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Benchmark Part II: The Dinner

Benchmark Part II: The Dinner

Mon, 17 Oct 2022 09:43

We sit down with all five current Benchmark GPs for one of their legendary weekly dinners, during which we ask all of the unresolved burning questions from Part 1. How do THEY think about Benchmark v3? What are their day-to-day emotions trying to keep the equal partnership “bending toward greatness? Why is there no growth fund? What does it take to become the next Benchmark GP? Why is there a secret Principal program? We cover all these and much, much more. We also recorded the whole thing on video — which we highly recommend watching even if you normally only listen to the audio feed!

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  • Thank you to our presenting sponsor for all of Season 11, Fundrise! If you’re considering raising a growth round of capital in the next year, you should definitely explore raising some of it with the Fundrise Innovation Fund. Just email, and tell them Ben & David sent you. And if you’re an individual looking for exposure to private growth-stage technology companies, you can invest in the Innovation Fund here.
  • Thank you as well to Pilot.

‍Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.

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I've spent a lot of time in Europe. The dinners are about three hours, maybe three and a half hours long. So unlike the acquired episode. Yeah. And that's the whole point. Is that social connection is not something that's transaction. It's fluid. It's fun. It's playful. And so the idea is people are coming out beaming, smiling after a dinner as opposed to this sort of rigid structure of a typical dinner with an agenda. There's no agenda. Yeah. The agenda is to come together. Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down. Say it straight. Another story on the way. Who got the truth? Welcome to season 11 episode five of acquired. The podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund PSL Ventures. And I'm David Rosenthal, and I'm an angel investor based in San Francisco. Where we were for this very episode. Indeed. And we are your hosts. Last episode, we told the four-hour story of benchmark, the legendary venture capital firm that stayed small while all their competitors ballooned in size. At the end of the episode, we mentioned that their partner reading had this dinner at the end of it, where the five equal partners of benchmark sit down for an open-ended discussion sometimes with a special guest. Well, we were talking with the benchmark partners about that last episode, and they invited us to be their guest for one of these dinners. And for the first time ever, record it even on video. So we are so pumped to share this with all of you. We got to ask them about a lot of the open questions we had about the future of balancing those out there consumer investments with their B2B portfolio, how they think about making sure that they see that next world-changing company, the pressure of inheriting a top venture firm and trying desperately not to mess it up. And of course, there's some good war stories from the portfolio companies in there too, David. Indeed, indeed. But this was such a special episode on so many fronts. This is by far is a record on an acquired episode for a number of guests that we have concurrently. Oh, we had seven microphones running. We had to buy like $5,000 worth of gear just for this episode. I think it was worth it though. Next time I need to account for the fact that there will be a violent laughter when I'm setting the audio levels, because we just had a blast, and you'll definitely hear it when you listen. Well, for our presenting sponsor on this episode, we have a company that you know very well at this point, Fundrise, and this very interesting thing they've been sharing with us this whole season called the Fundrise Innovation Fund, that enables their customers not just to invest in real estate, but also private late-stage growth tech companies. So we are back today with Ben Miller, the CEO and co-founder, to dive a little deeper into the model. I want to ask how you are identifying companies that you want the Fundrise Innovation Fund to invest in. So we're a different kind of investor than most venture funds. We are also a tech company. We have a hundred software engineers. When we went out looking for great companies to invest in, we started thinking, what are great technologies we want to use? And if we like the product, and our engineering team can vet them, then pretty much anybody would want to buy them. And that's a good, good signal that we should invest in them. And so we reached out. We had our engineering teams set up calls with companies we thought were potentially interesting. We started integrating even more advanced technologies than we probably would have otherwise. Rutter Stack, incredible company, retool, incredible company. We're going to be customers of those products and hopefully investors. We're non-investors now, so not to confuse anybody, but I think it's very consistent with Fundrise's approach. When we invest, Fundrise wants to bring as much value as we can. So we have a million and a half users and individual investors that's going to bring brand awareness, that's going to bring future developers who adopt the product, and where it'll be a customer. You think of dog fooding, right? We don't need to look at tickets for reports to figure out if the product's good. We're going to actually diligen suit with our software engineers. Even though I do like tickets, it's a great product. It is a great product. Yeah, every time we make an investment, especially like big, notable investments, we send out an investor update that's almost like a combination of an investor report and an Instagram story. It's really how investor reporting should work. And we send it out to, basically almost two million people, a million and a half people will get this. So it's a whole different form of comms for companies that I think is really going to be valuable but people actually never seen it before. It's a little bit like going public. Yeah, it's just without all the nightmare of actually being public. Our thanks to Fundrise, the largest private investment platform in the world for retail investors. You can click the link in the show notes and if you're a founder and you want to get in touch with them about the innovation fund participating in your next funding round, email notvc. That's notvc at Well, we just launched the acquired 2022 survey. We would be eternally grateful if you would take the three minutes to participate and help us learn a little bit more about who listens. One winner will get second generation AirPods Pro and 10 winners will get T-shirts from our merch store. It's a huge help, so please and thank you. Well, we have an update to the merch store. We got many requests about this. Gosh, why isn't there a dad hat? Well, we called up the good folks at Cotton Bureau and we did some horse trading because I wanted a really good one. You know, I wanted one that was embroidered that felt nice. So for the next couple of weeks, there'll be a limited edition dad hat embroidered with ACQ right there on the front. So get them before they're gone at slash store. All right, join the slack slash slack. The LP show has been on fire recently. For those of you who are paying LP's out there, we just dropped an interview on the profitable growth playbook for B2B companies with Jale Rizai, the CEO and co-founder of Mutiny. That is live just for LP's right now for another week or so and then it will hit the public feed. So you can become a LP at slash LP or get those episodes after they're made public by searching for the LP show in your favorite podcast player. Now without further ado, on to the dinner and listeners. As always, this show is not investment advice. David and I may have investments in the company we discuss and this show is for informational and entertainment purposes only. Okay, so our first question is, what are we doing here? Like what are we at? And Peter, it feels like you would be the best person to explain this dinner or tradition. Why don't you have a dining room in the office? On the 19th floor. When I joined benchmark, there was great optimism between Bill and me about injecting new practices, new habits, new ideas into the firm. And Bill had just read the Ben Franklin biography and Ben had four dinners I fire call a week but they were like going deep on finance and then on chemistry and then on life sciences. And he took the catalyst to say like, why aren't we doing dinners? And anyway, we had this playful experiment where we said, well, let's try a few of them and we did a big dinner towards the end of the year and I think it was like 2007, maybe 2006, it was actually my first year. And it was amazing, like time stood still. And we realized like just the partners or no? We had four outside guests, Katerina Fake, Mike McQ, Gideon U, and Martin Mekos from Not Mistake. And it was electric and we came out of that, Bill had this habit, he'd always call me in the car after like, what did you think of the dinner? I'm like, I want to go to bed. He's like, alcohol had been served, people were in a bed. Like it was his baby, he wanted to like keep working on the concept. Well, we danced with this idea. And so the concept that I came to is that firms are fullest strategies that aren't coupled to reality. And if you look at a venture firm, eventually it's just a collection of habits. And this is stealing from William James, so I think was the greatest American thinker. That, you know, we are nothing but an amalgamation of our habits and habits so characterly. So everything. So the idea that we should be nurturing curiosity, which is the essential lifeblood of the firm, needed a habit. And Monday's as much as they're an attempt at that, you sit around the office and you joke around, you try and dive into topics, they're limited. And so the dynamic range of a dinner with, you know, an open ended, no agenda, wild explorations of the most bizarre things your partners might be curious about. And I've definitely gotten a few, you know, rattle with this group and they pull me out. It just became one of those things that honored the purpose of the firm, which is the sense of like constantly learning and activating our curiosity. But collective effort, investments of a group that we could never get in a one-on-one dinner. One of the challenges, which is being manifest right now, is that in a table, you know, where there's a head of the table, you can get a dominant participant in the dinner conversation. But the problem with the table is that you either have a rectangular structure, which carries power structure embedded in it. Or you have a circular table, which atomizes the group. And so I'd seen this table, the seven by Jean-Marie Mossoud, who's a French designer, and I ran with the idea. Something would be organic that could expand and collapse, but most essentially destruct, or deconstruct power centers and create a non-hierarchical construct with