Leonardo's way

The worst state to be in is forgettable. A forgettable person is one who you have no desire to stay in touch with again after you meet them once. A forgettable holiday is one where you weren’t able to relax and nothing interesting happened. A forgettable city is one where everything blends together into an unmemorable mass of activity, averaging out to the same thing every single day. To be forgettable is instant death, and to share a forgettable moment every minute is slow soul death, until eventually we expire and become one with the matter that exists in the earth. 

Avoidant humans seek to be forgettable. Forgettable is different from being essential but silent. The nurse who makes the hospital go around may be essential, and invisible, but she isn’t forgettable. A forgettable nurse may not have even needed to show up to work. They weren’t needed in the first place. So to be forgettable is also to be non-essential. 

The most interesting things in the world are unforgettable. A peacock showing up in the middle of the street, surrounded by bland surroundings is unforgettable. What is it doing there? The colors of glistening tiles, in a musical sunset of Lisbon, is unforgettable, those images searing themselves onto your retina falling into a synaptic connection that holds true until eternity. By sheer contrast, objects and expressions that are adorned as unforgettable sit alone when you encounter them. They jolt you out of a stale existence bringing color, music and joy to a dull moment. You know the first time you saw him, her, it, and it was unforgettable. Being unforgettable once doesn’t mean that this moment only comes once. It may come again and again, being unforgettable is a transitive quality that lasts, defined by foundations and choices of expression that only come together once, but morph and shift to always standing alone, when in contrast to other things. Unforgettable things can be timeless, but even more so when considered in their original context. They may change from one unforgettable form to another. Losing one’s appeal is a fad. Unforgettable things that last are timeless. 

I’d rather be unforgettable in the right context. To work on things, and be with people who want to create moments that are unforgettable. Making choices that lead to unforgettable outcomes are exciting. 

When you are thinking of an idea to work on for a company, the shape of the idea matters. Just like fitting together a puzzle, the skills that you have and what activities give you energy as a founder really matter, how they fit together with your co-founder really matter, and how they connect with the shape of an idea will determine if there is success or not. This is a spatial puzzle. 

What if the shape of the idea doesn’t fit you? Then however hard you try you might not be motivated to pursue it further. Shape friction is when the shape of the idea and your skillset don’t align. So the real question is what generates this friction. Leaning into the activities that bring you energy really matter. This determines the internal shape. So for example if you love selling and evangelizing the internal shape of the idea must fit a situation which requires selling and evangelizing because sitting in a room coding might not bring you energy over the long term. I particularly enjoy identifying the demand in a market, and solving the puzzle of getting customers and aligning it with designing an exciting product idea that fits the emotional condition that drives adoption. Once this condition is identified I really enjoy evangelizing to prospective investors and hires and customers to solve the chicken and egg problems of capital and talent. With this framework in mind, an ideal co-founder would be one that would like to partner on taking the market and product conception and figuring out how to make it real technically, while being open minded to changes in that definition as clarity emerges. The right co-founder is an energetic catalyst. In their presence one plus one can equal seven. Another co-founder with a similar skillset to mine may not have the patience for building, nor know how to interface with a more heads down counterpart. 

The external shape of the idea is if the idea requires a deep technical invention or not. As that determines the lead up time, patience and funding to being able to bring it to market. Also the flow of money determines which method of distribution aligns with your internal shape. Does selling without speaking to people matter – pick a prosumer subscription or consumer business model. Do you get more energy to charge a lot and do deals directly to pick an enterprise to go to market. Once the external shape and the internal shape align, the energetic flywheel begins. Then the external shape is dictated by the yield of the idea. Does every customer interaction bring you joy, are you excited to speak with them and does it lead to scalable revenue. Just like a dopamine hit, the external shape of an idea has some inherent reward. 

A scalable energetic flywheel for revenue is where the demand, the product and the revenue fit together in a way that you know that a few tactics for channels and messaging, drive acquisition of leads that generate net positive return on investment, with the payoff being effortless and non linear. Literally rinse and repeat to a billion dollars a year in revenue. At the same time the external shape has to support this flywheel. If the product is unique (and hence patience required to build it) and the market is large enough (or growing) this can support this energetic flywheel spinning. The right shape literally pierces through a market, achieving escape velocity. 

We have long sought to understand biology through the central dogma of biology proposed by Sir Francis Crick in 1952. The central dogma of biology – where understanding DNA, RNA, and Protein structures as the key information architecture of biology may just be at the wrong level of abstraction to predict exactly what happens in biology. 

The electronome is a concept that may just upend all of this, which is that electrical patterning acts as a type of molecular informational memory to guide the goal of cells, organs, organisms in a holistic way. Rather than being defined at the hardware level – like genes, molecules, and proteins, the electronome is defined at the software level - at the voltage level, where patterns of changes in electrical signals serve as the blueprint for the goal of a collection of cells. In a single cell electrical voltages are generated by the passage of Sodium and Potassium ions across the cell membrane via Ion Channels, and then this information is communicated to adjacent cells via gap junctions. The resulting system of ion channels, whose output can be changed by shifting the distribution of ions and the resultant electromagnetic changes at the cell level, cascade through collections of cells via gap junctions creating an emergent informational architecture which communicates at the cell level, the tissue level, the organ level and the organism level in an elegant hierarchical way. As such changes in the software or voltage level can cascade down resulting in a different molecular outcome. This is striking because it suggests a new way for biological information to flow where changes in the electronome can generate changes in the molecular level, even with an identical genome. 

What I find elegant about this idea is that it explains a number of biological phenomena - for example cancer can be described as a situation where a cancer cell loses electrical congruence with its neighboring cells, and hence acts in isolation. In experiments in xenopus levi, an overexpression of p53 in a particular location induced tumorigenesis, but the expression of the cancerous cell was kept in check by simply changing the electrical signal at the local level to maintain the pattern memory that bound the cell to its neighbours. This is striking because a change in the electrical voltage at the local level by manipulating ion channels can keep cancer in check. 

In regenerative medicine if we want to stimulate the regrowth of an organ, we can restimulate the cells using the same pattern memory of electrical signals meaning we can regrow a leg or an arm or a finger back in the pattern that the organ already had. The changes in the electrical memory reminds the cells to regenerate in the pattern required of them before the organ was removed. Also developmental events like how embryos mature or reversing birth defects can have similar impact through manipulation of electronomic signals. In aging – we move between different morphogenetic states from childhood to adulthood to old age. Can we remind our cells to act like the pattern of the previous morphogenetic state to stimulate repair and reverse aging. In infectious disease pathogens may manipulate electrical signalling in order to manipulate cells into differentiating differently - so can we explain infectious disease or the impact of the microbiome on our health through the lense of the electronome? 

And further afield – environmental stressors which create trauma – may also be mediated through changes in the electronome which lead to molecular changes leading to stored stressed states in our nervous system. Can electrical repatterning reverse these signatures? 

The Lottery Ticket Mentality plagues us when we make decisions in life. The idea is simple. With a small amount of effort, and if everything goes really well, that lottery ticket leads to some abnormal payoff that means we won’t have to do any work again. The optimism that leads us to take the lottery ticket overrides the potential risks. We are seduced into thinking that this low effort, high risk, high reward type of decision is good for us. And when it pays off, it leads to so much happiness that it hurts. 

Examples of lottery tickets can be when choosing a relationship. Imagine the frenzy. She might be the hottest person you’ve ever met. And you think you’ll never find someone like her ever again. So you choose her. The lottery ticket is that she becomes your perfect partner. But the cracks start appearing after six months. Hot but she’s crazy, you complain to your friends. The lottery ticket was that your optimism overlooked the fundamentals of the person. And as such, you were willing to let a few things slide. 

Another example of a lottery ticket decision is the start up idea. You jump in with optimism, with the idea that this is your one chance to get abnormally rich. The optimism leads to immediate action – finding a co-founder and amassing some funding. You tell everyone, we’re going to be rich don’t you worry. Everyone jumps in. Twelve months later you’ve made no progress towards your dream of being rich. In fact you’ve become poorer, because all your time has been spent fighting with your co-founder and investors. “I thought we’d be rich by now” they complain. The problem with the lottery ticket decision is two-fold, you suspend diligence, through optimism. The second problem is that external expectations become the marker of the payoff, before it happens. As such you are left holding the ticket in your hand with nothing but hope. You didn’t look at the details and now you are sitting on the floor staring at your shoes in a pensive mood. It’s not the idea of the lottery ticket that is wrong but the actions it induces can lead to a negative pay off. 

So what if we shifted our perspective here. Is there an alternative idea that has the external outcome of the lottery ticket but with a much more stable way of being? 

The lottery ticket has several properties. One is the payoff. It’s exponential in nature. We can learn a lot from the shape of an exponential. Exponential curves start in daily compounding actions and take time before they start yielding. A small amount of effort which compounds every day can lead to a high long term pay off. What this means is that a better path would involve activities that compound daily. For example in a relationship, working day to day to become a better partner. Daily improvement will lead to a better relationship in 6 months and even better in 12 or 24 months. The same with a startup. Building daily compounding habits will lead to a better outcome over time. Both situations reward daily compounding actions versus low effort decisions that don’t care about the details. 

The second is the nature of expectation. The bad lottery ticket is based on external expectation holding the fort while we wait for the reward, what if we shifted the perspective from external expectation to internal reward.  Every daily action should lead to an increase in internal reward. As such, the expectation grows as the rewards exponentiate. Starting with low expectations and being focused on daily actions that drive internal satisfaction can lead to a compounding dynamic. A relationship can be focused on internal satisfaction versus external expectations and steady growth leads to expectations being low at the beginning and growing as the internal satisfaction gets amplified. With a startup, initial low expectations align everyone to developing the daily actions that compound, eventually honing in on the properties that drive market success. With internal expectations set for compounding, we know that good things will take time and have the patience to focus on our internal satisfaction as the compass for what to do. 

The third dimension is planning. The lottery ticket mentality defers planning after the action is taken because the reward seems so great we use optimism to just jump in. If we reverse that, we take action once we’ve identified a strategy that might have a long term payoff, we think of the principles we have around that outcome. A great relationship may have the principles of great communication, mutual attraction and low stress and is always fun. By defining these axes we can make sure that before we take action we are strategic about how we show up on these properties. And when we are in the relationship we focus on internal reward and compounding daily actions that make the relationship better. If two people work together on these principles the chance of exponentiating and being strategic together increases the chance of a huge payoff at the end. The same thing is true in a startup. Before the startup can we be strategic about the market or technologies we anticipate in the future, the product we build and how we may price it to generate profit. When we start our daily actions, can we be strategic about the team we choose, the investors we work with and the order of operations to evolve the company from one phase to the next.  

I've been an Arsenal supporter since the age of three. It formed the fondest of childhood memories watching players like Dennis Bergkamp and Thierry Henry bring mesmeric moments to the club, culminating in the Invincibles era. I got busy with work for a number of years and lapsed being on top of what was going on with the club, until 2021, where a behind the scenes documentary on Amazon Prime reintroduced me to the work that Mikel Arteta was doing having been a player, to assistant coach at Manchester City in their prime era to revive the greatness back to Arsenal.

