Tyler Tringas of Calm Fund - Going against the grain of classical VC - The Michael Girdley Show Episode 36

Hey, Michael here. Welcome to the Michael Girdley Show. I spent a really good hour in this episode with Tyler Dringas, who runs the Calm Fund. He talked to us about kind of how it works. It's an alternative to venture capital, especially for tech companies. And we went down a bunch of really cool rabbit holes that I learned a lot from. So everything from lessons running in-person events, online events, why he lives in Mexico City, calm companies, how to raise money as a founder, how to hire as a tech founder. Uh, all good stuff here. Um, great person, really good outlook on life, and really enjoyed this one. So, uh, here it is. I hope you enjoy it as much as I did. Hey, Michael here. Uh, today's sponsor, uh, is Harbor Capital. Uh, so Harbor Capital is a firm located up in Austin, uh, and they are a real estate private equity firm that focuses specifically on light industrial assets across the state of Texas. So Levi and his team, I've gotten to know them pretty well having worked with them as an advisor over the past several months and excited to have them sponsor today's episode. So, you know, what they do is basically, you know, acquire these real estate assets using their own money and investor money as well. And then they manage them over time for cash flow and appreciation, hopefully with everybody winning throughout that process. They're excited about what's going on and I've seen what they're doing. And they're also building a portfolio designed to weather both the ups and downs of the economic cycle. So thanks to Levi. Thanks to Harbor Capital for sponsoring today's episode and helping me on my never-ending quest to make the Michael Girdley Show a break-even podcast. I'm so excited to do that. And thanks again to those guys. Check them out at harborcap.com. And here, back to the episode. Awesome. Tyler, thanks for being here today. Like, I'm super excited to talk to you after spending all this time talking to you on Twitter. I think it's going to be a lot of fun.

Yeah, I'm excited too. I mean, we've never actually really had a chance to chat despite a decently long history of, you know, Twitter DMs and things like that. So this is great.

Yeah, it's awesome. Well, so I wanted to start, if we could, first, like, you run like a really, I think, a really cool fund in terms of what the CALM Fund, C-A-L-M, is. And so people listen to this that don't know what that is, maybe start there. Tell us what the CALM Fund is, and then I'd love to kind of go into the mission and the challenges and all kinds of interesting stuff that you've gone through because I find the whole space totally fascinating.

Sure. Yeah. Yeah. So I'm the founder and currently the only GP of the CALM Company Fund. And the thing that we do is I'm a big fan of brands that say exactly what they do. So we're a fund that supports calm companies and Kalm companies are like— we used to call ourselves sort of funding for bootstrappers, right? Which was something that resonated a little bit, but it gets kind of complicated. But basically what we do is we provide capital, resources, mentorship, all the stuff you kind of associate with, you know, a good fund partner for entrepreneurs, but focused on companies that are building on a slightly different strategy and trajectory that's a bit more focused on building with a sustainable pace of growth, profitability. Oftentimes you're targeting niche markets, a lot of the stuff that kind of contrasts with the venture capital approach to building companies. And since I know a lot of your audience is building all kinds of companies, we're quite focused on software companies, although the concept of calm companies I think applies much more broadly. But when I talk about calm companies and I contrast it with VC, it's mostly sort of tech companies, tech-enabled marketplaces, you know, that sort of stuff. Um, and so building it with a, a slightly different, you know, ethos, and that yields all kinds of things you have to do differently when you're thinking about how to build a fund as well. You can't really take a lot of stuff off the shelf in terms of strategies and things that, that folks, uh, approach as investors.

Yeah, dig it. So what, like, if I had to quantify, like, what a calm company is like, is there a checklist where I'm just like, okay, this is how, how I should think about it? And So you're only doing software companies, but like, is there a checklist associated with those where I'm just like, okay, this, this makes it calm or it's not calm?

Yeah, we do. We have it. So, um, you can actually find the— I have an investment memo template. I have like questions that I ask myself, and I would put the link in the show notes or something. It's just calmfund.com/investmentquestions. Um, but it is kind of my like final checklist. There's a lot of subpoints to it, but it focuses on a couple of key areas. So one would be, you know, what, what What kind of market are you tackling? If you want to go after a very, very big, very, very crowded, huge market, you're probably not going to be building a calm company because you're going to be looking at winner-take-all dynamics. You're going to be looking at lots of very well-funded competitors and all of that just gets a little bit uncalm. So we tend to look for folks building in more niche opportunities. One of the questions I ask is, can they build a micro-monopoly? Right? Can they basically have the absolute best product in a big enough market that you can build a great business, but a small enough market that not many people want to pile in and fight for number 2, 3, or to overtake you? So market is one. Another one is capital efficiency. So we're really focused on businesses that are not going to need a constant infusion of capital. That have really clear upfront positive unit economics that can be built in such a way that they're not going to need a huge overhead of engineers and salespeople and stuff like that really far ahead of their revenue. And there's a couple more things down the list, but some of it ends up aligning with how everyone thinks about investing in entrepreneurs. One question we ask ourselves is, founders— does the founder have kind of an unfair advantage, right? And that can kind of flow through to some of these things like building a micromonopoly and being capital efficient. If you are building for a market where you have an audience of 100,000 people and you've built a decade of trust in that community, that can also help you build a calm company because you just don't have to pay for a lot of things right out of the gate.

Yeah, so yeah, I dig it. So do you think— I mean, one of the things I've always struggled with, and I've played with this, like how do you incubate like non-high-growth companies, right? So venture capital wants these things are going to turn into, you know, the billion-dollar exits, right? And I've, I've played in that type of investing and still do. Um, but then there's this idea of like, how do you structure something more akin to like somebody opening a restaurant, right? And those have pretty straightforward kind of ideas. Like, how do you think about like the applicability of this beyond just kind of software, right? Like, does it start to work as people are trying to put together local services businesses or plumbing companies? A lot of those guys are going out and gals are buying businesses to try to do that. And it's like, ugh, why don't you just buy a truck? It's just much better. So I don't know. I've struggled with this because I've never really figured out a model where it's like your upside matches your risk of ruin, right? Because even still, most of these operators, when the business fails, you just look straight at the CEO, right? It's like, okay, I know why you failed. You ran out of money because you made some bad decisions. Anyway, so I was just curious how you think about that beyond kind of the software space.

Yeah, it's a good question. So the opportunity is kind of particularly acute in software because of this dynamic where software, and again, like even, you know, if you're going to launch a D2C e-commerce brand, these are very asset-light businesses, which means they can't access any of the kind of small business debt products out there. SBA loans, even like lines of credit and stuff like that are really hard to come by when your assets are a domain name and a couple of people and some MacBooks. Right? And so in part, there's this extra acute nature of the opportunity specifically in, you know, sort of tech and tech-enabled businesses that I think might be a little bit reduced in businesses that could go get an SBA loan to get started, or, you know, any kind of traditional small business loan to, to kind of get the ball rolling in terms of like home services businesses or retail-based businesses and things like that. You know, the opportunity cost might be a problem because you know, they don't necessarily need— a talented entrepreneur in that space maybe doesn't need your equity capital because they can go get a bunch of debt and launch the business. Um, that being said, I mean, we are experimenting with this kind of concept of, you know, a different form of portfolio construction. So the, the venture model really all distills down to this concept of portfolio construction, which is, you know, you're going to get almost all of your returns from 1 or 2 or a very small percentage of your bets, you're going to get grand slams out of that and you're going to have a ton of strikeouts. It's all about creating that kind of power law is what they call it. We are sort of taking— at least we're a running experiment of can you invest at the early stage on a different sort of distribution? It's more like to keep the baseball analogy going, can you just reliably hit singles, doubles, and triples, have far fewer strikeouts, and probably fewer but maybe non-zero grand slams or home runs or what have you. And I think as we start to accumulate more data and really prove out this thesis, I would be excited to see it apply to other opportunities that are not software. We're already dipping our toes into things that have similar characteristics but are not just quite SaaS. So we've invested in a couple of membership-based professional communities where they have recurring revenue, they're very asset light, they have all this kind of stuff, but they're not software necessarily. So there's definitely ways to keep pushing the edge of the thesis for sure.

