Product and User Experience, how to make a cure and not a vitamin with Greg Raiz

Hi everybody. Welcome to another one of these webinars. I do them maybe once a month and occasionally I'll get to talk to somebody that's really smart. Today I'm talking to Greg Reyes, who is a longtime vc, also an LP in my fund. We're looking at investing in a bunch of things together and I like what he's investing in. We'll talk for about half an hour, answer some questions about product UX and how to create a cure versus a vitamin. You'll get all the pithy wisdom from two VCs about that. And then at the end we'll have another maybe 20, 25 minutes for questions. So to start off, many of you know me because you follow me on Twitter. Hey Johan, like the beard. It's looking great. I used to work with Johan at Microsoft back in the day. And you were at Microsoft too, Greg.

I was at Microsoft during the Windows XP days. I have my Windows XP trophy and a bunch of patents. But yeah, a lot of fun.

Tell me a little bit more about you. Most people know me from Twitter. I'm a B2B VC. I invest 250 to $500,000 into B2B software companies. I've made about 70 investments in the last five years. In the current fund I've made 19 and six of them turned into unicorns. So tell me more about your background, Greg.

My background? I'm an immigrant. I came to the United States when I was very young, about 2 years old. My father was an entrepreneur and feel like I grew up watching him building startups and businesses. I always had a little bit of that itch. Worked at Microsoft for a number of years on operating systems and I was on the User Experience team. Complex technologies or things that are in deep research and trying to figure out how to translate them to be usable, understandable. And in school I always had a passion for design, visual design, product design was always on the school newspaper and things of that nature. When I left Microsoft to start a business, I had no idea what I was doing. I had zero business background. I literally went to the library and checked out books on how to start a business and what it even means. When I went to the bank, I thought they were scamming me because they were like, hey, you need to open two accounts, you need a business and a personal and you need checking and a savings. I was like, why do I need multiple accounts? And so I just had zero business experience. And I figured it out. I bootstrapped my business for about three years. I was by Myself in coffee shops doing things. And my vision early on was really build better software. When I left Microsoft, I was enamored by this, this idea of user experience and customer centric thinking. And I was like, why don't more companies do this? There was so much software that I was seeing being produced that was frankly terrible. And I was like, why don't companies build better software? If they built better software, customers would be happier, there would be less churn, it would just be better. I joined the uxpa, which is the Usability User Experience Professional Association, Boston kai, which is the Computer Human Interaction Society. I started a small business, we were working with at first local companies in the Boston New England area, helping them on UX and product. We were in the right place at the right time. When Steve Jobs introduced the iPhone, the iPhone was very much what we had been talking about. Simpler user experience, customer centric, more intuitive, more emotional. The early iPhones had a lot of emotional design put into the product, which is actually a lot of the research that went into Windows xp, like the rolling green hills and blue skies. That's not just the pretty wallp. There's a lot of research on why emotional design wins. One of the things I did at Microsoft was we ran a competitive lab. We would bring usability people in to play with the new Aqua, which was Apple's operating system, and with Windows 95. And we would do all the kind of classical task performance. Can you change the wallpaper, can you open an email, can you open a website, install a game, install a driver, play a dvd? But then we asked people the emotional reaction and what we saw over and over again was like people were actually accomplishing their tasks faster in Microsoft. But when we asked them what did they prefer, they shared a strong prefer reaction to Apple products. We're like, oh, a lot of this design actually matters a lot. When Steve Jobs introduced the iPhone, I was like, let's pivot into that. We ended up building many apps for many Fortune 500 companies. We built apps for Macy's and Costco, Bloomingdale's, Home Depot, Verizon, gm, ge, a bunch of others as well. Grew that, bootstrapped, never raised venture for it, exited to a private equity company, started angel investing, have made about a hundred investments as an angel. I ran techstars Boston for a few years and very recently I started my own venture fund to invest in very early stage businesses. Using both data, we think about user experience intersected with AI. And so it's like, how do you fundamentally change experiences by really Thinking about what AI unlocks.

Right, let's get into our topic, which is making a cure and not a vitamin. A lot of founders hear that all the time. You've mentioned something relating to design, but what do you think is the difference between a cure and a vitamin in terms of a software application?

