Robbie Paul on The Truth About Venture Capital No One Explains Clearly

After six years and over 450 episodes later, the Lead On Purpose podcast wraps up and finishes today. This is the last episode. However, if you enjoy what I do and the amazing guests that I have on, stay here. Because it's going to change from Lead on Purpose to our new name, the Habits of High Performers podcast. I've got incredible guests lined up from Navy seals, SAS Troopers, leaders of countries, sleep experts, money experts. It's going to get real fun, so you don't need to do anything different. If you're subscribed here, it'll stay the same. The only thing that'll change is the name. Thank you all for your incredible support over the years. It's been a blast. And thank you to all the incredible guests. Of course, our sponsors throughout the years as well. So today's last guest for Lead on Purpose is the amazing Robbie Paul. Robbie is the CEO of icehouse Ventures. Enjoy the show, Robbie. A huge welcome to the Lead On Purpose podcast.

Great to be here. Thanks.

I'm excited. So I've been following what you guys have been doing for a long time, but there's always been questions like, what is it that they really do? How does that work? So icehouse Ventures, household name in this part of the world, you've helped brands that I can think of like Brianne West's Ethic, or Ethique, as they say, Halter, more recently, Henry, multiple aerospace companies. So what is venture capital to get started?

That's a great question. And, you know, we're still finding our way, but ultimately we are investing cash for shares in companies and we want shares in companies because we believe that the entrepreneurs leading those companies can create lots of value in those shares by building new technology, solving real problems, targeting big markets, and through, you know, triumphant acts and lots of bravery, doing something very unique in the world. And our goal is just to be involved.

Incredible. I love it. I've had a few people over the last few days. Mary Holm, who's very big on the KiwiSaver type thing, index funds as well, we talked about at length. I had Sam Stubbs from Simplicity this morning. If we think of KiwiSaver, then Index Fund, and then we think of VC and we just look at it from a risk perspective. Would you say that arguably it's higher risk in vc? If I was putting money into vc, is that a higher risk thing?

Possibly. Depends on the structure, but certainly the common narrative and most of the data would support that it has a completely different risk profile than putting money in KiwiSaver. Different return profile as well, though possibly you should be rewarded for that. I always think, and this is not always true, but you walk past a TV at a bank and it's essentially when it shows the term deposit rates, it says, hey, we'll give you a little bit more money if you give us money for a longer time. And that's because they know they can use it and invest in things where you get rewarded for the amount of time that you're willing to invest. In any asset class, you are getting rewarded for either hard work, quantum of capital, patience, perceived risk or liquidity or perceived illiquidity. And venture is at the extreme end of that you're investing. It's very difficult to sell out in the near term. These are not public shares. At least as a venture fund, you need to put in a little bit of extra effort to source companies and to support them, and there's a likelihood that companies can fail and you can lose all your money. And so putting that all on the table, it's like, well, if I'm investing in this space knowing all that, I better be rewarded for it. And that's what venture sets out to do.

And the word venture itself, what does that mean?

Gosh, I don't. Venture capital, where did that even come from?

North America for sure. Right?

Yeah. Venture is investing in companies that are privately held so not listed on a public stock market. More often than not, investing in companies where there's still things to be proven that you can build technology that hasn't been built before, or that you can access markets that haven't been accessed before, or that you can compete with incumbents or alternatives successfully. And so I guess there's the. Venture sort of is an appropriate word because you're pioneering and you're sort of taking risks and so on.

That's cool.

But venture capital, to be clear, is not really related to a stage of a business, except if you think of the next stage being publicly listed. It's everything from a single entrepreneur with the concept starting something to halter with 400 employees and 100 million in revenue and still needing and meriting more capital to grow you.

Yeah, hey, James here. I wanted to take a quick moment to let you know about something. Look, I get asked to deliver keynotes and workshops for teams and companies all over the world, from London to Antarctica, from America to Australasia, from armies to small businesses to large corporates to sports teams. But I go in and deliver keynotes around the mindset of high performers, around the habits of high performers, about how we navigate change. If you would like me to come and speak to your team or speak at your conference or deliver a bespoke workshop, please get in touch with my team. Carolinejlochlan.com will be able to help. I'll also make sure that we put that in the show notes. And so the idea for someone listening, bootstrapping versus venture. What's the difference of approach there?

The idea of bootstrapping is that you don't take on external capital. And I'd say that's extremely advisable for certain companies because you can control your own destiny entirely. And of course, in certain cases, if you bring on capital, it raises the bar of what you need to achieve before it could be really meaningful for yourself. Where if you bootstrap and you own a company 100% and you sell it for a million dollars, you got a million dollars. If you take on a million dollars, you've probably attracted people's investment on the basis that you're going to make it into a lot more than a million dollars. And that requires extra risk, extra time, extra hard work, all sorts of things. If I was to make a case for not bootstrapping, it wouldn't be about the capital, it would be about the accountability and the way that it can level you up. I've felt it myself, raising money not for our funds, but for our operating company. You set a vision and you need to compel people to believe in it. And your ego even drives a desire, even if it's not to get the money. It's like, no, I want to be proven right. And in this ambition that I have. So then you, as a result, have to better organize your thoughts, better build your case, aim a little bit higher, stretch a little bit further. And in doing so, you are actually forcing yourself to achieve more or try to achieve more.

I get that. Because I could say over the years, maybe 15, 20 years in business myself, I've bootstrapped. And I'm thinking if you were to come along, or someone was going, hey, well, actually, here's a million dollars and here's all the people that have contributed and here's the parameters and here's the KPIs I know that would have forced me to do things I haven't done and it would force me to level up and that the accountability would drive me because I don't want to let people down. I want to make sure I achieve. So I think it's a very, very healthy thing for a lot of operators, but maybe not for everyone.

Oh, definitely not for everyone. And it's a beautiful thing when somebody can build a company without bringing on sort of others and they can sort of benefit 100% or whatever, or just control their own destiny. And in your case, if you haven't taken on capital and you say, I want to do pottery, you don't have to explain to anybody why you're going from podcast to pottery. You just go. Right. And so the negatives are if you set a course of action and you want to make changes, there's a chance that you won't be able to make those changes as rapidly or with as much agility.