I've heard about the economics of some of these online-only membership communities, and I'm part of CEO peer group, and I know those guys are printing money because their cost basis is negligible and they keep wasting money on stupid stuff. That's why they're printing money. They're like the, the economics of these like professional peer groups and stuff are fascinating. Like, you, you know, the model is, is you take people of a like kind of interest group and a like cohort, you put them into an online community, and then you go hire a bunch of like global people to build content, manage your interactions, you know, in terms of the discussions, you know, deal with all the admin stuff. And then you just to some extent kind of sit back and architect the whole thing. And you'll see these things doing $50,000, $60,000, $100,000, $200,000 a month in 95% gross margin businesses. Like, like, it's amazing. It's— they're, they're amazing. I don't know. This is just my commercial for how awesome these businesses are, especially with how unawesome, like, software to some extent has become with how discovered it is by buyers. Like, these people that are just like, oh, I'll buy software. Yeah, 10 times, you know, 10 times revenue, whatever. Like, okay, so Anyway, it's interesting you mentioned these because I've started to hear about them. I'm like, oh really? Like, this is an amazing opportunity.

They're great calm companies too, right? They have a lot of those same characteristics. The thing that they tend to— they have a little bit less of a moat, right? And so you have to be like, really, you have— you need typically, in my opinion, you need to have more founder unfair advantages, right? They need to have done some work. Can't just be someone with a good idea who knows how to put together a WordPress site that can work. But in general, I think it skews even further towards founders with some non-replicable set of skills, experience, track record, community, et cetera. But yeah, we're invested in a couple of them, and my goal is to sort of learn about that through investing myself. But it's a when, not if question that we will have a dedicated GP investing just in membership-based communities for sure. There's so many opportunities out there.

This is great. I'm making myself a note. I need to go explore this space some more because, well, it's usually like, I usually go with, um, kind of the rule of 3 before I get excited about some space. Like, I wait until I kind of get 3 signals that it's like worth digging into, and it's like, oh, well, that sounds pretty good. There's a second signal for me. Like, you're not just seeing, seeing what I'm seeing.

Yeah, the last piece of the— but we can move on from our infomercial for membership businesses. But the last piece of the puzzle has been that acquirers are now really interested. That was the piece that was always a little hard to wrap your head around is how do I get my money back as an investor? And you're starting to see a wave of these communities get acquired at very healthy revenue or profit multiples because they are reliable recurring revenue businesses and they're out of the doghouse. They're sort of on par with SaaS and things like that in terms of people's willingness to pay for them once they're at scale. So pretty—

means I'm late.

Yeah, well, I don't know.

Shucks, shucks. So one thing, you and I have talked a lot about your fund, and thank you for like giving me the opportunity to give you feedback on it and stuff. And for full disclosure, I'm not an investor in the fund. I'm not an investor in anybody's funds except for generally my own, but Um, you know, one thing I just, it just occurred to me as I, I was thinking about hearing you talk again about this is I wonder, I wonder if you're not really, if you're actually doing private equity, that you're not doing venture capital. And I, I mean, I've watched like, there's, you know, there's been several iterations of people that have tried some variation of what you're doing, um, with varying success and some have given up. Um, You know, and I, but they've all gone on this path of trying to say we're doing, we're doing venture capital, but better. And like, I wonder, I wonder if that's like a lens that confuses people and I haven't talked to any of your potential LPs, but I am one. And I'm like, well, maybe if I approach this thinking about you're just doing a version of private equity, that makes a ton more sense than you're doing a version of, of venture capital. Like, I don't know. I wonder if you have a, a, um, a category problem right now. You're putting yourself in a tough category.

You're 100% right. And like, I got that same— so, so you were gracious enough to give me a ton of feedback on our latest round of fundraising materials. I sent out to a bunch of people, and one of the things I heard a lot was, you know, in my head it all made sense, but it wasn't clear on the page that like we are a totally different bucket from venture capital, right? Venture capital, you know, is up there with some of the sort of hedge fund strategies and stuff where it's like really asymmetric upside but very high risk, and we're not trying to do that at all. We are exactly as you described. We're doing growth private equity, but at an earlier stage so that you have more upside over the long term. Right. And why can you do that? Sounds like a free lunch. How can I get growth private equity level, like, sort of risk profile distributions? But when I'm investing $250K in a company doing $10 grand a month in revenue, Our basic theory is this thing that I call the peace dividend of the SaaS wars, which is this idea that it used to be so much more expensive and risky to start a software company because you had to build so much stuff from scratch. You needed $2 million to ship a V1 of an iOS app because you needed 10 people to spend a year to launch one of these things. Now you can launch these products because of all these different things from a gazillion B2B products that you can use for your help desk and your docs and all this stuff that you don't have to build from scratch. Really well-developed frameworks like Ruby on Rails, this endless list of stuff. That means that you can launch these businesses for so much cheaper that for a check size that used to be incredibly risky, right? A 6-figure check when it's only 3 people 10 years ago was like it had to be a venture model because it was so risky. You had no idea. You had no market feedback. They probably hadn't even shipped a V1 MVP yet. But now these folks show up and they're like, yeah, I launched this as a side hustle. I've got over a year track record. I can show it's a small data set, but we've got 60 customers with 2% monthly churn. I mean, you really have quite a bit of information, which I think materially de-risks these opportunities such that you do get basically a private equity type profile versus, versus venture capital. So I think you're dead on.

Yeah, yeah. I mean, I've spent time with these guys that— and ladies, I try not— I'm trying to use general neutral or general encompassing guys, ladies, and theys. Um, so anyway, I've spent time with these people who their lens is kind of this category design approach to anything, right? They want to define what the category is going to be in terms of how they talk about something, and it becomes super powerful, right? Like, I, I saw one group that was doing not what you're doing, but more of a private equity thing. And they called themselves venture equity. Like they would go, go to that, get that peace dividend of, or the war dividend of, you know, the, uh, the failed kind of software startups or failed businesses came out of that came out of startups. And then they would do like a faster growth, like turnaround of them and they called it venture equity. Um, and so it wasn't private equity and it wasn't venture capital. It was this new thing that they, they had. So I don't know, it's just fun to do that. It's like one of the hardest things, right? Is like, how do you define what category you're going to be in when you're truly innovating? Because everybody wants to use, especially on the allocator side, the people that are considering investing with you, they're like, well, what bucket do I put you in? Are you venture capital? Are you private equity? And it's like, well, no, you should have this other bucket for really smart private equity. You know, so yeah, it's just, it's, it's fascinating, but also the core struggle of what you're going after.