Also symbolic was the fact that a new star, Bukayo Saka, who was 18 at the time, went to my high school. My interest was again peaked. I'd spent most of my early life, following, playing, and getting deeply obsessed with football in a way that it helped me advance my early writing and thinking as a child. Understanding every player, every transfer and every game and how they were all linked became the way I thought not just of information but also how these systems all connected. I was obsessed. Reading and watching as much as I could. Developing an encyclopedic understanding of the game and a love of being an expert in an area.

Returning back to this obsession reconnects parts of my nervous system that were activated in childhood. Its almost like a source of power. Revisit old passionate areas and reactivate a dormant part of yourself.

The pandemic had many effects on society but one was in universally educating the general public to become conversant in universal biological concepts - viruses, RNA vaccines, and vaccine development. This has laid the foundation for what I believe is a need for universal biological education that lives outside the traditional university system. 

Biology has been on an upward trajectory since it has become easier and cheaper to sequence genomic information and synthesize it -- companies that have been central to this trend have seen rapid acceleration both in terms of investment and talent migration. The new biotech 2.0 movement doesn’t just have Pharma companies but companies creating new materials, foods, organisms, as well as hybrid software/hardware/biology approaches to problems which were traditionally one dimensional. As such may new workers are coming into the biology 2.0 workforce - from marketers, to chemists, to software engineers and Roboticists who are all professionally trained but not in the biological sciences. 

Having studied Biochemistry as an undergrad and researched infectious diseases and applied bioinformatics in graduate school I made a twenty year bet that the growth of knowledge in the field would keep growing. Jargon and visual abstractions mean that practitioners rarely make their content accessible to bigger audiences. This would mean dumbing down or explaining concepts without jargon - a place which threatens experts. Also to make industrial knowledge accessible would extend a graduate or undergraduate curriculum in a highly practical dimension (for example how can you optimize fermentation - which is the cornerstone of industrial production of biomolecules). A Feynman like intellectual honesty coupled with the visual communication skills required to go viral on Tiktok is a rare combination. 

The parallel analogy is how statistical methods, and machine learning went from academic theory to practical reality with widely accessible software, leading to businesses like Datacamp fitting a highly pragmatic role in between a traditional educator and a vocational teacher fueled by subscription access to step by step training and well written videos. 

A strong positive trait of entrepreneurs is the ability to will something into existence. There are circumstances where this is a positive thing, certainly where there are external existential risks around a business for example, getting investors to believe in your company before you have a product, buying time to build the product.

Where this situation is a negative is that you have to be willing to be able to suspend judgement around product progress, or fake that the product works by constructing a demo that shows the vision but takes a golden path. Often the founder's charisma is reassuring to the investor, who suspends their own judgement in asking further questions. The money is wired and the company is off to the races.

At an early stage all companies look promising -- the future is bright and shiny, and everything *looks* possible - unless you are still to figure that out. This is the danger of willing something into existence -- as the next key decision is made, the last decision hasn't been made, if you have to figure out who to hire, while also figuring out how the technology should be made, there is a lot of debt to cover up, and as scrutiny increases those shaky foundations have an opportunity to be exposed or never fully acknowledged.

A more appropriate mental framing is being both optimistic and critical around key execution challenges and knowing when to suspend judgement, and force something and when to lean into more objective signals and derive them from intrinsic problem solving. For example having a market cannot be faked -- if there is a lot of demand for your product you should be able to prove it, if there is a market for financing your company it shouldn't be difficult to raise money because its obviously a good investment, if people are willing to join, and stay with your company because its the best place they have worked -- faking any of these signals is ignoring the current that needs to be surfed on to make any business idea viable.

There is a time to will things to buy time, and create social proof to build a talent and capital magnet, or to use personal charm and connections to save the company or unlock the next frontier -- engineering sales, financings, partnerships or M&A to get the company out of a tight situation. This is where will matters and the principle of never giving up along the way.

Every so often after a period of stasis I find myself the need for a creative restart. Returning back to a place of relative anonymity in order to give rise to something new, pursuing a dream or a direction that feels like a fantasy but if it came through would be a dream come true. 

Creating new things requires not being famous. Not being famous means that there is nothing to lose psychologically and everything to gain. Its better that no one knows you. Remember Airbnb launching five times. Everyone only remembers the successful time. Reducing all expectations, to find within yourself and authentic starting point. That is the archetype of a creative restart. 

Its ok to be bored too. Being bored and being ok with it gives one the ability to switch off obligation. Inactivity becomes prized, and the inspiration that can jolt you out of inactivity becomes rocket fuel. 

The early days of hacking growth as a formal discipline came from the work being done to optimize the virality of consumer apps. This is evident in the work of Andrew Chen, Sean Ellis, Brian Balfour and others between 2007 and 2012. 

As online channels proliferate, sales cycles come down and software is instantly delivered and paid for the boundaries between systematic growth strategies and enterprise sales are being blurred leading to the development of a new discipline. Led by the CRO, as one who weaves marketing activities, sales and retention activities as one cohesive strategy to drive fast and sustainable growth against product market fit. 

In the last year as CRO at Plato Design I discovered and formulated a strategy for systematic growth, leading to going from 0 to $1.6m in revenue in just 7 months. 

 I believe there are a set of systematic steps for identifying where to grow by starting with the unoptimized inbound demand, and refining the resonance of messaging against key verticals (good revenue) while discarding verticals or segments that are more costly to serve (bad revenue). This refined messaging then filters through into compressing the sales cycle into being as short as possible (how self serve can it be, how much qualification can happen up front, what’s the threshold of payment that’s valuable but bypasses committees etc). All this up front work should be demonstrable by the CRO as an individual contributor, eventually leading to a bottleneck in the number of inbound leads processed by the time available in a single day. Then its time to bring in a team to scale up. 

With a magnet of messaging resonating against the emotional pain of each target vertical, and a refined sales process, that is when the top of funnel tactics can be amplified to drive more appointments per rep per day, with >90% conversion rate. At that point the CRO role becomes about process optimization, and increasing the number of collisions between qualified clients, and ready to close reps. If the process is working you will achieve the nirvana of the one call close. The ask is already resonant, and no one who gets to a zoom call will not buy because you’ve filtered out everyone who doesn’t have pain, budget or timing. 

The subtle dance of incentivisation between product and sales then becomes an issue. If the product isn’t fully ready, creaks will show up in retention, not in sales. At that point it makes sense to slow growth and drive growth in a step function, not an exponential curve for a little while. The more self serve and the more intuitive the product the easier this transition will be. The less well documented a product the more that needs to be explained by humans. Once the product is through the door, confusion is the only thing that stops it from being adopted and obsessively retained. The more up front work that is done before the sales lift to optimize this, the easier this is later, but inevitably sales and product have to empathize which each-other’s jobs and play nicely, as the refinement of messaging and segmentation may throw up changes which are unanticipated or new use cases that are profitable and easily retained.  

Upon locking in process, messaging, product and retention, its time to aggressively grow. Aggression isn’t subtle. You want reps who are addicted to the speed of closing, who love making a lot of money. Reward plans should have a small number of reps who make huge amounts of cash. Keep it elite. The best place to be is when you can sell a high margin product that every customer will have great experience on. That is when you want to drive 20% month over month consistently – focusing on getting from 1 to 10m, and 10m to 25m, and 25m-50m in revenue. Each phase will have a speed bump, but the goal is to saturate your resonant verticals, before developing new segments. Distraction will be easy, you will have to tell your reps to catalog any deviations from your messaging into a separate optimization process. 

Upon each checkpoint, the ability to use reps as signal generators for what the expansion plan for the next resonant verticals will define your total addressable market. Picking one strategy to hit $10m in revenue is the best thing when you have very few people. Later on you can imagine it as a portfolio of strategies. Divide up $100m into 3-4 different opportunities, and start achieving more sales predictability.

Just like consumer growth hacking, developing the fastest path to $100m in revenue involves optimizing the collision between resonant customers, hungry reps, and highly engaged products. 

(AngelList Radio)

In the second episode of AngelList Radio, we interview Sumon Sadhu and learn how to improve as an angel investor and why he thinks “national empires” are good investment opportunities.

Sumon explains why he’s excited about investing in international startups like Mobius Motors (an African car company), Chaldal (a Bangladeshi delivery company), and ClearTax (a Indian electronic tax filing company).

Here are a few of my favorite lessons from this interview:

Now is the time to build big international startups. Billions of people are entering the middle class or coming online for the first time. New startups that serve their local communities can build important companies, especially in large countries like India and China. Sumon discusses examples like Alibaba, and talks in depth about his investments in ClearTax (India) and Chaldal (Bangladesh).

Academic research can help you predict technology trends. Academic publications show us what is becoming technically possible. If you combine that with new behaviours you see in the world, you can use research that is five years old to predict new trends.

Be a signal. As a contrarian, Sumon often has to convince other investors to consider companies that they normally wouldn’t. Fast forward to 31:00 to hear how Sumon did this with Chaldal.

Share your favorite part by leaving a comment on Soundcloud.

Learn more about Sumon’s investments on AngelList, follow him on Twitter and read his blog.

Read on for the full transcript of the interview.

Tyler Willis: Hi, everybody. I’m Tyler Willis. I am an entrepreneur and an angel investor. This year I’m your host for season one of “AngelList Radio.”

[0:17] In our first season we’re interviewing different investors. We’re learning how they invest and what’s made them successful.

[0:23] Today I’m joined by Sumon Sadhu, the co-founder of Snaptalent and the first employee of Quid, which had raised $49 million from top investors. Most recently he co-founded Muse.

[0:32] Sumon is also an angel investor. In talking with him, I’ve really enjoyed how defined, well reasoned, and unique his thought process is. In a business where it pays to be contrarian and right, this is usually a signal worth paying attention to. I’m excited to hear what he has to say today.

[0:47] Sumon, thanks for joining us.

Sumon Sadhu: [0:48] Thank you, Tyler, for having me.

Tyler: [0:50] Before we get started and dive into it, give us an overview of what your career has been like today. How do you find yourself here?

Sumon: [0:58] I’m originally from the UK, originally from Northwest London. I studied biochemistry and infectious disease, both at Oxford and in Imperial College, London, so by training, I’m a scientist.

[1:12] My original sort of motivation for going into that was, I was really fascinated with how nature works. Back in 2000, when the human genome emerged, was really a time where there was exponential knowledge being created in biology relative to other sciences, so I made a bet that that would be a good place to be.

[1:30] As any sort of good student does, I was originally really focused on research, and managed to sort of publish a paper during undergrad and sort of get myself over to an internship in France.

[1:41] It was there in France where a professor that I was working with said to me, “For a scientist, you talk about business in a really sort of interesting way, in that you seem to understand,” we’re talking about stocks. I was analyzing a company. The way that I was describing it to him was certainly different to how he, any previous student has described to him.

