What did you learn from from your time being that what did you say, first or second employee there?

I mean, I think, you know, one of the big lessons there that was a hardware company. So as I mentioned earlier, Javelin, we don't invest in hardware. So I think that was the big lesson away from capital intensive businesses.

I feel like a lot of VCs don't invest in, like, the thing that they used to be doing.

Yeah, yeah, yeah. I think when you learn the lessons the hard way, you know what is really into. You kind of want to stay away. So what is it about the hardware that makes it so hard? Yeah, I think the biggest part, and I think it's changed a little bit over the years has become a lot more nimble and flexible. But back then and I think to some extent still true, you don't it's like software.

You can't iterate your way to a great product. You sort of have to make that initial investment. You hope it's the right one and you don't have that many shots on goal. So if you don't if it doesn't kind of hit the product market fit from day one, it's very expensive to to keep iterating on it. So we do invest in some hardware. Javelin, but it has to be really kind of inexpensive, sort of inexpensive hardware where there's a big software component to it or doesn't.

It's not going to take, like, you know, 20, 30 million dollars. Just see if this thing has product market fit. That's just not our profile. And that was kind of an issue that we saw at Ooma was, you know, we have to iterate our way through it and we have to raise a lot of dilutive capital along the way. So that was a big lesson.

But then one of our investors at Ooma, was Draper Fisher Jurvetson, now called Threshold Ventures. And I had a great relationship with them and they were starting a venture fund in Eastern Europe.

So I was actually born in the Ukraine, speak Russian. I've always had a fascination with economic development in that part of the world. And this is like in the 07 08 timeframe. And so they asked me, do I want to build a venture fund from scratch in Eastern Europe? And I just thought that was just a crazy experience that sort of tapped into one of my interests, which was international development, economic development and technology and entrepreneurship.

Yeah. I had forgotten that you set up DFJ in Russia.

So right now, do you invest internationally or where does Javelin do? How much of your portfolio is Bay Area? How long have you been in L.A.? Yeah.

So well, I mean, I grew up in L.A., but to the Bay Area, I was there for 18 years and I was always looking for a way to to get to get back to SoCal. At Javelin we invest in, you know, in the US primarily, I would say about fifty percent of our portfolio is in the Bay Area. 

I do have a very bullish kind of thesis on L.A. over the next 10 to to 20 years.

So I think, you know, I know you moved here as well around the same time after a long stint in the Bay Area. I think we're a bit ahead of the curve there in terms of I agree.

We are kind of thought leaders. I like that. What is it about L.A. that makes you so bullish? Yeah, you know, I think in the past, LA has had a lot of buzz and excitement, you know, Snapchat, Silicon Beach, these kind of things, I never thought those were real, real moments for me. The real moment for L.A. is when a lot of these larger tech companies I'm talking about, like Apple, Netflix, Google, Amazon started setting up large operations here, opening up big offices, investing in some of these SVOD services that they're offering.

What the what to me, what that does, it not only brings tens of billions of dollars of investment to the L.A. ecosystem, but it creates massive amount of job opportunities for for technologists. And these are these are people that are constantly going in and out of the startup ecosystem. Right. So in the Bay Area, it's like you go start a company at any point. If it doesn't work out, you know, you could always go get a job at Google, right?

So that whole ecosystem, I think, is longer lasting. To me, it feels like a decade plus type of a bet that's been made in L.A. And that's that's one of the reasons I'm super bullish on what's going on here. What about so the competitive competitiveness of deals? And do you think, you know, L.A. seed companies or series companies are more likely to work with series investors who are here? What do you think? They'll just, you know, keep going back up to where like they've done?

Yeah, well, I think the seed ecosystem is super robust. I think on the Series A fronts, I think there's still this bias towards Silicon Valley 

One thing that I found interesting in my last year and a half is by saying that I am a partner or a managing director at a Silicon Valley firm, but I happen to live in L.A. It's actually been the best of all worlds for a long, long entrepreneurs.

They kind of love that like, oh, it's and it's a Bay Area fund. You have Bay Area, Bay Area network, Bay Area partners, but you happen to be here. So I can see you face to face at any time and have that access without having to fly up there. That's great. That's ideal. So that's worked out well for for us, at Javelin. And I do wonder if that's going to happen more with other firms where they're still going to be based in Silicon Valley.

But you're going to have a partner or principal or someone down and based in L.A. and more accessible to the entrepreneurs.

