A Fireside Chat with Rob Go

Everyone, welcome back to Investream Live. We've got Rob Go from NextView Ventures joining us today. Rob, welcome to the show.

Hey there. Thanks for having me. Excited to be here.

So, Rob, tell us a little bit about your background. I know you've had a couple of stints at financial firms, startups, large tech companies like ebay. What were you doing in some of these companies? And how did you decide to get into venture capital?

Yeah, if I'm honest, I actually think my interest in kind of startups and entrepreneurship started with my dad. My dad was an entrepreneur. We grew up in the Philippines and Hong Kong. He had started a number of different businesses. Most notably, he started a company in Hong Kong that was essentially like the local Chuck E. Cheese and grew it to, like, you know, a dozen locations before getting acquired by a Japanese company and then rolled it out across Asia. So it like the. And there are a lot of failures in between and after. But so I kind of saw that and that really had an imprint on me growing up. Ironically, my parents wanted me to get, like, a real job and work for a real company. And his. His argument was that, like, I had to scrape by to and start companies because I had to, not because I wanted to. And, you know, now you have the opportunity to, you know, got a good education and you can get a real job. And. And so he was always, like, giving me a hard time for that. But anyway, you know, I. I had a typical undergrad, you know, went to Duke undergrad, worked at a consulting firm out of school. I think I may be alone, but I'm just gonna keep going.

It's focused on you. Since you're talking.

Oh, there you go. But then ended up moving out to the west coast and joined ebay in a product and product marketing role out there in the 2003 time frame, you know, had a job that honestly was, like, way too big for somebody with very little experience. Was what they called the business product head for what was called findings. So search engine data structures behind the products, a lot of functionality around navigation on the site. So it was a pretty remarkable time to be there. High growth period for the company. But like I said, a lot of things, I didn't really know what I was doing. When I left, they replaced me with a team of 10 people. But when I was there, I was like one dude doing all this stuff. So that was super fun. Ultimately came back to the east coast, went to business school here in the Boston area, did some work for some startups here, but then ended up joining the team at Spark Capital, which is where I learned the venture business originally.

What made you jump from ebay to Spark? Was it kind of like post grad school you just said, hey, you know, let me look at other opportunities besides for working at a large tech company or was it something else?

Yeah, you know, when I came to the came back to the east coast, plan A was to start a company or if I didn't have a company that I would start join a high growth early stage business. And, and that was the plan. And I had talked to a couple of companies about, you know, essentially being their first product hire and ultimately the folks at Spark cold emailed me, which is kind of shocking. It was a weird time back then where there weren't that many people who were eBay, PayPal, Google, Yahoo alum in the Boston area. And so they pinged me and I was sort of like, huh, maybe this could be for me. I like the idea of being around founders in the early stages of businesses. I like the idea of thinking about what the future holds and trying to anticipate that. And I always tell people this, I really enjoy games. I like trying to think about how do you develop an edge, how do you win in a competitive environment, a multi turn environment. And I think that that actually lends itself pretty well to the investing world. And so I kind of reflected on it and ultimately decided to go down that path. And yeah, I was fortunate to join Spark and start to learn the venture business there. I was there for about two years and then teamed up with a couple friends who were at different funds and decided to start NextView. And so this is now a little bit about 10 years ago when we started the firm and at the time we were just, I think we were just experienced enough to convince LPs to give us a shot, but just inexperienced enough to to be ignorant and think that we could do it, which was a perfect place to be I suppose. But we raised our first fund then and have been reasonably consistent in terms of raising new funds every three years and starting to invest out of our fourth fund now. And since we started some of our strategy has shifted a little bit, but the core has been the same where we are seed stage focused. So we look to be the first outside institutional investor into a company at the earliest stages. We have a fund size that is right sized for this stage where the incentives of a founder and our incentives as a fund are quite well aligned given our scale. And we have a high conviction hands on model where we make relatively few investments on A per partner basis relative to almost anybody else in the country. We make fewer investments per partner than almost any other seed fund out there. And we try to really be engaged in hands on and we're very top heavy. So I started the firm with two other partners and added a fourth partner recently. And that's a lot of people for what's now $80 million fund making 10 to 12 investments, core investments per year. So that's our model.

So when you guys started out 10 years ago, were you doing the same high touch model? What's changed between you know, 2010 and 2020 in terms of the fund model and thesis anything specific or is it really just evolving with the time?