Makes sense. Yeah, it makes total sense. If we think of Ice House Ventures and we go back over, how old is the company?

First investments are happening in 2003.

Okay, so it's been around a while. This is not a yesterday thing. Great. What are some of the big moments in terms of some of the companies that you've helped to fly high that maybe even went global?

For us, I mean, we're proud of so many companies. And in aggregate, the thing that I've loved the most is seeing companies that have gone from sort of nothing to something. Right. Or another way to put it is there are entrepreneurs that went on this journey, they were laughed at and then people started to like them and they were sort of laughed with. And now they're so successful that they're laughed for. And people sort of laugh at their jokes because they've accumulated sort of influence and power and across the board. Seen Jamie Beaton from Crimson right now, multi hundred million dollar revenue, business offices around the world, extremely prominent investors, global recognition, all from a 19 year old here who interned with me before he went to Harvard.

Wow. And so we talk about Crimson for a second. So John Key was sharing with me down in Queenstown a while ago a bit about Crimson. This is four or five years ago. He's kind of sharing what was going on there. So for somebody who's never heard of Crimson, what exactly has Jamie created?

Crimson is all in one sort of education technology play. It includes one providing service to help really ambitious students access the best universities in the world and prepare for those. That's a very large business in its own right. They also have an online school, private school, and now, as announced a couple of weeks ago, a charter school where they're trying to tap into the best resources from anywhere. So it's not just a teacher who's based in Takapuna, it's a teacher from anywhere to provide resources and training and Teaching to great students.

So essentially, could we call it homeschooling to a degree if it was high school?

Yeah. The online school does try to have a bit of a hybrid element to it. And in person engagement and group classes. So it's online as opposed to you show up every single day at a physical location.

Amazing. And primary and secondary. Or is it secondary mainly?

Right now it's just high school. CGA or global academy is what they call it. But phenomenal. The thing about Crimson is that they are aspiring to integrate into the entire sort of lifespan of learning from sort of. And they do own the number of works and words. If you've driven around the country this little red signed tutoring centers and they provide postgraduate training and support.

Phenomenal.

And so that it's not just sort of get into college for six months.

Yeah. How do you, when you see someone like Jamie come along, how do you go, yeah, we're gonna back you. You've got the goods. What do you look for when you're. You're kind of gonna back someone?

I mean, Jamie's almost a terrible example because who wouldn't? Well, actually lots of people didn't, you know, give such a brilliant young founder a chance. So here's a 19 year old. He was interning with me and studying at the University of Auckland while he had applied and gotten into all the top 25 universities in the world simultaneously. He went to Harvard, did a double degree, graduated magna cum laude in math and applied economics. He was the youngest person in the world to get into the Stanford MBA program, graduated 14th in his class while running Crimson. He did a finance degree at Princeton, a law degree at Yale, master's of public health at Cornell.

What age is Jimmy?

He's just went to his 30th birthday in February, so he's 30 and change. And so now he's has a stated goal to have the most master's degrees in, in the world. He wants the Guinness Book World Records. And obviously people could say, oh well, that's just like a bookworm who's not doing anything else except he's got a business worth a billion dollars and you know, generating hundreds of millions in revenue. And these degrees are extracurricular, if they will, if you will.

That's beautiful. That's awesome. Let's take a different industry, something else that's been quite unique or fun to be a part of and support and see thrive.

Well, I mean, since we're in the neighborhood, it's hard to look past Powered by Proxy, which sold to Apple A lot of people don't know that if you have a pencil, headphones, iPad, iPhone, watch anything that's charging inductively, meaning it's, you know, surface to surface as opposed to with a plug. That's New Zealand technology. And the more interesting thing is that technology is still developed here, right down the road. They were upstairs at one point around here. Wow. And so it makes them sort of one of two companies to not be subsumed into the Cupertino mothership of Apple. And that's because the University of Auckland is producing tons of talent still in inductive wireless power research. And there's this very healthy ecosystem here. It's beautiful. And here's sort of. Yeah, it's a silent company in some respects because it's Apple, but the. The tech is across billions of devices now.

Wow. And that all starts here at home. That's amazing. And you were part of that. You guys had a hand in that.

I don't want to take any credit for it, but yes, we did have investment and shares in that company. And I sat next to Fadi and Kunal when it was just those two back in the day.

Wow.

They were based in our office.

No. That's so cool. So there's lots of successes, but with every success, there's often multiple failures. So over the years that you've been with ihouse Ventures, what have some of those failures been like? How have they shaped what you do and how you look at things?

Yeah, we've had 81 companies fail. And a failure would be defined as we got less than our money back. So sometimes they sell or go through some sort of liquidation event and we get some dollars, but if you give them $100 and you get 50 back, that's a loss. And the goal is not to have companies fail. So it's not like a badge of honor. But it is also the reality of venture capital. And if you tried to optimize away from failure, you as a firm will fail because safe bets don't equal outsized returns. Anything that you can intellectualize is a certainty, is possible, is achievable, is affordable, whatever. If that's true, then there's no yield to exploit because other people will have done it, or big companies would have done it, small could have done it. And so it comes with the territory that you take punts on different technologies that have not been built before and. And they don't work. Or you try to address a market or change the market dynamic and the market says no, and I would. Yeah, I Study it a lot to try to say, well, like, okay, well, can we like, learn from it and avoid the losses? And the answer is sort of not really. You can optimize and certainly from the finance sort of world you can, you can engineer ways to sort of reduce downside. But if you're investing as we did in a company that was trying to genetically modify brain cells so they can be the receptors of information, so then if you want a brain computer interface, you can basically just beam it into the skull. I mean, it's hard and if it worked, it would have been amazing and then it didn't. Equally, most of the companies that have become successful have been on death's doorstep so many times and they've had one little fortunate fork in the road or some stroke of luck or whatever, and that got them back on. Obviously, the achievements are solely attributable to the super hard work and commitment of the entrepreneurs. But they do need a few things to go in their direction and sometimes that doesn't happen, of course, that's just

the nature of life. So if we look at some of those entrepreneurs that have failed, are there any ingredients that you go, hey guys, if you're thinking of trying to build something and you're going to have a bit of venture capital to support you, here's a few things you need to bear in mind. Try to avoid this, this and this.