And and I guess it's it's sort of even a broader question, which is regardless of, you know, even when you were back up in the Bay Area, how do you position yourselves Javelin? Like, how do you win against a Sequoia, Benchmark, whoever else is also looking at deals or do you look at them sooner or do you build a relationship? How does that work?

Yeah, if we're competing against the those firms, we're not doing our job. Right. OK, that's it. Yeah. I mean, we're we're positioned at this, as I mentioned earlier, between seed and series A, so we're we're ideally coming in earlier than the Sequoia or an NEA. So that means we're taking on more risk. And frankly, that's the stage that works the best for us. You know, we get excited on that stage where there's still a lot of questions to be figured out on product and distribution strategy, business model.

So we're comfortable with that risk. In fact, it's the one way that we sort of fool ourselves as former entrepreneurs that it's OK to be doing venture capital totally by doing it at that stage where it feels like you're you still have a hand in company in sort of the foundational work, but it's something that I've really taken to heart and sort of Kuret-su type approach. Kuret-su is a Japanese term for, you know, kind of a small, intimate network of people that know you and know what you like.

And I thought it was like a complicated, odd business structure that was hard to unravel in Japanese businesses. But maybe it's more what you said.

Yeah, that's right. That's that's that's what I thought of it. But okay, great. Well, what was your definition of go with that one.

So yeah. So just like a more sort of less quality, more sort of quality and, and depth of connections. And these are other entrepreneurs we've invested with before, other investors, investors we've invested with before, who just to get really understand the kind of the kind of opportunities that we're attracted to and vice versa.

So we prefer that approach versus, you know, kind of a a broader you know, let's create a lot of content. Let's, you know, blog a bunch of Twitter.

But we don't we don't really do that.

It's not authentic to to our style, which means we're probably we're probably missing some of the hotter deals, but we shouldn't be honestly in those hot deal conversations anyway because we're not we're just not going to win against Sequoia or Benchmark.

So like a Thumbtack or a Masterclass, which you mentioned, do you think that you saw something early in those companies that I mean, other investors must have also looked?

What do you think you saw that other people missed? Yeah, yeah.

We got really lucky on both, but so with a Thumbtack. Yeah. There's a sort of famous story with that team where they went out and pitched everybody in the valley and they got like forty five no's and they talk about it all the time.

We were the forty six and we, we did say yes, but there was a caveat there.

They were raising more money and they were raising like 10 million and they adjusted and they raised, they started raising at five, a five million round which is more in our sweet spot. So we were fortunate to see them at that point. But they didn't have a business model. They had a marketplace that was sort of working and some basic liquidity dynamics that were there. But you also just explain what they do.

I think that's sort of them. But go ahead.

The problem there, marketplace for consumers and service providers. So if you wanted to book a plumber or a roofer or a tutor, you know, a clown for your kid's birthday party, you would go on Thumbtack kind of a new YellowPages, you know, to compete with home advisor Angie's List. So now, you know, it's a company that's been backed by by Sequoia and Tiger Global and Google Capital, you know, north of 100 million revenue company with close to two billion dollars valuation.

So pretty, pretty large scale. We saw that when they had zero revenue.

And, yeah, they had you know, they had a little bit of a marketplace working, but no business model, no revenue. What we saw was that they were extremely methodical in how they measured everything.

They built their own internal dashboard. So we knew that they could test a lot of different hypotheses and get to the right answer eventually after thousands of little optimizations. The other thing that they had, which sort of fits our model of investing in, you know, capital efficient businesses with high leverage as they were masters at SEO so they could get to large scale without spending a lot of money on marketing. So that was extremely appealing to us as well.

So we didn't hesitate and pulled the trigger pretty quickly.

And I think they have so much data, as you say, and I guess you saw that early. But like, I feel like I know them also because they publish interesting things sometimes that say, like there's too many clowns or there's too many plummers. You know, if you you know, California has too many yoga instructors, go be a yoga instructor in Wisconsin, you'll do much better or something.

They do like a small business survey, actually, where they have local data for how service providers are performing and working in those local areas.

And so they they create this really useful tool that is great for small business owners, but it's also great for just consumers in those local areas. The other side benefit of it is it's great for their SEO. So that actually helps build their their linking strategy.

So, yeah, I think it has the very creative over there.

Were there any interesting things we can learn from, you know, that you saw them do when they were early stages and they were iterating and optimizing things that, you know, stories you remember you can share. Yeah, I mean, I think they're the company I think of most when I think of, you know, scrappiness at the start and that kind of a scrappy spark. I think one of the best things that they did was how do you build supply and demand at the same time.