I would say it's been, you know, it's been small evolutions over time. So you know, I think. And it's, and it's actually mirrored the way seed investing has, has evolved as well. So when we started $1 million was like a huge seed round back in the day. Right. And so we at the time our first fund was a $20 million fund. You know, you could 3 to 500k check and probably the biggest or second biggest investor in the round and probably lead it or co lead it. There was a lot more syndication happening because there are fewer funds of scale at that time. And so to do a million dollar round usually we'd have two or three groups doing 250k, 400k and that's how you built the round. So that's been. I'd say that our model today is not that dissimilar. Just the scale is a little bit different because of how the market has shifted. I think the other change is we're a little bit more geograph geographically agnostic than when we started. And I think that that's somewhat a factor of the entrepreneurship market has become less local even before COVID Right. You have a lot of distributed teams. Even Bay area companies could never hire people in the Bay Area. And so those teams ended up looking pretty distributed. And you saw a real democratization of entrepreneurship where founders who were in secondary markets had pretty good access to the kinds of information flow and networks that were previously restricted by geography because of social platforms, Twitter, the fact that even the teams of big companies were getting more and more disparate. So geographically we've become a little bit more open. But a lot of the core tenets of the model have remained the same.

What geographies have you become more active in that you weren't active in when you started the firm?

Yeah. So you know, I Think the markets where we do the most are New York, Boston and the Bay Area. What I would say is the Bay Area investments in our first fund were very much companies that started in the east coast and then kind of migrated. And when we saw opportunities in the Bay Area that were like native to the Bay Area or to la, we were like, oh, well, why are we seeing this? And you know, we get worried about that and we've kind of learned that like, we feel like we're pretty good at picking and even if everybody has seen something and we might be the fool that says yes, but we don't really care anymore. And so that's a little bit different. And then I think we've done a lot of stuff in markets that we didn't expect we'd be making investments in. So one of our most recent, probably our most recent investment is in Charlotte, North Carolina. We invested in the company fairly recently in Richmond, Virginia. We have a couple in the Raleigh Durham area. We have one in Houston. So, you know, I think we're just much more open minded. You know, we get a lot of really awesome opportunities that we haven't done yet, but we look at a lot of stuff in Canada and other regions. And so it's, it means that we travel a lot. But it's, it's actually really fun to meet entrepreneurs with different perspectives or you.

Used to travel a lot, right?

You used to travel. You know, I'm still expecting to travel a lot once, once we're able to and it's prudent to, but that's my mental model. But yeah, that's, I've been pretty locked down for quite a while.

We were talking about this offline before and I think it might be interesting for some of the founders that might be watching today about Zoom Calls and you know, doing an investment without meeting the founders before. Right. Like, you know, in the past I've done that numerous times just because of the nature of where I was investing a lot in the US and I'd be investing in a company in India and stuff like that. But, you know, a lot, for a lot of investors, this is kind of a new thing to potentially invest in a company without meeting the founders ever before. So, you know, how does NextView and how do you look at that? And you know, is it something that is been a hurdle for you guys to really overcome or is it something that you've been far more comfortable with than perhaps other firms? You know, what are your thoughts on, you know, investing without meeting founders?

Yeah, absolutely. I think I think it's hard to do. I think it's a little bit different depending on who you're talking to. As a firm, we've made now a handful of investments without having met the founders in person. Since COVID hit. I'm a big fan of a book called who by a guy named Jeff Smart. I don't know if you're familiar with this book. We actually give it to all of our portfolio company founders. Long story short, the founder was an academic who did an analysis of how VCs evaluate talent and so basically talked to a bunch of VCs bucketed the way they evaluate teams in several buckets and then looked at the outcomes. And basically what they found is that the most common mode was the in person meeting where you have an unstructured conversation and you walk away with a feeling like, I really like that guy or gal. They're really good. They're really. And I saw this in my venture business, right? Like people, you have one interaction or they pitch a big team and there's a sense that like, oh yeah, that person has, they have the X factor. Turns out that is the worst way to evaluate talent. The outcomes are terrible. When you look at it that way, the best way to do it is to have structured interviews and to do very, very thorough reference, checking around those structured interview questions. And so my takeaway from that is actually what you glean from the in person visit is actually somewhat limited. And so I worry less about that from an evaluation standpoint. I do worry about it from the standpoint of building rapport with founders because you just lose the ability to have met to build a relationship and give a relationship off on the right foot. And frankly, this has been one of our advantages when we do seed investing is that if we meet a founder again, this happened. My partners went to Charlotte to visit this company called Carewell, probably the day public schools were closed in New York. But they flew down to Charlotte, met the founder and the team and you know, we were thinking it was a competitive deal and we were thinking to ourselves, I guarantee you there's zero chance any other venture capital firm got on a plane to go meet this founder and their team at that point. And so like it's our DNA to get on planes and trains to meet people. And it's a selling point. It's part of like building, building relationships. And so that's lost. But I don't worry too much about it from a evaluation standpoint.

Yeah. Talking about some of the companies that you guys have gone out and met and invested in years ago. I'm just curious, how large is the NextView portfolio now?