intimacy. But this table ends up being Oli Lundberg designed it. I gave him a hand sketch, and he ran with it. And it's allowed Oli's lifestyle to meaningfully upgrade because the number of people with means that have sat at this table, that they decided they need a table just like this. Well, and the people you have at this table, just for listeners who don't understand the gravity of this dinner, it tends not to just be the five partners. You have pretty esteemed guests come to these. It's the spotlight of attention, which is the biggest gift you can give to another human being on an individual. And more often than not, it's somebody that we haven't worked with or invested in. And I think you guys might have mentioned this in the podcast that we've had dinners with people like Dylan Field. And you come away, you swapped off your feet. This is why we exist to serve people like that. Toby from Shopify. Jeff Bezos has been, we traveled to Jeff. Do you bring the table? Unfortunately, it's not portable. We've got the dinoside, Seattle side, where we've been in LA. We've been in LA, we've been in Seattle. And I think you can tell just from, you can see the ethos of the firm in the structure of the table too, which is that you can't have a sidebar conversation in this table because everybody else can hear it. And so it's all one conversation. And that sort of coming from the outside and then being part of benchmark, the one conversation element of everything that we do on Monday is so powerful because we're all tuned in on whatever's being discussed. And sometimes it's not great news, sometimes it's good news, sometimes it's tough news, whatever it is. Getting the whole group tuned in, I think is the essential power of this structure. And I really like the table for that. I mean, I remember, I'll never forget early in my venture career when I was a venture capitalist. And remember, an older partner taking me aside and saying, if you want to bring something up at the partner meeting, you need to have had a side conversation with everybody else before you bring it up at the table. Which is so funny because Bruce, when we were talking about Bruce Dunlavy, he was like, our one rule was no preselling a deal. Like you can't walk around the hallway and say, hey, I'm super excited about this one later. If you, I think you'll be excited too. Vote for it. That's one of the great perks, especially for somebody who's come from another venture firm to benchmark. So you don't run a memo. And it is because the memo, when your memo really is a vehicle to obviously give background on a company, all the work you've done. But it is also a little bit a presell before the company comes in to present. It's persuasion. Yeah. And so a lot of hours get consumed by the writing of it and the reading of others and not to have like a founder come in then. And there's none of that. So blank sheet. And you just get to have the experience of the founder. It's a nice. So it's just this phrase, which is treat seeking, which I think is a really good one, which is it's like, yeah, does it? Does the is the company incredible? And does that company have a chance to be one of these few extraordinary companies every decade? And like, that's actually all that matters. Like, that's all that matters for us. And if you find that, then you really don't need to sell it. You don't need to sell it. Do you have any sort of format of codifying your thinking? Because like, memos serve the purpose of forcing you into clarity of thought in addition to creating an art, a sales artifact. And so what things do you do in your partnership to gain clarity of thought? I would say the memo is a crutch often. Because yes, it can force you into clarity of thought. But it also allows you to fill in blanks that the entrepreneur themselves are not saying. And it pushes a sort of bias and perspective that maybe the firm has, or maybe you have a sector thesis. And it's like, there's a lot of manifestation of ego when you put a memo together. Not having a memo does not replace work and does not replace the calls and does not replace the conversations. And what I find so amazing about our Monday discussions when you're reeling the calls you have, reeling the notes you took on those calls, you're actually telling exactly what you've discovered without the overarching bias, without your ego pushing into it. You're not pushing anything into the firm. You're just saying like, this is what I've discovered. We all just heard from the entrepreneur. It either confirms their views and sort of like how they want to roll through this market or we found some challenges. And so it's that sort of like, and I think you all mentioned it on your podcast, which is that when you talk to benchmark partners, it feels like we don't have some hard stop. We can just keep going. And that is the beauty of that Monday meeting, which is that we don't have a next topic to jump to. It's not like we're working through a list. And so we allow ourselves to have that open discussion. There's a agenda. You gotta go through the CRM, update the CRM. And if you haven't updated your CRM, you're gonna get negative points. Negative points. Like I don't see all these calls logged into the CRM. I absolutely like the artifacts, like they live in the memories in the live stories of the partners. And so like sort of if there's a curiosity in that direction, call up Mac, call up each other, call up Mac, call up Bill. And so those learnings, those stories, that wisdom sort of still walks. Success. And one of my first experiences this unbounded agenda on a Monday was, I brought up a so uncomfortable, a new part of it. Actually, just before, you know that that's gonna be what Monday is like coming when your first Monday. Is more of the five of you were GPs at other firms? Yes, before this. Yeah, yeah. So we've all read you boys. And like you talk to Bruce or whoever, and it's like, just Monday has no agenda. And I get that. No, no. But you can intellectually get that. Yeah, you get it. And then I remember my first Monday. And so I introduced it on your first Monday, but you sit there and you keep on waiting. We're like, well, when are we gonna talk about pipeline? And when are we gonna talk about, you know, the school or the updates? Yeah, and it like doesn't happen. And instead it's like these random, roving conversations, but then the, you know, the topic of substance will come out in a natural way. You have to really enjoy being around each other in order for that to work. One of the things we didn't talk about for our dinners is like, we really, you know, you just, by getting into engage on these topics that aren't just the business of our day, you know, what we do every day, you just get to enjoy being together. And then, and you get to know each other in different dimensions, some of the stories I get told. Last week was a deep dive in psychedelic. So for a deal or four, I don't know if you're gonna do it. I don't know if you're gonna do it. Yeah, I don't know if you're gonna do it. Expensive, my God. Expensive. I hate anyone, yes. But it is, it is, it is critical to then what happens on the Mondays and everything in between. What do you see? Sarah, you and Tatham both mentioned, lack of structure, lack of memo is not a replacement for doing the work that I assume happens during the week. I'm curious, what does the work mean? They've been in the meeting itself. There's no reason why we can't call somebody that we want to talk to or we're together. Yeah. Do you put them on speaker phone? Yeah. It's like, hey, we're on speaker with all of us. We have a couple questions for you. What is it, how do entrepreneurs react when they get a call from the partnership? Hey, it's Benchmark. Yeah. Yes. No, I think it's surprising to everybody, whether it's entrepreneurs or whether it's like people that we call in the industry versus like, hey, we're all together. This question came up and we want to talk to you about it. It's like, oh wow. Like that's actual teamwork. Like you're working together as a team. And I think you both have investigated the mentioned or show you so much that sort of like all the stories that are told at Benchmark are all about the group going and accomplishing something. And there's a lot of like, we did this, we did that, and then this happened, and then we did this. And then I think broadly the stories are natural, in the industry, naturally tend to be one person. Like there's like, the venture capitalists is the hero. And the truth is, that's hardly the truth. And part of that is, all five of us are deeply engaged on that and working as a team for that. And so when you call somebody together, you're exercising that motion, you're exercising that muscle. So one of the things we spent a bunch of time talking about on the first episode was what the psychology must be like been an I speculating of being around this table here as a partner with you guys. And our thesis was that for an ordinary group of people, it would trend towards mediocrity. But if you have a cultural norm of, we are all bringing it all the time, then it trends towards greatness. And why would it trend to prepare mediocrity? Well, because it's the line that a bunch of other DPs said about Benchmark when it was getting started was that's communist capitalism. And it's going to end up like communism. But obviously that is not the case here. I'm curious what that feels like for you guys on a day to day week to week basis knowing we've got this partnership, this relationship, we spent all this time together. But obviously we each need to like really bring it. So right before Sarah was joining. Do you remember this? Yeah, of course. This is what, five and a half, six years ago. Yeah, something like that. So she texted me on a Saturday. She's like, do you, so we hadn't, didn't announce. We hadn't decided anything. Like it was like, we were close. And she's like, do you have time tomorrow? Okay. And so anyways, we got brunch at the pub. And she's like, Eric, okay. What's our job at Benchmark? Like this is V3 or whatever, Benchmark. Like what, what is it? And I was like, Sarah, job number one, don't fuck it up. No pressure. Yeah, don't fuck it up. Because I think there is a real risk that you could imagine a risk where you feel like you're born on third base or whatever the analogy you want to use is. And I think one of the things that you have to hope for is that every single person who you add feels like, hey, I'm in service of the entrepreneur and it's my job to find and work with and help. The next event. The next, the next great, the next great entrepreneur. And believe me, I wake up every fucking morning like hungry. That I don't want to be the beginning of the end. Yeah. You want to contribute. And where does that come from for you personally? Why are you, because you don't have to be in. Because I'm a failed entrepreneur. I think that really is it for me, which is I know what, I know how hard it is because I did it and failed. Did not live up to expectations. Did not live up to expectations. And I started a company and it was really hard and it didn't work. And