Maybe I would say from an investor point of view, one thing I can observe is in the 80 that have failed versus the 35 that have sold or IPO'd in those that have become successful, it's a lot easier to triangulate. Y X founder is working on Y project so Fadi Mashriqi, wireless power researcher at the University of Auckland, starts a wireless power company. Okay, I get it. It tracks, yeah. Other companies that have failed, you cannot do that as easily. So it's somebody working in a different industry or it feels like it's more of an idea than a calling or there's not like deep research, deep thinking, unique perspective on the world. And so that, yeah, it's just more frequent on the loss side than on the success side. But from a sort of advice point of view from entrepreneurs, I just actually don't think you can take advice to say, avoid X or Y, because then you're trying to spot those sharks in the ocean and you, you know, you get stung by a blue bottle or something. You know, it's just, there's just like tenacity, resilience, you know, I would say honesty, respect, Right. Having good values like those things help and, and certainly there are some companies within the 80 that I would attribute. The primary cause of death is that the founder doesn't want to build a team or wants to keep all the power.

So like one man band or just won't give the autonomy, won't delegate the power. So it's a control freak issue. Potential.

Yeah. Something there and I've seen it. I remember one who just hadn't built a team, kept not building a team and. And then finally was hiring. It was for like an EA type of position which is a power trip in its own right. Like, oh, I'm so important, I need that. And so yeah, if you don't have a gravitational pull for talent and a real passion to trying to elevate talent to work really hard on something, then you're not going to build a big company. Like there's not, there's no big companies built by individuals. Yeah.

If you look at Steve Jobs and obviously very focused on what he did. Very talented, had a massive team. Yeah, like significant.

Yeah, thousands. And I'm daily just in awe of the entrepreneurs who one learn how to level up from five people to 20 to 100 to 400 or whatever, but also to somehow to strike a balance of urgency, intensity, commitment without veering into sort of toxicity and monarchy and just aggressiveness. Right. It's a, like you have to find ways to push people on the team to their outer boundaries so they can really discover what, you know, great looks like. But if it manifests the wrong way, you're just a jerk.

Yeah. Not fun to be around.

Yeah.

So in terms of leadership, what have you seen from the examples of the people that you've worked with that have succeeded? What are some of the traits you see as great leaders?

Well, I think communication is just so important. I mean they need to find ways, written and oral, to just keep pushing messages to their entire group or team or whatever it is. And, and that's just not natural for some people. You certainly come across some that haven't accelerated as quickly and it's mostly because they are fixated on a specific area and maybe they just love their product and they just focus on that. And so storytelling and getting people's sort of senses heightened and helping people understand why they're working on X equals some sort of desirable outcome is a difficult one. Right. Equally, communication comes into play when things are going poorly and sort of convincing the team not to freak out or give up, but to double down and to hold on. And I guess I just default to that because a lot of people have lots of different technical skills and, and areas that they know better than others. But you're out of control very quickly. When you have 100 people, you're not building anything. And you can't just step in and say, oh, I'll fix this anymore. You have to compel other people to do so in whatever way it is that you desire.

And that's why, as you're saying, there's 80 that failed and 30 odd that have succeeded. It's not natural for a lot of people who are incredibly intelligent that have all the wisdom that are building the product to want to go, yeah, I'll let you in, you do your thing. It takes a lot of yeah, yeah, that's right.

I mean, team building certainly it's part of the sort of compounding that can unlock value, which is you attract a great team. They actually build something better than you could have imagined. Right. They're not just following a script you didn't write. Here's how to build the company and hand it out. You just hired people and tried to give them loosely the right direction. And if you do that and it works, it can work really well. Equally, if you grow too quickly, which has to happen, usually you can not have the time that you would love to have afforded to you to learn how to look after that group and then that starts to create problems and then it could create a loss of faith or just a little bit less performance, which, you know, that's sort of the reverse flywheel.

Of course you talk a little bit about their storytelling and it's interesting. So when I'm working with teams, I'll say, like, every one of you is a storyteller. And I say, hands up, who would believe that? And usually 5% of the room will put their hand up. So, okay, if I give you some beer and wine, three or four of those, all of a sudden you'll be spinning yarns, you'll be natural storytellers. Actually we need to be able to do that in our day to day lives, in our work, when we're leading others, when we're influencing customers, telling stories are important. So look, I go back to coming to Christchurch. One of the main missions for me was to help this team become the first world champions. From New Zealand. They'd never done it. The Aussies had done it, the Americans had done it, Irish had done it, the Kiwis had never done it. So for me it was easy. Let's give them skill. So to put it in perspective, it was drummers and bagpipers. So like a pipe band.

Oh, that's cool.

Something different, right? But unique. So my focus was drumming. And so, okay, if they're world class in the drumming skill, they'll be world champions. Natural go to the world championships, they don't win, they come third. So I come back and I go, ah, they need mindset, they need to perform under pressure. So we work on that. They go back, they come fifth, what's going on? So we started asking, what's going on? They didn't believe they could beat the best at their own game. Like the big dogs, we can't beat them. And I see this in business all the time. So for the next year or so, I stopped focusing on tactics and skills. They were still important and I started sharing stories, getting them out of their heads, into their hearts, you can do this. And inspiring them. That allowed them to perform freely and level up. They became the first and still the only Kiwis to win the world championships. Not my secret sauce though, right? It's just me helping them unlock that through story. So for a Kiwi listening right now, that's got a company, what advice would you have for them to understand the components of their story and to actually share their story within their team and out to their customers.

Everybody has different learning styles. I would say the way that I learn the best and others may is just seeing it in action. And I guess I say that because actually other entrepreneurs are very accessible. We had a founder recently who wanted to level up and she asked Craig from Halter, which is obviously a sort of hero company at this point, and Connor from Tracksuit, which last night was named fastest growing company in the country the year before was Halter actually. So back to back the Deloitte number ones. And she took a lot of time out of her year basically and spent about a week shadowing them and has leveled up so much as a result. And it seems like the easiest advice, but it's the hardest to follow to take that second and learn from others. But honestly, the founders can learn so quickly, even from just equivalent peers. You don't have to find a hero to learn.