Yeah, I think it's really listening to customers and listening for pain. Martin, you said something that I like. The way you describe it, it's like listening for friction in the world. And it's probably even more than just friction. There's certain things that the classical I go to a mall and the door looks like a pull door, but it's a push door. These things are annoying. These things should be fixed. Those are small annoyances. They don't represent giant opportunities. I do wish the doors were fixed, but you're really listening for customers with hair on fire type problems where they're like, they've looked for solutions, they need a solution. This is costing them money, time, lives, health. Like something fundamental where if a solution existed, they would be more than happy to switch, jump through hoops and whatever. One of the things in our research and one of the reasons I spend more time in AI right now is that we've seen that technology waves or technology shifts tend to create opportunities where the need is much more poignant. And so when I was building my company in the mobile sector, when Steve Jobs introduced the iPhone, all of a sudden all these Fortune 500 companies were like, the BlackBerry isn't good enough anymore. We need to have a solution for mobile. And so that started to be a pressing need for them. Before the mobile, like during the dot com era, it was the same thing. Like many businesses were like, oh my God, we need to solve this dot com thing. We need a solution. And right now I think there's a similar opportunity where a lot of enterprises, small to medium sized businesses are like, we need to understand how AI fits into the picture.

Let me give you an example from my portfolio, and I'd like to hear one from your portfolio recently of a. Of how AI unlocks some new pain point that previous versions of software haven't. I recently invested in this company called Quintess AI, which is building a voice agent for railroad equipment maintenance organizations. And it's an industry I'd never freaking thought of before. But these are, this is an old industry. The average technician is 60 years old. And the way they used to document their. What they did in the maintenance thing is that they had all these paper forms or they had these apps on that they had to go back into their office and use a desktop app. It wasn't something they could do in the field. They were forced into using this work management system with a bunch of forms and acquired fields, taking 10 to 20% of their day to document their work as opposed to do work. And these are people that would rather do work. And so these guys came up with a voice agent that allows you to update your ticket, say what you did, create new tickets and everything with voice, which in many ways, especially for this cohort of employees, is a much more natural language interface voice than even an application. I've seen that similar type of thing happen where people are doing voice ordering for restaurants instead of doordash. In many cases, ordering a pizza with your voice is way better than trying to hunt and peck through an application to find the right toppings and adding the gluten free toast and all of this different stuff. The way I explain my AI thesis is I want to hear what kind of previously intractable problem is today tractable given the infrastructure that's available with AI in the same way that many mobile problems were intractable or the iPhone or things like that. Do you have some examples from your portfolio?

Yeah, I think that's spot on and I'm definitely paying attention to a lot of similar things. Company that's in the med device space saw an opportunity where manufacturers building medical devices, OEMs, selling these devices into hospitals, were having utilization issues where these devices were getting lost, they were getting moved in transit. People didn't really know where they were. And these are when those devices are lost or misplaced. It was all due to labor. People just didn't want to log it into a system, they didn't want to put it into a thing because that's work. And if you're a busy doctor, if you're a busy hospital, you don't have time for that. You're going to go talk to a patient using AI to systematize, automate, send the scheduled reminders. Your point is spot on. We're looking for clear answers to why now. What is it about the last three months, six months, 12 months, that all of a sudden this opportunity to create something emerges? The market always needed the solution, but all of a sudden the particular solution becomes possible and practical. The other thing we're listening for is a founder who has deep industry understanding and expertise. It's really knowing the complexity of these enterprises, software companies, businesses or workflows. The thing I discovered, and we did a bunch of study, entrepreneurship and investment is sometimes the Best opportunities are actually non consensus. We're looking for found that have this. I know something about the industry or the market or the application of AI to the industry that other folks are really haven't figured out.

Yeah, yeah, I do like that two person team. One of them having deep business knowledge, preferably sitting in the seat of the potential buyer for a couple years and another person that's technical and can build the product. That combination tends to work well. There's another company solving a pain point that I invested in recently called Civic and they're building a local purchasing database. There's $1 trillion of local purchasing spent in local governments. Think cities, counties, school districts. There are 180,000 different websites that had these RFPs. Anything under $100,000 wasn't an RFP. It was just talked about on the zoom call. People tried to build these databases before, but you had to do public records requests, get PDF files, send them to India. It was an intractable problem. You couldn't map all of the local spending cost effectively. But today with these things that will read a PDF and create structured data out of unstructured data, you can have AI listen to the county council meeting, extract all the vendor opportunities from there, put it in a structured database. The ability of AI to take unstructured data and make it structured is allowing us to create new databases that were never possible before and they can certainly remove a lot of pain. You're selling chairs to the school district now. When is the table contract coming up? You have no idea. Right now?