So we've invested in about 30 companies per fund and we're investing out of our fourth fund early in the fourth fund. But so we've made more than 90 investments over our 10 year period. Not all of them are active. Some of them have had happy outcomes and have been acquired. Some of them have unfortunately gone out of business. A lot of the majority of them are still active in some way or another. And so, yeah, it's a big portfolio at this point.

So how many active companies are you guys managing today?

So the way we think about it is we really focus our height, hands on, high conviction engagement model in the first two years of the life of the company. And so, you know, and then after that point, typically, you know, you typically were a board director or observer during the seed period and then we step back afterwards. So the way we think about it is like we're engaged with a small number of companies, but it tends to turn over a little bit quicker than a typical, you know, lifecycle VC fund where somebody may stay on a board for eight, nine, 10 years plus. And so, you know, the way this all works out is we tend to be working on, you know, five or six companies really closely per partner at one time. And that's usually a combination of, you know, companies that have new investments that have been made sometime in the last, you know, 24 months or so.

Gotcha. So, you know, now with, you know, pretty much everything changed, how is, how is your portfolio kind of. Yeah, you know, there's founders that want to raise money, there are founders that raise money pre lockdown, pre Covid. There are startups that, you know, might be in the portfolio for seven, eight, 10 years, you know, and they're kind of, I'm sure they're all over the place. Right. But you know, if you can look at the whole portfolio, out of all the active companies, what are some common threads that you've been seeing across your portfolio and how companies have adapted or evolved to kind of meet the needs of today? Right. Everything is, except for some companies, things have accelerated far more quickly than they had originally thought in a good way. And for other companies, things have accelerated further away from what their core might have been. So I'm just curious, like, you know, what are some common threads that you're seeing across the portfolio?

Yeah, so yeah, I think you're right that it's a broad set of outcomes. There's sort of been three buckets, one Companies where the pandemic has actually created a pretty significant tailwind to the business. There is some where the pandemic has been catastrophic and most though, are in the middle where, you know, business is progressing. They're able to adapt to some degree, but like, you know, it's a tougher environment than it normally would be. So those are the three broad buckets, you know, some common threads, I would say. And this is a little bit of our. The feedback that we've given to most of the founders is most have really rationalized their business models. You know, I think that apart from a few small number of companies, raising new capital will be relatively expensive in terms of the equity that you're giving up. And so it's actually been really extraordinary to see how many of our portfolio companies have basically refactored their expenses and gotten to cash flow break even or generating profit in a pretty short amount of time. And I think that just being in control of your own destiny, if you're able to do it, is great in a period of great uncertainty, which is where we're in right now. So I think that's one a lot of rationalization of expenses. I think the second is a lot of our companies that were not initially going to be distributed teams have gone distributed. There's a company that I work with in New York called Otis. They're a series A funded company. USV and Mavron are in it with us. The center of gravity for the company was in New York. The founder, Michael had started a company in New York previously called skillshare, but he made the decision that he's going to go 100% distributed. And he and his wife, for the time being, have moved to a different state and have managed the business that way. They've actually used that as a strength because all of a sudden this is a fintech company. They can now look to functional experts at companies like Acorns or Wealthfront or, you know, a lot of these Bay Area, you know, chime and say, hey, you know, they're. That talent is just as accessible as the talent that we would have otherwise been focusing on in New York. And, and they've used that as a real advantage. And we've seen that with quite a few of our companies where it was a little bit of a jarring period at first in refactoring the way they think about their teams, but then once they thought more, you know, nationally or globally about their hiring, they've made some really, really amazing hires that they wouldn't have been able to make it with a more narrow geographic lens.

Have you been seeing a lot of international hires that some of these folks have made or are they still sticking to, you know, domestic. Distributed domestic rather than distributed global?

I see we've seen some global mostly with development teams that are, that are offsh or, you know, I have one company also in New York where most of their tech team is, is, is distributed. And so, you know, it's everything. I think they're lead designers in Michigan, they have a couple developers in, in Montreal, you know, so we've seen a little bit of that as well. Yeah, so I'd say that's, that's what we've seen.

Okay, gotcha. So, you know, now with a lot of the companies bringing on distributed work teams, you know, has that one created more challenges in terms of managing the companies? At least from what you're seeing being, you know, perhaps a board member or an observer, are you seeing other challenges that these companies are facing now that they are, Many of them are being forced. You know, you mentioned one that made a conscious decision to be distributed early on. Right. So they've probably grown into that. But some of the other companies that have been forced to go to go distributed relatively quickly. Are you seeing other challenges that they're facing in terms of managing that?