[2:01] I went back to Oxford, sort of final year of university, and ended up joining up a society called Oxford Entrepreneurs, which was the student entrepreneurship society at the time, and attempted to start a company.

[2:16] My first ever sort of venture was trying to build software to bring together…there’s a lot of latent knowledge that exists inside of a student population, so how do you turn that knowledge into something, so conceived of something that was sort of Yahoo Answers back in 2005, in the UK.

[2:34] That was really my first experience in trying to put together a project. Obviously, didn’t work, programmers walked out on me, ended up finding a bunch of people to come together, but what it left me was with this desire to sort of turn ideas into projects.

[2:52] That got me started practically in entrepreneurship, and then the summer between Oxford and going to grad school at Imperial College London

[3:00] At that point I didn’t know what I wanted to become but finally I got this glimpse of entrepreneurship because of the Student Entrepreneurship Society. I ended up…again, this was part of the telephone campaign, raising money and did pretty well. I was one of the top callers.

[3:17] Ended up swinging another internship over the summer where I was part of a team that was responsible for performing the first census study of venture capital spending in the UK. My job as an aspiring entrepreneur was to call up every single entrepreneur in the UK, and try and figure out how much they raised and what their companies did.

[3:38] I learned a lot about how to analyze venture back in that summer between university and grad school. The two strands of analysis, as well as practical entrepreneurship, are two things which have combined over time to lead to investing.

[3:54] I went to London. I went to Imperial College London. My goal there was not to be a PhD student. It was actually, really, to spin out the society that was in Oxford to Imperial College London.

[4:09] I attempted that, then I had a really massive setback. I paralyzed my right arm. That was a pretty critical injury. For six months I had to recover from that. What happened was that I was either going to start the society or I was going to be considered a failure.

[4:26] My friend Bob, who earlier had gone to Silicon Valley. He was headhunted by Max Levchin. He was the first employee of Yelp. He wrote me an email, actually. That email was pretty interesting. It said, “If you don’t make this thing real then you’re going to be considered someone who talks, who doesn’t act. You’re going to leave yourself all these splendid starts.”

[4:46] After this injury, I was determined to make this happen. I ended up starting Imperial Entrepreneurs, which was a spinout of Oxford Entrepreneurs at Imperial College London. Imperial College London at the time, 2005-2006, didn’t really have a culture of entrepreneurship. The goal was this is the MIT of Europe. How can we build really great companies out of here?

[5:09] Through that initiative was really great to meet some entrepreneurs who had gone to Imperial. I had to raise money for the student society. I ended up pitching Index for money, for £1,000. Can you give me a £1,000 to start the society?

[5:26] Got some money from Michael Birch, who was an Imperial alum at the time who started Bebo, is in Silicon Valley. Then also at the time I met Saul Klein who was just leaving Video Island and starting up as a partner at Index.

[5:42] When meeting Saul and pitching him this vision for a student society and sparking entrepreneurship in Europe, he said to me, “Hey, there’s an initiative that I’m starting up which your counsel might be very useful for.”

[5:55] That was Seedcamp. Here I was, 22 years old in London, organizing these events, bringing together entrepreneurs from outside and the student population, and I ended up getting to know a lot of the European venture capital community.

[6:12] At that time, Imperial Entrepreneurs was my startup, and then I got to sit on the advisory board of Seedcamp, help to start that. When Seedcamp needed space to start up, we used our student connections to get some space at Imperial, and managed to help build their first website with some of my later co-founders in the startup, and that was a really great experience.

[6:37] The connection that’s interesting is being on the Seedcamp website actually alerted another major incubator at the time, which was Y Combinator. Obviously my aspiration was not really to be a PhD student, so I was getting by, doing enough work, but at the same time, leaving the lab to go do Seedcamp stuff or do an interview at the BBC about entrepreneurship in Europe.

[7:02] Came to San Francisco over a summer with a couple of friends, and managed to get an email in my inbox from Paul Graham, of all people. He’d funded a few friends of mine from the UK, and he said to me, “Hey, we were looking for founders that were promising, and your name appeared familiar. I recognized you from the Seedcamp website. Would you consider pitching me in California?”

[7:28] That email was the opportunity of a lifetime. With a couple of friends, I ended up putting together a prototype over the summer, and we were accepted early, during the summer of ‘07. I went straight back to the UK, quit the PhD, and that started the entrepreneurial journey into Y Combinator.

[7:52] Until that point, there had been a bunch of key inflection points, and then I came to the Valley in 2007. We were staying in the Y-scraper, which obviously was the cheapest place to rent at the time in North Beach. It was great.

[8:11] Some of the first people I met in San Francisco were the founders of Scribd, the founders of Weebly, the founders of Dropbox. They were all in that building.

Tyler: [8:20] I’d not heard that before, “The Y-scraper.” Is this where all the early Y Combinator founders were renting?

Sumon: [8:24] Yeah. The reason why it was quite popular is because it was one of the places where if you didn’t have a credit history, you didn’t have any kind of financial backing, it was somewhere that you could rent that was fully furnished, month to month, and also at the time, it happened to be that a few other people were there, and so the secret was out.

[8:45] It wasn’t so popular that everyone was going to do it, and really for us, we had no option. I was a PhD student. I wasn’t very good at working for other people. I’d always had this aspiration of turning projects that I thought of into companies, and so this one opportunity to come out to California and be funded was a great one.

[9:10] We managed to bridge ourselves between getting accepted into Y Combinator. Back then, funding was you got around $17,000. It was me, Tim, Jamie. Jamie was from the states, so he didn’t have to go back and forth, but me and Tim had to fly back and forth. Just before YC, he brought on a fourth guy called Brad, from MIT. We met on “Hacker News.”

[9:37] We were four guys in Y Combinator in the winter of '08, and on $17K, so we had to make it last, and we had to make money. What happened was that the idea we applied with was not the idea that we executed on. We’d been working a lot on understanding student employment, and we also reasoned that the way that students behaved online were very different to how ordinary consumers were behaving online.

[10:06] The base idea behind Snap Talent, which is the company I started in winter '08, was, “How do you distribute recruitment advertising to the sites that people already spend their time, not on job sites?”

[10:19] We conceived a distributed recruitment ad network. we changed the formats of those ads from text to rich media. We built novel targeting mechanisms, so if you were coming from a Google IP address, how could I show you an ad that said, “Leave Google. Join Microsoft”?

[10:36] That was the basis of what Snap Talent was. During YC, we signed up 18 companies. We made about $30,000 inside of Y Combinator, and ended up raising $1.5 million after YC, and we really needed to raise that money, because we were running off of a cliff, flights back and forth from the UK.

[10:57] That was my first venture, and within…it truly did accelerate our progress, because four months before that, we were just students in the UK, and five months later, we’d come out with a company that had money and actually had brand-name investors. It was fortunate to work with a bunch of really great investors back then.

[11:19] We were in Zachary’s first fund. We raised money from early Googlers like Andrea Zurek and Aiden Sankkt, Paul Buchheit. We raised money from Index, at the time, and Jeff Clavier was also an investor in the company, and Saul, who probably said Matt through the course of this innovation work, back in the UK, and came to back Snap Talent.

[11:45] We put together a really all-star set of investors around the company, and so Snap Talent was an interesting experience, because it didn’t go right. I managed to learn a bunch of lessons from Snap Talent. One is of market timing. First of all, what we were conceiving was incredibly future-looking relative to the state of the market. It also happened to be prior to the recession.

[12:14] Also, I think another thing is we probably made every entrepreneurial mistake in the book. We did very well in raising money. We then had to go straight back to the UK, because of visas, and so keeping momentum of the company up post funding was challenging.

[12:30] The second thing is, internally, while doing YC, we were pretty together. There were certainly moments in the company where we weren’t, and I think learnt a lot about who you work with, why you work with them, and really, the way that you know your cofounders is in crisis, not in actual, in glory.

[12:51] The short lesson was, we built four or five different products inside of Snap Talent. It wasn’t a very long period, but in a year and a half, superstar backers get impatient. We ended up with a board ultimatum, which was, “Shut down the company or get viral,” which is a very incredible request, if you consider it.

[13:13] We had over a million dollars, $1.5 million in the bank, and what we decided, instead of pivoting again, was to cut our losses and return the money back to investors. That was a moment of crisis, a very difficult decision as a CEO to go do that to your first company. That led to the next chapter, looking for the next thing.

Tyler: [13:41] Was it right after that that you joined Quid, or was there some space in between?

Sumon: [13:46] I pretty much jumped in as soon as I really to put my head down, and get back into a project, whether it’s my project or a friend’s project, and it happened to be that Bob and I were really close. We’d always advised each other on each other’s projects, and the two things that they were doing at the time were fascinating to me.

[14:04] One, because they were analyzing networks of information and trying to pull out insights, and two, they were doing that for the understanding of the venture-backed ecosystem, and I’d done both of those things. I’d both looked at networks as a bio-informatician, and I was able to analyze. I had learned the fundamentals of analyzing venture capital.

[14:25] A network of venture-backed companies was probably foreign to someone who didn’t understand venture capital and some of the trends that you could pull out from that data, and so we built a platform that effectively reduced the number of hours that humans had to both read as well as connect ideas, and ultimately that led to a system that could answer many, many valuable questions, leading to the automation of knowledge and knowledge industries.

[14:55] A lot of the problems that Quid software solves is where the question that you are asking does not have a concrete end answer, so, “What is the future of the electric car? What is the state of technology in China? What are the ways in which cloud computing will completely impact the enterprise?”

[15:17] It was through both building that system to look at data and understand connections from natural language as well as apply that in industry, and then eventually go and scale the application of that across many, many different clients. We both built an impressive system that actually, today, we do many secret projects that power many important decisions, as well as I built a massive knowledge base of understanding technology from first principles.

Tyler: [15:45] How do you, Sumon…? Walk me through one of those areas, maybe the electric car, or cloud computing, or something like that. When you’re setting your mind towards analyzing a trend, how do you discover the trend, and then what’s the next step from there?

Sumon: [15:57] You can look at technology trends from a set of fundamentals. One thing is first, what are the enabling waves that come together in order to make new things possible? Those technology waves could be in the case of the electric car, could be the fact that batteries are becoming smaller and more powerful.

[16:18] In the case, from a macro perspective, you’re looking at things like reducing our dependence on fossil fuels, because there’s immense pressure on natural reserves. For all technology possibilities, it comes from, initially, technology trends that are four to five years out of research, which can come together to enable new possibilities.

[16:45] Then you’re looking for needs which exist in the world, which intersect with that. so in the case of transportation, it could be that the miniaturization of batteries and the increasing power density of those batteries enable other forms of transportation beyond large vehicles, and it could be that smaller vehicles like the boosted Ford are new forms of transportation that fit into novel needs. Urbanization creates a need for transportation that lives alongside you.