Yeah, I think there's a lot of interesting opportunities in the AI space. In general, strong teams with deep industry experience tend to outperform. One of the things I highlight to founders is the biggest advantage. Couple advantages that startups have specifically when it comes to AI. The first is speed. When you compare a startup and a large company, your biggest advantage, the thing that you can do that Amazon and Google and OpenAI cannot do, move as quickly as you can. If you can learn faster, you can iterate faster. You can talk to customers more frequently, more often, you can iterate and solve their problems. You can A get to market faster and get customers faster and iterate and B on your version 3 before the incumbents even get out of the gate.

Yeah, yeah, I definitely see that. So let's talk about founders. When you're listening to founder pitches, what are you looking for to show you that they have found potentially a cure versus a painkiller? You mentioned lots of customer discovery, but what kind of things are you looking in the pitch for.

Yeah, I'm trying to think how to most helpfully answer this question. The key thing for founders, the thing I'm listening for, is how do they significantly remove that friction from the world? How are they solving something that is irrefutably a huge problem? Sometimes people articulate the problem and they're like, oh, yeah, people don't. Like, this is annoying. I think there's an opportunity. Like, we do this a little bit better than all the incumbents. Not everything has to be charged with emotion, but I find that when people are passionate, it does come through. When I was running my company, one of our customers, he pulled me aside. He's like, greg, I don't know. Like, you guys do things with product and technology. It's just different. Like, we. We've hired other firms, we work with other people. What you do is different. It's like you have this magical ingredient, ingredients. Like you have paprika and no one has it. And I said, like, we don't have paprika. It's just like, we give a. Like, we really, truly care. And when you really care about stuff, the details matter. I'm definitely listening for founders that know this problem is huge and it's really meaningful and they validated with customers and they built prototypes and they're really thoughtful about how they will really take over the world with what they're doing. When they believe it, it's not like they're convincing me. It's like I see it in their eyes. The energy is higher. I lean into the conversation. I want to know what they know. Right? Investors are fundamentally, we're trying to predict the future, right? Which chips should we put our money on, which are going to turn up true in the future? And when founders have this, like, when they're clairvoyant, when they're like, this is the future, I know it, I've built it. This is why this problem is visceral. This is why this is such a painful problem today. This is why customers are banging down my door. Like, it just comes across. And again, there are a lot of subtleties that we do look for in general, like, obviously, strong teams, ability to execute. Technically, tenacity and grit, some ability to execute. I do this thing when I was running my company, I called it forensic recruiting. In forensics, you're looking for evidence. So when people say, oh, I'm really good at Python, or I'm a Swift developer, I do Android, I'm a UX designer, I would go online and I would be looking for Forensic evidence of the things that they said were true. The people who are really good at whatever they say they're really good at, they end up all over the place, right? They're posting their stuff on Twitter, doing their thing on Instagram, speaking at talks, being booked at venues. They're just exuding this energy and truth about what they believe. And I would certainly find engineers, they're like, I'm a passionate Python developer and you go on all of their online and LinkedIn and whatever, and it's like they have zero stars in their GitHub, zero public repos, never contributed a pull request. You're like, okay, maybe it's true, but it's hard to have zero forensic evidence. Same thing when I'm talking to a founder, I'm also looking for kind of like, why do I think this is really true? Because the people who operate and execute at a really high level, like world class engineers, founders or designers, have a history of doing things that are impressive. It's not like accidentally they started a very interesting technology company. No, they did something before that was interesting. They did something in high school that was. Yeah, I did something very likely before that that was also interesting.

I often ask founders questions like, tell me something you believe that a lot of people would disagree with you on. I want to know their unique interests. Or tell me a big problem that you ran into in college and how you overcame it. I want to see that they have resilience, that they faced hard problems before and they've gotten through them. I think that's really interesting. Sometimes when I think about this difference between a cure and a painkiller, sometimes it's not the founder or the product, sometimes it's the whole category. And let me give you an example of a whole category that I passed on because I thought the whole category was painkiller and not a cure. And that is, we even have a few of them in here now, which is all these video transcribing bots. I was like, that's a technology looking for a problem to solve. They were super easy to write. When Otter came out and fathom and all these things, I was like, first of all, Zoom is going to include that and it's going to be table stakes. And by the way, those notes, it's really the integration to other note takers. For example, I saved my notes in roam research or notion instead of on somebody else's server. And so it's not just that one feature of transcribing the call, it's integration into the whole Workflow. I think there's going to be other companies other than individual companies. Just making a transcription brought that whole category seemed to me like a painkiller, not a cure for a problem.