Yes, it is quite the double-edged sword that, you know, folks— sometimes there's value in saying you're not in any bucket, sometimes there's value in trying to squeeze yourself into one of the existing buckets. And yeah, it's, uh, yeah, one of the less fun parts of the fundraising process for sure.

Yeah. Oh, kudos to you. Well, I mean, have you done—

as you—

we've looked at some of the other people that have tried and given up kind of in this space, like Have you done postmortems kind of on some of their strategies and how you think about it? Like, what is there to learn from? And I don't mean to turn this to a negative, a negative ask. I'm just curious what you learned from, say, like Bryce, who's on Twitter, did NDBC and other things. I'm just curious your take on what learning opportunities there are from those kind of things. Yeah.

I mean, so the first thing to say is we're operating on an incredibly small sample set here, right? There's like, at most, if you give a very broad interpretation, you start to go across multiple stages and stuff, we're talking about like half a dozen companies that are doing stuff with comparable theses. So I don't really want to over-index on any one particular example. IndieVC is very interesting. For folks who don't know, IndieVC is probably the closest thing we have to a fund that predated us. So they launched probably about 2 years before we launched. I think they launched 5 years ago, 6 years ago maybe, and we've been doing this for about 3 years and change, and relatively small, especially at the time that we launched, and they grew, and they were also talking about some of the same type of opportunities, created a financing structure that was more aligned with these kinds of opportunities and started investing. And then after doing, I think they did 3 iterations, so the first 2 were subsets of their venture fund, and they did an educated NDVC fund. And then after that, shut it down. So I mean, the postmortem from my perspective, the interesting thing is what I've heard from LPs and what Bryce has said very publicly is that the returns from the funds are actually great. They're actually really solid and exceeding their expectations. So it's not so much a failure in terms of the investment, like the theory they brought with them didn't work. In my mind, and I don't have any it's an informed guess. I don't have any inside information, but I'm also not a complete outsider to this topic. I think it was just an opportunity cost question because Indie.VC was basically one person, Bryce, and he has a very long, decade-long track record as a successful traditional VC. Like I said, their first VC funds were actually just a carve-out within their OATV venture funds.

Right.

And so I think was just a matter of, hey, it's really hard to raise this money for this strategy, and I can raise money as a VC, and people want to give me money for that, so I'm just going to go do that, right? I mean, I, I don't know that's his exact decision-making structure, but I mean, you know, he has a venture fund now and he's doing venture investments, right? So, um, he's good at it too.

That's the crazy thing.

Fundraising is hard.

So I mean, one thing that's curious to me, so like, I appreciate your space, but I mean, just for full disclosure, like, it's not one of my, like, it's If you had to draw a Venn diagram of my passions, it's outside the circle, right? Like, I'm just not like, I'm not drawn to it. Yeah. So what about it is so fascinating to you? Like, why climb up this mountain? Why not a different mountain?

Yeah, it's definitely not because it's playing on easy mode, that's for sure.

Yeah.

No, I mean, at the end of the day, like, I think that entrepreneurship is inherent social and public good. I think that entrepreneurs tend to be some of the nicest, most empathetic people that I meet. Of course, some of them are pretty cutthroat, but on average, especially successful entrepreneurs tend to give back to their community. They tend to create great things. They tend to make people's lives better. And I just think having more successful entrepreneurs is just inherently good. And the problem, the dynamic right now is that software is eating entrepreneurship, right? More and more of the opportunities fit into our bucket of either they're going to build like a com software company or a venture capital company. And the venture model is just by its definition very exclusionary, right? It's not super scalable, right? Because you just can only have so many outlier $10 billion companies before the whole thing doesn't make sense. So the thing that really appeals to me about this is our long-term goal is to be funding thousands of companies a year, if not more, right? Because the opportunity set here is just massive. So I think if we can get this right and we can build a suite of products, we can do all this sort of stuff that helps these companies succeed, we can have a huge impact in terms of the just quantity of successful entrepreneurs that we can help create. And that's the main thing that motivates me. Everything we do is we think about how can we eventually scale this up to thousands and tens of thousands of, of entrepreneurs and, and help them all be successful. So Yeah, that's what's exciting.

Yeah. What, if I may ask, do you know what generation you're part of? Are you Gen Z or millennial or?

Millennial, yeah.

Yeah. So at the younger end or the older end? I think I'm— 80 to 94. 81 to 95. 81 to 95, I think.

Right in the middle.

Right in the middle.

Okay.

Yeah, that's super interesting. As you know, I've gotten really into generations lately, so. It's interesting to hear where people are coming from. There's some extent you're, you're closer to kind of the younger generation, like where people are born after you in the late '90s, you know, and you'll, you'll talk to them in their early 20s. They're wired really differently than, than my generation where I'm 47, pure, pure straightforward Generation X down the middle. To us, the VC path seems really like, yeah, why wouldn't you want to do that? You want to do something big? Like, go ahead, you know, and then, but to a Gen Z, it's like, whoa, whoa, whoa, it's got to be meaning here. Lots of meaning. So, and I'll appear now you're thinking about it. Whereas I think you read what Bryce would say about what he was doing. Like it was much more an undertone of an injustice. He felt like there was an injustice in the world. And, and I'm hearing from you like a much more of an opportunity. So I don't know, I, I could be reading into what Bryce said, but that was just the impression I left. Oh, it's like, oh, he's, he's He's fighting windmills here and you're trying to save the polar bears. I mean, in a nice way. In the nicest way possible.

Maybe.

Kind of different things, but—

Yeah. I mean, I just think it's a huge opportunity. I mean, one of the things that I've always loved doing throughout my various and weird career is just kind of asking the dumb questions and then doing the kind of first principles thinking from there. And I was lucky enough to basically have bootstrapped a company that fit this exact risk profile and was like, man, it really sucked in the first year when I had $100,000 in credit card debt that I was using to finance this thing because there were no sources of capital for me. But I ran the business for 5 years. I sold it to a private equity shop. And if somebody had put a couple hundred K in at the early stage, they would have done really well. Why is there nothing for this? And then I just started asking that dumb question. And the sort of dumb answer is that it's just kind of been considered a law of physics, basically, that you're investing in early stage tech companies, you have to do this venture model. And I sort of ask the question of, is that true? Maybe not. That's kind of what drives me. It's just asking those dumb questions and following where they lead.

Yeah, well, it's so tough because you know, I appreciate what you guys are doing for sure, but so many founders are on the calm path, uh, but are delusional about what path they're on. And they will, you know, so that creates a problem, right? Like, to make calm work, I think you have terms that allow you to have good upside in, in, in a modest outcome. Like, recently, like past 6, 7 years, and it got pretty bad like 2014, 2015, like there was no way anybody was taking— everybody was delusional they were doing the next Uber. Like, that was just 100% of the way it is. So hopefully that shifts. But, you know, that's the other part of it is like, you know, I've had conversations with people where I'm like, look, if this was priced right, or there was a, you know, a call option for us at a certain price, like, we could imagine putting in 10% of the money into your company, right? And, you know, our own 10% for $250,000 or whatever. And, um, but like they'd have none of that. They're like, oh, some dentist will give me $50 for 0.25. And I have no obligation to him because it's a safe note and I don't know when it's going to— they don't know when it's going to get paid back, but he doesn't care. And, you know, of course, those are the guys like— and they're always men, by the way. Investor dentists are always men. So I'm being non-general neutral. But those are the guys like 8 years in that the founder calls you and they're like, hey, this dentist wants his money back. I'm like, well, What did you think was going to happen here? Of course he wants his money back. You haven't given it to him yet. It's been 8 years.