[17:20] You see all sorts…it’s the intersection between societal behavioral change, because ultimately, if you want to build a technology, it’s got to be used by a lot of people, and technology possibility. Those two things coming together is what creates the opportunity for timing as well as possibility.

[17:36] You can anticipate a lot of those things by watching those things very closely.

Tyler: [17:41] Give me some specifics there, of when you’re watching very closely. Where are you looking for sources of data that you’re starting to pull out. Are you following specific blogs or information sources?

Sumon: [17:51] If you’re trying to understand technology from first principles, you really do have to understand research, and so what’s interesting is a lot of great ideas are already described in literature. There’s no surprises in trying to understand the next big thing to be commercialized, because it’s already been described probably 10, 20 years ago.

[18:14] Naturally, there’s a big treasure trove of information in academic papers in understanding any fundamental technology trend. For example, if you, as a biochemist, have been following synthetic biology since it’s inception – it’s something I wanted to do as an undergraduate, and obviously, you see the iGEM competition and how it arises.

[18:37] It wasn’t around when I finished my studies, but 10 years later, in 2010, you start looking into this stuff, and you see the understanding of the space increase.

[18:49] We have funds-submit enabling technologies. We can read DNA. We can start to write DNA. We can start to understand that we have a bunch more experiments as to how you can recompose those elements to bring novel changes to cells. You could start to see some of it bubble up in 2010, 2011. I actually crashed a synthetic biology conference, Synberc, in Berkley, pretending I was an on-leave PhD student.

[19:16] You can start to see a lot of these big ideas bubble up in academia, being very well described, where the application’s very well described.

Tyler: [19:25] Your thesis is that that often takes several years before the commercial application. You’ll start seeing it in the research and in the academic pursuits?

Sumon: [19:34] Yeah, you’ll see the really crazy ideas be…anything which was the vogue of research, probably four or five years ago, is something which should be commercialized today, and so you should quite heavily looking at those ideas, those algorithms, those opportunities, as something that is commercializable today, because there will be follow-up worked to make them robust.

[20:00] Then there’s the difference between server…the way that I think about new ideas is several fold, and this is inspired by John Maeda, who used to be a professor of design at RISD, and later on joined Kleiner Perkins. He says innovation comes from the thrust of four different disciplines – art, which questions, and questions without needing answers. You just question.

[20:27] The second thing is science, which obviously provides a foundation for possibility, engineering, which turns possibility into reality, and then sales and marketing, which ultimately drives things which become possible to things which become usable, and then mass market.

[20:46] Whenever you look at new ideas, there’s the artistic phase, which is, “This is crazy, and it has no purpose, but it’s worth asking the question why it doesn’t exist.” Then, as you go through thinking about new ideas, whether it’s from the perspective of inventing new ideas or from the perspective of investing in new ideas and assessing where we are along those things, you can put on a different hat and create a different lens for what you’re looking for.

Tyler: [21:16] Let’s step back really quickly. When you think about yourself as an investor, what kind of investor are you? It sounds like you’re obviously very data-driven and very analytical. You’re looking at particular spaces.

[21:28] How do you think of yourself in the universe of other angel investors? What makes you unique, what makes you different, and where are you aligned with a stereotype if there is one?

Sumon: [21:37] A lot of my influences in investing come from very classic things. I’m very influenced by the way that the Medici family in the Renaissance were able to cultivate a set of talent in order to push forward. One is, it’s very people-centric, in terms of I believe that if you can align with people’s fundamental motivations to do something, and you can enable them, then you empower them to create new things.

[22:14] Capital drives the permission to do new things, and so that’s one place, is in influencing people who typically have strong aspirations to invest, to be psychologically confident to make it to the next level.

[22:29] On the other end, it’s combining that with a very rational understanding of market timing, and so from that, the influences are really sort of the classic investing mode to Don Valentine at Sequoia. Market timing is everything, the size of the market, the confluence of factors that drive the market is absolutely everything.

[22:52] When you can combine both, when you can align the psychology of people’s desires to be great, and you can cultivate that together with aligning with market timing, you get great investments.

[23:04] In terms of where I fit into the spectrum of angel investors, I’m investing in things that are timeless, from a thematic perspective, because when you eliminate time, you end up in thinking about things in a very different way. You don’t follow trends.

[23:21] I’m very passionate about investing in for societal needs, and this drives both the projects I am involved with as well as the ones that I invest in, and I don’t look at the two things as being separate. There are some things that I can do myself in terms of companies that I could start, and there’s some things where I should be supporting other individuals, because I believe passionately in those ideals.

[23:42] Those four things that I believe in is – and these are fundamental societal needs that should exist for a very long time, are one, we should make economies more efficient, whether they’re physical or digital economies. We should create economies that create new jobs, so changing the efficiency of economies is one big thing.

[24:04] The second big thing that I’m investing in is the extension of human life span, whether it’s direct or indirect, sort of enablers. I can talk about examples of companies in these themes as well.

[24:15] The third thing is amplification of human intelligence. We live in a complex world. We seek to understand that world in order to make decisions for our survival, for our survival on this planet, for our survival on other planets. We need to extend the capabilities of the human mind to address that complexity.

[24:35] Then the fourth thing that I believe in is this throwback to empires. We’ve sort of forgotten about empiric thinking, and investing in entrepreneurs that want to build empires, particularly national empires, is something I’m pretty passionate about, because those companies can attract and monopolize talent and their local markets, and really build something empiric. The ambition that those entrepreneurs have is fascinating.

Tyler: [25:00] I want to talk about each of those separately, but the kind of building an empire, especially building a national empire piece is particularly interesting because it’s very unique. I don’t think a lot of people think about that today.

[25:11] You see some of these empires being built. The ones in China have gotten some attention recently. What are the other areas where you think national empires can be built? What are you evaluating when you’re looking for a potential national empire?

Sumon: [25:23] Obviously, the first thing is there could be a massive national market, or it could be a massive market where a national focus gives you real emphasis. For example, one of my investments is a company called ClearTax. ClearTax is essentially building the Intuit of India, and every single year, people do their e-filings through ClearTax.

[25:54] This year should be around three percent of e-filings in India go through ClearTax. Next year, 10 percent, and this is an example of an opportunity where an economy is going through a transition from having nothing to going digital. That is an opportunity in the history of that country for a company to enter and take advantage of that shift, but the fact that it’s starting to build a transactional relationship with so many Indians, over a very long period of time, leads to many other opportunities to digitize, to change the behavior of those companies.

[26:28] That’s an example of this historical shift where, for the first time, you can do x, and it seems very obvious to everyone sitting in the US or in the UK, but you get a chance to take that thing and have it become something completely different over time. That’s very exciting.

Tyler: [26:48] There’s a saying that I’ve heard from another investor that I’ve stolen for myself, which is ideally you find somebody where their initial market is very obviously massive, and then there’s optionality towards much larger markets after that.

[27:04] There’s a clear path to a billion dollars, but then if you’re really looking to find the company that’s a $10, $50, $100, multi-$100 billion company, they’re going to have to venture out of their core business at some point, and so you’re looking for somebody who has both a clear initial business as well as then great future optionality.

[27:23] Is that a fair way to say that a lot of these companies that you’re looking at, because they have a monopoly focus internal to one country, they have a lot of optionality to go elsewhere in that country?

Sumon: [27:34] That’s fair to say that, but what’s also true about these entrepreneurs is, because they’re looking at the problem for the first time, they inherently don’t have any limitations to their thinking. They’re not checking themselves because there’s competition left and right, and they’re veering in one direction. It just means that they’re very free about how they’re thinking about things, and that’s a very different way of thinking about an opportunity.

[27:59] When there’s nothing, and you’re the only guy that can get capital to address that opportunity, you can do anything. Then the choice becomes what do you do, and why do you do that? Those are the choices that I help those entrepreneurs make, and I remind them. It’s like we often check ourselves in the US, because there’s someone doing something on the left, and someone doing something on the right.

[28:19] It’s very strange to find yourself in a place where no one’s doing anything, where if you do it, everyone will follow you, and everyone will work for you. That’s kind of an interesting opportunity that many of these emerging markets entrepreneurs have. From a fundamentals perspective, they’re very large opportunities, so we see that as a chance to make a company worth $1 billion, but there’s also a chance to make a company worth $100 billion.They’re not focused on the financial outcome. They’re focused on making something for their country. They’re focused on, for example, creating a type of work that their country doesn’t have, and also, they have no limitations. Often, the conversations with these guys are very crazy.

[29:02] For example, my investment in Chaldal, which is the Amazon of Bangladesh, their motivation for starting that company was a very cheeky remark, which is like, “There’s hundreds of millions of people with money. How do we take it?” You wouldn’t make that statement if you were starting an e-commerce company based out of New York.

[29:24] It would be much more reserved, and so, I think there’s just a different mindset, which if you can cultivate and tune that ambition in those entrepreneurs, they really end up going for something incredible.

Tyler: [29:35] One of the first things we, basically the way we met, was around this Chaldal investment. Is it OK if we tell the story there? Is that…?

Sumon: [29:42] Yeah.

Tyler: [29:45] You organized an angel list fund to invest your XY Combinator founder to invest in Y Combinator startups for that particular batch, and I thought this was a couple of things I wanted to dive into. Chaldal, but I also want to talk about the process used for evaluating companies.

[30:02] One of the things that actually made my ears perk up was like, “Oh, I want to know that guy, and I want to learn more about how he sees the world and what he’s going,” is the fact that you didn’t take the safe route. You didn’t raise a bunch of money to deploy into a batch of 80 or 90 companies, and then really diversify. You didn’t go for 15 investments or 20 investments.

[30:22] You put the bulk of it into one company, into Chaldal. Tell me a little bit about how you made that decision, because obviously diversification is widely regarded as, “Oh, it’s the safe strategy, and it’s what everyone should do.” Why did you buck that trend?

Sumon: [30:37] I do believe in an all winners strategy, and in evaluating the Y Combinator batch, I did say to myself…I’m interested in returns, and I’m interested in disproportionate returns, and ultimately, that’s how you get remembered as an investor. That’s how you make money for your LPs.

[31:00] My focus there was simply the thinking around, “This company has a national economy to dominate, and if we’re able to appropriately capitalize this company, I give enough of a signal to other investors, then they will disproportionately capitalize in this funding round relative to their competitors, therefore giving them a significant advantage in doing this.”

[31:26] That doesn’t necessitate a $25K investment. That involves being the lead signal for the round. Obviously, it wasn’t a decision that was made in a day, but it was fairly quick, from meeting the entrepreneur to doing several days of diligence, really trying to understand the national opportunity, the risks, the psychology of the entrepreneur.

[31:53] It felt like supporting this entrepreneur…and the other thing about the company is, the company was making significant money on a monthly, recurring basis, so objectively, you’re investing in something that returns your capital in cash.

[32:17] Unobjectively, you’re investing with the upside of if you owned a piece of a company that had…Bangladesh is the eighth largest country in the world, and was the number one transactional commerce provider. What else gets built off of that platform? That was the upside, and so I felt that it was a better way of turning $400 into $40 million, $50 million, than other bets.