Yeah, you know, I, as an investor, you're not really close enough to really see the leading indicators. My suspicion is we are in a weird, like head fake moment where a lot of companies are thinking to themselves, oh, this is great, this is easy. Being a distributed team is the way to go. And they're not really seeing the costs, you know, kind of lack of agility within the team, the lack of cohesive culture, kind of alignment of goals and objectives. Like that's there's a reason why people like working together. And I think those reasons aren't going to go away, even with all the greatest tools. And yeah, I think founders who don't realize that that's a risk are going to like wake up in six months or nine months and be like, man, I thought this was really great, but we have all sorts of issues that insidiously appeared. I feel like from my vantage point, I'm thinking about that and worried about it, but I haven't seen it yet. But I think that it's coming and I think it's going to be true for a lot of companies.

Actually you mentioned that you've seen it work with dev teams, but at least from your perspective, could you identify types of teams where it has worked well, Right. So dev teams I think are natural or distributed just because of the way developers are and the way they work. But are there other types of teams where you've seen that it has worked?

I mean, I actually think that any sort of team could have success with the distributed workforce. I just think that it's helpful to have, I think it's helpful to have managers and also the individual contributors to have had experience with it because so they can adjust their work styles appropriately. And I think it's just much more likely that on the development side you would have had people with more experience versus everybody learning on their own. And so, you know, I don't think there's any reason to think that like a marketing team or a product team would not be as, couldn't be as effective. But I think it's helpful to have some experience. You know, I think if you have a business, if you have a function where you're largely reliant on like coordination between, you know, cross functional teams or between different, you know, like layers of management, I can see that being really challenging because it's just harder to just like decision needs to be made, see the person across the hall walk over and like grab the time and make it happen. I mean that's, that's beautiful. When you can do that in person, it's much harder to do remotely. So I can see that being a challenge. But I think companies that have like embraced a distributed working style just has to build in some of the operational infrastructure to make it work.

Yeah, yeah, no, that makes sense. I want to switch gears a little bit and talk. Come back to talking about the fund.

And.

The NOW accelerator program.

Yeah.

When did you guys decide to launch an accelerator program?

Yeah, so it's funny, we had an off site, I think in the fall of last year where we talked about creating an accelerator and it went from like, oh, this is the idea, this is an idea that we should pursue to this is an idea we're doing and then execution pretty quickly. When Covid started to get serious, there were two reasons for doing the accelerator. One was Covid related, one wasn't the non Covid reason was pre seed is now a thing. And we felt like we needed an engagement model that made sense for pre seed stage companies that require less money where we can deliver on our high conviction, hands on model, but do it in a way that made sense given the scale of the investment and our time. And so doing it in a somewhat programmatic way kind of made sense where you have some programming for the broad Group of companies, you have scheduled finite engagement touch points with companies and founders and so forth. And so that was the idea. The COVID related motivation is that I think every VC fund, when Covid happened, said, well, actually we're in business, don't worry, we're in business, we're going to do deals. And everyone's been doing deals. The problem is what people do during an uncertain time is that they tend to close their circles a little bit. And so all the deals that have gotten done were ones where, you know, founders already knew the investors really, really well. And I feel like over the last two to three years, there's been a lot of great strides made in the industry where investors were being pushed to be a little bit more open minded from a sort of diversity standpoint of the types of founders that they're seeing. But you know, in a pandemic, people are just going to like shrink that what, you know. Yeah, yeah, exactly. And you know, it's, it's no surprise that if you're going to focus on people you already know, you're going to perpetuate the stats that exist today as opposed to trying to improve it. And so we like the idea of doing the accelerator as a way to push us to be able to see a broader set of entrepreneurs and be a little bit more open minded from a background, ethnic, geographic standpoint.

Okay, so let's follow up with that. What types of founders are you courting? Where are you courting companies from? Geographically, areas of interest, like specific sectors, verticals that you are interested in that you want to see deal flow? You know, is it a, you know, cohort that runs once a year, twice a year? How many companies in the cohort? You know, let's talk about the accelerator model a little bit.

Yeah, so the point, the idea behind the accelerator is actually not to make it cohort based. That's going to be distinctive relative to like a YC or techstars. But given that we started at a certain, at a point zero in time, the first group is kind of like a cohort, right? Yeah, but we don't see this as like, oh, we're going to have a cohort. So we have six companies, but we could meet a company tomorrow and be like, oh, it'd be great to add that company. And you know, there's no reason why things close off. The geographic reach, as I said, is actually pretty consistent with our reach as a firm where we have a couple in the northeast, we have one in the Bay Area, and we have a couple in Non core geographies. So a couple in the Southeast, different states in the Southeast. And so that's been interesting. And from a sector standpoint, I think that what we're going to try to do is be. Is to basically publish some of the themes and some of the areas that we're thinking about. And sometimes the companies that come our way overlap with that, sometimes they don't. So we have a company that's thinking about the future of retail. We have a company thinking about kind of fintech, the software plumbing of fintech. We have some companies focused on influencers, we have one focused on weather data. So it's a pretty interesting of topics, you know.