Success leaves clues, right? You find someone doing something really successful, there's often ingredients that is leading to their success.

Yeah, yeah. And if you look at a board pack of a certain company, it can remain nameless. It may look exactly the same as Halter. And that's because that company said, hey, what does a good board pack look like? And we said, it looks approximately like this, and next thing you know, it's there. And, and so to back to the sort of learning to storytell, just learn from others, observe them. And you can do that reading books or listening to podcasts or literally trying to shadow them or meet with them.

That's great advice. And this idea of pitching so finders having to pitch. So I imagine you would have a session where people come and pitch to you, why you should back them. What does a good pitch look like? And a good pitch deck, when you see it, you're like, God, this is a front runner here.

Well, first thing is you should be embarrassed by your first pitch by the time you get to your last pitch. Right. Because the only way you, you really start to learn, like, hey, if I say X, I get the response I'm sort of looking for is to go through those cycles. And, and so, yeah, tip number one is, is just get out and repeat and repeat and repeat and practice. And you will, as I've experienced, you'll know the question that's coming before they've even thought it. And then you'll know the way that they want to hear the answer and you'll be able to package it in the right way to achieve what you want to elevate people's sort of interest. And for us, yeah, I would always say spend like the one document that people would spend the most time looking at would be a sort of 10 to 20 page PowerPoint or PDF or Canva or whatever. Highly visual. Tell stories with pictures, graphs, references, quotes, whatever, and not words. And, and have it very considerately structured from sort of this is what we're going to say to telling people what they are expecting to hear, to driving home the sort of concluding point and then the sort of substance of talking about the market or your technology, your team. I mean, you can find a million templates online, but the templates only take you so far of giving a bit of a framework of the key things to talk about. I think it all comes down to structuring it in a way that really reflects your business. And again, all you're trying to do is get investors emotionally committed to learn more. But 90% of the decision, I would say, is in that first sort of pitch check or first few minutes with somebody.

First impressions really last. It's like a book. And people don't judge a book by its cover. Well, we all do constantly.

Yeah.

When I'm walking through the airport, if the book's cover doesn't catch me, I keep walking. Yeah, Rarely that I would see an awful cover and then go. What does the title say?

Rare. Yeah. What is that expression? It's like you can't judge a book by its cover, but you can probably know its cost. Right. And it's, you know, it's true. So um, and I, I would also just say be overly prepared and tailored to the individual. It would not be hard at all to know that I don't have any interest in your sort of technical story or product. Yeah. Like I want to know about the team. And, and, and so, and if it's not obvious through just asking somebody or, or getting some advice, you should be able to pick that up within five minutes of talking too much about like your customers use of your software. It's just. And so pick that up and move on to the things that get the person's heart racing.

Makes so much sense. And as an investor, how long have you been in this space? What got you into investing?

So I joined Icehouse as an unpaid intern in 2008. At the time it wasn't a venture capital fund. It had an angel network of individual high net worth people who came together and invested together in New Zealand startups. And, and there was an incubator that sort of helped various sort of fledgling entrepreneurs in. I was looking after the angel network and then started raising funds in 2013. So it was a half a million dollar fund which is a humble start. Right. Like we get more commitments per day now than what took me sort of six months to raise. Credible.

Can you just define angel? The comparison of what an angel is versus venture?

Angel investors and venture capital funds are investing in the same thing which is privately held in New Zealand. New Zealand companies, technology mostly looking to buy shares in a privately held company that everybody aspires will become a lot more valuable by going from research at the university on wireless power to selling to Apple for hundreds of millions. Right. Angels as individuals are people that are making their own investment decisions with their own money. A fund is where investors commit capital to a manager like me and the team and they're committing capital on the basis that they have faith that the manager will execute the strategy to invest in a set of companies that, that meet the criteria.

Makes sense. So if we look at your current round right now, so you're getting towards the end of it. So who's in some of the companies that are in that right now?

So right now we're raising our fourth seed fund with about 70 million committed to it. That's 360 or so investors. All of our funds to date have been for wholesale investors, which is a label that the financial markets authority applies to people who have a certain amount of wealth or earnings. And that regulation has been in place historically just to make sure that mom and pops don't get exploited and put their entire retirement into some sort of sexy sounding tech startup. So all of the individuals that invested with us meet that criteria and then they commit to the fund. And in this fund it ranges from sort of 25,000 and I should say that it's not even paid up front, it's paid over three years. So it's roughly eight grand a year to five million. There's a few people at five million that have committed individually. And the strategy with this fund is to build upon the previous three funds. 2016-2018-2022-2016. First investor in Dawn Aerospace and Halter and shares and Tradify and a bunch of others. And the second one was very early in basis and Mint Innovation. And then the third one in Tracksuit and ideally and whole slew of other companies. And our goal is to pool the capital, we raise it once we get the commitment with the mandate to go out and find and invest in extremely promising but early stage entrepreneurs and startups, mostly software, hardware, robotics, clean tech, medical devices, fintech, you name it. And to make investments in companies over sort of three years, about 30 or 40 of them.

Wow, that's incredible. And who are some of those right now that you're currently. Have you got an idea? Have they already listed of who you're going to support?

Not with this fund. I think the most torturous thing for anybody entering the realm of making seed investments, Seed being companies right at inception, sometimes a day old, sometimes not even formed on the company's office. They may not even have a bank account. Let's say I gave you a million dollars and I said go find the next seed stage company. That would be like walking around in the forest, just guessing where a truffle will sort of be. Right? Entrepreneurs are beavering away, incubating ideas in their head, testing, researching, whatever, all over the place. Sometimes within a bigger company, sometimes just literally at home, sometimes at their university, and sometimes at a research institution, you name it. And so trying to figure out where they're going to pop out of the ground is a very difficult one. So when we raise money, say for this fund, we can show people the nearly 100. It's about 98 companies we funded with the previous three funds and give people a sense of the stage, the profile of founders, the industries, the sort of Ambitions and the terms upon which we invest. But we don't say commit this money. And here's here, we're going to buy shares in Tesla and whatever, because these companies may not even exist. In fact, a lot of them that will end up in seed fund 4 do not exist today.