Tyler: [32:47] You talk about three things there, in those days of diligence. You’re analyzing the opportunity, the risks, and then the entrepreneurs’ psychology. Let’s walk through to those. How do you evaluate an opportunity? What are the things you look for in upside potential? What are some of the questions you ask, or things, your criteria you look for?

Sumon: [33:05] Proxy dollars don’t really go away. Even in the most obscure opportunities, there’s always some proxy spend, that there’s always dollars for displacement. In the case of Chaldal, there is a share of wallet of the Bangladeshi middle class, and that money is going to be spent in some way or another, so there’s proxy dollars at stake.

[33:31] The other thing is that a lot of the risks have been taken out as to whether this company was one that could take money from those individuals. They had already built a transactional relationship which was growing at a significant rate per week.

[33:47] Just to get some of these things off the ground is often difficult. You’ve got to master the logistics, you’ve got to master marketing. You’ve got to actually brand the thing. You’ve got to get it out there. They were on a path where they could be profitable by the end of the year, and so a lot of that risk had been taken out.

[34:02] The third thing is, is the entrepreneur crazy, because he could just stop at being an e-commerce business, and it happened to be that we’re seeing from Chaldal. There’s somewhat an interesting aspect of the psychology of the entrepreneur in that he was a former colleague of Parker and Laks at Zenefits. They’d all come out of SigFig, which is a really interesting company in that it’s created founders that have gone on to do really great things.

[34:28] In his peer group of friends, his immediate influences are to build something massive, because they feel…there was a psychological aspect where one, this was a guy that wasn’t normal. He was slightly crazy. Two, he was in a peer group of founders that were building big things, and he clearly wanted to do that, and he didn’t want to stop.

[34:53] Their original motivation for building that company is to build the Internet company of Bangladesh so that they could create the types of opportunities that they experienced in Silicon Valley in their home country, and that was a better way to do economic development than just throw money at things. That felt like someone who could go a long way.

Tyler: [35:12] You said there a thing that I think was really critical, which is slightly crazy, and you said that as a good thing, where I think a lot of people would say, “Well, is the entrepreneur crazy? If so, I don’t want to back that person.” You actually look for that as a signal. What are you looking for in the right type of crazy?

Sumon: [35:29] It’s really a scale of ambition. Scale of ambition means talking about something that takes many steps to execute, but talking about it in a very confident way. If you’re willing to entertain the possibilities that will take 20, 30, 40 steps of execution, then you’re, as far as I’m concerned, the right level of ambition, because we can figure out how to descope it, how to make it more tractable, and ultimately most entrepreneurs do that.

[36:01] One of the differences is the scale at which people talk about their ideas. There’s some absolute thing that’s really driving them, and most people will check their ambition. Checking your ambition is a sign of not being as determined or as crazy as you’d like. I like those entrepreneurs, because I can spur them to think at that level.

[36:23] That’s another reason why people are interested in working with me, is because that’s the level that I like to participate in in companies.

Tyler: [36:32] I want to take you back to the early days, let’s say your first investment that you made. When was that, and were you at Snap Talent at the time? Were you at Quid? Were you already past that?

Sumon: [36:43] I was at Quid. It was a year or two before I left. It was 2013, 2014.

Tyler: [36:55] What was that company?

Sumon: [36:56] Zesty.

Tyler: [36:57] Tell me a little bit about Zesty. They do food delivery, right?

Sumon: [37:00] They do food delivery. The original reason for investing…I was actually very nervous in making that investment. I was very nervous in making that investment, because it involved one factor, which is how determined was David Langer, who was a friend that I know from Oxford University, in building that business?

[37:21] He had previously started a company in the UK, which he was not so happy with the success of, and so this was his chance. He’d finally made it to Silicon Valley. This was his chance to do something big, but at the time, the configuration of the business was not the one that you see today.

[37:40] At the time, the idea was very simple. I was a user of their app, and as well as a passionate, enthusiastic supporter of David, and he wanted some help in sequencing his round. This was the first round of the company, very close to the friends and family round, and they needed more capital.

[38:00] One of the things that I was obviously very good at is in understanding how do you position a pitch, and then going and making upstream introductions.

[38:09] I had been doing that for a little while. I was walking out of the room, having helped him put together a spreadsheet of upstream investors, and it just occurred to me that maybe I should really just do something here myself instead of talking about it. It was that very nervous first step in making that investment.

Tyler: [38:28] Did you have money set aside at that point? Did you have a thesis set aside, or was this really just kind of a, “Hey, there feels like something here, and I can afford to take a risk”?

Sumon: [38:37] I had actually seen the connection between nutrition and life extension, and so the fact is that he was really focused on delivering healthy food, and taking a swath of all of the possible meals that one could order from restaurant delivery services. They weren’t optimizing for what is healthy, and my fascination with that was that if you could deliver that at scale, you’d actually be impacting the nutrition of a lot of people, and that would have some meaningful impact on lifespan.

[39:07] That was really the thesis, like, “You’re the anti-McDonald’s, and you’re impacting.” It was an irrational connection of things which I was passionate about that led me to say, “No, this is how you should pitch it. This is the big idea, and this is what I believe in.” I psyched myself up to invest. I’d put aside some money for investing, whether it was in public equities, but didn’t necessarily know that that would be how I would get into angel investing.

Tyler: [39:37] You had set aside some money for investing, but it wasn’t clear to you yet that that would be private tech companies?

Sumon: [39:42] Once you make that first investment, and you start building that inductive feel for how to do it, it’s very scary, and I was certainly scared. I was like, “Well, I’m probably going to lose all of this money.” Fortunately, he pulled off a $17 million Series B, Series A with Index and Founders Fund recently, again building on that thesis of extending human lifespan through food.

[40:11] You could tell he would get that. Food is a big business, so a lot of space.

Tyler: [40:17] Do you think about, once you had made that first investment, were you committed to building a portfolio? Do you think about building a portfolio as a way of mitigating risk? How do you think of constructing where you invest?

Sumon: [40:31] I actually made two, three other investments in quick succession after I had made that investment, and the reason was, again, it gave me conviction to back some of the things I believe. When I look at investing – we talked about the four things before – it’s like, “Can we extend human lifespan? Can we expand the efficiency of economies? Can we amplify human intelligence? Can we support these national monopolies?”

[41:03] I believe them regardless of whether I’m investing or founding companies, and so it was more that I had belief in those areas, and as a consequence, I was able to make investments that fit those areas. Another investment was Benchling. Benchling at the time no one wanted to back, because they didn’t believe that cloud software for life sciences was a market.

[41:25] Even people in the industry had said, “It’s not a market,” but as a scientist, as someone who had said, “There’s a lot of people creating a lot of GDP in life sciences. If you can change the efficiency of that, that’s a really valuable thing that you could to do the world. What would happen if you changed the efficiency by one percent, two percent, three percent?” That’s the big idea. I believed in that idea, and so I backed them to pursue that.

[41:48] These are all about the founders. The founders are incredibly determined.

Tyler: [41:52] Do you think about downstream effects? Do you look at something and say, “Well, shoot, I’m investing early, and I don’t know that there’s going to be a lot of people behind me,” especially in the case of a Benchling, where it’s not clear that a Series A investor would look and say, “Oh, there’s a market there. I should bet.”

[42:09] Are you considering that before you make an investment, or are you trying to prove that by your investment?

Sumon: [42:14] In the case of Benchling, there’s proxy dollars. A significant portion of GDP comes from life science industry, so there’s actual proxy dollars. Those companies do make money, and so have money, but they don’t buy software, because no one had built the relevant software for them to buy.

[42:31] By proxy, I am investing in fundamentals – markets, market timing, the psychology of the entrepreneur, as well as my belief in when those things will intersect correctly. I’m very independent in making those decisions, and quite often, my investment is a signal for others to come in and validate that. Often the thing that I do with entrepreneurs, I change their deck, and I work with them to re-architect how they tell their story.

Tyler: [43:01] Is it fair to say that part of your value-add is then helping them tell that story and show that signal, show the path for the Series A or Series B investor who may be lagging behind?

Sumon: [43:10] Yeah, it’s giving them conviction or early conviction where maybe others don’t give them conviction, and I think once the entrepreneur is sufficiently determined, then that’s wind in their sails. That initial set of belief is really valuable.

Tyler: [43:26] You did three or four investments in fairly rapid succession. Was that too fast, too slow? If you had to go back and do it again, would you have changed anything?

Sumon: [43:35] You sort of invest in waves. You first have to put out a set of bets, like, “What do you believe in?”, because then you don’t have enough inductive experience. You don’t know what a good first meeting feels like. You don’t know what a good set of co-founders feels like. You don’t know what a mistake feels like. You have no range of experience to draw from. You have to pay for that.

[43:57] It’s like college tuition. You’re paying for that. You’re going to pay for that regardless. Maybe if you make money from those companies, that’s fantastic, and that shows some strong conviction, but really at that point, it’s like you’re putting down your college tuition and it’s going to cost you.

[44:14] For me it was really important to make a set of investments, and then to sit back and evaluate before making another set of investments.

Tyler: [44:22] You did three or four, and then how long was the break that you gave after that?

Sumon: [44:26] Finally, what happens is that as soon as some of those companies do well, and your a value add to them, obviously more people approach you. I did my first six investments reasonably quickly, within a year of going, and then I’ve slowed down since then, and really focused on…my pace is actually two to three a year. That’s my actual pace. I’m on a slowdown with that.

Tyler: [45:03] I want to put you in the hot seat of giving advice to somebody listening here. We’ll end up with, obviously, lots of different types of people listening to the podcast, but I have in mind two archetypes of people that are probably listening to this, and they’re right on the cusp of making a decision of whether they should become active angel investors or not.

[45:24] One example of that might be somebody who’s an insider, who’s steeped in technology already, but is figuring out whether they want to risk capital and become an investor. The second archetype is somebody who’s maybe flush with capital, but is unfamiliar with technology. I want to run through each of those with you and get a sense for what your advice would be.

[45:45] For the person who’s an insider, let’s call them an x founder. Maybe they have sold their first company, maybe they have gotten some secondary liquidity, and so they’ve got some capital that they can put to work here.

[45:56] If one of your friends who’s in that scenario called you up and said, “Hey, I’m wondering whether I should or should not be an angel investor,” what are the first things you ask them or direct them towards looking at to help make that decision?

Sumon: [46:08] A lot of good experiences with investing in my life have come because of benevolence. You’re not investing because of your capital, because there’s no amount of capital that could provide value. There are people with way more capital than you, and there are people with less capital but maybe more value add.

[46:28] The first thing is, can you practically make a difference in this entrepreneur’s life, whether it’s through giving them perspective, whether it’s giving them experience, whether it’s protecting them from thinking about things in the wrong way, whether it’s protecting them from distraction.

[46:43] I use “Protection” as a really important word, because a lot of the best investors don’t distract. They’re available in the right place, and they’re incredibly benevolent, and eventually karma pays you back. All of the experiences I’ve had that are positive from Y Combinator onwards have been about benevolence.

