Haley "Zap" Zapolski Interviews Shane Mac About Nashville, Startups, Investing and How To Build Global Companies From Nashville, TN

Since you gave me the honor of asking questions, I'm a little bit biased. I wanna talk about why are you in Nashville? Why are you here? Why are you building your company here? Why are you stoked about the city? Explain that to me.

Brad Feld did a study when he wrote his last book on startup communities. People who start companies where they want to live are much more likely to succeed than people who don't. And it's a fascinating stat. I never thought of San Francisco as home. My home was next to the office. I lived in SoMa for almost 10 years, and I lived there to work. And I think it led to short-term thinking. I think it drove a very manic culture. And when I came here, I felt like I would actually be here to live, and I would go to the farms, and we would ride four-wheelers, and we'd listen to music. I loved music my whole life. And so I think the opportunity is, I'd meet people in Nashville who love living in Nashville. Just being around that culture, and also it was a stopover city. I call it the switchboard city, and I still do today. I think it is a switchboard city 'cause it's right in the middle. It's not about being better than New York or better than San Francisco or like Miami. It's about owning the differences of what make it special and unique and realizing that we have this like perfect middle ground to be the closest flight to any other city. And now I can get to New York I can get to SF by 10 AM, I can get to Austin by 10 AM, and I can get to Miami by 10 AM. And I think that switchboard-like thing is something that was very attractive to me. And then when they launched the British flight, a company from London who acquired us, and so I had to do my lockup and I told them I had moved closer to New York. They thought New Jersey and I moved to Nashville. And that kind of really changed for me Nashville's connectivity to the world as well as For me, I got to move here and start thinking about a 20-year plan to live, not burning it down just to work.

What do you think are the greatest challenges for like startup founders in Nashville, but also maybe just the startup ecosystem as a whole?

I'll start with what I hear from other founders that the challenges are. And I've been coming here about 7 years, but I don't really know as much as everyone who's been here forever. But what I hear are two things. I hear— There's a lot of great founders here, but it's very disconnected. And the capital's not like the coast. Over and over again, every time I came here, I heard the same things. And I think 7 years ago that was relatively true. If there's anything positive that came out of the pandemic, it's that capital went from wanting to be somewhere to wanting to be everywhere. And it really did flip. I mean, I invested in a company a month ago from Tara Fung called Cocreate. It was a $25 million seed round. Chris Dixon, he led the round. So Andreessen's investing here, her co-founder's in SF, she's a CEO who's in town who used to work for Eric Satz who's at Alto IRA who she was the CRO of. And all of a sudden it's like, bam, no one cared that she was here to raise a round from Andreessen that was a top-tier round at the highest valuation I've paid ever as an investor. And it happened in our backyard. And so I think the capital conversation actually flipped, which is a huge opportunity. The capital with the different mindset is now investing everywhere, and I think that's a massive opportunity. From a physical location perspective, I hear there's a lot of great founders here, but it's very disconnected. And the reason San Francisco worked is because the density of SoMa was so small that everyone was running into each other at every coffee shop. And Philip Rosedale, who built Second Life, he did this talk and he's— drew a circle of 100,000 people on LinkedIn he surveyed, and he overlaid it on a map of like, what does that area look like in a city? And in San Francisco, it's about SoMa. In New York, it's about one area of New York, like a Midtown. And in Peoria, Illinois, it's half the city. But he put the number of founders or entrepreneurs per 100,000 people on a map. And what was interesting is that Peoria and New York looked the same. They both had like 25 dots. 'Cause not a lot of people in New York are founders. A lot of banking, a lot of finance. And the thing that you need is other people around you going through the same struggles as you are so that when your doubts and your insecurities and your shit's failing, someone there is to have confidence in you, build yourself up, and actually be the safety net if your startup fails. And he said the thing about San Francisco is there's 10,000 dots. So the person you ran into at the sidewalk in that density of physical location in SoMa is the person that's gonna hire you when your startup fails because you have the same empathy and respect for each other and you understand what you— your skills are and what you've went through. And so I really see that. And so I've been investing a lot in Wedgwood-Houston. I really believe in is like the perfect location. Matter Health just moved in, who's Scott Soar, who co-founded Built, the big real estate developer named AJ Capital. They built the Soho House, they're building the National Warehouse. Third Prime, a huge VC from New York, a $500 million fund. So I'm just trying to make the flag in the ground of like, let's all go here. There's 4 coffee shops, there's gonna be 10. There's great restaurants moving to town and a lot of people are building space there to allow us all to be around each other. And I think it really matters.