Yeah, yeah, sorry, go ahead.

Yeah. So we have a question on Asia, India, geography. Is that interesting? For next view the the as a fund. We've told our LPs that our focus is on companies that are looking to initiate to primarily do business in the United States in the first couple of years. That's a primary market. And so. So that's our focus.

So in that particular case, would you say a company that's starting out in India, but they're focused on the US market, like a SaaS company, for example, Would they be a potential candidate to either join the accelerator or for a seed check?

Yes, that's possible. It makes it a little bit. Yeah. So we think a lot about, like how can we help the company is how strong is our intuition about the customers and the market problem. And if we feel like we can get comfortable with that, then we can back founders that may be in different geographies. It would be great if there was a meaningful presence in the United States. We have one company called Kinko which is a direct to consumer food business. Most of the team is in Portugal. The founders are Portuguese, but they both spend a pretty meaningful amount of their time in New York City. But the majority of the team's in Portugal. And we've had some other companies that are. We were investors. A company called GrabCAD a number of years ago, which was largely a team that was based in Estonia, but again their market entry was in the US as they were selling CAD collaboration software.

Gotcha. Gotcha. So what's the check size for the accelerator?

It's 200k.

Okay, so is it a fixed 200k for 5% like a YC or a Techstars or is it kind of variable based on a company might be a little bit further along than another company? How do you guys do that?

It's been fixed thus far and obviously that's the initial check and part of our hope here. And we try not to be, we're trying to avoid the signaling risk that could emerge with not that we're a huge fund, but that we're a bigger fund. And so what we say is that we will do our pro rata in a subsequent follow on round and, but we won't lead the next round. But we're good for our pro rata. I mean, the only exception is if there's been like, you know, something dishonored, what in our view is dishonest has happened or you know, some, some sort of conflict. But you know, for the most part, the plan is we do a pro rata for any round and we try to work as hard as we can to help the companies get adequately financed to hit their next set of milestones.

What about those companies that are going through the program and you guys get really, really excited about and they haven't necessarily gone out to raise around yet. Would you proactively suggest that they go out, find a lead investor so you can write a check? Would you go out and say, hey guys, we're ready to write another check, we'll do another note until you guys decide that you want to go out and raise a larger round. How do you handle those, you know, like the superstars, how do you handle those guys?

I mean, I think one could say that we leave, we may leave value on the table, but the idea is that the, the message is kind of the same. It's like actually, so I want to clarify one thing, right, because this isn't like a cohort and it's not like a demo day oriented thing. The idea is not that, you know, on this day every one of the companies is going to go raise money and if you do it a little bit earlier, you're doing better than the rest. Like, I actually think like fundraising is the wrong goal for, for accelerators. And you know, candidly, we've like skewed like pretty early with the companies in our accelerator and you know, but some of them are generating revenue and are profitable and who knows if they're ever going to raise again, right? So I think that, so I think that's one caveat. If a company's really knocking the COVID off the ball, I feel like independent of us, they would think about going to raise another round and we'll help them do it. And similarly, our plan is we're going to do our pro rata or if it's going to be a note or a safe, it's Sort of like what our effective pro rata would be. The good news with our at the stage that we're investing in, it's not that hard to calculate what would have your effective ownership have been if it converts and so what the effect of Parada is. And so that's, that's kind of how we approach things.

So are the accelerator docs, are they. Do you guys use a safe convertible series seed?

Yeah, we use the YC docs. So it's the YC safe with a cap and the YC Pro raticide letter.

Got it, got it. So pretty consistent messaging across the board. And doesn't sound like you're creating much signaling risk. I mean that's a challenge that, you know, at least I've seen firsthand.

Yeah.

Where you know, you're running an accelerator program and then you're trying to, you know, put more money into your winners or your perceived winners at that stage. And some other companies don't necessarily get a check and, or don't get one at that same time. And that could create some friction within the portfolio. So it sounds like, you know, you guys have figured that out pretty well.

I mean, I wouldn't say we figured it out. We're definitely mindful and sensitive to it because we've been on the other end for sure and but so we're trying to design the best program we can. I also think that when this is a little bit more evergreen, right. Where it's less cohort based, but there's always like a number of companies are coming through, it's a little bit less like, okay, who's the winner of the batch? Right. Like I saw this with, with some other, other accelerators where there was always this like, oh, this is the one from this batch. And like I think that that's, I mean, I guess it's kind of true. Like maybe there is one company that's the best, but a lot of great companies take a little bit longer to marinate and the winners from the batch, from a fundraising standpoint often don't become the best companies in the end. So I think we're trying to, we'd like to avoid that dynamic if we can. It's hard to do, but we're going to try to fight it.