[47:02] When you’re making a decision about whether you’re investing in something, if it’s a good investment, typically it will follow a very ambitious person who, often, that’s the only constant that you’re investing in. The idea will change, how they execute it will change, their mind will change about how they do it.

[47:19] But if they’re intention and projection of that intention is to do something big – it’s the right time in their life to really commit to something, and you can be benevolent to help them in some way, then do it, because that is your only constant.

[47:33] If you are evaluating on external circumstances like whether the market’s there or not, whether you believe in this team, whether there’s competition, then you’re evaluating it in the wrong way. Obviously, those factors matter, but very much so in 5 years’ time, in 10 years’ time, as companies get going, the competitors won’t be around, because the determination of that person, the magnitude of their ambition, is going to be the thing that drives them to do something.

[48:01] If you have a connection to that person, if you can help them in a benevolent way, if you can bring them some value, whether it’s protecting them from distraction, or giving them advice at the right stage, then invest, but otherwise, stay out of that.

Tyler: [48:14] I want to, maybe even a little bit more tactically than that, assume that there’s plenty of ways to add value, as a friend, as an advisor, as an investor. If you’re on that fence of deciding, “Should I start writing angel investment checks?”, is there a certain number of companies you have to commit to?

[48:30] Let’s take the tuition example, earlier. How much of a tuition should you expect to pay before you actually have learned the business or understand whether it’s for you or not?

Sumon: [48:39] I think you’re going to spend $50,000 to $100,000 in tuition.

Tyler: [48:45] Those initial investments are $10K, $25K? Is that a rough assessment?

Sumon: [48:50] You should start small and slowly build up, as you build conviction behind your investments. I started with $5K investments to build, and then later on, I went back to those companies and put in more money as I had more conviction. I think that you want to feel like you can lose it. You’re slightly scared of losing this money, but you want to feel like it’s meaningful to you.

[49:13] If you want to make money long term – and I haven’t had any exits, so I obviously can’t talk to that, but a lot of up rounds in the portfolio. I think you should always start small, and you should deploy widely. Like I said, you’re going to pay tuition on your first 5 to 10 investments.

Tyler: [49:36] To the point of tuition, that you were saying earlier, the person who’s coming in who maybe kind of learning tech may also have to pay a larger tuition cost. They’re starting to learn what makes a good investment, what makes a good CEO, what makes a good leader, what makes a good founding team, for example, especially around tech, where they may not be used to evaluating technical risk.

[49:59] Do you see people learning that fairly quickly, or should somebody who’s coming in totally green to set aside a little bit more capital?

Sumon: [50:07] Setting aside capital, and there’s also learning from history. A lot of things that I’ve looked at have been historical investments. The thesis around investing internationally came from looking at Celtel, for example, was a deal that Bessemer did. It was a infrastructure company focused on telecomms in Africa, and if you would invested in that, you would have generated 200x return on your capital.

[50:35] Alibaba was a national monopoly. I think that you can learn a lot from history, and learn a lot by historically understanding the decisions that people have made, but yeah, also I think inductive experience like having that first meeting, doing that first check, getting in a round with other people, feeling what that’s like, you only get that from doing it.

Tyler: [50:57] So you think really the first few are important for building reputation, for building experience, network? What are those things that are interesting to you?

Sumon: [51:04] It’s building a track record of service to entrepreneurs, because those entrepreneurs will talk. When you want to do your third deal or your fourth deal, the first guy that you backed that’s really happy with you will give you a reference to get into that deal, and that’s the stuff that matters, that later on compounds.

[51:21] Focusing on having a really good experience for the entrepreneurs that you back initially, and then using that to compound your involvement, rather than having a very light touch involvement. Your name on the CAP table, it doesn’t matter. You have no relationship that you can draw on to gain leverage from later on.

Tyler: [51:40] I want to switch gears a little bit for the other type of investor, the other archetype. The person who is…perhaps they’re coming from real estate, or they’re coming from financial services, or something separately, where they have a lot of capital. They may be users of technology. They may deeply understand technology, but they’re not steeped in the business. They haven’t been operating a company, or investing in tech companies.

[52:02] What would be your advice to that person who’s sitting on the sidelines and looking at, “Hey, maybe I do want to invest in technology, but I don’t have a clear, deep, competitive advantage across folks that have been operating?”

Sumon: [52:16] That’s two things to think about. That one is maybe there is an angle that you have that is valuable. If you’ve been in real estate, maybe there’s some advantage you can provide beyond capital, or if you’ve been in finance, there’s some rigor that you can add, but for the most part, if you’re completely new to the business, then I think find ways of being involved that are helpful, whether it’s empowering others to invest on your behalf, whether it’s…

[52:48] Again, it comes down to being helpful. If there’s a situation where you have an opportunity to invest, think about how you can be helpful. Quite often, writing a big check and getting an entrepreneur to a certain funding milestone is helpful.

[53:01] In fact, it’s like, beating around the bush, waiting for a check to arrive or asking too many questions often causes disappointment. Maybe there’s a way in which you can get a great reputation by being a guy that’s reliable that ask good questions but was quick and did things.

[53:18] There are ways of differentiating, that’s if you’re doing direct investing and there are opportunities for this indirect investing through value added individuals. Get to know them, reach out to them, talk to them, understand how they invest. Then pick a few of those that you back indirectly, it could be through syndicates. It could be by being an LP in a fund.

[53:38] There are lots of opportunities to participate in the ecosystem beyond that vantage point.

Tyler: [53:46] For those folks, let’s say, was there ever a point where you would say, “Hey, don’t do direct investing”? If somebody came to you, what are the times in which you would tell them as a potential, “Hey, you should really go do LP or you should really go back syndicates instead of trying to do direct investing”?

Sumon: [54:02] Direct investing is incredibly stressful. Quite often, if your relationship with the entrepreneur, you have to be incredibly patient capital, and it requires a sort of understanding of the human situation an entrepreneur’s going through.

[54:17] If you’re not used to those ups and downs, then don’t invest directly. It’s not sort of a good thing. If you’re willing to be patient capital and sort of see things out over a long period of time, and smile through thick or thin, then I would say do it, but in general, it’s not a good thing if you’re not patient in that way.

Tyler: [54:41] Yeah, I think your point earlier about reputation compounding is a double-edged sword. If you have a negative in reputation early on, you get bad selection bias after it.

Sumon: [54:51] Yeah, and quite often, there are some angels that I know that I just known as being the guy that you go to for a few hundred K. Those are the guys, they invest passively, they often interact over email, but they’re known to be reliable. If they want to do a deal, they do a deal. They’re getting into a lot of stuff.

[55:09] Being reliable, being virtuous to an entrepreneur, that’s how you build a stellar reputation for yourself.

Tyler: [55:16] When you’re talking about a reputation, the things that are really critical for an LP, being able to provide some sort of value add, and then being consistent. Is that, those are the kind of the two things that you see as being important?

Sumon: [55:29] You, as a GP or as an LP?

Tyler: [55:31] As a direct investor.

Sumon: [55:34] As a direct investor. Again, I think it’s about, can you impact the levers that drive a company’s sort of positive value? One thing is, in raising financing, do you know other investors that you can bring in? Quite often the conversations that are happening, like, can you help focus the entrepreneur in on a specific way of describing the opportunity that is valuable to them?

[56:05] It might be the central thesis that drives the company or something like that, but can you help focus them on that? When the entrepreneur’s distracted can you bring them back to focus?

[56:15] Also, the other thing is that there’s lots of ups and downs in starting companies. Can you be a source of positive psychology for the entrepreneur? You often see a lot of entrepreneurs – that’s what they’re looking for in terms of service. Can you be the guy that you go to?

[56:34] Quite often in Snap Talent Chris Sacca was the guy that I would call up who was the founder’s friend. Being the founder’s friend is a really valuable position.

Tyler: [56:45] Talk a little bit more about that. I know it’s valuable from the entrepreneurial side, where there are people that I’ve called and gotten great boosts to morale. Something’s gone wrong. I really need somebody to tell me it’s not the end of the world.

[56:58] As an angel investor, though, I think it’s also similarly valuable to be the investor that’s closer to the company, the investor that’s let into the wall a little bit more deeply. Do you see that as well playing out in your role given that you’re really early and really connected to the company?

Sumon: [57:15] If you can accept imperfect circumstances then you’re really valuable. Quite often investors meet companies at inflection points. Those companies are perfect for those inflection points. They have got the right messaging. They’ve got the right team, they’ve got the right funding. But the point is that you know that three weeks before they made up all of that stuff.

[57:34] If you can understand the relationship between the stuff you make up and the stuff that’s perfect, then you’re going to be the guy that sees the stuff that’s imperfect. Quite often that means you’re meeting the companies at a point where they are not refined.

[57:48] If you can assess something that is not refined and you can make it become more refined that’s a very valuable place to be in the ecosystem. The guy that gets the call about the board deck before the board deck goes up is valuable. The guy that sees the pitch before you even have the third cofounder, that guy’s valuable. The guy that can persuade the fifth guy to join, that guy’s valuable.

[58:11] It’s about understanding imperfection. I think that’s a role to play that a lot of investors don’t lurk in.

Tyler: [58:22] There was something that triggered in my head from the very start of this conversation. You described getting the email that changes your life. That’s Paul Graham reaching out and saying, “Hey, would you consider coming and pitching us?”

[58:35] One thing that blows me away, especially seeing how big Y Combinator has gotten today, is the concept that they would actually hunt – they would actually go out and look for talented entrepreneurs or people that possessed the potential that they wanted to tap into.

[58:50] It’s my understanding that even today they still do some of this. Partners are very active in evangelizing YC and trying to find raw talent that might not be convinced to join yet.

[59:01] You’ve been close to YC for a long time. Do you think that’s a core part of their success?

Sumon: [59:08] The two core parts of the success is…I think that there’s an adage that there’s 15 great companies that get built in Silicon Valley every year. Andy Ratcliff talks about the study that he did, comes out of benchmark capital and Marc Andreessen references it.

[59:24] The truth is, how do you make 15 companies that didn’t exist that become those 15 great companies? There are certainly more ideas and more entrepreneurs of unfulfilled potential.

[59:35] That’s the gap that Y Combinator fills. The matching the total idea space for technology together with the total opportunity space for individuals to fulfill their destiny as being great in that.That’s the marketplace opportunity that Y Combinator is looking to fulfill.

[59:59] Being benevolent to those individuals, believing in those individuals before they became big because it was their only opportunity. It was their first opportunity to be believed in. That’s the other place where that is consistent with the values of Y Combinator.

[60:12] Ultimately what that means is an army of angels, an army of founders that are schooled in that way. That ultimately leads to an ecosystem that has those values.

Tyler: [60:28] When you were raising money for your own companies, what were you looking for in your angel investors? When you were talking to the angel investors for the company you just founded what were the criteria that you were looking for?