That's a great example because if you talk generically, hey, who's ever really wanted detailed word for word transcription of their zoom calls? There's not going to be a lot of people. But if you say to doctors and you talk to a hundred doctors, you're like, hey, how many times have you not wanted to update charts after you meet with a patient? They'd be like, yes, 100%. Every single doctor wants to spend more time with actual patients and less time updating charts. And it's the same technology, right? Record the conversation. Identifying an ICP and talking to the right customers is just such a different problem.

Solving the problem of not enough time. I think the best AI agents today are doing that. There's another company, Growai GRW AI. They have an AI sales coach. This guy had run a one on one sales coaching business himself for 10 years and he was paid a lot of money to train salespeople how to become better salespeople. But he had a scaling problem because it was a one on one thing. It was $300 an hour. He also had a data problem in that he couldn't understand everything about a particular deal that he was talking to because he hadn't read every transcript, he hadn't read every salesforce thing. And he's I actually think I can do a better job than I could as a coach. So he understood the customer problem. He implemented some AI solutions and for a fraction of the cost, he's able to give every SDR a personal sales coach and two or three of my portfolio companies have installed it. A primary thing that the VPs of sales with CEOs who are managing the salespeople said is that their salespeople don't spend so much time with them. It's basically lowered their management overhead. They don't have to spend as much time with these salespeople. There's this AI sales coach that freed up management time and that's a big problem in these companies. Managing the junior salespeople.

Yeah, there's a trend of startups called AI enabled services. There's a whole class of businesses that previously existed as service businesses. You know, if they approached venture capital and said, hey, I'm a service business, I want to run raise venture, the VCs would typically say this is not venture scale. Because these types of businesses don't Scale very well and there's lots of examples of that now. For instance, a coaching business previously was unscalable because the labor costs wouldn't scale. Now you could scale certain types of businesses that previously wouldn't.

Exactly. Yeah, there's a lot of those. What do you think? One of the questions. We'll go to questions pretty soon. If you have a question, raise your hand and we'll go to questions soon. The last thing I wanted to get your impression on is in the pre seed or the seed a lot of founders have heard about you got to find product market fit, you've got to find product market fit. What is a myth? Think about product market fit. You know what you want to debunk. What are the things that define product market fit for you and what are the things that are like faults?

I think generally it is very rare for companies to have product market fit at pre seed. Even at seed. Ultimately the thing I'm looking for is speed of learning and de risking of the business. I want to know that you as a founder see a huge opportunity for your product. I want to know that you can convince other extraordinarily smart people to join you. I think that's really important because to build great companies you need great people. I need to know that ideally you have good decision making ability either through prior experience or through demonstration and building new product and that you've taken some active steps to de risk the core business. There are multiple ways to de risk the core business. Certainly building prototypes can be one, getting initial customers can be one. But that's really it. I will back extraordinarily strong teams that have no revenue, that don't have product market fit, that have a concept of what they're going to do. I just need to know that they can execute rapidly at a high level. Pre seed investing is significantly higher risk. That's why many pre seed investors are taking lower valuations and higher equity. I ran techstars and there's a lot to be said about that model. But it's really if you can execute really well and you're a really strong team, like that's often enough. I have backed teams without a pitch deck, but they show their product or explain their vision and it's whoa, this is big, this is something and it's the right team. And I believe they can execute like the.

For me, precede is much more about the team. What is your guidance in pre seed for how far they have to get before they raise a seed? My guidance today is that in the Pre seed, you need to get up to about $500,000 of ARR before you can raise a seed in order to get to 500,000 and you have to get there with good metrics like high month over month growth rate, positive net retention on renewals and some proven ability to sell beyond your friends.