Incredible. And so if there's someone right now that's going, I'd like to be the recipient of that. Where do they start? They need to get in touch with you guys direct. Is that the best way to do it? Is there any other way avenue for them?

Well, our goal is to connect with as many ambitious people as possible at all times. We hosted 72 founder events around the country last year for free. Right. There's no tickets, there's no sponsors. It's us. And we do that because we really want to cultivate a community of ambitious entrepreneurs and if we get lucky, in the position to invest in really promising ones as early as possible. That's a long way of saying our door is always open and we always want to connect and try to give some advice and share some resources and so on. Like Craig Pickett, who was the founder of Halter Company's Not Worth A Billion Dollars US Our first interaction with him was with a different company that he was thinking about. And it was not as interesting as putting collars on dairy cows and using sound and vibration to control them. So you don't need fences or farmers or dogs or whatever. And when we first met Levi, the founder of Partly, which is extremely valuable, but sort of under the radar company in Christchurch, he was working on something else. And so, yeah, certainly one of our very important measures is of the people that we say no to. What is the net promoter score? Because we know that a certain number of people in this world have entrepreneurial sort of inklings and they're going to test some ideas and maybe find one that really hits.

That's cool. It's very much relationship based. It's very deep. Like you get to know them, they get to know you. There's trust. I love that. I was chatting with a friend yesterday about that and he's involved in this space and said, james, it's all about relationships.

Yeah. And play that up. I mean, it's not that hard to

get connected in a country like this, particularly.

Yeah. You know, and it's not hard to find out who could make an introduction for you. And having somebody vouch for you makes a big difference. There's only one company and we funded 378 that we've ever Invested in that just inbounded through the website. In fact, they sent an email, like a cold email to the wrong email address and it somehow ended up back at us and it was Dawn Aerospace. So talk about an exception to the rule.

That's pretty cool.

Yeah, they, in every other case though, if we have a cold inbound, like hey Robby, I want to pitch and here's my pitch deck and some long explanation. We don't even respond because you sort of failed test number one, which is as an entrepreneur you need to rally customers, founders, team, investors, government, everybody. And you need to get in front of them and connect with them. And so do that effectively. Don't just put some, a task in somebody's inbox to respond.

Yeah, yeah. ChatGPT creates it for you, you send it out and you hope for a response.

Yeah, well, there's an interesting extra layer.

You must be getting a lot of that.

A lot of. Yeah, there's definitely. I've said, I remember the very last pitch where somebody said they were cloud based software. And the reason I remember it is because I thought, why are you telling us this? That of course you're cloud based. Right. Like what, what else would you be? Are you still sending CDs? You know, and so I, I suspect, and I hope AI will sort of go that same way. You're not AI powered X, you're just, you are doing whatever you're doing and AI is infiltrated into the or or permeated into all of it.

So 100%. Have you backed any AI companies from New Zealand?

Yeah, lots. I mean, but the ones I'm least interested in are sort of ones where you've seen this rise and rise of headlines about AI and then you skin a sort of chatgpt for X. Right, We've done some of those, but a lot of companies, even partly out of Christchurch, so what they've done is very heavy lifting to map all the car parts in the world and they've got about 800 billion of them now and there's estimates of maybe there's a trillion or it's something ridiculous like that. And they're seven years old and they were talking about large models, data, machine learning way back. Right. And not because it sounded cool, but because it is what was necessary to be able to answer the question for the 1994 Honda Accord, you know, model LX. What like Spark plug do you need? Right. And even Honda can't answer that. Well, and so partly solves for that. And so partly has mapped all the car parts in the world and can answer that very accurately and rapidly and can play a role in sourcing as well. So that's. And then there's a company called parrot analytics. It's 12 years old. He was using AI probably even when it was like detrimental to say the word, because people didn't think it was. Had any substance. But they ingest tons of data off the Internet to determine if a program, a show or a TV program will be in demand in different geographies and so on. So you launch Orange is the New Black. It works in America. Will it work in Ireland or Japan or New Zealand? And obviously the answer to that question influences whether or not people should pay for ads or buy the content or license it. And Parrot can do that, having ingested now almost a decade of data to inform it. That's interesting.

That's very interesting.

AI for booking an appointment at a doctor's office. I mean, there's probably. There are going to be successful companies that do that, but that's not up

your alley in terms of what gets you guys excited.

If it was an. If there was like an AI researcher that somehow had a specific take on it, then maybe that would be cool.

Yeah. So you're looking for uniqueness?

Well, I just think they don't have to be unique, but they need to have a unique perspective on the world or have deeply thought about something. And this is back to the sort of successes and failures, right? The successes, a lot of those, you can say, well, there's somebody who felt a visceral pain or could just see a very unique opportunity in their industry and thus they're solving for it. There's a company that we've backed recently that because it's sort of in security, it's trying to stay a bit under the radar. But it's like four technical executives from a bank who are always trying to combat scams and all that. So, yeah, they felt that pain. You know, they know it and they're going to build into that space.

What about from your own end at Ice House Ventures? So do you have much AI in terms of tools, in terms of part of your strategy to grow as a company?

Not yet. Yeah, like, we're in a very interesting position because we've had a software team for five years, which there's not many venture funds in the world who have that. And as a result, and we have scale, 378 companies, fund reports, or, sorry, company reports, board reports, shareholders agreements, changes, all this stuff, like every sort of legal document across all those companies coming in by the hour. And so we're starting to get a scaled database and that's interesting. And we can sort of train it because we've been doing the sort of hard graft on the data such that we, I think we'll be able to become pretty powerful with answering investors questions, helping people better answer questions with data like how much should a chief revenue officer be paid at a software company? And guess how that's answered right now? In most cases it's like well, my friend at x is paid 180. All right. You know, but, but like we have 300 plus companies so all of a sudden it can be, it can scrape that data and start to answer it in an organized form. And I think that could be a really interesting unlock.

That'd be amazing.

It's phenomenal.