So we got two more questions from Abhit on LinkedIn. How do you evaluate the investment thesis where founders throw in a lot of buzzwords? Right. So like, you know, buzzwords are exciting. A lot of people use them in their pitches. How do you cut through the crap is I Guess the real question here. Right.

Yeah. I mean when there's a lot of buzzwords that's usually bad. It's nice. Visionary.

So you don't like folks that have visionaries in their LinkedIn?

Yeah, the flowery language I don't like very much. We try to be very practical and just understand what are the problems that are being solved. Well we have buzzwords of our own but they're actually not very externally common. So when we look at companies, we think about founder market fit. How well does the attributes of the founding team match with the specific challenges of the market that they're going after? And then we think about this concept called JDCC that we borrowed from a founder on our portfolio. It stands for jaw dropping customer value through competition Crushing business models. And so we think about that. So the jaw dropping, the JD part is basically like is there a product that has the potential to deliver 5 to 10x better, you know, better performance or better value or greater convenience? And then the CC part is, is there an accumulating advantage? Right. Is there a reason why as the company gets traction, there's a compounding benefit to the company and that's more or less how we sum up what we look for in the companies that we pitch. But when I meet a founder, the most worrisome thing is if in 30 seconds I don't get what they do, that is usually a big problem.

Yeah, I mean following up with that thread, you probably don't see it as frequently here as somebody who was investing internationally. That was one thing I saw very frequently was the founders ability to communicate was not at the same level as a lot of founders here. And many of them were great founders and have built amazing businesses. Many of them are in my anti portfolio. But you know, like I'm sure there are founders that you come across also that are probably great founders, just horrible communicators. So I guess the follow up question to Abid's question that I would have is how do you like in a couple of minutes, you know, perhaps you're meeting somebody at a conference or a quick call that you're doing with somebody, how do you quickly decide like all right, this founder seems like they are a high quality founder, they just are terrible communicator. Right. And do you know as a firm do we want to spend the time coaching them on the communication side because we know that they can do the business side. Like how do you make that determination of the amount of time that you should or may need to invest in this founder and realize that their communication skills are really the only challenge here, not their ability to execute on their business. Yeah.

So I got a great. I heard something from a friend of mine at Bessemer years ago who was talking about one of his mentors who actually had as a business school professor Felder Hardeman. And the way he described him is he said he talks himself into every deal. Now he ultimately talks himself out of almost every deal, but in the beginning talks himself into every deal. And I think that that's actually a really important mindset to have, which is like when you have an, when you have a conversation, it's easy to figure, to try to think about like how can I as quickly as possible shoot this down as opposed to searching for like, is there something special here? Right. Because when I have an engagement with any company, I'm trying to find like one special thing that gets you to say like, okay, because of that special thing, I want to dig in. And then at that point you're going to be kind of brutal about like all the drawbacks and the flaws. But that's sort of my mindset when I think about founders. And so I usually recommend if founders are trying to communicate, you know, in a short amount of time, we know what they're doing. Instead of trying to like put forward like the most comprehensive argument about why this company is going to be great, you kind of want to like hone in. Like is there something special about your background, your insight, the technology of develop that you can just get across really quickly and then kind of get the investor to say, okay, let me see another card and spend some more time.

Makes sense be had. One more question here. I'm sorry, not that one. Who are your outside counsel or do you have an in house team? I'm assuming he means legal team. So is that outsourced or do you bring in legal and operations internally?

It's a mix. So we work with Gunderson as our fund counsel for a fund formation and helping us with affairs related to the firm. We have an individual sort of GC that works with a few different funds that does most of our deal work unless he's busy or unless it's getting. It's something that's a little bit more complicated, in which case, you know, there's a number of other individual firms that we really like collaborating with as well on a one off basis.

Gotcha. Okay, question that I had for you was now, you know, a lot has changed in the last couple of months as we talked about before. How has that changed? You how has that changed Next View? Like, what are some things that you've tried to adapt to based on what has happened over the last three, four months or six months across the globe? How's that affected you? How have you changed? How has that changed Next View's perspective on investments on the industry markets?

