin to show them. And that could be over time, not just at one fell swoop, but it's through a little bit of dropping the breadcrumbs to help them get there. There's a lot of different ways to help a founder see a point that's not just, I gotta tell you something really blunt and be super aggressive. So I totally empathize with that and I appreciate that and I don't mind taking that role myself as needed. But I also find that. But through those conversations, you wind up forging the deep bonds that build trust. And so all the entrepreneurs I've worked with have come back and us as a firm. And so that's like a core attribute is being able to talk about all things and have a high trust context in terms of.

So a lot of times that conversation may be happening or at least you're having the conversations at board meetings. And what do you think? This is a thing for me where I always tell this story. My first board meeting after Enrique from Bain invested, I thought I did amazing at that board meeting because we had crushed every number and we had like. And it was the first meeting and I said, I called him after. I was like, we did great, right? He said that was terrible. And I was like, why was it terrible? And he said, you just read me the news for three hours. Like that was the most useless, you know. And he flew into New York and we had Excel there and everyone. And that was a real turning point for me of realizing like, man, I had been doing board meetings like it was a waste of everyone's time. You know, when you think about the best companies that you work with and you've seen the companies scale all the way, what are the best board meetings look like?

Yeah, I think what you are. What I am constantly trying to do is get to high enough trust quickly enough that the board meeting is not a sales pitch. Because if it's a sales pitch, you can't really work on or help with the core problems, both identifying them and then helping figuring out what resources you can bring to bear to help solve them. So, you know, and I think it's also, you know, like my job to be a point of stability. So if things are awesome, I'm going to try and talk about where the vulnerabilities, if things suck, I got to think about how do I keep the team fired up and like pointing out the things that are working or what are the experiments that we can work. So it feels like there's a path out of this, you know, ditch or whatever it may be. Right.

So.

So, you know, I think, I think board meetings are the best board meetings. You have information out in advance for the things that are about, you know, metrics, like they're well read the best boards. What oftentimes they'll do is say, we're going to take that as read. Submit your questions, send your questions of the things that you have that we can talk about either in advance or live. And then we're going to focus on a couple of topics where we want to dive deep the challenges that we're seeing in the business. And you know, again, I, as a first time founder, I think you sometimes believe it's your job to only deliver outcomes and answers and you carry that burden unnecessarily because you have a room full of people that are not only rooting for you, but are highly vested in your success. So like, instead, bring your problems and your challenges and, and let's see how we can work on those and feel it's almost like the more vulnerability you bring, the more confidence you inspire and the more trust that you inspire. And the worst meetings are also where you feel like you're being sold to. So you have to unpack things and then you figure out something and so you have to unpack it more and you're chasing down this rabbit hole of what's actually going on. Those are the worst board meetings. And then, and maybe second to that, or where you're just doing readouts of slides that you could have read in advance.

Right.

The best ones are about the challenges because everyone's interested in making this company great. And it's not easy to build a great company. And every stage in the company life cycle, including when you're public, has another part of the journey that's extraordinarily hard. Requires a new level of training, requires a new level of commitment, might require a new set of people, a new way of thinking about things. And you have to believe that evolution and change is the constant state of your business.

Is there any company you've been a part of that had a extended period of time with no challenges?

No. No.

Some people say to me, they're like, oh, that company. They, you know, that they're crushing it. They must have no problems. I'm like, everyone has, everyone has problems.

Everyone has things that happen out of the blue. Everyone gets surprised with, you know, something someone pushed that brought down the system, something that happened to a customer, an employee got recruited away who might have trade secrets. The best company have problems. Challenging companies have problems. They're different in nature. And maybe some problems are more fun to work on than others. But every company has challenges and problems.

What do you think kind of about the moment in time that we're in right now with AI you've invested. I mean, you saw the huge SaaS kind of wave. Now you're kind of at the forefront of this. What is your take on where we are at the moment in this market? Is it overhyped? Is this just the fact that the next generational companies are coming through this so everyone's just trying to pump money in to try to find that. What is your take on what's happening?