Yeah. I always think about what AI is doing even just at a personal level. So for me it's simple. Like most people, I'm using ChatGPT, starting to kind of tap into replit a little bit and understand what is capable there, which is quite a lot. Whisper flow has been brilliant in terms of just kind of getting faster in terms of texting and typing. Not a fast typer. And so if I'm able to speak and I can understand my Irishness and put it all into text, that's awesome. What have you been using personally from an AI perspective?

Gemini.

Okay.

I just like the, just deep research and just the ability to sort of. One of my kids had this book about a scientist and the quote was like, you know, whatever the actors or the character's name was like. And she did what all good scientists do, she asked a question and that led to two and those two led to three and that and those led to four more. I don't know what that sort of rhyme was and I think that's a very powerful concept is, is doing a deeper dive and, and of just inquiry and so that's, I think that's the most exciting. Like I'm not, I don't really cycle back and sort of read notes that have been recorded. All of our calls are recorded 20 times over. But learning more quickly is really fun.

That's brilliant. I was in Singapore about 10 days ago and sit down with head of Meta or Facebook for Asia Pacific and just looking at their specific challenges and what they're doing and obviously they've got challenges like the rest of us but we got talking about kids. I've got a nine year old and he had some kids about devices and he says, you know, I Try to keep my kids away from that stuff. And so what's your. You're right in the thick of tech and in the thick of, you know, what's happening in the world. Do your kids have access to social media devices, etc.

Oh gosh. Parental advice. I don't, man. I think everybody just has to navigate that. Wouldn't profess to be an expert. I do have, you know, a son and a daughter, 8 and 6.

They're not quite a social media level yet.

No. Yeah. That's a scary phase. Right. Like, and already you do worry about some of their friends having phones and just how it's just completely untethered and you can just go anywhere in the world. And we all know how like in our generation, how much you could sort of just veer off into the dark Internet, you know. And so like really, I feel like it comes down to instilling good values, having self belief and confidence, understanding what hard work is, being honest and being able to interact with people. And I hope those are constants. Right.

So too.

But maybe I'm wrong. I mean how do you, how do you predict this? I think people in every generation try to project their own experience and so I'm trying to find what the sort of common threads are and I would say it's sort of those.

Yeah. And it's doing the simple things.

Well.

Right. I was chatting with Cecilia Robinson earlier who's really driving the Before 16 campaign, like keeping kids off social media up until the age of 16 and very interesting. Just her take on it and she's done a lot with Jonathan Haidt who wrote the Anxious Generation. And as a parent, I've just read it recently, I'd highly recommend.

If you haven't read it, just make me more anxious.

It could. Or I think it just equips us as parents with a little bit of ah, we could go this direction or that direction. It's interesting. Now going back to Kiwis finders, do you think that Kiwis take big enough swings or are we a little too conservative?

No, I think Kiwis are doing great and I think New Zealand produces phenomenal entrepreneurs. And I don't think there are any sort of systemic weaknesses that are backed up by data. I think it's easy to try to pick on sort of macro issues like there's not enough money or there's not enough ambition or not enough talent. And it's like, well, for every statement like that you have to ask, well, what happened with Rocket Lab or Crimson or Zero or Power by proxy or whatever. I also think that New Zealand has some real trends in its favor. The world is becoming more connected. You have this intersection of technology making commerce and interaction and communicating better and better. But more importantly, you have a mindset shift where it is more and more accepted to interact online and to have a zoom. I mean, it's. Our generation still remembers conference calls and just how impossible it was. Right. It just didn't work. Or the sound of the Skype noise when it was trying to reconnect or whatever. Right. And that creates a friction that would limit our drive to do more and more online. But the next generation doesn't feel that it's always worked. You FaceTime your friends, and it works pretty much. And so why does that matter? Because as a relatively remote country, we are disproportionately advantaged by things becoming closer. Like whether you're based in Lake Tahoe or Silicon Valley, zoom doesn't make that much of a difference. Right. But if you're 12,000 miles across an ocean, it does. And so I just see a direction of travel where New Zealand is politically stable. It's beautiful. It's English speaking, it's connected. It doesn't face all these pressures that other countries do. Right. Big military budgets, immigration, which can have all sorts of just challenges or, you know, in our sort of population pyramids. Not too messed up. Like, we're not. We're not overly leveraged. There's just so much going for us in a world where I think the answer to the question, can a global company be built anywhere? Is increasingly going to be yes. And so then it's like, well, where will these global company builders be based and who are they? Well, they are usually people with resources and ambition and as a result, mobility. And what are they going to choose? A beautiful, connected, stable country with no poisonous animals. Yeah.

New Zealand kind of ticks all the boxes.

Right?

I love that. That's a good perspective. And you're right at the coal face. You're in amongst it. You've got big decisions to make in terms of who you're going to back. What do you do to keep innovation and creativity and mindset and acuity at its upper level? Are you reading? Are you podcasting? What kind of do you do? Wow.

What do I do? I would say yeah, trying to strike a balance is good and trying to stay optimistic is really powerful. And trying to stay grounded, I think with friends who don't care about your work or kids who change your perspective is a healthy foundation. And having a Desire to always learn and learn from others is great. In my case, I learned the most with observing and being around and working with really great people that are extremely ambitious. I mean, you cannot be in a role where you're backing these companies and it is all that matters to them, is just triumphant and not have osmosis happen. And you can't be surrounded by all sorts of investors from around the world who have achieved a lot, but also specifically in our area, have an ambition to help the next generation and not absorb that sort of desire and mission.

So, like learning by osmosis, almost like you're around great thinkers who are maybe further down the track in specific areas.

Yeah. You know, it's worked when there's somebody that all of a sudden you realize you just parroted a little bit. Right. But you did it in a comfortable way, not like a replication. And that's when you're like, okay, cool. I've been around somebody that's actually rubbing off on me in a positive way.

Who comes to mind when you think of a mentor or someone that is making an impression on you.