Yeah, yeah. I mean, it is a big— there's a big battle around effectively communicating these different trajectories. And the problem is that in this venture, or just the general idea of raise a bunch of money at the highest valuation you can and try to grow super fast, is that all the risks are kind of like swept under the rug. Right. They're very systemic. It's like you don't see the risks until the whole thing blows up in your face. So it's this really challenging communication issue to sort of say that. And especially when I'm a millennial, I graduated in 2008. Right. So although I graduated the worst—

On behalf of my generation, I apologize. Sorry, I screwed that up for you.

Yeah, but from there, my whole adult life and professional life has been a massive bull run. Right. And so it's very hard to communicate that fact of the systemic risk being built up and stuff like that when everything is just going up to the right and the people who YOLO the hardest are getting the highest returns and stuff like that. It's interesting to see literally just now, right, we're starting to see some of this stuff where I saw a tweet the other day that was like, if your company recently raised at more than $100 million valuation and you have a 90-day options exercise window on your equity as an employee, you should basically run that equity down to zero because C-raises have such inflated valuations that they're never going to catch back up to that. And if you leave or get fired, you're going to have to spend a ton of money to buy at the last crazy valuation. So we're going to start to see this stuff where, hey, this was a pretty good business that got ruined by really going— if this had been done in a calm way, everybody would've been much, much, much better off. We're going to start seeing more and more examples, I think, this year. So hopefully my communication challenges will get a little easier this year. Yeah.

Yeah. Well, it's two interesting anecdotes I'll tell you. So one is my, one of my business partners, he went, there's this conference here in Texas where the University of Texas system, I think it is. So the endowment brings in all of kind of the alternatives managers. So private equity, VC, like all the all the private equity folks, they all come in, right? And so they'll bring in these like, and it's a big endowment so they can get everybody in. And so a big private equity firm flies in the head honcho, right? This, you know, they've raised 15 funds. This guy's an old soul. I've been in it since the '80s, you know, white bald guy from New York. I mean, just exactly what you think.

Okay.

And he gets up and he gives a speech and my partner was there. He said it was the funniest thing he'd ever seen. So this room's just filled with lower middle market private equity firms all trying to get, you know, allocation from, you know, different LPs that are there. And so the guy who's the old saw, he stands up, he goes, well, so how many of you guys are keeping dry powder in reserve hoping for the big downturn so you can deploy some capital? And this is like 2017, 2018. And everybody raises their hand like, yeah, definitely. He's like, It won't work. That's what he told them. It won't work if you're all trying to do that. It's not going to work. Something will happen that your dollar cannot be invested and you'll be in big trouble. So that's kind of thought number one I had about that. And at the time, you know, where stuff where I was fully invested, I've been like super happy with that. Where stuff where I was like being playing that play, it wasn't so smart. And I understand I was around for 2001, 1993, 2018, 2019, like 2008. Like, I've been part of all these things, so I understand it works well until it doesn't. So that's part of the deal. But I just thought that was hilarious that all these guys were like, yeah, we got all these reserves. So that's kind of number one, number one thing I wanted to share. I just thought it was a funny anecdote. I don't know if it's helpful or not. But number two, that, um, that I think all those people on Twitter— like, you know how Twitter's like, uh, like, uh, enthusiasm cycle like goes like 50 times the frequency of the real world? Like, the real world has this big harmonic. And like, Twitter's like, whatever the day is, like, oh, we had too many, too many drinks on the red-eye last night. They're all grumpy. So, so everybody's like negative sentiment. Anyway, sentiment is just like all over the place. But like, all those like small seed fund guys and stuff who are like, yeah, like this is ending, Series A is ending, those valuations are done— like, nothing has structurally changed. All those big multi-billion dollar funds still have a ton of capital they're trying to deploy. Like, those those big LPs didn't call that back. That money's got to go somewhere and it wants to go in the best companies. So that's why I'm reading this stuff and I'm like, you, all caps, you are full of crap. Like, think through this more deeply. Like, I just don't believe those people saying it. And if you said it, I'm so sorry that I'm pooping on you, but that's just, that's just my second point. So sorry.

I mean, yeah, I agree with all those things. I mean, I would not want to be a, you know, subscale venture fund right now, like a not an A6, Z or Sequoia or whatever, because they're pulling their lever, which is like, we'll give you $1 million at pre-seed now because we have a $600 million seed fund, right? And nobody else can follow them there. I'm just over here happy, explicitly not investing in the same companies, not competing for deals. Almost all of our opportunities, they're talking to us and nobody else. They're going to bootstrap or work with us. So we're just over here like, blah, blah, blah. Valuations are going insane. They didn't really change that much for us from 2019 through last year. We kind of still invested about the same pace, about the same amounts, because we're just not investing in stuff— we're investing in stuff that's just overlooked, right? You know, and explicitly staying away from things where we're going to get into that slugfest with, with, you know, huge venture funds.

Yeah, that's awesome. Well, I mean, I think the other thing I really love about your model is that it, at least just looking at the results, like it tends to skew more towards whatever the opposite of white guys from Stanford is, like, I think that's just awesome. Like, and they're, they're not in Palo Alto. Like, the world needs more of that. So I think that's like, super cool. So I saw Bryce doing that. I see you doing that. Like, just, it's nice. The world needs that. Like, you know, need balance in the Force.

Yeah.

So I definitely wanted to talk to you about like, in-person events.

Okay.

And like how much that plays in what you're doing. And you would like, What I understand is you would take everybody that you work with and other people and you'd invite them to come to Mexico City. Seems to be mostly like 20-somethings. So like, I didn't try to get invited because I'm not a founder. I didn't really qualify. Also, I don't want to be the old dude at the club. But anyway, the, uh, the, so like, tell me about like, what's the impetus for doing this? Because I'm looking at doing this for like my world because there's so much Zoom fatigue now and like. That FaceTime is super important. So what's your thinking on that? And then how does it play into what you're doing?