Yeah, again like the metrics are always a bit of a moving goalpost. I do think it really depends on the type of business that you're running. I've certainly seen strong teams raise seed rounds, actually very healthy seed rounds with very little and that's typically more oriented around multi time founders or folks who have very, very strong connections. There is a lot of who knows who and there's certainly an element of luck to it. I do think your guidance of hey, am I getting repeatable traction. My biggest level guidance for founders is that seed investors are largely running the math on their own end to be like is this the company that can get to an A? And so you have to be like, okay, the seed investor wants to know that I can get to an A. What's the metrics for an A? And metrics for an A are call it 1 to 3 million dollars in reven growing at a pretty rapid clip year over year. Again, as founders you always have to be thinking one or two steps ahead. If you can clearly articulate like there was a founder I passed on, but he was saying I'm going to get to my series A later this year because I have these large contracts coming in. I think it's going to close very quickly. He was solving a specific pain point relative to tariffs which had a poignant hair on fire. People like some of these enterprises need the Solution. And again, ACTA considers this a 10 year year, 10 year pain or a 2 year pain. But companies that can articulate, hey, this is going to move quickly and I believe it'll get to A will have an easier time convincing seed investors that it's a good bet to bet on them.

Yeah, definitely. We've certainly seen the bar go up. The bar is probably double for every round in the last two years.

We do have a question.

Go ahead.

I was just going to say the key for founders is actually you shouldn't and not that raising round after round is a good or bad thing. But you should really be think what is the best thing for the company? Sometimes inflated valuations are actually bad for the company. They can cause bad habits. Great operators should be like, look, is cash expensive or cheap? If investors believe that your company is growing quickly and you Think it's a like you're ultimately selling equity. My general advice to founders who are fundraising is don't think of it as you're trying to convince investors. Think of it like you have a product. Your product is equity. You're selling equity. You want people who are interested and can add value, make that equity more valuable. If you can find people who could make your equity more valuable, it is worth the dilution because you're like, sure, I'll give up 5%. I think Greg and Martin can increase the value of my company by more than dilution. If it's a bad deal, don't do it.

Definitely. Fernando, why don't you ask your question for Greg Rye? Hi, Ray Martin. What about successful companies like Meta and Snapchat?

TikTok, how can this fit to make a cure? Yeah, there are businesses that are definitely not profitable for the first 10 years. I happen not to invest in those types of companies. It's very difficult. And I have seen lots of pitches for social media companies. Absolutely possible that I passed on some amazing unicorn company. I just have a hard time thinking through how to. How to find the next Facebook or TikTok. Those are very rare businesses that have to get to scale to have a business model. They do exist and there are absolutely investors who are very bullish on that. That is not my personal model. Yeah, I think entertainment is difficult in that way. I've seen gaming studios in companies building by the founder's notion, like we're going to build the next Minecraft or the next whatever maybe they are. It's just difficult for me given my background. That's not an ideal fit type of company for me. But there are investors that do that same thing for social media apps. There are a couple other categories that I tend to not invest in. Whether it's like Facebook arguably was more needed when it launched. I don't know the specific history of why TikTok took off versus the other competitors did not. But in the early days of Facebook, like the ability to make friends on a college campus, there was no like the classic myspaces and other social tools that are out that day were not really doing the trick.

Yeah. For the founders on the call, you've got two B2B software investors here. And I don't think either of us invest in consumer. And the question I of Painkiller vs Cure is different in consumer. I think it's harder to identify what things are really curing pain. I would say Facebook was curing the sort of loneliness and keeping track of your one or two orders of magnitude removed friends or family. I mean, for a lot of people that was a problem. But it's harder to quantify the pain in a consumer app than it is in business. In business, you typically like one of my companies called Vega Cloud. They help reduce your cloud expense. If you spend $500,000 a month on the cloud, you install their software, you'll save on average 21% your first month. So you've got a 30 day ROI of 25%. You're saving $125,000 in the first month. In B2B, it's actually pretty easy to measure an ROI, which is normally a good proxy for a cure versus a painkiller. If you can deliver a quick ROI to a business customer and materially move their top line or bottom line, you've got a real cure to their problem. Every business is cash flow constrained. On the consumer side, it's completely different the needs that people are trying to fill. And it's harder to identify a cure versus a painkiller. That's one reason why I don't do it.

One thing I will call out on Facebook in particular is that that in their MVP, when they launched at Harvard, they had 90% student body participating within a week. About a month and a half later, they had three or four colleges onboarded. And so the key thing for investors is obviously how rapidly is this thing growing? And then secondarily, how fast can this make money? Traditionally, more east coast investors care about how fast things can make money. West coast investors care more about how quickly things can grow. Both ultimately are important. But if you're growing at a crazy exponential rate, that's very investable, even if I don't really know exactly how or why it'll require iteration. But the fact that you're growing so quickly gives you optionality. One of the other things I often say with technology waves, whether it's AI or mobile or whatever, when you're growing quickly and have customers, they will pull solutions out of you rather than you pushing the solutions at them. When a company's hit closer to product market fit, their customers will tell them what they need. They'll be like, oh my God, you need to add this. Oh my God, can you do this? Hey, if you do X, I'll give you money. Have you considered doing Y. That's a very different proposition than most companies in their first year or two.