I've had so, so much fortune with just great people around me. But I would probably say it's the sort of entrepreneurs, Right. And like, if I was to name just like, completely different sort of styles, although it's probably not that discernible on the surface, would be like, you know, Sean Quincy, who founded Genoa Pay, sold that and then now Symphony. Tim Brown, who founded Allbirds and, you know, took that to ipo. Right. And Brooke from sharesies. Right. And Jamie Beaton. I mean, I can't emulate his intelligence, so I have to see if I can find other parts of it.

AI might help with that, you know.

Yeah, yeah, yeah.

Sean's great. I had him on the pod and Brooke as well, a few years ago. They're great. I. I just love the way Sean thinks. And he's always remembered his feet on the ground, you know, even though his brain is a million miles a minute, his feet are always on the ground. And. Yeah, solid Kiwi leader.

Yeah. Yeah. Everybody's got a crush on Sean. Yeah. Yeah.

He's the man.

Yeah.

And what about reading? Do you read much?

I do a lot of books, ebooks, but I mostly like biographies. Just on anybody, so. Yeah, just the one on Masa Son, you know, from Softbank.

Yes.

Yeah, it's called the Gambling Man. It's really simple advice. I mean, basically take the biggest bets of all time and be right, you know? Yeah. And just go. Go hard and get you know, and crush it. So it's kind of like what the

Paris Hilton say, stop being poor, you know? You know? Yeah, yeah. So it's like, yeah, I get that I could try and make the right bets, make the big bets and. Yeah.

But I mean, also just incredible rise from living on the side of a railway as a sort of oppressed minority and dirt poor and I had no idea. Now one of the richest people in the world.

Wow. I'm gonna get that book. So I'll probably not get Paris Hilton's book, but I'll get his. Anything else you've read in recent months or years? That's been good.

I loved the Disney biography, and I'm just blanking on his name. Iger. Paul Iger. Yeah, he's got great values. I loved Reed Hastings biography.

So it's a LinkedIn finder.

No, that's. Hoffman Hastings is a Netflix.

Ah, yes.

Yvonne Chouinard from Patagonia. That was a great one.

I'm writing all these dynamics. We'll put these in the show notes. Folks, this is awesome.

And I'm blanking on the one other one recently. Oh, basically any word that was written by Ben Horowitz from his two books. He's great. Yeah, I love it.

Yes. So it's interesting when you talk about Netflix. So my friend Jim had the opportunity to acquire Netflix and he said no, he was running Blockbuster.

Okay. Yeah.

And we talk often about that decision. That was a pretty big decision. But he had the data around him that made him feel very confident. It was not the right time and place. And you must see that yourself where maybe in the past you were like, nah, we're not backing it and it's taken off. Has that happened?

Oh, I mean, we haven't missed Netflix, but we've missed some huge ones. Yeah. Yeah. And that's the most formative thing thing is learning from mistakes. Last night was by coincidence, sort of interviewed after the founder of Kami and the founder of Legend Stories Studios. I mean, two phenomenal companies, both of which we missed. And that shapes you because you really reflect on, did I put myself in the right position? Was I thinking clearly? Is my mandate right? Am I a desirable source of capital and so on. And so, yeah, we've missed some spectacular ones. And I guess I would console your friend to say, if you don't have examples of having missed something, then you're not scratching around enough. So it's also a positive signal. Although it felt like that one sort of landed on his doorstep.

That's a pretty Big one. So decisions. So I think of the word decide a lot. So you've got two syllables, de cide, second syllable, C, I, D, E. So several other words end in that syllable. Pesticide, homicide, genocide. They're not good words. They all mean to kill. So the word decide, when you go back to its Latin roots, means to cut off all other options or to kill off all other options. So I think decisions are pretty damn important and we've got to try and make informed decisions. We've got to try and remove emotion often from decisions. So I've got a decision making filter. I use a VP filter. Helps me with the big decisions and sometimes with the small ones for you. When it comes to decision making, do you have any processes you go through

that sounds pretty prescriptive? I don't have that. I mean, I guess we could talk one about sort of investment decision and then second is sort of strategic stuff as a business, but certainly running like Icehouse as the company. I'd first default back to the overall mission, which is like transformative investors and transformative companies, right? Or another way to think of it is like, we want to be helpful and associated with and invested in the real consequential companies that make a massive impact. And so that's the direction of travel. And then you have to ground yourself in facts like, do they exist? Can you access them? Why would you be able to. And to start to answer those questions like, why would they take money from you? You go through and you start determining what matters to them. And then you have to ask yourself very honestly, are you, can you take those boxes? Right? And so when it comes to making decisions, if, if it's a decision on an action, for me, I always just go back to, are we like, the headline goal is to invest in the next greatest company ever. So is this taking us in that direction or not? And, and it matters a lot in venture capital because it really is sort of a winner takes all market, right? In certain businesses, if, if one customer doesn't walk in the door to buy your jewelry, I mean, there's probably another one. In our case, that person walks in and they spend a half a billion dollars, right. Where Everybody else spends 25. So you have to have them show up. And so that I think that clarifies your, your direction.

I love that. I think a lot of us need to hear that whether we're running businesses or not. But I call it El Capitan. Like, what's your rock face that you're trying to scale? That's your Big Everest, whatever you want to call it. And every decision you make is going, does that take me closer to the top or not? And if it takes you in a different direction and there's no way it's going to serve that mission, then it's a no. If it's not a hell yes, it's a no.

Yeah, that's right. And that's where I think some people can be tied up. And you said it sort of remove emotion and so on and try to be a little bit more ruthless and factual and honest. I think learning to be honest with yourself is very difficult because actually a lot of life you're sort of trying to persuade other people and you know, find half truths or spin or whatever and then that could potentially work for a short period of time and then you can like actually start to learn how to lie to yourself and trick yourself. And that's. Yeah, I feel like the biggest weakness of phenomenal persuasive communicators is that they can persuasively convince themselves of complete bs.

Yeah, of course, I see that all the time. It's interesting. So I'm going to write it down. But the one word you've probably said five, six times is honest and honesty, which is really cool. So to me that would suggest that honesty is a core value of not just the company, but of you. So what do you believe about honesty?