Yeah. So first of all, I mean, at the Founders Summit, you would not be the old dude. I would say— I feel like it. We have a big tent and our audience definitely skews older than your traditional tech conference to the extent that one of the things we put in our checklist for designing new ones is having really good childcare options, right? So, so in Mexico City, we had a childcare option in-house at the Four Seasons. And then we're doing another event in western North Carolina. Like, we booked out this entire retreat space, private lake, the whole thing. And it's like, you've got dozens of cabins, you can book a whole cabin with like 3 bedrooms, you can bring the family, we're doing an on-site, like summer camp for kids. So we definitely skew the age range skews more towards older and people with kids. So yeah, you should come. I promise you won't feel weird. It's a good vibe. But yeah, the gist of it is that we have been fully— like our fund firm has been fully distributed remote from day one. Actually, my previous companies were all like that too. So I've been running remote companies for over a decade. And, but you're right that like you need to have some face time with people to really build that connection, right? So we had this remote team, we're investing remotely, we invest in founders who are based all over the world. So we wanted to create some sort of central hub for everyone to get some face time with each other, kind of like a big company retreat but inclusive of the whole portfolio. And a lot of our investors I've never met face to face and stuff like that. So we started doing that and I just happened to live in Mexico City. It's an awesome place to throw a conference. It's a wonderful city. It's also very cost-effective. You can get 5-star everything for reasonable rates. And so I was like, okay, well, we'll bring everybody here. We started getting RSVPs and it was like, wow, okay, this is already like 60, 70 really cool people, almost all founders. Maybe we should just throw a conference, right? There's a bunch of other people who— we have these very narrow funnels of like, are you a company we can invest in? Are you a person who can and wants to invest in us? If you're not one of those two things, we didn't have a formal structure, but there's always other people who were picking up the vibe and really liked what was going on and wanted to get involved somehow. So we're like, "All right, let's just throw a big conference. Let's bring everybody together. We'll make sure that they have plenty of time to get to know one another and we'll turn it into a thing." We collaborated with another fund that we're pre-aligned with, so ShortSquirt Capital, they basically by calm companies, to put it, you know, shortly. So they're kind of like the end of the life cycle. So we kind of put our heads together and launched this thing called the Founder Summit. We originally were supposed to do it in March of 2020, uh, so first one got, uh, delayed at the week of basically because that was the exact week that everything went nuts, uh, with COVID But we were able to finally pull it off last October. So it's like 150 all getting together, hanging out, spending a bunch of time just eating great food, getting to know one another. And yeah, it was cool.

That's awesome. So is that a profit center for you, or is it just like a break-even type thing?

It's not a profit center. I think we did break even on the first one, but probably only because Again, prices are a little bit more affordable in Mexico City. We went all out, but we had the Four Seasons. We rented out a bunch of restaurants. We had this amazing party space, but all still, it's probably cheaper than hosting it in San Antonio or something like that. But it's not about making money. I mean, this is much more of a strategic leverage point for us, ability to continue growing the vibe, growing the tribe, getting more people under the tent than it is a way to make money. We may make money eventually on it, but my goal is basically to get to, just like Cardone's business, my goal is to make it break even with a dedicated person running it full time. So that was our goal, to do enough events, have enough revenue, et cetera, that I can have a dedicated events manager that is only thinking about doing this. Because the problem is when you're below that scale, everything in the 2 months prior to the big event, everybody just kind of has to drop their normal responsibilities and spend 20 to 30 to 50% of their time on this major event. And that's not great. So we wanted to get enough where there's one person who can really just crush it for us.

Yeah. And I mean, we're seeing the same thing with podcasts. So Mirko, who's producing this one and mainly working on our Acquisitions Anonymous podcast, cause like it makes the podcast better too. Like just when it's just somebody's focus as opposed to just being a sideline, like I think that's enormous and that's where we wanted to get on the podcast. Thankfully Mirko's selling advertising, so yay Mirko. Appreciate him a lot. It makes it, makes it, it makes it cool because then, you know, it's like the coworking space I have in San Antonio or the podcast, like with a lot of that stuff, you could just dump it right back in and just say, okay, like just keep making this better. Like just keep making it awesome and you don't have to worry about, you know, making it profitable because it's just an accelerator for your core business, which totally makes sense. So, so what else did you, what else did you learn from hosting the first one and what are you doing to translate that into the second one?

Yeah. So we, we made a pretty big bet with the structure of the conference schedule. So, you know, essentially I mean, I don't know what your experience is with general industry events, but mine is usually that I could not care less about the content that's being produced, like the speakers and anything that's not interactive where they're just up there talking. Like, in a world of ubiquitous, really high-quality podcasts like this, I would rather have this content delivered to me while I'm at the gym multitasking. I don't want to fly somewhere to sit there and listen to very similar content that you would hear on a podcast. And so what I get out of it is the magic of having, you know, hundreds or thousands of like-minded people with similar interests all in the same space. But the problem is you're trying to meet these people and there's like no time for it, right? You're squeezing in, in a 10-minute coffee break, all of these interesting conversations, and then you go back and sit in an auditorium. So I had started years ago, whenever I go to events, I just, I don't go to any of the speakers at all, and I literally just book like back-to-back back to back to back kind of coffee meetings and stuff. I'll be like, I'm going to be standing over here next to the Starbucks or whatever. Let's go just sit and chat because we happen to be here. So we're like, what if we completely architect the entire conference around maximizing that surface area for people to meet, hang out, get to know one another? And our KPI was that you would have 2 or 3 people that you consider friends that when things get really tough 6 months from now, you can pick up the phone and call them because you had this great experience together. So we ended up doing a bunch of stuff. We didn't really have any star-studded speakers. We did a few panels mostly for the idea of being like, this is just food for thought to spark interesting conversations. We had a ton of padding in the schedule. So we did actually, the structured content was maybe 2 hours before lunch and 2 hours after lunch. And then we would have like long open lunches and great venues and breakfasts and after parties and taco crawls and all this kind of stuff to just actually like hang out with the people who all flew to Mexico City. And then to the extent that we did structured content, a lot of it was very interactive. So we brought people in to do like small group workshops and things like that. And it was a pretty big bet, right? Because I think the star-studded star power speakers is what makes some people feel like they got their money's worth. We charged about $1,500 for the first one of these. And so it's like, oh, I didn't hear anybody fancy speaking. Maybe some people wouldn't like it. I told the team, I was like, we don't have to be an events company. We can just not do events. Let's do this event exactly the way we want it. And if people don't like it, we'll stop doing events. And if they like it, we'll do more. And it turns out they really, really, really liked it. I think we definitely touched on a feeling that a lot of people had about conferences, which is like, I want to hang out with and meet the other people who came, not watch a bunch of VIPs like speak and then go back to their green room and I never see them. Yeah. So that's not going away. We're bringing that vibe to everything.

That's awesome. Have you done— have you done or been to like an unconference before? Are you familiar with that concept?

Yeah, I'm sort of familiar, but I've never been to like a formal one that really bills itself as that.

Yeah, they're not as popular as they used to be, you know. So it's the idea that, like you're talking about, you're, you're optimizing for inner, inner collisions, right? Like by kind of how you're scheduling stuff and, and the activities. But you're still relatively like it's thematic and the themes and what people want to talk about are somewhat dictated by you, right? Um, an unconference does things the opposite, which is it says we're not going to have any predefined topics at all. Um, but what we're going to curate is just having really awesome people there and use that as the way to then get those people there. And then the couple that I've been to, you actually just show up to the conference. It's like a 2-day conference. There'll be a bunch of rooms and there's a blank schedule and people walk up and they suggest topics and put them at times. And then other people put stickers as to what things they want to go to. And then as you start to run out of things that are interesting that people put up or the least voted stuff, like they, organizers kind of come in and move that around a little bit and manipulate it. So you end up with just like this crazy eclectic stuff where people bring all this random things. And they'll just do like spontaneous presentations or music or whatever about things that they want to talk about. It's really, it's something I've seen work pretty, pretty neat.

It sounds so like, sounds very cool when it works, but also just so high risk that it could just be a complete disaster.