so I think you just like realize like how difficult it is. There's a lot. There's so, the privilege of the job is there are people out there who are super smart, who have an idea that's often against the grain that want to change the world in some way. And it's doing what you can to help them. And so I think about that all the time. And I think that's a chip on your shoulder whatever to go prove. They're different motivational systems. Yeah, for an up and up. I think some part of them, all of us, some of those motivational systems are fear based. I don't fuck it up. Some are joy based. And I remember saying to Bruce, we had a long conversation about, well, you know, you guys are moving on. I really don't wanna, I'm gonna leave the firm in a better place than I joined. And it doesn't get to the core of your question, which is how do you maintain standards of excellence? Well, peer pressure is a really powerful mechanism. In a lot of directions, so why does it bend towards excellence? And I think we had this sort of insight that the joy you feel, the total complete joy of working with the great entrepreneur is contagious. It's energizing. It's the lifeblood of, it's the currency of our firm. And if we look up towards that, we can all recognize that benchmark probably isn't gonna be around in 30 years. And Bruce said to me, you don't need to keep me like, bench meds like we didn't try and start this so it would outlive us. I mean, it was sort of an accident. They did name the firm benchmark though. So they didn't attach your ego to its name, which I thought was a telling. But the idea that this is a femoral. And you said like everything's a femoral. Like the structure, we don't have any, we're an institution franchise. All those words make us nauseous because it's really the nature of the business we're in is that we wanna destroy the incumbents. And I think we're collectively aligned around being anti-authoritarian destroy the incumbents. So the last thing you wanna be talking about. Absolutely was the DNA of the founding of benchmark. As we talked about in great detail. And so we want no part of this firm to become the incumbent. And so how do you do that? Violent rejuvenation with a common culture of collective joy in serving entrepreneurs. And if you stay true to that and ruthlessly true to it, then you fire yourself because there's a day where you realize I will not give to the firm more than I take. And in the case of everyone who's left this firm and I've never seen this in the history of investing. You study all these firms, every single partner fired themselves. And it was that ethic that was recursive and you feel it and it's intrinsic. And I think it's also partly because the minute you're in a position to be the incumbent on the last man standing. I want my partners to destroy me. That's joy, which means I've succeeded. Now we're big limited partners. So that's also joy. What do you think of curious? What is the relationship of past benchmark partners to this group? We talked about one of the things I remember from the research and hearing Eric, you and Bill both talk about is with Cerebris. We got to call Bruce. We got to call the old guys. What is that relationship like for you five? I mean, the official relationship is their LPs. That's the official relationship. Like they're LPs with us like other LPs. I think the more the feeling relationship is like there you call and they want to see you succeed for all the reasons Peter's talking about. And so they pick up the call and help. And put their network at work to help you. And they have a lot of insights. And they've seen a lot of stuff. I would say one short hand. They feel more like uncles and aunts than they do like parents are great. That's perfect. And for listeners who don't know because I didn't know until Chatham just showed us the benchmark partners. None of you have offices. Like you all sit at this crazy round table. Looks like you're going to war. And you're like trying to put the strategy up on the board. And like you guys need a hollow deck in the middle. We had a poop emoji so far. Not officially a poop emoji. But you have like there are aunts and uncles with computers over there. Like there were not five computers. There were seven, eight, nine. I mean, it's getting rid of them. Not fast enough. But they'll be gone soon or not. So yeah. You're saying that's that's I shouldn't read into that. Like they're here still. For aunts and uncles. It's fine if they visit. Yeah. But not stay too long. He can watch the kids every now and then. But as soon as there's a real problem. Funny because aunts and uncles say, here's your baby. And let's tell you that's what happens. Well, this is going to be hard work. Oh, no, no, no, no, no, no, you're the parents. I got to go home. It's great being an aunt or an uncle. You know, I have five children. And I can tell you, I should have learned that lesson. I love my children very much. My brother is in a good position. What? Okay. So picking up on that theme. One of the things that I always have appreciated about you all. I mean, don't some co-investments in past lives and just your reputation in the industry. The hard work. What are examples of the hard work? Like real examples. We're going to dish this to Chathen. Because I know you have a story here. A very recent one. But the aunts and uncles are not going to do any work. What are the ways in which you get put to work by your portfolio companies, Chathen? Well, this Chathen, in part of the reason he's discombobulated and has a cold brew in front of him. I've provided the video. I've provided the video at 5 p.m. Is he got an international flight three hours ago, four hours ago. But was with us on Monday. But was with us. And decided to go. And decided to go on Monday. And today's Wednesday. So here we are. 48 hours later. I'm not just coming. Yeah, I'm not. I'm doing great. So what are the circumstances that lead to you suddenly, suddenly? Yeah. I think this is a great story of how the firm and we as a group operate, which is, you know, there was a portfolio company that was going through an important decision. And, you know, there was, there was a decision that was made Friday morning. It felt like there was a finality to that decision. And I was like, okay, this is what we're going to do. And then, you know, people go to the weekend. Emotions rise up. They have conversations with their friends. And, you know, stuff starts to get off track. And I get a call, you know, Sunday night. That's just like, you know, things are getting off track. What do we do? And, you know, we're all on a group chat. And so I put it immediately in the group chat that says, here's what's going on. I'm looking for advice. It was late at night. And Eric called me at 11 or 11 30 p.m. And we talk for 30, 40 minutes. Where we're just walking through everything. And what was so incredible about that moment is when you're in it, it's really hard not to get wrapped up in the emotion and sort of stop thinking logically. And what was great about that conversation is Eric was able to zoom out and say, look, we're in the service of entrepreneurs. We only recommend and guide entrepreneurs. It's ultimately their company. It's their decision. And so what Eric said on the call is, what I would do is, and what I know you would do, it's a good news to be a pressure on. I know you take them would do this, right? Yeah. Which is, you know, if you were, if you weren't in the moment, you would make the phone call and say, hey, this is your decision. I'm here in 100% supportive, no matter what. And so we got off the phone. I made that phone call. But also here's what I think. Yeah. Well, no, I think because you've gone through all that. The thing part had already been done, which is there is no more thinking. It's your call. We're a sounding board. You make the call. All the facts, all the reasoning, all that had been laid out. There was no more logic and there was no more explanation required. It was, at this point, it was emotional. And, you know, after that conversation with Eric, I made a call. I made a call. Just said, it's your company. I was sending out. This was Sunday night. Then Monday morning meeting. This was like midnight, I made the call. So you're all in the circle on that day. And so we come in Monday morning. We're talking. And then at some point in the conversation, Peter said, this is not a conversation that should happen on the phone or on Zoom. It needs to happen in person. And I was like, okay, let's do it. Okay, yeah. And it's like, okay, I should get on a plane right now. And so here we go. Like time to go to San Francisco airport. And then as I was leaving Eric goes, are you going to come back for the choir? I was like, oh yeah, okay, don't worry. I'll find a way to get back. I don't know. Am I getting on a last minute flight to your app? Yeah. And you have to come back by a certain hour on Wednesday. And what transpired was, as I was getting on the plane, that meant so much and set such a positive signal that by the time I landed, everything had just like gotten in place. Like I didn't say anything. I didn't do anything just showing that level of support and commitment. Change sort of like all the dynamics, which is like, hey, this is, oh, you actually meant what you said that you're here to just support me and support us and support the team. And you're right, it is our decision. And that was it. It changed the tenor of the conversation completely. I would say it's like also, broadly a manifestation of like the orientation to investing, right? There's a lot of people who would say I'm investing. Oh, like we made this bet. Like you might hear that word a bunch of times. Oh, like, well, it's a good bad or it's a good risk adjusted bet. Oh, hopefully it'll be good. And there's a very passive. I like to own that asset. Yeah, I like to own that asset. It's a bit of a maker's speech. It's a meta-missed play. But it sort of like pervades a very passive view of almost like trying to super-forkast a set of odds and you did the diligence to super-forkast those odds. And like we'll never, we never talk in that way. It's like when we think about partnering with our founders, it's not all we want to make a good bet. It's like we want to make a commitment. And that commitment manifests like as a group to be vulnerable and honest here and collectively get that feedback. And then with the founders to be on the field denting those odds. Right? Each year, big years and even a couple times and every year, there's important moments where you can tell. You can't transform necessarily when you say we got some silver bullet. But that commitment can really change the odds. You know, each of us make one or two of these commitments a year. Not bad. Right. They're not bads. And there's a level of relationship that then happens with the founders because there's only one or two a year. And what you end up feeling is that you really just care about every company that you work with. And the founders and the teams and everything. And so when these moments happen, it's not a transactional thing of one of, you