And so, you know, the early days they would go and essentially manufacture demand by creating these SEO pages and asking consumers, hey, who wants a plumber in San Francisco? And somebody would respond to the ad saying, hey, I'm looking for a plumber. Then they would take that ad and they would, you know, that response that lead and go to a plumber and say, hey, here's some money for you. Do you want to sign up for a thumbtack?

Right. So I thought that was extremely clever. And, you know, in a marketplace, you have to figure out kind of that that that scrappy way to get the supply and demand flygirl going. And that team had it in spades. So I remember that vividly.

Do you have any view on review sites generally?

I think that for thumbtack, reviews are important. But what they really excelled at is giving consumers choice and quality of match. Right. That's what they've invested a lot of time and energy into the product and honing that part of it.

So whenever you have a request for a job, you're going to get three or four quality response responses from different pros. And you can you can decide which one you want. And you're more likely to have a positive experience and leave a good review if you were matched with the right type of pro. So the matching engine is really where they stand out. And they're their match rate is something crazy, like 80, 90 percent in terms of successful matchmaking.

Yeah, very cool. How about masterclass? Have you taken any masterclasses? Oh, yeah, yeah, yeah.

I've been lucky enough to go to a few recordings and in the early days, so that was so I got to see it live as it was happening, which was really, really a treat. But yeah, no, I've taken many classes including I think the last one I took was the er Franklin barbecue class. That was my goal of the summer was to become a master of barbecue. So, so I did that. But yeah, the story of a master class in terms of how we got involved was founded by David Rogier, who was my good friend and classmate from the GSB.

And I remember when he he always wanted to start a company and when he started kind of ideating through different concepts, Michael during Harison Metal, gave him some money to do that.

He came to me maybe like a year and a half into that process. We had we had lunch or dinner. And he told me the idea. He said, hey, I want to create this online learning platform that will allow people to take classes from the best minds in the world, the geniuses in their categories. And my initial reaction was, well, that's that's a nice, nice idea. I'm sure lots of people have that idea. How are you actually going to do this?

And he slides a piece of paper over with like ten names on it. And these are like amazing maverick like James Panio.

James Patterson's on there, Serena Williams and many others, Wayne Gretzky. And he's like, see these names? They've already said yes to me, already in.

And I'm like, how how did you do that? Like, you don't have a brand. You don't have any funding, you don't have any revenue. Nobody knows where you are. And you got these amazing people to say yes to you.

To me. I mean, that was an unbelievable kind of testament to his ability to get this thing going. 

So for us, you know, it was a bet on David, it was a bet on the market. It was a huge market opportunity. And then it was a bet on a very capital efficient approach because we felt like each instructor they would bring on would bring their audiences, would generate a lot of earned media and press. And so that would effectively lower the customer acquisition cost of each subsequent subscriber.

So to us, it also fit sort of the business fundamental bucket. So we we made the investment nine months before they launched. It was a free revenue pre launch about October 2014, and then they launched in May 2015. And that's that's gone pretty well since then.

Wow. I feel like now there's a lot of you know, there used to be Uber. Hey, I'm Uber for X, I'm Uber for Y it seems like there's a lot of masterclass for education, masterclass for youth sports.

Or where do you think where do you think the world is going with with the masterclass for X or where do you think masterclass is going.

I guess. Yeah.

No, I think we see ourselves as sort of a combo company of between entertainment and education. We don't want to be all the way in the education bucket. We want it to be entertaining enough that you're taking these classes, not because necessarily you want to become an expert in that field. Maybe some some folks will take it for that reason, but maybe you just want to get inspired or maybe you're just curious, you know, more kind of like TED style of what is that career subject area all about, so so those are some great examples of what you invest in. And I think at the start of the show, you said that you're a generalist. Do you think things have changed?

I'm very interested. Like, are there things where you're like, oh, yeah, I used to invest in something and then I learned that I'll never invest in that again. Or, you know, has your thesis evolve?

Yeah, I mean, I think well, I mentioned hardware was the big one for me.

Yeah. That area trying to stay away from that said, you know, you're always finding exceptions like, you know, we have our sort of Peleton horror story or because of that rule we missed out on Pilton. So I think the one rule I think that we have is keep an open mind.

And one thing that we are not a job where we're not sort of like ivory tower, you know, pontificators that are thinking about here's where the future is going. We don't think that's our job. We think our job is to respond to entrepreneurs who are the real visionaries or the people are setting the course for the future.