You know, I, I kind of feel like, like the deck is being reshuffled or it's like the cards are thrown in the air and we're seeing where they're, they're gonna settle. So I don't know if I've landed on specific conclusions yet. You know, I, I would say that, you know, as a team, we've really emphasized just like time as a team together, even if it's virtual. So I have more scheduled, like lunches or, you know, check ins with my colleagues and my partners than we ever did before. And it's really been fun. And I feel like it's been a. I've really come to appreciate the people that I work with and, you know, the, the time that we're spending together virtually. And I long for seeing each other in person. We actually have spent some time together in person as things started to open up in the market in our hometown. So that's. I think it's one. I think, as I alluded to before, you have these counteracting forces around diversity, right? Like the urge to stick to the people that, you know, because it's hard to evaluate people you don't know. And then obviously a lot of external social forces that are making you aware of, like, biases in your inner practices. And the accelerator, which is a really great way for us to make sure that we try to do this. And so that's something that we are thinking a lot about. How do we make sure that our top of the funnel and then different stages in our funnel in every process is more representative, whether it's a hiring process, it's the deals that we're looking at, it's just founders or even operators that we lend some time to. And so that's been different. I think there's a bit of a debate internally about how much the pandemic should factor into investment decisions. The baseline way of thinking about it would be you want to invest in companies that you would have invested in before there was a pandemic, but just that the pandemic pulls the future forward a little bit sooner, which I think is probably like the good baseline assumption. But a part of me says, like, traction creates opportunity. And if the pandemic allows something to gain Traction that otherwise wouldn't have gotten traction and then puts a company into a position to kind of expand into other areas. Maybe that's a viable strategy and a viable thing to invest in and you know what I mean, you know, kind of COVID specific companies. I don't know. So that's something that is a little bit of a debate, honestly.

Do you sometimes look at public markets as almost as a proxy to some of those types of companies that are benefiting from the COVID pandemic and that have accelerated certain things? Right. Like, you know, telehealth, for example. Right. A couple of publicly traded companies that have done quite well over the last couple of months. And of course there's Zoom and plenty of other companies. But do you sometimes look at public markets as a proxy?

I worry a little bit about doing that because of just the time lag. We're investing in companies that might take 10 years to come to fruition, and by then the world would look really, really different. And so I worry that if you look too much at public markets, it'd be a little bit of tail wagging the dog. I actually think that public markets actually can give you a bit of a signal for what nobody wants to touch. And in which case maybe that'd be perfect time to invest in those kinds of companies. Right. But I don't know. But at the same time, I feel like the public markets is almost like a reminder of what the laws of physics might be. Although recently I feel like that hasn't been the case. But it gives you a sense for, you know, like, we work, can't get out. And that's, that's a nice reminder that like, okay, there's some balancing force, I guess, in the world. But, you know, I have a couple counter examples in mind right now. So maybe, maybe that's not true anymore. Who knows?

Yeah. Okay, so we're almost up on time. If there are any questions from the audience, we can take those. If not, we will go with one more and then that I have. So Amit has this question. How do you view investment technologies in terms of their customers base being. All right, so startups that are focusing on government or let's say nonprofit NGO type of agencies and things like that. How do you, how do you view companies like that?

We actually don't have a ton of portfolio companies that sell to the government. No, I think that the sales cycle is long and somewhat unpredictable. But, you know, I mean, Palantir is about to go public and they sell, they do a lot of business with the government. So it's not funny that you mentioned.

That, because that was going to be. My last question is like, all right, you know, Palantir just filed. What are your thoughts?

Yeah, I actually haven't looked closely enough at what the business looks like to really give you a smart perspective on it. I know that they just filed. I know that some really extraordinary people have worked there and have come through there. I have, you know, I have some insight into, you know, what their core technology was and how that's been applied. So I'm gonna. I'm gonna suspect that the numbers look pretty good, and they have a pretty defensible position and really great team. So I think there's a lot of good ingredients for a robust company. I have no idea whether, you know, I forget what. What the speculation is. It's gonna be like, a $20 billion company or.

I don't know. I didn't look at the F1 yet, so I'm. I'm not sure. I just saw the. The headlines and didn't get a chance to read into it myself.

Yeah. But, yeah, it'll be interesting to see.

Yeah. Yeah, I think that's, you know, one of the more anticipated IPOs that are back on the docket after, you know, Airbnb and a couple of the other ones pulling back earlier this year. Right.

Yeah. I'm so excited to see Airbnb. I think that company is so extraordinary. And, yeah, you know, I remember when Silver Lake did. I think Silver Lake, when they did the deal, I was like, man, I would have put a lot of my personal money into that deal if I had had the opportunity to do it.

It's funny, because when I was at 500, when I first joined 500, this is late 2012. October 2012, November 2012. It was around the time that Airbnb had just closed their first round or something. And, you know, I noticed that they had gone around and they had created. They were called something else. I can't remember what they were called at that time, but they actually created cereal boxes and they bought cereal boxes and they put them in the office. They had, like, Dave McClure's face on the. On the cereal box and, you know, very on brand type of thing that they did, you know, to pitch 500, unfortunately, 500 passed on that, but, you know, really creative ways of getting in front of. In front of investors and just pitching it. It was like, my first kind of view into that, and I was just, like, amazed at what they had done. I've never Seen founders, you know, go to that extent and like be that creative to get in front of investors, Right?