know, a lot of companies with which you work. It's, you know, a founder that you really work closely with that you know so much about and that, you know, that level of support doesn't feel like something unusual for us to do. It's something that we, we just expect of ourselves. And that's a relationship that we'll have with these teams. Can I ask, and this may be, you know, drifting into an area that's harder to talk about. And so we can abstract it a little bit away. We talked about Uber on our episode, but I want to abstract it to, you know, how you think about this generally. The role of a general partner in a venture capital firm traditionally is that you have a fiduciary responsibility to your LPs to maximize their returns. And you have a second fiduciary responsibility when you join the board of a company to the company. And it's hairy enough trying to balance the trade off that, because sometimes those things are at odds. You're representing all shareholders on the company's side. And with your LPs, you're representing, you know, their interests. And so you then introduce this third thing, which is the thing you care the most about, which is support of the founder and empowering the founder. When do those things get hard? How do you balance those things? I assume most of the time you're indexing strictly to we're partnering with this founder and we trust them. But when, when do you have to juggle those things? Yeah, I mean, it's, people go to therapy often, they only talk about the shit that's going wrong. And I think it's useful to think about what's going right. And if there's not a DSM for flourishing, there's, there's a DSM for this functions. We could open that book up and we can have all sorts of flavors of this function. And I think we could do that. And that would be illustrative and informative about how it can go wrong. I would flip it and say when it works well, what are the preconditions of where you have alignment? And then you look at degradations from that. I think one of the words that's sort of vital to any durable founder benchmark partner relationship is vulnerability. And if there's ever caution or pause that I can't share this information with my, then we've degradated the relationship and we have to fix that. And you fix trust is fixed intimately one on one. You have conversations that allow you to zoom up to say, OK, what's the collective purpose? And I think that we could talk about Uber. We could have every reason to believe Travis's purpose was the biggest, most extraordinary Uber imaginable. And, you know, we had a collective gaze on that together. And in many situations, this was one of them pathologies creep in. And you learn this through a course of firm experience, which is when you start to see that happening, you need to act immediately because the minute we get other and it's not about us and this joint purpose, but it's you and me. It's my agenda and my LPs agenda and all that. And I sadly see that with a lot of the other firms in the industry because it's not necessarily the partner in the room that's got the issue. It's their partners that have told them that they need to do this or they need to that. And I see it. I'm like, Oh, man, I adore you. But your partners, I have different feelings about. And you're here trying to rally because they've said, why aren't we meeting our plan? And so the entrepreneur immediately vulnerability snaps like that and it closes and then you have no trust. And now they come to us typically and they say, we got a problem with one of our directors. I'm like, OK. So we'll, you know, we'll have an off side bar with them and say, what's going on here? How can I help you with your partners? And as much as, you know, you look at situations where it falls apart, let me give you an inverse story, which is where it really only could work, I think, in this firm model. I was on the board of a company that racked somewhere between two to three hundred million dollars of capital. And I'm pretty accountable. Now I should be fired if this job actually had a statement and governance practices and that company is called Docker. And I was just in Miami yesterday at their all hands meeting. And I remember the last time you invested it was called that cloud, right? That cloud. So last time I did an all hands meeting with Docker was three years ago. And there are 60 employees that we'd spun out of the prior company and the valuation was zero. So we gone from over a billion, four billion, five to zero. And I was working with some of the great venture capitalists in the industry on that company. And aside from insight partners, crickets gone all left bail. And I mean, this is okay. What was different with benchmark insights another story. There's a very fun quote that we don't often talk about on the show. I don't think we ever talked about this on the show, but a very prominent firm has a one of their mantra quotes is focus on your winners. I think that's what you're talking about. Yeah. And well, at this point it was a pretty big loser. But the vulnerability that I was able to have with the team that remained to say we made mistakes were accountable to it. Shares how we work through this because you know what if you look up in the purpose of Docker, we're literally at this is cliche. It's the beginning. You know, we have 30 million developers that use this product every day. Yeah, that's the craziest thing. Unbelieveable product success that completely changed the industry, but like business model and strategic failure such that there wasn't effective value capture. There was value destruction hundreds and millions of dollars of adjunction my two partners I came in and I said I maybe drink my own bath water. I like I don't know what to do here. I was really vulnerable and I said if I've gone off the deep end, no part of that true seeking exercise would allow me to spin position blame be a victim. I was being accountable and I said like what have I done and they said not only do we believe in this company. Can we put it in the new fund to I thought well, that's crazy. It's like but you're right if you believe you have to have that founder level. Those joke you know employees can quit founders can't unfound a company. Yeah, and I think we feel that way in our commitments. We can't uncommit that founder permanence and oftentimes it outlives every executive that gets recruited. Not every but like a hyper majority of executives and so this case of flourishing and then that was a case of. Trust all these things that come to stress the LPs agenda the founders agenda become. It's not that hard you just look up and say what's the purpose of the company. Let's resolve around that and that'll sort the rest of the stuff out as the you know base of saying the long term there really is no conflict. Creating you know a delighting in a while and yeah. I'm pressing the customer and creating shareholder value. Our customer isn't it's not the founder is we say it is but it's really the purpose of the founder. It turns out that purpose that that's the customer. Yeah, one of us may be deviating from that and we can keep each other accountable and that happens internally like my partner said no the purpose of docker is just the beginning my god is they're going to get developers to program the global computer. Okay, so then you could dust off $300 million in a long time. So I want to do a big topic we really wanted to cover with you guys in this session is staying focused on early stage not having a growth fund especially when your entire peer set has become lifecycle capital providers. And I actually think this is a good entry into it so Peter the story you just told of like when things are not going right the bench break approach. I'm actually really curious when things are going right your competitive set has said when things are going right we should go long. We are going to interpret that I think in large part as a competitive response to you guys during the fast fat for error. We are going to become lifecycle capital providers we're going to put a ton of money round after round after round after round and our best wasn't in response to benchmark that was in response to there's a crap ton of fees to make on. And the founders were taking our money and we have the brand. Yes, that was a like a benchmark state so true to their thing. Okay, I think there are three classes of firms there's a class firm that fit that there's benchmark and then there's a class of firm that actually we're making a strategic decision we care about carry we're playing for carry we think we can. 100% yeah and those were valid decisions on that their class but you guys have not done that despite I assume every opportunity in the world to do so. Why can we ask miles you were the newest to join. He's going to try and change that. Well actually you have a great point to announce. Best one. We've got an even bigger. How far can we stretch this. I think there is there is certainly. All of those all of those opportunities to do that. I think Sarah says it nicely in part like our job we're really focused on how do we scale the company those companies right and how is part of that having a relationship that doesn't get sort of adulthood by this question of the us making another commitment decisions like we're we're in and we're not evaluating anymore we're not deciding what a fair price is anymore we're not trying to decide. How to maybe make a make a strategic core the company that optimizes for a moment for us to get more capital like this should be want to remove any chance of. We're not going to get out or alternative incentives or questions in that relationship right so it can be fully fully vulnerable and if we do that well and we've partnered with ideas with great purpose and and and a long endless runway to work on will scale well successful scale through that success and we don't need to scale ourselves you know in independently of those company scaling and so I think we're all doing it. It's like we'll do perfectly well but they're literally like million dollar bills on the ground for you to pick up if you were to just put more money in your own company. I totally agree with my also and I would just add one thing is like it doesn't feel like work if you love doing it. What do you love doing and I think that's the biggest thing which is if you love working with founders. Then you want to spend your time working with founders. And that means you don't want to spend your time managing a staff that's scaling you don't want to spend your time doing marketing to LPs or others like you don't want to spend your time. You don't want to spend your time meeting investments that are outside of your purview like it's just like that's like you want to spend your time with those founders and I think that's that's the what do you love doing and I think that's the biggest thing. I don't think there's any question that over the last few years the growth investors have done extraordinarily well. And there was millions of dollars to be picked up doing that. But I think the question of like what do you love doing really resonates and