Sumon: [60:40] Again, I think that when you’re building a company with a long time horizon and you’re building a company with a long technology time horizon, at least at the beginning, you’re looking for investors, again, that are willing to believe in the founders and the capability of the founders to lead you through that uncertain jungle to commercialization.

[61:06] In my experience, that patience was something that very few people had. That was something that I’m looking for because the journey in your first year, in your first two years is going to be very different from when you’ve taken the money, too.

[61:28] I really wanted to find investors that were willing to support that, that believed in me and my cofounder. That’s important.

Tyler: [61:36] When you think about when you started investing and perhaps today, have there been large scale changes? This is only a few years ago that you started. Is it still the same as when you started or are you perceiving changes in people that are just starting to angel invest today?

Sumon: [61:56] What’s true is, like any sort of movement, just line in entrepreneurship, there’s certainly more acceptance of how to do angel investing and how to do it better. There’s also, certainly, more opportunities for angels to fill in the gaps as venture and institutional investing moves upstream.

[62:17] There are certainly more ways in which angel investors can become noticed and build brand. I was fortunate to be hacking with AngelList Syndicates back in 2014. That was because I wanted to scale up my ability to be benevolent to founders, but also as a way in which…getting real inductive experience in investing other people’s money.

[62:41] There are definitely new opportunities to…I think any sort of revolution in product or technology comes when things become more consumer-centric. There’s a consumer need and then there’s a market need. Now there’s more opportunities to bundle capital advice and branding in a way that you can serve the entrepreneur more specifically. That movement has taken off.

Tyler: [63:10] You think there’s an increased ability to bundle those things? I know some of the other people in the industry have said actually this process is about unbundling. You’ll get advice separate from capital. You’ll get angels well before you get venture investing.

[63:26] Do you see this actually as a rebundling across smaller vehicles? Or is this an unbundling that’s happening across the industry?

Sumon: [63:36] What it is is that it’s the relationship between service and those bundles. It’s the opportunity to…

[63:45] For example, if you have those three ingredients, you have X amount of capital, Y amount of brand, and Z amount of service typically you can have more choices for how those things come together. Often they will reflect the optimal make up for an entrepreneur to take them.

[64:05] If the entrepreneur’s the customer there’s going to be more options for them with those three components. You can say, “They’re 10 percent capital and they’re 5 percent brand but they’re 50 percent service and maybe I’ll take more of that than this.”

Tyler: [64:18] How do you see yourself as…what’s the mix-up of your bundle? Maybe how that’s changed over time, 'cause I would assume with a Five K check you’re obviously small amounts of capital.

Sumon: [64:28] That was at the beginning I think. I’m writing much bigger…

[64:31] [crosstalk]

Sumon: [64:31] …checks now.

Tyler: [64:32] Now you’re probably changed the mix of it.

Sumon: [64:35] The difference is obviously I think with institutional support, with some of the work they’ve done with Maiden Lane, some of the work they have done with the YC Funds Project out of AngelList as well as the syndicate means that I see myself competing in the super-angel slot and often using the ability to drive much more capital to create new types of outcomes, whether it’s sequencing rounds, whether it’s pricing rounds.

[65:05] It’s moving upstream. The relationship between service and capital – eventually you’ll have the best service providers indistinguishable from existing capital providers, but because they provide the best service…my goal is to go upstream. I see that emerging with the different tools that are coming out.

Tyler: [65:28] Do you think, long time scale – use whatever time period you want – do you think you will work as a venture capitalist, or as a traditional venture capitalist, at a firm?

Sumon: [65:38] My goal is to pursue my mission, which is again, to further humanity on those four fronts. One way of doing that is obviously driving capital towards the ideas that further those things. Obviously by some reason that will involve controlling the flow of capital. That may involve traditional investing in that sense, whether it’s my own fund or whether it’s part of something else. At some point those things will come together.

[66:10] But my secret goal has been for a long time is to be one of the best investors in the world. I’ve been studying venture for a long time, since 2005. I’ve done my 20,000 hours of really understanding the future of markets and all that stuff. My angel investing activities is part of keeping a lot of that experience going.

Tyler: [66:36] Do you feel competitive with that person who is maybe on the sideline maybe thinking about investing, or is it cooperative? Let’s say I’m an entrepreneur. I’m considering writing my first 10K or 25K check or 5K check. Am I competing with you for access into companies, or is this a cooperative, helpful “We’re all in it together-type economy”?

Sumon: [66:54] It’s cooperative because every single company has different needs and different constellations of stars will come together around those companies. I think that it’s not a thing about competition.

[67:12] I mainly focus on, one, service to entrepreneurs, and two, my mission as an individual on this planet. If those two things are interesting to people, if those two things are complementary then certainly, very open to talking. But I think it’s all about service to the entrepreneur and ultimately that will dictate things.

[67:31] If people are genuinely benevolent, if people are genuinely value-added, if people are genuinely complementary then they’ll find themselves in constellations with other people.

Tyler: [67:41] This is…it’s an industry where the median return is negative – at least venture, and I would assume the same thing extends to angel and some of the studies I’ve seen have shown that maybe it’s less negative. But it’s still a game where being in the middle of the pack means you’ve lost.

Sumon: [67:57] It’s an elitist sport.

Tyler: [67:59] Yeah. Is your thesis that by being truly benevolent, by being truly value-added and focusing on long-term help for the companies that you do rise to the elite level? Or is this that being particularly good at analysis or particularly good at evaluating people is a critical start skill that you need to have and then all the rest of the stuff allows you to play the long term?

Sumon: [68:26] To be a great investor you have to be great at analysis. You have to be able to do a deal. You have to be able to assess people, and you have to have some differentiated view on the world at the time of the investment, because then that’s where you create an advantage. If you have an advantage in all four of those things they compound. As an athlete my focus is obviously to be really good at those four things.

[68:50] Then in terms of regarding how other people invest, if you want to invest, don’t invest casually. Invest seriously. Invest as a sport. Invest in a way where you want to get into the best deals, where you want to provide the best service for entrepreneurs. Then ultimately there will be 10 percent remaining in 10 years’ time that are still doing it.

[69:14] If you look at the cohorts of venture not everyone makes it. Not everyone generates returns. Ultimately I am very benevolent for those entrepreneurs that have massive ambitions, but mainly because by aligning around that you hopefully will generate big returns, which then allows you to get the next cohort of incredibly ambitious people to back again. It is about returns.

Tyler: [69:44] You said you do two or three in a given year? How many companies do you look at in a given year that you actually do analysis on?

Sumon: [69:49] Because of the selective nature of my thesis, I have a lot of inbound pitches, but I’m not actually focused on inbound. I’m focused on outbound. If there’s something that I like that I’m passionate about, I’ll go after it.

Tyler: [70:04] How are you identifying those?

Sumon: [70:06] Again, they fit within the four investment theses that I have. If I talk or write widely about those things, those…

[70:18] There are certain ideas that I believe in and they resonate with certain people. If I’m resonating with people then those entrepreneurs will come through. If there’s something I particularly like I move quite fast and try and be first into that company.

[70:35] In that respect I am competitive. The pattern that I look for is if lots of people are in it I won’t invest in it. For me being first or being misunderstood is important and for it to be confusing to me and confusing to others is also important.

Tyler: [70:53] Why is that?

Sumon: [70:54] Again, if we look at the 15 companies example, if there’s 15 great companies built in Silicon Valley, but another 15 can be created, I think that there’s less competition for the ones that get created because it requires a different skill set to find them, to nurture them, to build those up. That’s what’s driving a lot of angel investments.

Tyler: [71:18] I want to be respectful of your time. You’ve given us a ton. Two quick last questions. The first one is, what is the biggest obvious mistake you made in the first year? What’s an obvious pitfall you can help somebody avoid?

Sumon: [71:33] One thing is to make an investment decision really emotionally. One is to fall in love with the theory of the idea, and then to invest on your interpretation of that. You have to be listening for objective signals and I think it’s really interesting in angel pitches…

[71:54] There’s a company I was involved in as an advisor. I was in love with the theory of what they could build, and ultimately the fundamentals of the company were not correct. That company ended up being acquired, but mainly because acquisition was the only way to get out of that company.

[72:13] I fell in love with what I thought they could build, and that was the thing that made me invest. It wasn’t any of the fundamentals. You do have to remain very objective and unemotional, to some extent.

[72:26] That’s a big mistake in angel investing, is to lead with your dream of what this company becomes and use that to drive your decision, not something that’s much more objective that comes from the company, from the fundamentals of the company.

Tyler: [72:42] You publish thoughts online. You tweet fairly significantly. You blog. If people want to learn more about your thesis and how you view the world where do they find that?

Sumon: [72:52] My website, sumonsadhu.com, has a bunch of my thoughts on there. My twitter handle, twitter.com/sharpshoot has a bunch of my nascent thoughts.

[73:03] [background music]

Tyler: [73:04] Thanks so much for joining us and the time.

Sumon: [73:07] Thank you, Tyler, for having me.

The first salesperson for any company has to play the role of discovery sales. This is a role that involves making first contact with customers, establishing the messaging and areas of demand for the product, as well as the feeding back to how the product should evolve to better meet demand to solve for product market fit.

Unlike a traditional sales person the discovery sales person has to establish demand and messaging for upcoming sales people with no established playbook. As such he or she must posess the following skills:

1) the ability to sell and close deals as an individual contributor without an established playbook

2) a deep understanding of product thinking and how to build the product in order to provide feedback that is at the intersection of what is feasible/technically possible and valuable.

3) the ability to develop compelling messaging for marketing and describing the product in writing and orally in order to validate hypotheses for demand for the product.

The discovery sales role is therefore one which is a hybrid of sales, marketing and product.

The job of the discovery sales person can be summarized as running the market-sell-iterate product loop as efficiently as possible to allow the company to form conviction and repeatability for the path to $100M in revenue.

As soon as this discovery sales person starts they must establish

1) a number of plausible hypotheses for market demand with no emotion or prioritization applied to each (e.g. sell to anyone who wants to buy or is hypothesized to want to buy)

2) immediately start to get appointments, pitch and close deals independent of the state of the product in as many verticals of demand as possible and begin from a standing start.

3) feed those lessons back into developing an updated segmentation of demand to force some of the hypotheses into “good revenue” — which are profitable and repeatable segments, and into “bad revenue” where some segments have to be discarded because they are profitable but unrepeatable.

4) upon verticalization establish repeatable messaging, lead generation, email and phone communication and a process by which leads are moved from unknown to closed/won. As an individual contributor the discovery sales person will harden these strategies themselves before building a training program to train other sales people on.

5) a discovery sales person will then build out his or her team to follow the playbook and iterate on the formula to train others to follow it leading to rising revenue and accelerating product market fit.

6) grow to $100m/year by rinsing and repeating. Accelerating market adoption is compounded by lessons from discovery sales being fed back into product development leading to new features or new verticals being served. Also verticalization impacts every function from marketing to customer success if done correctly.