No, absolutely. I mean, you know, it's a classic, like I said, I feel like it's a classic example of traction creates opportunity. Like I don't think a lot of people would have said that, you know, renting out a spare room in an apartment or a couch would, is a great, is a big market. But if you can get traction with that and then you can kind of expand into adjacencies and you know, obviously did an amazing job creating an awesome guest experience. They spend a lot of time thinking about a host experience and you know, I think Covid was unfortunately like an exogenous shock that hurts that kind of business specifically. But I think as far as I have heard, they're back on their feet and I'm very optimistic about that company and we're not investors in any way. So I'm just plugging a non portfolio company.

Yeah, well, you know, I guess there are some companies that we all have to plug no matter whether they're portfolio companies or not, just because they're just phenomenal businesses and serve as a real good model for other founders and for investors. What did we miss when they were pitching us and learn from that?

Absolutely.

Got one more question from Abit. Do you generally look for proprietary tech barriers to entry, funding or the ability to scale as a formula for investing? So yeah. What are some of the, I guess X factors that you're looking at to kind of say yes, this is a company that we want to invest in or don't want to invest in?

Yeah, I, I think that a lot of companies that have truly proprietary technology. Like I think actually think the amount of capital that's required to develop that is kind of great. And so it's not really, it tends to not be a great fit our model. We tend to invest mostly in the application layer, so consumer end user focused services or the like. And so there's usually not like that much that's super proprietary. As I mentioned, there is like a compounding advantage in the companies that we invest in. And so it's sort of like the defensibility comes with as you gain success. Do you know, do you have more data or better algorithms to be able to deliver your value proposition better than somebody else? Do you have, is there a network effect in the business model? Are there other scale advantages that might exist? And so we think about barriers from that standpoint. I know that other people have very different perspectives where they're really Looking for a proprietary technology advantage at the core of the business. And I respect a lot of investors who pursue that. It just depends to not map that well with the types of companies that we're focused on.

Yeah, cool. All right, Rob, last question that I have for you is what do you think is going to be areas of interest for yourself personally over the next six to 12 months? What areas are you excited about that you want to see more deal flow in either outbound, inbound, whatever. You know, hopefully some people watching will get inspired to come come pitch you from that. But I'm interested in what, what are you excited about over the next six to 12 months?

Yeah, I appreciate that. So there's a couple of things. One is we've made a number of investments in the senior space, senior care, you know, senior or related commerce experiences. And I think that that is a really important market and I think that that's one where, you know, because they're the most vulnerable population with COVID I think you're going to see some permanent changes in that market. And so, you know, we're interested in that. The second broad area is what I call peace of mind businesses. So I like businesses that have an insurance style kind of value proposition where you get a consumer to pay for a service that runs in the background and delivers value without doing anything with it, which seems a little bit weird. There's actually not that many businesses like that. I think a great example of this was Lifelock at one point in time, which, you know, is identity theft products, subscription business. And like you basically buy it and you don't think about it. And that ultimately got bought by McAfee for several billion dollars. So, you know, within our portfolio we have a company called Jumbo Security, which is a personal data privacy business which has the value proposition is basically like you pay them, then they will, based on your preferences, essentially manage the data vulnerability of your social products and social preferences. And they kind of do everything for you and run in the background and tell you if you have any alerts. We have another company that does something focused on your personal finances and does something similar to that as well. And so we really like that. I actually think that there are way too few companies that exhibit that kind of a dynamic. And I think that that's usually what, you know, we're in a world where it's so hard to compete for consumers attention. How about companies that actually like get their attention once and then just get out of the way, but you pay for it, right? Like I actually have a lot of services that I pay for that look like that. And they're great business. Business.

Yeah.

Cool.

Rob, thank you so much for joining us today. Would you like to share any information with folks if they would like to contact you or pitch you guys in any sort of way?

Sure. So I'm ob go R O B G O on Twitter and you can email me at robexviewventures.com and I try to get to everything or at least review everything. Yeah. Thanks for having me. This is super fun.

It was. If you want to stick around for a couple minutes, I'm just going to wrap it up and we'll head backstage and just chat for a couple of seconds. Yeah.

Awesome.

Cool. Rob, thank you very much once again. Thanks everyone for joining us today. And in two weeks on July 21, we are going to have another fireside chat with Amal Sarva. He's the founder of Notel, which is providing headquarters as a service and was one of the most widely discussed startups in the space after WeWorks challenges last year. So that should be an exciting fireside chat. That's on July 21st at 12:30pm so we'll see you again. Thanks so much for joining us. Take care.