What are you most excited about that's really coming in Nashville or that you're watching or seeing? What do you see the future as in 5 years for Nashville? How do you think it's gonna change?

The way people talk about Nashville is, is tech gonna happen here? How's it gonna change? Will it get bigger? Where is it happening, et cetera. I don't feel that now. I felt that 4 years ago when I was flying here. I feel now it's already happening. He told me tonight, he's like, hey, 3 people are doing similar to what you're doing. You're all within like a mile of Wedgwood Houston. It's funny, these things form and they form for reasons because the impact of people and density really does matter. What I think has to happen is more capital from the top-tier firms comes to town. That leads to more founders getting rounds that lead to the best founders wanting to take that money. That leads to more economic development here and more job opportunities here. And that leads to Nashville being a place where great founders start companies and capital wants to invest. And when you get that flywheel going, the way I really think about it is it, in 5 years from now, The switchboard city to me is the interconnectedness to every other city. And what I'm trying to do is use physical space, events like this, bringing the network together digitally to build the trust network of Nashville. And when you have the trust network, information flows faster. And what that does is as information routes through here, or people are always routing through here, and it's a very like transient town. Whether it's visiting or living or people are always coming in and out. Our ability to get money from Miami, pass the information around, get feedback from each other, because we trust each other on a level that other cities don't, or it moves faster through our network, leads to connecting to New York, connecting to SF, things start happening and they're like, "Shit, a lot of things are flowing through Nashville." I love it. Our last investment out of the fund was called Highlight.xyz. We did it with Hawn Ventures, which is one of the leading crypto funds in the world. She's the largest fund ever raised by a woman, Katie Hahn. She raised a $1.5 billion fund after leaving Andreessen. And we were all talking and the CEO, Nat, was just like, Nashville is an important city to us because all the music managers live there. We're building the next Spotify for music that also has Web3 capabilities. And like when we were all leading the round, that was what he was most interested in. Even though I had a crypto fund. And so I think that magic is the magic of it. It's the why this city is different, and I want to lean in so hard to that. And it's like I said, the switchboard to me is so that we stop trying to say, are we like another city, and we just focus on being the city that we are. And that's how I see the switchboard in my head in like the next 5 to 10 years.

How do you reconcile building Wedgewood Houston and building density with Remote work.

WeHo is Wedgewood, Houston, which is a neighborhood 5 minutes south of downtown where Soho House is, where the new pizza place is, where the Nashville Warehouse is, the soccer stadium, all that's going in there. So that's, we call it, we're just trying to be cool like New York, you know? Which we shouldn't be because we don't want to be like New York. I think it goes back to my first phrase, which is it's so important when you're founding companies to have a support network, a mentor network, and have the people around you going through the same things you're going through because no one else believes in you. Founding something is really when you're in a basement, your parents think you're a failure, they can't tell their friends about the logo on the wall, and you don't work at Google, so their friends think you're a failure, then they feel like a failure, then your parents influence you to go work at Google. It's basically signaling theory and it's how it all works. And so, when I think about it, it's like without the people around you to give you the confidence in yourself, to be there when you have self-doubt, to show you what's possible because they're also building things, with big ambitions, that is the fuel that actually keeps people going. And I think you build that locally. You build that in Wedgewood, Houston, bouncing into people around. You're inspired by the person that's building something massive next to you. But we don't need to scale our companies in Nashville anymore. And you can scale now globally. I think that's what's changed in the world. I've always thought about the internet as this global way to build influence and impact and write that was different than getting the support network, the mentor network, the confidence from the people around you in real life. Build your confidence network in person, but build your impact and influence online. That's how I've always saw the remote work world. If you don't have a remote digital-first mindset for hiring, I think you're just at such a loss. And when you ask that question of, can you build trust better or the same as online as you do offline? Or in the crypto world, can you build trust with technology of people that never have to meet each other? That's really what crypto enables. So you don't have to trust each other, which actually scales trust infinitely. And I think what changes is what I was talking about earlier is it's not about future of work, it's about future of living. And when you change decentralized finance and you change how you're able to work and how your relationships with work are, it changes how you think about your life. And I think being able to live here, I probably wouldn't have lived here if they still would have said, "Go to SF to get money." I probably would have been there. But the founder and the investor and the community network that is your support network of other people that you need to get started, I do think that is built in person. And so I think they come together. The possibilities to like change your future of living, because of what's changed in future of finance and future of work, is the greatest opportunity in history.

All right, last question. What really gives you the energy and the fuel to get this all done?