Yeah.

So I was chatting with someone else who his point was that if you play out venture capital in 10 years or something, everyone's going to have a specific the we're going to be more thematic or we're going to be more focused and you're going to have to develop yourself as you are the go to expert on marketplaces or whatever.

And there won't be the generalist funds. You know, you're not allowed to keep an open mind in his in his vision of the future. You have to be more close minded.

I've heard that. I mean, I've heard a lot of that. You hear that from LPs a lot, too. And there's certainly merit to that strategy. But you have to go really, really deep and I think also depends on the stage that you invest in. So I think it's easier to have that if you're multi-stage or later stage. I think at our stage you have to keep the peripheral vision open because a great opportunity and an outlier could come from from, you know, from any direction.

You know, I don't know. I got some great advice of the job, actually, from one of my mentors, Peter Lendell. I don't know if you I know the name, but he's he was a founder of Sierra Venture, the founder of Sierra Ventures. He teaches a GSB entrepreneurship. And, of course and he his advice was, don't take yourself too seriously as an investor. Yeah, that's good to be ready to you know, there's a lot of power and self deprecation.

Right. So I've always taken that to heart. And I think that goes along with the sort of idea that, like, you know, our job is to be a service provider to entrepreneurs and help them build those companies. So, again, I just don't kind of believe in the you have to be a specialist in one particular area. I think it kind of happens over time anyways, like you have certain companies that you invest in more often.

So we've done a number of marketplace businesses. Yeah, for sure. We have more data points. More. Some marketplaces, but I'm a little bit shy about waving the flag, about being just a marketplace expert, because I think we have other stuff to bring to other companies.

So I told you, I definitely wanted to talk about you as a board member and working with your portfolio because you have this amazing medium post up about getting feedback from your founders.

So I thought I'd ask you about you getting feedback, which is a very unusual, but I'd love to hear about that.

Yeah, no, I appreciate you asking about that. It's definitely a topic I'm very, very passionate about. Yeah.

It sort of arose from the fact that it always bothered me that feedback flowed one way.

And most board settings, you know, usually from VC to the entrepreneur, it's sort of the perceived job of the board member to give that constant feedback. And it's accepted. Everybody accepts it. And which is fine. Let's that's that comes with the territory of of being a fiduciary and investing money into an entrepreneur, into a venture.

But I didn't understand why the feedback that also flowed back to the board member and especially in those early stages. I mean, I you know, I truly believe that you have as a as an early stage investors, a seed series A investor, you have a lot of impact on how that company is built on the foundation that's that's that's put in place.

Why isn't there feedback flowing back to help you be better at your job? And I, I want to be the best board member I can possibly be. I want that feedback. I'm hungry for that feedback.

And it wasn't coming to me and for good reason because of the board dynamics. A lot is not going to just give you unsolicited feedback because, you know, who knows how you're going to react to it. So I actually think it's the job of the board member to proactively go out and ask for that feedback. And entrepreneurs will be more than happy to give you that feedback. I guarantee that they're going to be excited by the ask itself. And that's what I found out.

You know, I did the survey, which is part of the medium post basic question, very basic survey of strengths, weaknesses and how I could tangibly be helping more where I'm doing things that are bad for them and not not helpful that I don't maybe not be aware of. I had such a positive reaction from all my entrepreneurs, like their minds were blown that I would even ask for feedback. Like this is the first time anyone's asked for feedback as a board member.

So really positive reaction. And then I learned a whole bunch about myself. You know, things that I was doing that was that was that was good. And then things that I was completely oblivious to that maybe we're not so good and help me course correct those those points. And then I kind of tied it back to, you know, a few experiences that I've had as a as a as a board member, where I've had companies that were in a privileged position to receive multiple term sheets and multiple offers and roughly same economics and all that.

So kind of it comes down to the references. And, you know, this particular company I'm thinking about, you know, ask for those references. And they got a lot of firsthand references from the VCs. Like here are my references of the entrepreneurs that should tell you good things about me. We called those up and we got negative after negative piece of feedback, like, no, I would never work with this person again.

Or like, this person's done really something really bad.

And I was blown away.

I was like this. These are the references that you thought were good and they were actually negative. And you just you never asked around. If you had asked, you would have known that maybe you need to work on that relationship or maybe you just something and they would have helped you in that deal.