one thing that's super nice is you know the cycles turn and strategy persists through cycles. And so I also don't worry about a hundred million dollar holes. And we were joking before we started like I would have met him here eating dinner you guys must be licking your chops right now like this is your time to shine here in late 2022. So well yeah. With the caveat that I think we sort of because we're early stage what does that mean it's moved it's in terms of its definition. We have faith that every year some number of above zero companies will be founded that are going to be worth more than 10 billion dollars and then about every two or three years a company is going to be found out this can be worth more than a hundred billion. And it seems to be independent of the cycle. So yeah, I think it'll crazier when things are and they get a little pressed but the growth fun thing I'll come back to answer a little differently, which is that I would like this group. I guess I'm part of this group to set a high water mark for a multiple on a fund. And I think it's kind of fun to think about okay, it's great. You can scale capital but you know if we had a 20x fund we get a fixed 50x fund. I'm not sure we can do that. If we start all we're doing we're investing more money on the stages we're lowering our returns. That's all we're doing because our commitment is fixed. It's not like we're going to be more committed. So you could say you're getting more cash from cash for yeah, but we're lowering our returns. And the hack of the venture business which is coupling capital from other people in ourselves with the partnership that it comes with. I think it's a little more inflamed when you're stuffing large sums of money into a company as it gets you know as opposed to keeping a pure and I will say like what would make me proud as if this team. Maybe after I'm gone you know sets a new high water mark they won't do that with a growth fund and the rest of it you know it's like should we care that's cash. Yeah, but I also want to know with our limited partners say there's nothing like a benchmark fund and when it works it sets the pace in the industry. And so you know it's sort of like there's that there's the which the quote Sarah and I used to the team the other day the Johnny I've quote. Yeah, I have like you know what's focus is like focus is when in some ways every bone in your body thinks an idea is a really good idea but you don't do it. Yeah, and saying no and and it's a fine idea we would I think I think it's not to say we don't have opinions on later stage. You know you had a idea of the opportunity fund staple to benchmark with the same team you would for sure it would be one of the best growth funds in the industry and we like to think so but that's not if we're going to do it but I think to be able to have that focus that you know conversation on Monday and our time together on Monday is an hour of roving curiosity of like fertile ideas the right at the edges that seem weird and because you got to be weird. Instead of instead of instead of okay what's the growth pipeline and you know is that a good valuations now a good moment to sort of get in and and I think it's the the focus is. And we have to have a CRM we did a girl. Sorry like that it's you know for us it is and like the world here because we want to partner with founders as early as possible in that kind of relationship on the board. And anything you know to this Johnny I you know just the focus like anything that distracts from that and we we've five people like this is it and like the capacity to do more things. We can't give up principal program but we'll come back to it. And the capacity to take on more things would take away from our you know getting in the room with that founder who is going to build that next iconic company and supporting the ones that we have and so we just we're forced in a way by the constraint of how many people you know the seal team of six people never being more than that. And we're going to be really useful to focus and that's that's what that's what we're here for that's super real I mean the that just to validate it like there's lots of opportunities that you can always pursue. And that seemed like good ideas and like we have this struggle acquired were two people all like and and and there's a thing that we know is uniquely differentiating which is these like ridiculous deep dive podcasts that are just us and sometimes we have guests like wonderful to be here. But we know that the most different changing thing that we do is this like you can do and every time we start taking on more stuff I'm like oh man the golden goose is getting worse I can feel the golden goose getting worse because we're doing other stuff you're really good about keeping us both honest on that too that's funny use that phrase I it in 2008. I was there's a first time somebody said to me you should consider a venture capital I didn't join benchmarking the 2014 so 2008 and a very famous nameless venture capitalist said our early stage program is our golden goose. That's everything that we do. Next was nice black. of it as an LP. And the benchmark fund, of course, again, the purpose is not, we don't come show up and say, let's drive returns. It would be alienating it to everything we stand for to think about that way. It's the outcome, right? Not the input. But I think the cash and cash multiple, both as an LP. And it's a real problem for a LP. So I will say, because we have large LP's who look at us and like, why do we waste our time with benchmark? We're 20. And I say, oh, can you save the number of year your largest LP, like what their dollar per fund, they're like 25, 30 million. I could get it wrong. I probably piss on them off. I've listened to this. But just in the context of a, and you can downstand for like that's tiny. That's barely worth their time, right? It, um, works. Or some of our retired partners are large itself. Indeed. And, uh, paying for fees. There are some discussions among some people in the firm that that over time is the way the model sort of endures is that the LP's become the former GPs. It's anyway, it's not, um, it's hard, it's hard to say that the LP construction has much to do with anything of our day to day performance. I do think this idea, though, of the principle of the firm being, um, standards of, of asymmetry in our exposure to the volatile material of the startup asymmetry is a 20x, 50x, 100x fund. And if we degrade that, it sort of misses the point, you know, and I want this to be, and I'm already were many of us at this place where we pay crazy, as a GP, I pay carried interest and management fee to my fellow GPs as an LP. And that's, well, that's crazy. And this, this, this, this is, you don't get like a GP allocation that doesn't, I get a tiny, my view, tiny, now we expose the 10s. But for this, for the super majority of my investment in benchmark, I'm paying limited partner rates and management. I would say that's where it's not tax efficient. But, but just it's the point, we have aunts and uncles, we don't have, uh, overlords that are there getting their, to the point of equality, right? Like, it equal partnership. Like that, that is, you know, taking it to, taking it to every extreme, yeah, along the way. So the partner to feel like they're working for Peter in this case. Am I understanding this right that the longer tenure you have as a benchmark GP, the worse your economic deal gets? It's, it's the same. Well, that's a horrible way to carry on. As your LP commitment goes up and you're paying fees and carry on, you know what? I think the argument, which I think is, is 100% right? Is it, isn't the worst economic? It's not a worst economic arrangement because the returns will be higher. So you'd be happy to pay the fees. This is the way it's thesis of every successive generation of technology should be bigger outcomes because you're addressing bigger market. Make it more simple. You can't get allocation to the benchmark funds. And so getting any allocate is going to be better. It's a new alternative. You're happy to pay the fees. I see. I see. You're happy to pay the fees and carry because it works and it's still the best. I see. Your marginal economic deal goes down, but your aggregate economic deal goes down. Your cash on cash even more because you're cash on cash. It's a different about this than we do. Well, we did spend a lot of time. We all learned from the past. Wow. Okay, one more thing I want to say because I think, I kind of think only we can say this, you can't really say this on the strategy before we move on. I think one of the most persuasive things that we heard in our research for part one about maintaining the model is we definitely talked to entrepreneurs in the current benchmark portfolio who believe that aggregate in the long run, they took less dilution by having benchmark invest and you guys not having your growth fund and having to put more money into them. Then they would have had you or whatever early stage firm they had taken money from been wanting to put more money in subsequent rounds because just to connect the dots, if that had been the case, then you would be have a conflict as that investor when things are going well to put more money in at a better advantage valuation for yourself and you don't have that conflict. Versus and what you actually have is quite the opposite. It's not even because this happens all the time where someone is an investor and they're like, oh, this company is doing well, I'm going to pre-empt their round and I'm going to get a slightly lower basis than if they went to market. That's firm A. Firm B is a not benchmark firm who also doesn't have a growth fund. They go out and they raise at market rates. Then there is a benchmark brand. Option C is take benchmarks money. I think and you guys probably are sure of this, your companies tend to go raise better series bs at higher valuations with more certainty than your average series A funded startup. Is that the dot? Is that the picture that you're sort of? Yeah, I'm just speaking purely in the realm of when things are going right, a company is super hot. The fact that there's not a conflict in a future round allows the entrepreneur to optimize valuation for future rounds better than if you were to try and put more money in. I told you this. This is a question we're just selling for benchmark. That's. I didn't think they would say it, but I think it's important that we literally never ever multiply. I believe that the founders own more of their companies at exit at S1 time, whatever it is in this case for those reasons. One other really important reason, which is a founder is going to raise a series B or series C or series D or IPO one time in their career, maybe two times in their career. If we're doing our jobs and the people around this table have all done this multiple times and you will help them raise better rounds from better investors, have a better process and get to a better outcome. You'd have to talk to the entrepreneurs that I've invested in, but I suspect if you were to talk to them, the value that I can provide