Yeah. So, so I've run, I've run one of these for a couple of years and I've been to other ones. And so 100% of it is the following two things. You have to do this as a strong organizer. You have to say no to crappy people who you know are crappy beforehand. And they can be crappy because they're going to show up and just talk over everybody, or they are just stupid, like, and they have stupid opinions on stuff. So like, you don't want to invite any Nazis. Like, they're not allowed. Like, just stupid, stupid. I mean, that's the extreme of it, but there's a spectrum there where you want to draw the line and say, anybody on this side of stupid, we don't want you.

Yeah.

So you have to do that. Like, you have to premeditate those people, and you have to have the courage to just say, no, we're not taking you. Or you have to have an application thing, we're just not letting you in.

Yeah.

The second thing is you have to— when you see somebody being a net negative during the event, you have to kick them out. Like, you have to go in there and just be like, you suck, you're gone. And so like, you harass somebody or you dominate the thing, like, it's pretty— so there's, there's a high level of intensity there that you have to have that courage to do as an operator of a conference. So to some extent, I think doing an unconference is more difficult and requires more courage than a conventional one. You have to be okay doing what I just said, and most people can't. You have to channel your inner mean.

Yeah, that's really interesting. I mean, because we definitely talked about it when we were first structuring this and we looked at some unconferences and how they were approached and things like that. And yeah, I just didn't feel like I personally or our team had enough experience to do that kind of curation really, really well such that we could trust that that was all going to work out. I was like, this is too scary. We're going to go for a little middle ground here.

So I have something better. I have something that works better than this. I stole this from— have you been to Web Summit? You know that, that show? Pretty popular. I used to be pretty popular tech company.

To the big event they do. But yeah.

Yeah. So they were in Ireland. Ireland wouldn't give them enough money. So Paddy moved it to Portugal, I think, because Portugal paid them off. And now he has a version, um, called Collision that happens in June. So it's mostly a startup festival.

Yeah.

Um, and you know, they're just really good at running events. So the thing that they do that's really smart, um, from this kind of crowdsourcing thing is they use the same principle that makes Twitter work. And I think Twitter works because everybody's in there competing to see who can be the smartest, except for the people that are competing to be who could be the biggest troll. But the people, the accounts you follow, like there's a lot in the algo that makes you forced to write the best, most useful content you can. So at like these web summit guys will do, they will find somebody like you who's like very knowledgeable about a topic. And then they will allow you as an attendee to sign up to go to a roundtable. And the roundtable is just like, they have like a portion of a conference area and there's like chairs in a circle and a, like a little placard and you like moderate the discussion. But the people that sign up for that, they show up. And then what you see is super fascinating. You have really smart people all trying to show up and give their best stuff to impress the other people. Because it's, it's, you know, there's this social aspect of it that makes Twitter kind of the same thing. It makes that work there. Everybody's trying to like peacock their best ideas. So like I have learned some crazy cool stuff going to those things because of the social dynamic of those. And you just focus it on one topic, like You know, can you, can you raise money and not be on the VC path? Like, that would be one I would do for you. And it's super powerful. It's that— I like that even better than the unconference, because then at least your damage is limited to those people in the circle, not the whole conference.

Yeah, yeah, exactly. I, I like that a lot. Yeah, we did something that was sort of similar. We did like structured small group discussions on— we did one on like, um, just like mental health and wellness. And the format of it was there was someone leading the thing. Everybody broke up. We had actually round tables was the structure. So at your table, there was like a series of discussions to go through and stuff like that. But I like the idea of having even more open-ended. That's pretty cool. Yeah.

So, so I mean, I like mental health and wellness. That would be something that if you gave me 10 topics, it's probably not in the top half for me. Like, I'm just not as passionate about it as other people are. There's other stuff I want to talk about. Right. And, you know, I'm not mean to be callous, but that's just kind of how I'm wired and where my passions are. The nice thing about having multiple of those, you just say this topic and this is this person, you know, you end up with this kind of ability to choose something you're passionate about. Whereas if you make me talk about mental health and wellness, I'm going to be like, yeah, it sucks, we need to work on that. Can we talk like this? So that is it. So, um, so we're coming up on the hour. I know you wrote down a couple topics you wanted to talk about. Where do you want to go? We've totally— I've totally dominated what we've talked about. What's, what's on your mind?

Yeah, so I mean, I had a— I wanted to kind of turn the lens back on you a little bit, which is I know you have a pretty broad breadth of experience, both from Dura with the software space and then just other things that are probably much closer to comm companies than not outside of software. Do you have any advice that you find yourself saying again and again, especially contra the narrative around the standard venture-backed Silicon Valley startup playbook that we should be highlighting for calm company founders?

I'm sure I say it. I'm trying to think, I'm trying to think off the top of my head. I didn't— I only saw this, uh, that you added this to the list after we got into the call, so I apologize. I didn't, I didn't know you added some stuff. I'm sure I say some stuff. I mean, I don't know, like what aspect of, what aspect of running a calm company is, is— do they struggle with the most? That'd be kind of my question. Like what I— maybe I can Narrow that down. That'll jog my memory. Some crap I tell people.

Hiring is a big one, right? Thinking when to hire, how to hire, what order of operations to hire. Here's a very common Silicon Valley axiom, which is like, A players hire A players and B players hire C players. You need to only think about hiring the absolute A players, no matter the cost or whatever. You know, anything in hiring where you feel like, hey, this doesn't work when you run a, I don't know, fireworks shop or something like that.

Yeah.

Yeah.

Well, okay, so here's a, here's a mental model that I've talked about a lot with folks is that, is that when you, when you're venture-backed, for example, in a high-growth thing, you can hire ahead of where the company is, right? You can hire somebody who's ready. Let's say you're at 25 people. You can hire to somebody who may be ready to get you to 100. And instead, the opposite of what you're doing when you're building a calm company or a bootstrap company is you're at the other end of the spectrum. You're always behind on your leadership team, right? You're always like, you're always like building each little brick as you work your way up. But you'll, if you're doing it right, you're always going to have somebody that is just behind what you need right now. And why is that? It's because you can't afford the next level up yet, right? So let's say, let's say a VP of sales, there's an entirely different thing that you get from a VP of sales at $150 grand in the US versus $250 versus $500, like Those are different, different things, but there's no way you can hire a $500,000 a year, like, VP of sales when you're a $2 million company. It just doesn't work. You need to be a $100 million company for that. That's, that's how the, that's how the model works. So like where people get stuck is they're, they're, they see this and they're like, man, why am I like, why am I perpetually behind on my management team? It's, it's because it's supposed to work that way. Like you're, you're always supposed to be behind it because you're a bootstrapper. If you wanted to go the other path and not be a calm company or not be a bootstrapper, then you raise VC. So I see that over and over again, and it's not talked about enough in terms of how the brick building of the company happens, I think.

Yeah. Do you think it's fair to say— so one of the things I end up saying on this topic a lot is that the value of— you always have this choice of like, do I hire someone with kind of raw talent that doesn't have deep experience and train them or help them learn on the job versus try to just hire the person who's like off the shelf, got the perfect experience for it. I feel like if you haven't raised humongous amount of capital, the relative value of the first person who is talented and can grow into it often exceeds hiring the person who is off the shelf, like has everything you need, just because of, again, what you're describing. Like you really need the $500,000 a year VP of sales. So your only option is to hire like the junior hustler and have them grow that role versus trying to go out to the market and quote unquote buy those kinds of people.