So I started playing out to myself thinking like maybe I'm oblivious to something. And I was so so I was really I was really grateful. I'm really happy that I did that. And it's something I want to do on a continuous basis once every year or two.

What's with all my entrepreneurs just to kind of like get that, you know, VC investor board member NPS score, right?

Yeah, yeah, yeah. Exactly, exactly.

To see if I'm doing my job and if it's if I'm truly helpful or if there are areas where I could be better.

That's pretty ridiculous. Yeah.

When you give out your names and you give out your name and references, they come back. Yeah.

Some people not self-aware. Yeah. Well OK, so staying on that without being personal, not like. So what exactly did people say you weren't doing. Well not asking that but like how have you evolved maybe. And learned what, what makes a really useful board member or investor. Yeah.

No, I mean like I think I got a lot of positive feedback too. I like to think but I got to highlight the negative, like one negative thing that I think I actually think of board members are guilty of this. You don't understand. The impact of some of your asks and requests to come right, you might have like a random question that comes up and like, oh, well, you know, what was the you know, what was the product decision behind?

That's right. Why did you guys decide to do this? And it's just like a haphazard question that you asked. You don't then think about the workflow that you set off of that company because of your request that then ends up wasting a ton of time because they're going to jump on it like they jump on it. The CEO will ask the product manager. The product manager was there. People don't like do a bunch of stuff to get you this answer that wasn't really even that maybe important to you.

I mean, if it's important, great, do it. But you just have to be more conscious of, you know, some of those asks, some of those requests, making sure that there truly are important versus just like a random like, hey, I had a I had a thought.

So I have I totally understand that from being on the other end of things. I'm like, oh, like send the. Here's my draft email. I'm going to have five people read my draft email or whatever.

But you're not leading a Series B like you've been the series investor. Do you actually have the power dynamic is weird because it sort of doesn't exist, right? Like, why do they care what you think? Sort of, yeah.

Well, I mean, I think it's part of the dynamic. You're still I mean, you're still a board member, right? Yeah.

Is there anything else with Javelin and what you're doing now? Like big things that we didn't cover fundamental to who you are. Alex, we should highlight on this podcast.

Yeah, I mean, look, I think probably the one of the biggest things is sort of the type of companies, the thematic thematically, the kind of companies that we love investing in. And entrepreneurs with that mission driven approach is investing in. We love investing in companies where the product and technology ends up helping and working for people instead of against them. I think that's like a fundamental theme for for us across across the board. And I think if you look at some of the investments like Thumbtack or Masterclass or Hit Record carbon health, they they have that profile where those companies are building technology to help small business owners, to help educate people, to help bring digital health to the masses at an affordable, affordable way to us.

By definition, if you're working on products and companies that are again helping helping people and having technology improve their lives, it's by definition a mass market product not as excited about the whole, you know, automating jobs away kind of thing. We do those. But, you know, there's I think it's a higher bar for for us to get excited about that. So my personal preference is to invest in, you know, the kind of companies that are more mass market and have have the same goal that they're really helping people.

Yeah, I remember you said once something like, I don't like investing in EHI or something. It was a pretty strong statement considering every other investor I know loves to invest.

And I know I like I like investing. I if it serves that goal. Right. So yeah.

If they're using like some stock using AI to help in the matching algorithm to help small business owners. I love that, I don't like the look we're going to have and it's going to eliminate fifty jobs like that's not like this much stuff.

OK, so one more random personal question I read maybe on your LinkedIn. Are you avid sci fi reader? Yeah, I love sci fi.

What it's what some cool concepts, things that have made you see the world differently. Oh, man. I mean, I just remember as a kid, just the power of it or the power of sci fi to help predict the future. I actually think sci fi writers are amazing at envisioning the future.

And not only that, it's sort of a bit of a self-fulfilling prophecy because a lot of our technologists and engineers and product people, they read those books as kids and as adults, and it actually helps them figure out what film they want to build, what they read it about.

So I remember reading like the Orson Scott Card, Ender's Game series. And, you know, I remember reading that 20, 30 years ago. And to me, I'm looking at like life now.

And other than the cosmic travel, like they were using iPads, they were you know, they were doing VR.

I mean, it's just amazing to me how accurate was. And of course, you have the the new batch of sci fi writers like Romney's name with Nexus and, you know, the three body problem, which I think is one of the best trilogies ever made. 

Very cool.

Alex, I will end there and say thank you so much for coming on this L.A. venture podcast today. Thank you Minnie.

This is great. I really enjoyed it. It was really fun to talk to you. 

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