Yeah, I mean, look, I'm fortunate to have started Inventure in the late 90s as the Internet was getting stood up and a lot of infrastructure was getting built. I was fortunate to see broadband going from sort of a minority of access points to the majority. I've been fortunate to see the mobile transition and a lot of other things. And what you realize is there's a reason why there's the hype cycle. You get peak inflation expectations and you get trough of disillusionment and then you come out on the other side. I think anything new is super exciting and people begin extrapolating upon extrapolations, upon extrapolation and eventually we go a little bit too far. But the fundamental infrastructure and foundation that gets put in place, you know, really provides the foundation for the, for the next wave and next opportunity. I would say that the challenge of this environment is because everyone knows everything instantly and it's happening at a scale and a pace that's never existed before. And there's more capital than ever before, but it tends to be concentrated even in a tighter block than it's ever been before. That's what makes it really unique and interesting is that there are certain pockets that are just so white hot and then there are other pieces that are outside of it that are still really, really interesting but don't necessarily get the attention because it's not so directly tied into the AI theme. And so it's that dynamic that I think is really unique right now. And so I do think that there is definitely a level of enthusiasm and euphoria in the market. Sometimes we ask the question, are we in 95, 96, 97, 98, 99? Are we about to? I don't think we're about to, but there's definitely a lot of, of excitement out there and for good reason. But technologies kind of need to go through their cycle, then get absorbed all this innovation and then build again from there. So I think we're at a great time. I think there's a lot of things happening and it's a great time to be an entrepreneur and to be building. And I think innovation is going to continue through. And again, you know, I always tell folks like, regardless of what happens in the public markets, if you plan your capital the right way and you plan your capital against the right milestones, you're going to be fine. If you have a truly discontinuous product, you're Going to be fine. It used to be not only did you have to be, you know, half the price, but you had to be twice as good. So you had to be a factor of 4x better than whatever that existed out there. If that is true in a bad market, people will flock to you even more than in a good market because people need to find realizations, find costs, savings, find whatever else. So you know, the pri. The beauty of building in the private markets is you have these much longer arcs that you're focused on and operating against. And you know, if you're truly an innovative product or service that's out there, you're going to be fine. Good market or bad, you're going to be able to sell what you're worth. May move around a little bit, how you manage your capital against those cycles may change, but you're going to be able to build a great company. And it's why a lot of people will tell you the best companies get built in the actually hardest times because it winnows out the competition, but you still can sell in that environment. And in fact more people want your product because it helps them do something in a much more efficient way.

My biggest fear as like an angel investor is for the speed. What you said, the speed that people are building is, I mean it's crazy. And the number of companies in any given space is like I've never even me, I'm not even a professional investor. And like I'll get four people. I'm like, you're doing voice AI for drive throughs of fast food. And they're like, yes. I'm like, but I just met with another per and I don't even meet with that many people. And you're just like, is this possible? Like how do they. I don't know, I get, I feel like product moat is not like it was, you know, because to stand up a product and you're such a product focused person. And so where do you think that moat is it just in the usability of the product? Is it in the go to market machine? Is it in like where's the moat?

Yeah, it's a great question and I think it's evolving very quickly in Software. In classic SaaS, just the time it takes to code could have been enough to keep you ahead. And as all of these coding agents become so much more powerful, you have to assume that that's not going to be it. So the real question becomes what is it about my product that allows me to get distribution faster than anybody else, which allows me to get data better than anyone else, which allows me to build something that is unique and differentiated against a core foundation model better than anyone else, that lets me embed into workflows better than anybody else. Like take for example Cursor. Cursor is a great example of a company going through that, starting in one place and eventually using their own data to make their product better, to continue to compound their advantage and their distance in the market. So everything is moving faster than ever. And that's why your plan of this is what I'm doing today. But this is how this informs the next step, which informs my scale drives my advantage. That loop is so important to understand over time because any just basic piece of functionality there's going to be somebody else who says, oh, they're at 30 in ARR, they're successful, I should sell the same thing for half price off.

Exactly.

You get into a terrible, terrible loop.

It's crazy.

And then you have to wait out the venture markets who may fund competitor 4, 5, 6 and 7. You have to wait until they go and that just becomes really, really, really hard. So you need to win your category. You need to be first in your category. You need to have an advantage that comes through structure and scale and, and also it comes down to execution. I mean this is why the bet on people matters so much because more than ever it's really the middle part of software may dissolve and you've got a whole bunch of data and you've got a thin layer, whether that's voice, text or way in which you're interacting with that data. And there's someone on top who's orchestrating how do I get brand distribution and more data faster than anyone else?

Right, so you've been investing in New York for a long time and you've been here. How has this ecosystem changed over the years?