I think what helps is having a 20-year view on the world. When you're able to think long-term and push something for a long time and do something with a 20-year perspective on what it could be, that's what I'm doing in Nashville specifically and with every company I own. And it really changes everything about how you think.

How'd you get that 20-year view though?

Brad Feld said it back in the day at Boulder. He said, "If you want to create a startup community in a city, spend 20 years doing the things that, like, you're doing." But the 20 years actually restarts every day. I do think the question of, "Is what you're doing today what you would still be doing 20 years from now?" every day is the 20 years you never get to. The mindset is actually the thing that changes everything for me. And I found out a lot of the early, the company that failed, I just thought if we could make this work, I would have enough money to then be able to do what I want. And I think that led to the greatest failure ever. 'Cause I think you rush, you don't make good decisions. I believe in direction over speed. I think a lot of startups believe in speed over direction. I think it's a complete failure. I ran for 3 and a half years. I almost killed myself. Our whole team hated their life. And it didn't work and nothing happened. The reason is 'cause we didn't ask hard questions. We didn't ask, is it really working? We didn't be self-aware. We didn't cut the team back. We didn't give honest answers to questions of like, are people actually coming back ever more than 95%? Do people even love the product? If we would've asked questions and slowed down, we would've picked a different direction and maybe it would've been a whole different outcome. And so I think long-term thinking is actually a very specific question in the daily time frame of, is what you're doing today what you would do in 20 years? Thanks, Shane.

Can we give him a round of applause, you guys? All right, I'm gonna open it up for questions.

What's your name? I'm Catherine. Catherine, what's up?

Just a question. So I cover like journalist in Nashville tech scene, and one of the common things I found is that most people in tech have a music background. Brian has a music background. I'm sure if you ask whether it's playing the piano, playing the guitar, and obviously you said you got into the tech space because of being a wedding singer. Do you think that Nashville is gonna have more of a creative tech space because they call it the Mozart effect of that like tech and music, there's like spatial and time references and you have that creativity, do you think that we're gonna have a more interesting ecosystem because of the music, like us being a music city?

100%. I think it's what makes it different. And I think a couple things. One, creativity is the core of everything that makes every business unique and different. And so I think any creative kind of culture, wherever it comes from, is the secret sauce. Business is just like a bunch of checklists of problems. All it is is things go wrong, a customer likes it or doesn't and it grows. But the reason that happens is because of some creative thought. And I think the creative process and how you get there is so powerful. And I think the way to do that, the other piece is connecting disconnected dots. Something that I'm really passionate about, what I'm doing in Wedgewood, Houston, the reason I host kind of these dinners, I did this thing called Off the Farm, it was musicians and tech and VC, people flew in, is 'cause I believe in the disconnected dots connecting to have the insights of seeing things that actually that you couldn't see if you were in the lane with everyone else. And so I just believe in that wholeheartedly. I really do always think that taking 3 things from different industries and putting them together is how you find the next key insight. And I think that comes from curiosity and creativity and being around people of different disciplines. One thing I learned from music is it's a very scarcity-driven mindset. And if I had to say anything about the culture here is a lot of the investors and a lot of the kind of like people I've met that are quote-unquote old school, it's like a get as much of the company as you can, buy as much as you can, I need to have as much ownership as I can. And I think that comes from like a culture of scarcity, which isn't bad. It's like where we come from historically. Where I came from, in a culture of abundance. And I think until you feel that there's enough for everyone and you have real exponential growth and you have power law that builds huge companies Until you're an angel investor with the smaller amount of the round, because the round was much better for the founder and there was not a lot of it, but it ended up huge. Until you have that happen where you have like a 1,000x return, that doesn't feel rational. I need to have as much as I can of the company up front. But the incentives aren't aligned for that founder to keep building a huge company. And I think from a perspective of abundance versus scarcity, music has 52 number one slots a week. The whole music of country is built on, and music in general is built on number ones. Number ones make money. And so, and a lot of them are 2 to 3 to 5 week number ones. So say there's 25 to 30 slots a year for winning. Well, no wonder it's a scarcity mindset, right? It's so hard. Like everyone in this town, I go to these events and there's like 1,000 people that work in the music industry under like 3 artists and I'm like, everyone here is fighting for that slot. And I don't come from that. I think building businesses and technology especially comes from a very abundant mindset, which is a really It's a hard thing for people to grasp, but it's really cool when you do. And I think giving people more of an abundance mindset where the pie is big enough, it actually grows as you scale, and the more successful companies make more people successful and more opportunity to more people.