Well, I mean, it's sort of the, the right thing. I've, I, I guess I feel vindicated in, in that respect, which is like I. Venture capital is a long term game, right. And if you stick at it, you can get real disproportionate rewards. And I feel like we've made great strides by not trying to get quick wins and not. And the sort of lecture I give to all of the new people that join is like, you are in a position of privilege where so much trust is given to you on both sides. So founders, they sort of have to believe you because they're like, I need the money. And so they'll. And then because of the brand cachet, they default. Think any word coming out of anybody's mouth is true. And man, that's an intoxicating power that can be wielded very ineffectively. And so the first thing is to know that position and not abuse it. And that comes down to being grounded, not sensationalized, not deceptive, and without any grandstanding. And with respect to them equally, investors sort of have to trust you. I mean, they give you the money and they're like, well, this individual is thinking about it all day. So the power all of a sudden comes where you can say anything you want about a company and oversell the company and the investors will default, believe you. Right. And guess what? You oversell it. The chances of a sizable delta from that reality are high, and your fall is going to be a lot further and harder. So that's why it's like no grandstanding, no overselling. Right. Stick to the. Stick to the facts. Actions over words, and don't ever abuse your very privileged position of power.

It's beautiful advice. If you weren't doing this, what would you be doing?

I have no idea. I would. Yeah. I think I've observed just so many people who've sold companies, generated tons of wealth, have infinite options, and they can, which includes just not doing anything and having no accountability. And I've never seen anybody choose that ever, ever. And, and, and that's because there is just reward in the, in the pursuit or, you know, the journey is sort of the reward.

Yeah.

And so that is. That would lead me to think that I'd probably be working pretty hard on something else very quickly because that's what keeps you energized and, and driven and so on. And then what area would be in. I mean, who knows? Because you can. You can have fun setting up laundromats globally or, you know, or working for a charitable organization or planting trees or whatever. Right. So, yeah, I could go into industries I probably wouldn't bother with, but ultimately it'd be find something big and challenging and with good people and good values and get back to it. I love it.

Yeah. It's at the heart of what you do is people and relationships and building teams and taking risks. Ultimately, you want to be in the arena and not a commentator. You want to be in amongst it.

Yeah, yeah. Although entrepreneurs, in that metaphor, they are the ones really in the arena. And venture capitalists, you know, sort of sit there and are part of it.

Insane that you run 24. You got 24 people on your team. Like you are in the arena, my man.

Yeah. Sales ventures is. It's actually, it's hard for some people to appreciate that a investment business is a business in its own respect and can be really valuable. Because, in short, if entrepreneurs, if you believe that entrepreneurs can create value, then Ice House has value and can have lots. If entrepreneurs can create lots of value, and obviously I believe that. So, yeah, we have to default back to what matters most, which is the entrepreneurs being really successful. But if they are, then we're in a really fabulous place.

Everyone wins.

Yeah.

I've got a few last questions for you as well. So, routines and habits. I believe we're creatures of habit and by the time we get to 35, about 90 plus percent of what we do is literally automated behaviors and we respond. Eating, drinking, responding in certain ways, emotional behaviors, we can influence it, but it's much more difficult after 35. So what are some of the habits for you on a day to day? What are some of the things that you do to help you perform?

Well, best case scenario is that I go in this order. I wake up and I exercise first and have breakfast second and have caffeine third.

Nice. What does exercise look like?

Any form. Yeah. I mean I like surfing and biking and running and yoga and tennis and all that.

Nice.

Yeah. And I've you know, certain. I think maybe you're right on the whole 35 thing. Like maybe I'm not like as hardcore as some people. Like and I don't know if I ever will be. Although like certainly competitive in sport but, but the reason I say that order is like well, I'm addicted to caffeine. It's the greatest thing on earth, you know. But I reckon you first want to get your heart rate elevated and sort of blocks blood oxygen up and this is not scientifically proven, it just feels better. And second have your metabolism sort of working and, and then inject the drug.

There you go.

Where if you wake up and you just drink coffee immediately it, I think it just like brings cortisol levels up. But.

And our cortisol is at the highest point first thing in the morning. So that's what gets us up, that's what awakes us is so people think when you're at awake and you wake up in the morning you're actually most relaxed. But it's your cortisol's at its highest peak.

Yeah.

So if you then go on your phone elevates it if you have your coffee, likely. Elevates.

Yeah.

I like that you do that and you're releasing BDNF that when you're working out as well, which is great for your brain. So yeah, I think you've got something working really well for you. What about for your brain training? Do you do anything for mindset, for focus or anything like that?

No, I would say probably the best part. So not in any measured way. So maybe that's a shortfall for me but being in nature is like really powerful and I've, I've actually built a home office that's tucked into these trees and, like, I literally have to brush through these Nikkal palms to sort of get to my door. And I. And I. And it's just because I read somewhere that, like, being in nature is good for you.

So that Japanese call it forest bathing and they have like research and data to back it up.

Oh, well, there you go.

Yes.

You're doing it right. Yeah. And being outside and remembering sort of what you're working for is good.

Yeah. Leading on purpose, right? That's cool. I love it. Now, I will put links to ICE ICE Ventures below and all of your social medias as well. But one last question. If we were to fast forward many years into the future and you were highly aware that it was your last day here on Earth and someone very young comes into the room, someone that you love dearly, maybe a great grandchild, and they say, robbie, how do we go about leading our life on purpose?

That's a really interesting question. Well, having purpose just generally is a good thing. Having some fire in you, I think is the point. And, yeah, I got taken through this exercise of trying to way to draw this, like, what our great, great grandchild would be looking at and sort of seeing. And so some people interpret it quite literally as like space and tech or whatever, but I just think you see what you want to see and I can't define that for people. And so if you can try to start with a positive angle on it and then you're going to see more positive things.

I love it. So you'd say to that young person in your life on your last day, hey, look for what's positive, look for what's possible and focus on that rather than the negative. Yeah, I love that. That's amazing.

Thanks.

Well, hey, thank you so much for taking the time out. Thanks for doing what you're doing for our country and helping startups and seed funds and all the stuff that you guys are doing, it's phenomenal.

Appreciate it.

Now. We'll see you again soon.

Okay, thanks.

Thank you.

Awesome. Yeah, cool.