to them since I stopped being a professional venture capitalist as part of a firm exponentially higher than when I was within a firm. Totally. Because there's no conflict. Because there's no conflict. You can do that. You can help them through that part of it. That outcome results in the subsequent rounds or D rest sure. I think there are a bunch of brands, firms that can say that same thing. There's no conflict. I think there's very few firms that can say that part. The multiplicative effect of those two plus the help I think should yield better outcomes. Strategy is just all about making trade-offs and aligning all of your trade-offs so that they're a force multiplier rather than in conflict with each other. If I had to summarize why benchmark works, it seems like all of the trade-offs are actually just thought through very clearly and tried to align them also. They sort of amplify each other rather than conflicting with each other. There is one big trade-off with our model, though. I think about all the time just because I'm a paranoid person, which is at the end of the day, our job starts. The thing that we have to be paranoid about every day is how do we make sure we have that first meeting with the founder that's going to build that next iconic company? So much of what we do is about maximizing that probability that we do get to meet that founder and then end up partnering with them. A lot of firms, all the other firms outside of us, have built machines around that. You have legions of people at these firms. I grew up doing this. I was an analyst at Bessamer. Right. Cold-con startups. Yeah. And so you have all these firms who have built these big teams to do that. They nurture relationships with seed funds, invest in the seed funds, relationships with angel investors, incubators. They have this machinery that's smart because it's all about making sure that every round that happens, they're going to be in the mix. There's five of us. There's always the risk that one of those founders who kind of mistake basically are lack of outreach for a lack of interest, when it's really just a constraint. And we do everything we can. Of course, we're just resting on our laurels and waiting for calls. We're doing everything we can to make sure that we are in the mix, but at the same time, we are limited. Even if you were 24-7, you still have a lot less than hours. More limited. And so that is the big constraint that I know keeps, I think, all of us up. It's just making sure how do we, the founder that is going to raise that round, many are intentional about how do I make sure that I'm going to find the right partner for me for the arc of this journey that we're all going to be on together. But we're still not there. You guys at this point have such a, for better or worse, mystique. I think for a lot of especially first-time founders that are younger, that are earlier stage, they're probably like, oh, I'm not going to call, I've got these other firms calling me, that's great, I'm going to go with, but like, am I going to call Benchmark? That seems like, wow, that's a lot of pressure. And that's potentially lethal risk for us. If you think about that being the incumbent and come back to the fact that a number of the people at this table have a lot of capacity and the sense that they could dive in, they can give their all, and they're very, very available. And so one of the things you think about is the shift in the last 15 years since I've been here, investments that are occurring before we get engaged have gone up by about an 100x, at least 30x. And so, I mean, seed was not an asset class. I didn't know I was a seed investor. I guess I was a seed investor. But that's the third of what I've done is like, formation of a company investments, right? And so when, so weird when people say to us, I didn't think you're at this early stage because then some of people say, you're like, no, like was incubating. We thought we were too late for you. And so I think our challenge, and I think you say it well, is that I would love to know, which is why if someone sends us something and anybody who listens to your podcast, but I start with the premise, and fatacues lets me, because I have always will create time as much as it may impact week. When I don't have enough time to take that next marginal meeting, I shouldn't be practicing. And what I would love to know is that people send it to us, say, this is the biggest favor I can do to this entrepreneur is to open this door because the gold plated, whatever in terms you want to use high quality experience, they're going to get it's going to stretch their thinking. And there's so many times and someone comes back, even when we don't say yes and say, I'm so glad we've met. I've heard something that really helped shape the course of the company. So the point of this is that our competitors, if we call them that, there are peers most of the time, have tried to build vertical systems, which is to say integrate into the variance section of the company all the way through to the last strip of capital going in as they go off of the whatever from seed to IPO and beyond. And sounds familiar to me. And one of the strategic vulnerabilities we have is that people tell stories that were this way or that way. No, we're just like everybody else, but we're highly available to meet and we're quite responsive. And the last two or three investments I've made were an example of the following, which is that there's an angel in the ecosystem who saw a deal going down and they said, you know, you probably should talk to benchmarks. And when they did, we committed in the last two instances and less than a day. Oh, if you knew it was only a day, we would have talked about it. Well, and you would have taken a week if you had one. Right. But this is illustrative because the system we built is to do just that. And so our biggest risk is that people tell stories. And I think sometimes the stories are propagating their agendas. We're widely available and open. We're in most times an emphatic yes for somebody who introduced something to us. And what we'd love to know is the person makes the introduction and we honor this, says, wow, I just did a huge favor for the founder. Now we have to earn that every single time we meet the founder. Every meeting. And we don't always get it right. We screwed up in the past. We've been less influxed present. Okay, we take that seriously. But that's the, that's the vulnerability of the model, which is that capital always carries its agenda. Oh, let me tell you about the way. Or this were that and it's like, and it's always threatening and attacking other layers. And like, we're hoping that we play a different game, which is like, you know, serving the founders purpose and like show up and be decisive less than a day. That's pretty common. All right, listeners, for our second sponsor of this episode and all of season 11, we have one of our very favorite companies here in the acquired family pilot dot com. Pilot sets up and operates the entire financial stack for startups and growing companies including finance, accounting, tax and even higher level CFO services like investor reporting, all of which all of you founders out there would otherwise be hiring an old school accounting firm or building out your own finance team with half a million dollars of additional burn that you don't really need to have or the very, very worst option that we know most founders take because they think they're going to be frugal and save the company money is learn quick books and do it yourself. For God's sakes, please don't do that. Stop. Go to pilot dot com slash acquired. Stop do yourself and your company and your investors a favor for the vast, fast, fast majority of companies out there doing it any other way just simply does not make sense. Pilot is so good at all of this stuff. We were just at their office in San Francisco actually right before we went to benchmark and met with wasime and got to get a little tour of everything going on at pilot HQ right now and they're just executing really well. It's a great company. And what's super cool is like they're not just an accounting firm. They're also a technology company, which is a huge differentiator today for modern companies because you probably run on some fairly complex fintech stack from stripe to friends of the show modern treasury, gusto, brex, Shopify, square, etc. Chances are you use one or more of these fintech platforms within your company and that impacts your finance and accounting pilot integrates directly with all of them through software through APIs. Go to pilot dot com slash acquired and thanks to wasime, Jessica and Jeff all acquired listeners. If you use that link, you will get 20% off your first six months of service killer deal killer deal. Thank you pilot. Thanks pilot. What do you do besides the five of your 24 seven being on? And what things do you do to keep your radar operating to try and address? How do you solve them problem? Yeah. We all have different ways. I mean, it's, you know, there is no single way for us, I would say. I mean, I like, I always talk about having an air game and a ground game, you know, and for me, like I, you know, it helps me learn to write. And then, you know, you write about things like areas that you're interested in and that are sort of retropeare, but just for somebody not about a endeavor. But also about going back theater to, as something you just already told me, youn't have to sit down on like a lock anyway. Like, naturally, that are like one of us band owners. Negative and then underneath a barrel of shit so, you know, I mean, he tells us and he's never answered you this, that's really thing that I got. And you know, Well, whatever reason I'm trying to get along with with him, it's like there's a situation is that whether I have a daily schedule, you know, that stuff that you never know where these things are going to come from. There's so many different domains where the next consumer company might come. I think like the B2B stuff, the developer-oriented companies are closer to the ground. Yeah, I think we all have our own strategies. And I would say the one thing that's always interesting is to compare sort of our different strategies of sourcing and how we source investments. I was sharing this note internally, which was that I found that 100% of the investments that I've made as a benchmark partner were all sent to us by an entrepreneur. And not necessarily an entrepreneur that we hit back. It was oftentimes an entrepreneur who had met with us once or twice or we engaged in their process and we didn't get to the finish line with them. But they enjoyed the process so much. What we went back to what Peter said is they went to the next entrepreneur and said, you should go to the process. Like just talk to them. That's the most meaningful introduction we can get. Yeah, and that carries so much weight. You have them to one of these dinners. Yeah, I know, I know. But I think it's in pop because there isn't really a process. Like if there's diligence, people oftentimes found us will ask, what's your