Yeah, well, often they don't grow into that role, which makes— that makes things pretty uncomfortable where you just have to have a real conversation with them. You know, I think the Netflix kind of conversation where just like, this is the Yankees, um, we're all replaceable because what, what matters is the Yankees win the World Series, and that's the company. And you know, if that means we help you get to work at the Mets, you know, or you work at the Giants, like, that's the way it is because it's the Yankees. That's how we do stuff. I don't know if the Yankees are any good or not. I don't like baseball, but, but so, you know, I think, you know, I think that's where I agree with you, like hiring for somebody with grit and intelligence and kind of that slope rather than intercept. That's kind of the way the math guys talk about it. Like, I like doing that. That's not the only way that works, right? You're a smart, you know, hustle type person. Like, you have a lot of grit. Like, you just go make stuff happen. Like we're going to gravitate towards people like us. There is another group of the people in the world that like, they're going to do better with somebody who's been there, done that kind of manager. So I don't think either is really wrong. You know, I'm not trying to be wishy-washy, but I think there's different strokes for the type of environment and opportunity and manager you are. Yeah, I do think it's a huge mistake to go hire somebody with big company experience and think that they're going to know anything about working in a small company. Like, just like, you know, and I don't mean to go on a soapbox here, but like, like we talk a lot about like hiring people from institutions, like you work at a big company like IBM or whatever, or the government or the military. Like whenever I hire somebody that's coming out of the military, like I budget mentally 6 to 12 months for them to get the, get the bad habits out of their situation. Like they have to learn it. And you'll see that even when people that come out of the military, like it takes them 3 or 5 years to totally get past that cultural kind of influence they had from 15 years of this is just how it worked in the government. And so, you know, I do think that's always a mistake to underestimate how much that transition is. Like somebody that's worked in small businesses is just going to understand small business much more than somebody from kind of big corporate, big government type stuff.

Yeah, totally. No, I mean, it's— I think one of the things you find with folks in, in roles at small companies or early-stage startups is they really understand that the totality of their tasks are figure out what to do, do the thing, and then teach other people how to do it. And a lot of folks coming from different backgrounds where a lot of time and energy goes into making sure that whatever scope is given to them is reasonable, they're just only focused on the middle part. I do the thing really well. Someone tells me what to do, how to do it, and then someone else is in charge of disseminating tell other people how to do it. And, you know, you really have to have that whole process of like figure out what to do, do it, and then teach other people how to do it. Yeah.

When I run into people like that all the time, especially they want to be entrepreneurs and, you know, for me, I kind of give them little, little bites like, okay, well, like, go do this next and then see, see, you know, see what the reaction is. And you can tell pretty quickly if they're going to be somebody that can kind of do what you're talking about, like that make, make that mental transformation. Make that cultural transformation or if they're going to get stuck. And 6 months from now, you're going to be having a talk with them about getting their resume ready to go back to, you know, USA or some big corporation, something like that.

So yeah, any insights on like how conservative, let's just say, you know, company bootstrap, whatever, you're basically, you know, funding off revenue plus some cash in the bank. You know, I think you're right. Like with hiring, for example, you have to be more conservative, right? You have to hire kind of behind where you are. Any lessons that you've learned around like how to, or just like mental models for how to think about that? Like how much should you reserve and what variable should be driving that and how should that change over time?

So, I mean, I always look at stuff. So, okay, so there's some emotional baggage here. I don't like to feel stupid. I don't like to screw stuff up. I don't like to lose. Like I'm very competitive. So those three things cause me to act in some weird ways. And one of those weird ways is, um, because I don't want to feel terrible for something failing out of my control or through stupidity, I will go, go through huge trade-offs to make sure that thing can't fail. Right. And to me, I'm in my mind, I'm like, I am going to will this thing not to fail. You know, there are times when I've heard myself just look at everybody and be like, there is no losing going on here today, guys. We are, we're going to the promised land. I don't know what it is, but we're, This, we're, we're, this, there is no failure here. We're doing this, right? We're, whether we're raising a fund or we're starting a company or we're going to sell this customer, like we're just going to make it happen. So, you know, when I translate that kind of mental model towards I own a business or I'm starting a business, like, like I want so many, like you're talking about like how much cash do you keep in reserve and stuff like that? Like, like I want there to be a plan A, a plan B, a plan C, and a plan D. That it's just like, in my mind, I know if things go horribly wrong, there's a negligible chance of failure. Right. And so, you know, so I'm in a situation where, like, let's say your founder is keeping 20% of profits in reserve, right? Is that enough? Well, you need to think about, okay, what's the plan B if there's a huge downturn, right? Do you have savings that you can deal with that? Do you have other funding sources? Do you have equity that you can sell? Like me, I'm going to go through all of those. And I have a business now that's, you know, pretty high risk reward that I own a big chunk of. And it's like, Plan A is this, Plan B is this, Plan C is this, Plan D. And so there's like 5 levels there where it's just like, failure is not an option. So, you know, as a calm company, as somebody bootstrapping, that's how I like to live because I don't like to fail. It sucks. Bankruptcy doesn't sound like fun either.

Yeah, yeah, yeah, yeah. Like, do do more work to understand in more detail each of those scenarios and things like that.

But yeah, yeah, yeah, that's, yeah, that's a very nice short way of saying what I was just trying to say. But that's, that's how I think about it. Like, yeah, just having the like, oh, if we run out of money, we're going out of business thing, like, that sucks. Like, don't do that. It's a really bad idea. You need to be like, if we run out of money, then we have this reserve, and if that, if that doesn't work, we have this other option, and we can always go to Uncle Fester because he you know, he'll loan us $100 grand that we need to make payroll. Um, you know, and that's— I'm speaking of somebody who put payroll on credit cards a couple times. I've done it. You're not supposed to. Yeah, the credit card companies get mad.

Yeah, not great.

But by the time they notice, you're hopefully past the crisis and you're just like, okay, hopefully.

Yeah. Um, all right, I want to keep rolling on this with a little bit, uh, of advice hour here. So one of the things you spend a lot of time thinking about is, tell me if this is fair, but long-term compounding, compounding unfair advantages over a long period of time. Let's say, so you gave me some great advice on our current pitch to LPs for our current fund, but let's take what I said at the top, which is like, hey, we want to fund thousands of companies a year, which means we're going to need raise lots and lots and lots of capital, especially relative to what we do now. What would you kind of be advising me with like a 10-year horizon as ways to build like a compounding unfair advantage on accumulating capital besides like make good investments, right? Obviously, but what else?

Yeah, I mean, I think that funds like yourself end up with moats around brand, like almost always. Like, I think that's the, you know, there's some talent modes, but ultimately, like, what makes Y Combinator Y Combinator? Brand. You know, they have some network there that I think is secondary, but it's first and foremost brand. Why is Sequoia Sequoia? It's not because Mike Moritz is still there, right?

He's—

Don Valentine passed away. Like, so like, that's what I would be thinking about in your situation is like, how are you going to be developing a brand? And I love your rebrand. I mean, it's much better than Ernest. I love me some Ernest Hemingway. Um, you know, I think it's, it's a situation where your brand is very strong now. And like, that's where I would encourage you really to focus. Like, how are you going to brand build in a way that when somebody by default thinks of the tier of funding options for something like this, like they think of you number one. Um, and so that's where the conference stuff is really smart. That's where I think your Twitter is very smart. What other opportunities do you have to do this? Is YouTube a platform for that as well? Like brand building, personalize yourself more and more. That's where I would start. And then the other stuff will come along behind it just through execution, in my opinion.