Oh man, I love it. It is a beautiful, wonderful thing. We started in 2005 and I was actually for the first six, seven years of my career at another firm. I was still based in New York. I've spent a lot of time in this ecosystem and as a firm I think we've leaned in as hard as we can to play a role in helping to catalyze the network effect of innovation and entrepreneurship that is now. New York City when we started might have been a small low single digits percentage of deal volume compared to the Bay Area. Now on any given quarter it might be 60 days, 80% of the bay Area. And most people don't appreciate for that to happen in the span of 20 years, 15 years. It's remarkable. When we started the knock was hey, this is about ad tech or it's about commerce. And then eventually Datadog goes public and Mongo goes public and you start seeing real breadth to it. And now we've got places like Curie Bio, which is building biotech incubation and acceleration. So like I think New York is just this place where you can't. The breadth and the density of the talent is so significant that we can compound in so many different directions. And you're starting to see that at scale. And it's also true that the biggest companies in Silicon Valley that you think of as Silicon Valley companies have 25 to 40% of their people in New York. And you know, I'm talking about the biggest AI companies, I'm talking about the hyperscalers, I'm talking about, you know, spin outs from the biggest foundation model companies that are also natively bi. Coastal out of the gate. I was having a coffee this morning and someone. It was a very well known company that's raised billions of dollars and I just assumed that they were mostly. Turns out they've got 35, 40% of their people here in New York. And so I think the New York ecosystem has gotten so deep and it doesn't have the 56, 60 years of history of Silicon Valley yet definitionally. But as you continue to see bigger and bigger things emerge, I just think you can't get away from. Companies are built by people and there's just so many talented people here in New York across all of these verticals. And as AI becomes applied to all of these industries, we're going to see some phenomenal businesses being built here. So I'm extraordinarily bullish. Obviously I was bullish when we started 20 years ago in New York. And so this just feels like an incredible, just gushing waterfall of incredible goodness.

I think there's something about New York. I mean I'm from New York City originally. I think there's also something here. Having spent a lot of time in the Valley is also. Tech is still not the cool industry in New York City, which I think actually is good. Yeah. Because you know, if you're in San Francisco, it's like every coffee shop that you go to, literally you hear people pitching, you hear people. It's kind of cool. You know, it is cool. But then you come to New York and it's like, yeah, it's, you know, when I go to the, my, my kids school stuff, it's like people in finance and people, lawyers and this, you know, and. And there's still a minority of technology founders.

Yeah, well, that's, that's. I mean, just to be clear, Silicon Valley is incredible when you go there. The power of that is unbelievable. But I think part of what's notable as New York about New York is there's so many different ways to make it in New York that I have that same experience. And it's because it's like, hey, I go to the same school things. I had one last night. No one really talks about it because I know you're here because somehow you made it. You made it and you made it and you made it. So let's just talk about all the other things.

He's.

That, you know, how do we like to have fun? What are our kids doing? You know, you know, that sort of thing. It takes a lot longer to get there because, you know, there's so many different ways that people can accomplish things here in the city, which is. Which is really cool.

Last question for you is why. Why did you become an investor? Originally.

I got lucky. I mean, you know, if I'm being honest, you know, coming out of school during the dot com bubble, there was a scale of things happening in innovation that had I come out even a year later, would not be happening. The whole industry, a year after I started in 99 and made my decision to join a venture firm, which coming out of school to join a venture firm at that time was just so unique and unprecedented as an opportunity being afforded to me more than anything else. And so, like, had it been the year later, the whole industry had collapsed, nobody was hiring, you know, so I happened to get in and I hung on for dear life. But you know, the thing that's amazing about I knew I wanted to be around technology. I'd done things around technology before school, through, you know, college, and I actually almost joined a startup and I was kind of weighing those things of joining the startup. And then I got this venture job and I said, you know what, maybe I should learn to evaluate these things before or I make any one sort of choice. And I think what happens is if you're a naturally curious person getting licensed to just go learn about anything that you find interesting and how that market works, and you get to meet with the best people in the world who are telling you how that's being transformed and is an incredibly addictive thing. I love people. I'm a people person, so I love spending time with folks. That's why we're doing this Live as opposed to in a zoom. So you get energy from that. So when you're spending, like when you're really curious and you love learning about lots of different things and unpacking, how do they work and how do they put back together and who's going to win, like, it's really, really, you know, really fun. And then you have to make decisions and you have to live or, you know, not quite die, but you have to live by your decisions. And, and when they work and when you see, you know, the seven, eight people that were in a room that then blossoms into a 5,000, 10,000 person company, it's just like unbelievable to see that sort of journey and you realize how fortunate that is and you get to do that across a lot of different industries and opportunities. It's really fun.

It's awesome. Thank you Amish for doing this with me. I really enjoyed this and learned some new things about you in this process. So thank you. And there's definitely a lot in here for founders specifically, I think to learn about pitching investors, communicating with investors, like what's happening on your end of the table. That's why I'm doing this because I think for founders, we don't first time founders do not understand all this. So thank you for shedding a light on this and being transparent. Thank you.

Super happy to do it. And you've built incredible businesses in your past, so seeing you now helping so many different founders is a really cool thing. And you're one of the OGs of the new York ecosystem building an entrepreneur infrastructure company here. So, you know, hats off to you. Thank you.

Thank you. Awesome.

All right, man. All right, Great.

That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining. For show notes and more, please Visit not another CEOPodcast.com we'll see you next week. Sam.