process? It's the funniest question. I don't know. We're just going to explore this together and talk to each other. That's the key. And I think to what Sarah said. So what are you saying? It's like that Elon Musk's tweet. Yes, exactly like that. Let's just text back and forth a bit. What did you do today? But to frame it more precisely. So for founders who are like, I don't know what does that mean. You do as much diligence as you need to do to get conviction. Yeah, and I would say, I think of it. The experience hopefully is great for the founders. In pop because we're not trying to sell internally. We're trying to truth seek. And the coming in meeting with all of us or meeting some more groups of us is not us trying to get some information again to super-fork astronauts. It's to, we're putting ourselves in the shoes because we make commitments to start working on this and work together to say, OK, how will we think about navigating that? Where could sort of full starts or local maximas be? And how could we realize the full purpose? And that comes with dynamic sharing of stories and history and learning from the past. And I think you find hopefully that's sort of leads to a lot of the introductions and come out of that as in pop because it was sort of this reverberation of discussion around the potential that they had and how to navigate that correctly. And they got an interesting view on their own business together. And that's... I think the best founders ask questions on these things. And so one of the things that I've noticed is the great founders will often use their fundraising process to get connections and introductions. And sometimes it's customer introductions, sometimes it's about sometimes it's just like Lumnet. Like, connections to people who've been there before you. We just went through this process on a recent investment and we introduced the founder to other CEOs who were further along and she extracted knowledge, basically from them and not in a reference context, but in a literally like how do you build the company? How did you make this decision? How did you know when you had a product market fit? How did you raise the next round? And pulled and build connections that way. And I think that's a sign of... That's what it's like whenever you meet with someone who's worked in Amazon for a long time. It's like scary. You sit there and they're silent and they may just extract all this information from you. But you know, you said like our process is, as long as it is for us to get a conviction. But actually, I think it's really important that it's a process of getting conviction on each other. And that should be the greatest part of it is like, this is, you know, I like one of the things that makes me sad about kind of some of the conversation in the industry is this like, the idea that a board member is just somebody who shows up. It's kind of like, it feels like that's what everybody's been reduced to. And we hold a higher bar for ourselves. Like we try to have that level of commitment that ends up manifesting in all different ways for the company, whether it's helping close like an IC engineer or whatever, or having those like late night conversations or whatever it is, like that is in the best form can be a really meaningful relationship for the founder and from the company from the very beginning. And a founder should realize that that is like, you know, of course, you get into the anxiety and the stress of am I going to get funded? What are the terms going to be? All those things I want to get back to building my business, all that. But at the end of the day, it is this relationship that you're beginning. And it's really important for the founder to recognize also that they are getting conviction through the process on what it's going to be like to partner with that person. As is a trope in the industry, right? Which is, you want to be the founder's first call. And it's like, I've never really liked it in so far as it's like very reactionary. It's like, oh, they'll call me. I'll pick up the phone and respond. And I think it's a low bar. I think it's a low bar. I think that hopefully founders would say of us, like, we're the best caller. They've been proactive and had the space and thoughtfulness and contacts and trust to be able to do that. I remember when Peter and I worked on the air table, not pretty close to the initial investment right after it had happened. Peter, you could imagine, it was a decently high price in some ways, like a high multiple. Okay, let's press sales, what a, and Peter came in and was proactively sort of shattering the frame and saying, let's give away more for free. Like why constrain this and squeeze juice from what we have? Let's unfurl this even further. It's a database at the end of the day. Why would you constrain people putting stuff in a database? There's so much that happens on top of that. As you're evaluating mutual fit on an investment between the entrepreneur and benchmark, in e-boys there's some famous line about venture capital is more a balls business than a brains business. And like, let's stop using that phrase immediately. But it's still a view of that phrase. It's the most e-boys they've ever. It seems to me, benchmark has shifted to become much more analytical over time. Do you think about that? Do you think about what the right balance of gut feel and courage versus? Having done analytical things, I would disagree with that completely. I would say that we're not particularly analytical. And so it still occurs more than a brains business. No, I think it's very gut driven. And I would characterize it as like, it's a set of discussions that you have that resonate or don't resonate. And it's like, I really want to commit to this and this puzzle for the next 10 years. And let's go do it. And there's going to be a lot of fulfillment here. And if everything works and we serve that great purpose that we're all aiming for, then the financial returns are going to be excellent. But there's no sort of like outcome scenario analysis here that says, here's the 10% upside, bull case, bear case. These are all things that, those of us that came from other places had all done. And one of the interesting things is watching the firm externally and seeing how this works inside of boardroom, like Miles just talked about an example. I was on a board with Peter for a long time before I joined here. And one of the elastic. Yeah, that's right. And one of the things that, because I was on a number of boards, and I would see all sorts of board members. And one of the things that stood out to me that I aspired to and I modeled a lot of my behavior after was every board meeting, the amount of preparation that Peter would do ahead of the meeting. I mean, he was by far the best prepared board member I had ever worked with, ever. And the number of discussions he would have, the number of calls he would make, and just how present he was in the board meeting itself, was just so far in about any other board member that I had worked with, I was like, I need to model my behavior to that, because that is the model board member. And I don't think that work, that dedication, that commitment comes from any sort of analytical work you do on the macro. Because if you do, then you start getting tied to your own biases, and you never let the company, the founder, the team breathe, because there may be a thesis, but you rapidly pivot to something else because it's working or you're getting different signal. And so I think that there's so much of this that is just instinct, gut feeling, emotion, commitment, et cetera, et cetera, but it's not analytical. I think most of the investments we make, differs consumer and their products, marketplace, all of them are different in different ways. There's just very little data to analyze, period. But when you're looking at something that's like a consumer social app that seems to be catching fire, there are things you can know, like viral coefficient, or like, we go really close. A lot of the things can lead you the wrong way. Yeah, the truth is in this market, oftentimes you're making a commitment before, there's enough enduring data to really know what it is, but the way I... Which is different than 10 years ago. Which is very... 10 years ago, Ben Spine was making commitments when there was like Uber, like Instagram, like it was early, but there was data proving it. I think of it more as like, I always think, in a way to make green investments, you have to be okay looking crazy, maybe even stupid in the short term on the outside. Like, and then, but it comes from a place of deep conviction when you're in front of the entrepreneur, and they have, they see something that other people don't see, you feel it too, and nobody else who hasn't had that conversation sees it. And so from the outside, and you see all the time, like it could be, people always critique other people's investments, like, oh, I can't believe that person did this. I can't... I looked at that deal and that's... Yeah, exactly, but I remember when we... Merging professional. We invested in channels, this... Which is interesting, right? Yes, yes. With all ICOs, we're going crazy. Everybody was thinking about tokens, and two people I remember calling the after-way analysis, like, you invested in a, like, a SaaS company, like, shouldn't you be putting the money in tokens or like, Bitcoin or the moon? Like, yeah. And, you know, not really, but also not right. Like, it looked like, you know, a stupid investment in the beginning, and before it can have the room. And so, I think part of the relationship that we then have with each other is, that comfort that something, you know, seeing something that can be contrarian or misunderstood from the outside, and you have to nurture that. Okay. When benchmark, no pun intended, I guess, or when measure of quality for the firm will be, how good our failures are. WebVAN was a really good failure. WebVAN was awesome. That's the perfect venture. WebVAN was awesome. And I, you know... You should make that bet a thousand times better. The shame that most venture capital has felt towards, maybe contempt towards the venture firm, because it's the first time I've ever been here. And it's laughable, it's stupid. And if we start to look like we're, um, we should probably get worried about the long-term degradation of, eventually we go away, so it all doesn't matter. But... I would love for us to be conversational. I think we pulled it off in the last funder too. Like, we haven't... Is that a good funder? A real stinker, is that... I think... Honor? The fact that we are still just as gullible, just as naive and fallible as the part of generations. Um, not yet more so, but we're working at it. Yeah. I think some of those are really like, that's a good... WebVAN is a good venture investment. Yeah. Great. And I think there are... There are a set of them I think of in my head in recent funds where like... It was definitely a good venture investment. It was a good use of venture capital dollars. It was a worthwhile endeavor. An entrepreneur pursuing that... should get funded. And they should get funded by the best. And they should have... We should do everything we can to give them the best odds of success. And have another partner be on the board. LAUGHTER I never followed that before. And I think that if you just look at, you know... The last... Yeah, I joined right before our ninth fund. And so I've been here through Fund Nine, and we're now deploying Fund Ten. There's a lot in there that wasn't... I mean, most of it is not analytical. And I would say like, if you just look into it, you know, there are going to be some bad investments that come out of it. But doesn't mean that had we gone through the process and we look back at how we made those decisions. It's exactly what Eric was talking about. That was worth the shot. It was like, that was worth the effort. Well, and the pivots validate why you can't be super analytical. It's like, did you think that the game was going to end? You guys are the best pivots. Like multi-billionaire. Discord, next door. Talkers, business. It's like, Uber. I mean, like learning from lifts, discovery of the UberX model. Like, that's the business. Okay, so... You have some stalling theories and you get in the mud. Yeah, and it was always funny reading my old investment memos. And I've only been doing this for five years. But like, the amount of wrong... I don't think I could have predicted how wrong I was about what the businesses would ultimately go on to do when you're doing this ridiculously early stage stuff. 