Nice. Yeah, I like that a lot. Yeah, that was the crux of the rebrand, was trying to create a term that was a rallying cry in a positive way. We kept getting positioned as not VC, right? VC alternatives, like these kinds of things. We're like, wait, wait, wait, we want to show what we stand for. And it's been awesome to see more and more and more people not even affiliated with us using lowercase c column company for different terms and use cases and stuff. So yeah, I think if we can help that grow—

I do think— I mean, you didn't ask my opinion, but I do think I would consider getting out of the VC bucket and getting into the growth equity or private equity bucket and just say we are private equity that does this. And people understand that. You tell me what your portfolio does and it's actually, um, the return characteristics are consistent with private equity. Like, I'm in a private equity deal right now. It's like we're, you know, we're planning 4x MOIC and very negligible chance of losing all of our money. Like, that's the deal. Like, so, you know, I think that's the other thing I would think about is your brand building. Like, you're fighting against a tide of TechCrunch bullshit. Like, but there is no, there is none of that in the, the empty ocean of small-scale or micro private equity. Like, that's where I would think about it, because that's really what you're doing. Like, this is much more like structured, structured, you know, preferred equity or structured capital than it is, um, than it is looking like VC, in my opinion. So that'd be the other, as you're building this brand, that's something I would try. Like, could tell people I'm the private equity guy. Well, okay, we do private equity on the small scale at scale. It's like, that sounds pretty compelling.

Yeah, that's a good point.

But it goes against your enemy. Your enemy is venture capital, but right now it seems like your enemy is people are stupid, they don't get your model.

Yeah, I don't care. I don't think about venture really that much because it's just at the end of the day, it's very important when done well. And as much as I've offered critiques of the overall model, I really admire some of the VCs who are taking these true moonshot bets. And where I've tried to— I look at, I don't know, whatever. I don't need to call out any specific funds that I admire, but when they're really building stuff in robotics and biotech and space and all this kind of stuff, that's incredible. And then what I've seen is this problem of the default creep where more and more funds and more and more founders are doing stuff that is just not a moonshot, and what you're doing is just introducing a ton of risk into a business that could be really good. So that's the only thing that drives me to want to care about the venture industry is to try to help people hold the line on what is and is not venture. But really, at the end of the day, you're right. I don't wake up thinking about the venture market dynamics. They don't really affect us that much. You know, when people launch their million-dollar pre-seed accelerators, like, I don't care, doesn't really affect me at all. So yeah, that's a good point.

Well, maybe a better way to say it is your enemy is the mindshare that that model has and the, you know, like, that seems pretty hard. And at this stage in life, I like playing easy games. I'm a lazy man, so I will spend a lot of work to figure out how to play an easy game rather than a hard game. Especially when it doesn't cost me much to switch games. So that's kind of the second thought. Second thought I have for you about getting bigger is I think you're going to change your category. I really do.

Yeah. Yeah. I mean, I think I get that too. But I think I find myself saying to our founders again and again and again is like, if it was easy, like truly easy, the opportunity wouldn't really exist, right? Like it's a big economy out there with lots of people trying to find easy wins. Like there's some value in doing something hard just because that's where some of the biggest opportunities are, for sure. You know, in some ways we're like not as calm as the companies that we fund, right?

All I'm saying is right now it looks like you're playing golf, which is hard. You're right-handed, you're playing with left-handed clubs by the way you define— by, by putting yourself in the VC bucket. That's the argument I'm making. Call it private equity, call it growth equity, and get right-handed. Right-handed clubs. Life— then you're still playing the same game, you're still going after the same aim, you're just making your life easier by not making it harder.

Yeah, no, I like that a lot.

That's what I mean by playing easy games. I want to play it on easy mode and I make the changes to go from there. So cool. What else you got on your mind? Otherwise we're— we've done a great job today. I've really enjoyed speaking to you.

So this is cool. I'm actually curious, so you put this down here, um, one of my tweets where I was like, imagine the potential that could be unlocked if almost everybody in tech/startups wasn't 85 to 100% burned out.

Do you think that's true? Do you think your premise is true?

I guess I could unpack what I mean there, but I'm curious what you think about—

I understand what you mean because, I mean, at least what I'm hearing there is like, imagine how much better the world would be if people weren't coming home and yelling at their kids or exhausted or are burnt out because they're trying to achieve some, you know, unachievable goal for venture investors who put them on this path or founders who put them on this path. You know, I think what I was just questioning is, is that really 85 to 100%? You know, do you have numbers on that? Or is it like—

Yeah, I have no idea. You know, I mean, I just— my general sense is like that there's a lot, lot, lot of burnout within the tech and startup world. Imminent burnout, borderline burnout, and categorical burnout among founders and early employees. And a lot of folks have asked us, what's a calm company? And one of the things I've used to describe it is there's a bunch of different ways to slice it, but the one that I think is the most resonant is being long-term ambitious, right? So saying I'm actually trying to maximize both the probability and magnitude of how much impact I can make over like a 10+ year horizon. And when you look at that and you say, okay, what is the main thing that might prohibit me from getting to my 10, 15, 20-year goals? I think a big chunk that's really underfaktored in is burnout, right? Either you personally burning out or your team burning out. That might be the single largest, even if it's not individually that large, but the largest individual contributor to Why you looked back 15 years later and didn't hit where you wanted to be. And I just feel like that, especially in tech and startups, is just pervasive. I mean, the amount of people who have built very successful venture-backed companies on high-growth trajectories, venture-backed or not, that then tell me later, like, man, I wish we'd built the company this way. It's just like, it's every day I get a new anecdote like that.

And so I don't know, I think And I think you hear, you hear it too, like a big corps, right? Like you, like the number of people that I know that have friends or that went to go work at Amazon, for example, and they're like, yeah, I had to quit after 9 months.

Well, why?

Well, my doctor said my heart was stopping because they were working me too hard. Um, you know, that's, it's not just these startups, right? It's just, you know, it's, and I think it's what you're talking about, which is how do you live like your best life, of which work is part of that. By the way, this most Gen X stuff I'm going to say today, this is very Gen X, like You know, work is, work is an element of that. Your friends are part of that. Your health is part of that. Your family's part of that. And those all move in unison as to, you know, align with what you want to be in life. And, uh, but yeah, you just see these people that burn too hard, you know, and sacrifice too much. I'm totally with you. You know, the world would be a better place, I think, for sure. Super good, man. All right. Well, this is amazing. Thanks for being here. Uh, I love digging into what you're passionate about and it's really fun. And thanks for asking questions of me. Yeah, this was really nice to get to talk about them. They were hard questions.

No, I appreciate, I appreciate the thoughts there. This was great. Yeah. Thanks so much, man.

Cool, man. Well, excited to get this out. If, um, and I'll talk about it in the intro also, but if you're interested in following along with what Tyler does, you're on Twitter at Tyler Tringas, right?

Yep.

And, uh, the Calm Fund is at, is, uh, calmfund.com, right? Or do you have, uh, what's the domain name for that?

Yeah. calmfund.com. Yeah.

Super cool. Super cool. All right, man. Thanks for being here. I will click stop and, uh, really enjoyed it.

Cool. It's great.