I remember when Facebook went public, they hadn't even launched their ad marketplace yet, so they had almost no revenue, but they had a Crazy user growth. They had good engagement rates. And the people investing in the company said they'll be able to turn that user base into money later, which they did. I remember I met at an event one time the guy who wrote the first check into Snapchat. The only reason he did it is that his daughter was back home from college and he said, what's the new cool thing on your college campus? And she said, there's this thing called Snapchat and it's gotten like 30,000 people in its first month. He could identify that this was was a viral thing, that demographic was going to adopt very quickly. And he wrote the check on the basis of the virality in consumer apps. You can measure that, the viral coefficient and the rate of growth that makes it investable in a way that in B2B you're looking more for an ROI on your software expense. Are there any other questions that people have? You can just go off mute and ask a question or. I have a few closing thoughts.

I could share a couple things if we're waiting for questions. I did have a few slides I'm happy to show just because we're talking about product. Can you guys see my slides? Yep. Key thing for startup founders is iterate quickly and learn quickly. When you're thinking about product, your key advantage as a startup is your ability to iterate and try things quickly. The slow thing is to write code. Writing code usually takes weeks, months, years when I made this slide. Now maybe you can vibe code in hours, but you want to learn as quickly as you possibly can. The faster you can learn and de risk your company, your startup, and head more quickly in the right direction. So I really think about minimally viable product or minimally valuable product. Like how do you build something that customers value? You don't want to build the tire and two tires and the body and then add the steering wheel, right? You want to show, hey, we can solve people getting from A to B and we're doing it better. Hey, I can get from point A to point B, but I do it slowly and it's dangerous. I do it a little better, I do it a little better. And if you can iterate, you're going to learn so much faster. Getting to MVP often requires very little technology. As a technologist myself, I tend to hit everything with a hammer. Two founders who told me their founding stories, which I really admire. One was Robin Chase from Zipcar and her MVP was literally, she was living in Cambridge. She, she was frustrated that it was very expensive to keep a car In Cambridge, and there was not a lot of parking, and her neighbors had the same thing. So she took a clipboard, wrote the odometer mileage, left the clipboard on her front porch, and talked to her three neighbors that like, okay, we're going to share this car. Whenever you're borrowing the car, you just write down the odometer and we'll figure out the money at the end of the week or month. That was her mvp. And very quickly she was able to show that people actually wanted this. They were willing to pay, and she was able to make some margin on it. So went from one car to three cars. She got an investor. A lot more to the story, but very little technology for her to validate the problem. Craig, the founder of Craigslist, kind of same story. He started as a mailing list. It was a bunch of friends in San Francisco. He was emailing them on a weekly basis telling them what events were going on. I think it took several years before he even had a website really focused on MVP and not a lot of technology. Initially, Paul English, who started Kayak, would tell me the way he would test features. He would have a concept of what the feature would be and then put a link on the website. The link didn't go anywhere, by the way. You just have a link on the website, and it would go to a 404 page. And then he would go look at the logs to see, okay, how many people hit the 404 page. If not a lot of people hit the 404 page, it means it doesn't. It's not worth building the feature. I love that. I'll play this. I don't know if you can hear the audio.

I can't hear the audio.

Can you hear that?

No.