The discovery sales person can be remendously impactful for a startup’s valuation and is typically performed by a founder or early employee. At Quid, I acted as a discovery sales person developing the company’s messaging and initial sales into financial services, healthcare, and the creative industries booking $2.6m dollars in sales in year 1. This work paved the path for others to build out and deepen those verticals.

Alongside a great product architect, a discovery sales person is one of the most valuable but underrated startup skillsets. Quite often the role of the non-technical cofounder is unspecified but a discovery sales person can be one of the roles that can drive a company from promising to lucrative very quickly.

Building a great Marketplace depends upon connecting two parties that couldn’t do business before. A really key component of that matching of supply and demand is search.

Better search depends upon indexing information in a way that unlocks a new kind of matching. Therefore the ability of machine learning algorithms to create new facets or features to index the properties of the two parties is very interesting from a marketplace perspective.

To give a concrete example better matching of supply and demand for podcasts can be unlocked by speech based indexing of a podcast corpus. If a user is looking to learn about something specific he or she can search for mentions of “Chinese technology policy” and immediately hear snippets of sound bites from inside the podcast which if they are interested in they can hear about the whole conversation.

A better search algorithm creates new demand for each of the sound bites inside of the podcast by separating music and speech, identifying phrase and pause boundaries, and transcribing key phrases in order to build an index that’s “hot” for instant search and retrieval. This creates a new marketplace where consumers can search more precisely for what they are interested in, drives demand and exposure for new podcasts that users have never heard before and creates new inventory for sound bite based advertising.

The key point is that advances in content based indexing unlock completely new economic value by changing the way we match supply and demand. The second and most important point is that as more participants exist on the marketplace the search algorithms get even better driving better supply and demand. For example every additional publisher is incentivized to make sure that the sound bite indexing is accurate in order to find more listeners. Their contributions drive more data back to the core algorithm which can retrain and become even more accurate, creating better search and even better matching of supply and demand and hence revenue for the marketplace.

A marketplace for supplying companies with design talent for example can index the work of designers under facets that could not be exposed traditionally through form fields (for example on the aesthetic properties of their illustration style) which may unlock even higher fidelity matching of supply of design talent to demand.

Either way these machine learning marketplaces have the same properties

1) novel facets for indexing supply that depend upon advances in machine learning

2) incentives for suppliers to improve their indexing in order to drive demand

3) dynamic improvements to the core search algorithm as more demand unlocks supply

4) a flywheel of economic prosperity that is compounded by better search, better matching and more transactions.

The canonical example of a machine-learning enabled marketplace is Google. Standalone advances in indexing unlocked new demand for matching users with webpages. The economic cycle is only compounded by the bolt on of the marketplace for small business advertising. The two are perfectly intertwined.  

In a world where it is easy to move on to the next thing, what we fail to develop is any depth in what we know. 

Depth is riddled with the paradox of choice. You have to stick to a few things and seeing them through requires patience. But if we pursue these things over others we feel like we may be missing out on what we should learn. The result in not picking anything, and failing to progress from where we are. How do we choose what to focus on? 

A better mental model for dealing with gaining depth is one of cumulative benefit. What if the things we learn have layers which build on one another, combining in ways we cannot imagine yet, but unlock emergent abilities later on. 

Figure 1: In Leonardo’s last supper the artist creates depth through the softening of the edges of the objects in the distance -- this takes advantage of perspective to create the illusion of depth with Jesus at the center. 

Layers of skills that build on each other

This is more comforting as when thinking about depth in this way the investment in the lower level skills has a future payoff. By contrast skills which don’t combine and have cumulative payoff aren’t worth sustaining, or may not give us the benefit of depth. We now know what to avoid. 

But if something confers cumulative benefit, it requires sustaining over time. These skills then may require repeated, rhythmic motions, which are backed up by habits. 

Through creating a habit we allow our biology to take over and reinforce the cumulative benefit by strengthening synaptic connections, or co-ordinating muscle movements to work together. For example meditating every day makes it easier to focus, which makes meditating even easier until we’ve sustained a habit. We can call these rhythmic motions -- processes: repeated algorithms which engage body and mind. 

These processes could also be mastery of tools to generate an output from an input of effort. For example knowing how video editing software works and practicing the process of imagining a concept to outputting a finished video that you can share is a rhythmic motion can be repeated again and again. The same is true of a physical motion like swimming, mastering one lap, is the basis of a session of swimming that involves ten laps or even a hundred laps. The basis of programming is imaging a program, writing it, debugging it, getting it to work, and then creating something that a user can use. So breaking down these motions into repeated atomic processes is a basis of depth based understanding. 

However since our definition of a process was something that engaged mind and body, if we have habitually engaged in something, we need to engage in something intellectually for these abilities to combine. 

For example our appreciation of language compounds when we understand the grammar and syntax of a foreign language as well as go to a foreign country and meet strangers in that language. Our understanding of programming only increases when we understand the tools, and the syntax of giving instructions to a machine. The depth of knowledge is gained by both by repeating the process (speaking/programming) and mastering the concepts (spoken language/programming language) at the same time. 

Processes and Concepts

So it appears that to acquire depth we need two things - mastery of a process, and mastery of the concepts that underlie it. The two then are mutually reinforcing -- the better you become at the habit or rhythmic motion, the more you appreciate the concepts, the more the concepts make sense, and so the better you get at the process. So if you want to develop depth you have to pair the experience of the process, with the learning of the concepts and use that as a way of prioritizing what to pick to create depth.

For example

Goal: Gain Depth in Cooking

Process (Engage body): Create a meal from scratch that you can eat

Concepts (Engage mind): Understand how to buy ingredients, what tastes good, what recipes are possible, what tools you can use and how they work. 

How to gain depth (Add time): Repeat this starting with something simple, and complete. Start by cooking for yourself with whatever you have in the kitchen, and then upgrade from there. Eventually cooking for others. Mastery of the process upgrades the concepts which will create stimulus to upgrade the experiences you have, until the two things are mutually reinforcing that they lead to depth. 

Creative Mastery

So what if we have this method for gaining depth. What should we choose?

If we look at the way the world is heading -- conceptual knowledge is becoming easier and easier to obtain. It used to be that a few universities in the world held on to the world’s knowledge and they were also the few places where you could practice that knowledge. This is still true some cases (try ancient history for example) but increasingly where conceptual knowledge is a barrier to entry it will be easy to learn it from the internet. Eventually machines will be able to absorb that knowledge and make simple decisions on it. 

Having depth in processes which apply our creativity to create outputs therefore becomes the frontier where human effort should be applied. 

Ambition isn’t created equally -- it is either natural or unnatural. Telling the difference between natural ambition and fake ambition is key to investing in people or hiring them for your company. Naturally ambitious people have unbounded vision for what they can become, and so make exclusively better people to partner with. Unnaturally ambitious people have some artificial constraints which if unchecked make them look ambitious, but if you look closely at their nature you will see something different. 

So how can you tell the difference between natural ambition and fake ambition? Success requires a combination of luck, and being able to position oneself strategically in areas that are poised for growth. This personal positioning requires being on track for a particular trajectory. Naturally ambitious people lay their own track. Their ability to come up with a vision for themselves, deliberately change their actions and then transform themselves through a process of struggle and commitment defines every chapter of their lives. 

By contrast artificially ambitious people follow the tracks laid for them. Getting into an Ivy league school, followed by a top investment bank, followed by a stint at an investment firm is a well worn path that requires no thinking to come up with. If the path looks well understood, what happens when the path becomes more ambiguous? The naturally ambitious person will be able to do as they have always done -- which is construct a vision, and a method of transformation that catapults themselves onto their next chapter. 

The unnaturally ambitious person will not know what they should do next and start drifting in the wind looking for someone else to define their path.  Naturally ambitious people aren’t tracked. They come up with their own path. If the path is too well defined be skeptical of it. Well defined paths require no innate thinking or taming of ambiguity to be defined. By contrast, where an individual has had to make a lifetime of deliberate decisions about their path they are in complete control of the input of ambition and the output of effort. 

A side effect of this deliberate path finding is that naturally ambitious people look unoptimized. By not optimizing for public perception their resumes look ordinary -- but when you peek beneath the surface you find a whole host of projects that were never talked about. By focusing on internal satisfaction naturally ambitious people are not optimizing for perfect scores from their CVs/Resumes. If you encounter a background that sounds just perfect dig deeper as marketing one’s worth maybe a higher personal reward than showing it! Naturally ambitious people lead with what they’ve done and plan to do next. Unnaturally ambitious people lead with what perceived value they want you to feel and hope you never dig beyond the surface. 

The study of Dante Aligheri - the author of the poem the Divine Comedy. 

There is more to learn on the internet than ever. Courses, tutorials, primers, introductory guides etc. Its incredibly easy to consume, but in my experience also much easier to forget. 

Digital delivery and test taking makes it easy to activate short-term memory but does it have the same impact as having to etch the same knowledge in your brain through physical immersion. Spending the one minute a day using language learning software may be effective and give the positive stimulus of making progress but is it better than living in a country and being forced to experience and use the language? What does it mean that you’ve completed a certificate in Machine Learning online, but when it comes to build a novel algorithm you don’t know where to start?

Ephemeral Learning and Candy Crush culture come together to cancel each other out in a way that leads to many hours consumed but no net change in the ability of one to use that knowledge productively. Because we spend so many hours in front of our screens do we even consider learning time to be any different from casually reading a text message. 

Digital learning creators need to account for the experiential changes it takes to permanently change one’s brain biochemistry to impact long term memory and skills development. As computing becomes more experiential e.g. with VR enabling one to experience situations it might be that we can take ephemeral learning and make it more permanent. Can you learn Spanish by visiting Spain in VR, and interacting with virtual but real Spaniards. Will the Coursera equivalent of VR involve sitting in a virtual university facing the cyclic stress of doing an exam?

For ephermeral learning to be permanent one needs to retrace steps. Practice makes perfect only because knowledge and experience of the same thing strengthens the synaptic pathways. Also if i want to retrace my steps how do I know where I was -- a physical notepad and a pen in this respect has a huge advantage over activating my memory versus a web browser. Perhaps this is the reason why paper books will always have a place -- they create focus and enable us to retrace our steps. If the next generation of learning & information platforms can master going from ephemeral to permanent they will have a place. 

Good friends improve you. 

Good friends encourage you to be better.

Good friends can say harsh things without fear of offending. You are just as honest back. 

Good friends live close to you. Or at least show up often enough even if they are far. 

With you a good friend you can pick a conversation back up where you left it. 

Good friends encourage you to dream. 

You can’t do smalltalk with a good friend. 

A good friend is open to exploring. 

You can say nothing to a good friend and its ok. 

Good friends help you scheme. And plot, and plan. 

Good friends make you generous without expecting anything back. 

Good friends sense danger even though they won’t tell you. 

Good friends do tell you even though you may not listen. 

Good friends stick around when you don’t like them. 

And tell you to go away when you do. 

A Good friend has a kind heart, and a sunny outlook on life.