The McDonald's test, he would basically go into McDonald's and he would sit in line and he would tell people that he would pay for their lunch if they would try his product. And I've actually done a variation of this. I used to do this in Starbucks. I would go into Starbucks, ask people to download my app or product I was working on and get feedback. Really rapid iteration. You know, sometimes I'd show them a screenshot or figma, and it allowed me to learn faster, like multiple times a day. You don't need to write code to test key assumptions. You should be trying to test key assumptions on a daily, weekly basis. Key assumptions can help you pivot your startup or business in the right direction. Are you solving the right problem? Are you solving a vitamin or a medicine do your customers want it? Would they be willing to pay? How much? If your solution existed, would people actually use it? Would they search for it? How would they search for it? I ran this one day myself. I was like, hey, if I held a thing for angel investors, would they want it? They said they would. Following week I was like, okay, will anyone actually click on a paid ad to book me? If they did, how much would they be willing to pay? And so again, like, I'm not in the business of training angel investors, but I did this to show in the span of about a week, I ran three rapid tests to be like, should I do this? Is there a need in the market? People say they're going to pay, Are they actually going to pay? I actually got revenue and some angel investor paid me for an hour of my time. I think the key is iterate rapidly. When I was starting my business, we were doing things in the photography space. Before I figured out I really screwed up. I probably lost half a million dollars building a product that nobody wanted. It was a cool product. It was like this 3D photo viewer. I actually emailed Steve Jobs. I talked to the team at Microsoft and Google Photos. It just didn't solve a problem that people had and it cost me a lot of time and money. Talk to customers, do customer discovery, but don't actually talk. Listen. Make sure you're not telling them what your solution is. Listen for what the problems are rapidly iterate. Great. Landing pages are a good way to do that. Ads are a good way to tell if people care about the problem solution you have. You can test things rapidly. If you already have a product with dead links, you can wireframe. Don't bother. Making it pretty actually prevents people from giving you feedback. You can paper prototype in coffee shops. I would often print out things and bring them to places and people would give me raw feedback. You don't need figment and vision. Obviously if you have those, that's great. Do coffee shop usability a bunch as well. My favorite is wizard of Oz prototype where you pretend to you as the human are the AI or the man behind the curtain pulling all the strings. And so I would text people and be like, I'm an AI, I do XYZ and see what they text back. See if the wizard of Oz approach actually works. And that's a very rapid way to test stuff. Certainly as a startup, do things that don't scale, right? You are trying to learn, you're not trying to scale. In the early days, the more you learn, the more likely you are to build the right things.

Thank you for that. I appreciate it. Those were all good insights from your long time as a user, designer and investor. Is there a book that you recommend to founders? My book that I recommend to founders is Annie Duke's Thinking in Bets. She's a poker player and it's CEOs have limited resources and too much to do. You have to figure out how to allocate your resources to the highest priorities. Just like a poker player has to decide am I going to put money into each hand based on the odds that this hand is going to be a winning hand. So I like that one. Do you have any particular books or bloggers?

Yeah, I have a YouTube channel that I don't update often enough, but it does have a couple videos on there. I pissed through one in the link which is the top business entrepreneurship books that I recommend and there's a bunch of favorites that I like. You can choose your own adventure, whether it's product culture, user experience or other things like that. The key thing for you as an entrepreneur is just constantly be learning. So lean into the things, things that are timely and that you're curious about if you're curious about building culture or product discovery. When I was starting my business, I hung out at the library a lot because it was quiet and a free office space and I didn't have to buy coffee. And so I would hang out there and I would just check out books and listen to audiobooks on my drive back and forth and figure stuff out and always be learning.

Okay, all right, great. Thanks for that. Most people on here already know they can find me on Twitter. Where can people find you, Greg?

I am on Twitter. I've been been posting less. I've been playing around with TikTok a little more. You can generally find me at G Raise. I've been posting on LinkedIn a little bit. Folks can find me on there as well. Appreciate everyone joining. If you have questions, definitely hit me up. You can find me@foundnersedge.com as well. We invest in a lot of AI.

Let's have one last question here from Luke.

Hey, can you hear me? I was curious. Could you guys each tell me something that you believe in terms of starting a company that a lot of people disagree with you on?

That's a good one. I believe that resilience and having a resilience practice is really important. Maybe even more important than having specific experience in a product category. If you have the ability to take a punch in the face and get back up again, that's more important than if you have 10 years at McKinsey be in the industry you're trying to solve.

I'd say my I don't know how contrarian this is, but I don't hear a lot of people talking about it. Is that the culture you build in your company is very predictive of how big and impactful your company will be. A lot of startup founders are very focused on, frankly, money. Money is important, but the founders that have a larger mission and vision can look ask money, attract stronger people to their company and go through the hard speed bumps. Like startups are really freaking hard and if you're doing it for the paycheck, it's going to be really painful in the first five years because that may not initially materialize and sometimes it takes longer. For founders, the startup founders who are really building for something much more meaningful than they're building for culture, I think that tends to be pretty predictive in my mind.

Mind everybody, thank you for your time. Thank you for your time, Greg. And I'm going to look at that company you sent me and hope we can do a few investments together this year.

Awesome. Thanks everyone for joining. Appreciate it.