100%. That's why we don't write memos. Yeah. There's no artifacts. We don't do portfolio reviews. At least they... They try to do portfolio reviews. And I don't show up. I do remember when I attempted a portfolio of you a while back. And there was like the apex of failure at benchmark. And I think I have one of those in my portfolio now. You guys can guess. And Kevin Harvey said, this one has the dual benefit of being a bad idea, poorly-expected. It turns out that a bad idea well executed is a problem because then you give it more money. But... Or a good idea, poorly executed, well that hurts because you think, oh, I mean, we can think of companies like Forenster and think, oh... But the bad idea, poorly-expected. I'm so curious. I've had best investments in venture. Like that clearly that was wrong. It's the middle ones that are... I love Warming Donald's joke. He was like trying to explain the fact. You get in front of you doing a stand-up that Plus has already died, of course, is... And nobody laughs. And he says, then I start laughing to myself. There I am. These people have paid money. It's a whole thing. And I just did this thing just to make them laugh. And nobody laughs. And then we have a few of those. If we're not doing that. That was the early days of the quay. Yeah. I like doing that. But I feel nervous. I know. Can I ask, I had a really dumb question prepared that we sent over. And I want to try and ask a smarter question. The dumb question was, well, to maximize your chances of getting that, you know, great decade-making company in the portfolio, double the partnership. Keep the same number of board seats, raise twice as much money, double the partnership. That way, everyone's managing the same amount of capital that they are now on an average basis. But I would ask the opposite question. If the thing that makes this all work is the fact that all of you can be ridiculously focused and say no to most distractions on your time, could you raise less money and have a more concentrated portfolio? I've thought about this. And I think it's an interesting provocation. There's the extreme, of course, which is to raise no money. And just go on the boards and say, we're tired of the hack. It's a hack to take. I'm going to, I mean, tell this is a funny story because you say, okay, well, it's nice to meet you. It's a imagine dating. And then you have a relationship. And it's like, by the way, a bunch of people that you don't, you and I, I don't really know them very well, you definitely don't know them. They're going to be moving in. And they're going to take up about 20% of your capital and they're pensioned funds. They're very decent people and they're noble causes. We do work for noble causes. Why are they on my capital? It's like, because you've got to work with me. But I didn't choose them. Well, you kind of did because I bring them along. We're right. And I, they're unpacking their stuff right now in your basement. And they're going to have more equity in this company than your VP of sales. Or your VP engineering? Well, that's the same right. And so you play with this idea. And as an LPM benchmark, I don't like, you know, there's a limit to the real thing. This idea. GP, I think. As a GP, I think this is interesting constructives that what's the residual value that is separable from the capital? Breast use to joke. We can pay a higher price because we have more value. So isn't there a benchmark? I think that's a lower price because we can afford to pay a higher price and get better terms if we have more value. It's a joke. But the point is the same, which is that we've confused these two things. Capital, which seems to have been free. Now it's not free. OK. So now that maybe you are fused again in capital and partnership. And I think that you've done some deals where you put no capital in. There have been examples. And we're, we don't, there's some awkwardness to talking about it publicly. One of the ones is probably a good example is Tinder. Yeah. And you know, Barry Diller said, what do you want? And it's like, well, we want equity in Tinder. He was like, shut up. What do you want? We want equity in Tinder. And like I said, I don't need cash. It's like, so it's not. So it's not. I'm just imagining me in the fly on the wall of benchmark negotiating with Barry Diller. That must have just like, I would pay a lot of money to watch that. It's, it's, it's more bizarre than your imagination can allow. So go there and then go pass that. And you'll get questions. So this, this question of like, can we decouple is something that I kind of look at as like the residual value of the firm? Is are we, are we generating multiple equity points for our contribution? And I think that's what I would love to know is our best reference, which is a founders able to say, I look at my cap table, and I look at where the equity went. And this is what burns me, which is there's a lot of people in that cap table to say, they bought a ticket. You know, they were in the, they got a ticket. Versus they made a huge impact on our total success. And, and that's equity that was the best return of my allocation of that equity. And every time you're taking on, on, on dilution, you're asking that question of like, what's the return on that, on that allocation? I think a lot of times the return is like, it's 100% towards the person who got on the cap table, not the other way around. And, and that's how I think. And it may be there'll be a model where we're not going to be CIA where we take 10% know that, but you know, the capital light, you couldn't raise less. Why not? I bet if you raised 400 million in your next fund and you have five fewer companies, your scoreboard number, that multiple could go up. I'm the person that the last discussion of the like, we were going to do it the same size fund. I'm like, why don't we cut it in half and people that will then people, others will say we're becoming irrelevant. I'm like, oh, no, but it's so different than they say now. Yeah. Anyway, we might one day, yeah, it's four 25 go down and it's 200. Yeah. Okay, so 40. Yeah. Was it 40 per partner per year? Oh, the old Benzberg website. That's such a good line. Other firms are overfunded with over 20 million per partner of capital. The Liebanks machine is such a gift to humanity. Yeah. The, okay, so last big topic. I think a lot of folks, we asked a lot of folks in the ecosystem. What do they want us to ask you? Where the vehicle for that universally, everybody responded. They want to know what is the process, what's involved? How do you think about who's taking the next seats at this table? So how does that work here? I think it's like 250 hours of board meetings together. All right. It's a 10 year long process. You have to serve on the board on one of us. We have to watch you grow. And then we say, you know, that person, what do you think? You think Mitch was an exception, Bill? Mitch had, you know, 200 hours of board meetings together, maybe? You know? Eric, you didn't have any, you're the only one who didn't have any. I was just joking. No, no, no, I know. But literally, that seems to be the model of like, serve on a board with the Benzberg partner. And that's how you get to know people and build really deep relationships. You need to go through shit together. Like, I mean, the shit can be, the company is going really well and we have to react to a super dynamic environment. But like, getting coffee every once in a while is not a great way to get to know should I take someone on as my spouse effectively? I think that's right. And I actually think it's, it's actually, I was just thinking about it because it's been different for everybody, I think. You know, I think the story with Peter is like, he was repeatedly showing up competing for investments that Benzberg, before he was here, was working on it. You were walking out the door as they were walking. Yeah. And so like, that's a, that's telling. You know, the story with Miles is Miles was there before. Like, he invested in, eventually before us and super great before us and was, was early on air table at the same time. And so like, that's a really important like signal. Like, okay, you know, Chatham had worked with Peter on the board. Sarah, I just glowed by that. Yeah. Yeah, actually, Sarah, Sarah and I, I think, had no like, no professional in that context. Who made the first phone call this year? I've lost track. Peter, what's that? I'm like, I don't think he's lost track. I don't think Peter loses track. No, that's not. I think the way in is something that's common what we've heard for the people we've recruited. And maybe Eric's an example of this. But it's that they don't want to join a venture firm. Like, the only firm they could imagine being at would be Benchmark. It's the last job you're going to take. So there's this underlying love of the craft. And it sounds, yeah, a little romantic, but it's intended that way. I left Stanford Business School in Barras that I went there, maybe at some level. And I dreamed about getting a job at Benchmark. And Bruce canceled his meeting with me. And then I waited and then, you know, another time he was late, he sent me a handwritten note saying, oh, I have bigger things to deal with basically is what the note said. And then, and then like, you know, I think you gave me like a t-shirt. Seven years passed. And I think I sent like, typically I sent them a note say, hey, I'm working at Excel just to see if I could catch his interest. And he said, good luck. Did that motivate you? Like, were you thinking of back your mind? I don't know. No, Peter Fett. I feel like I do. For now, up on your wall. He, we, we, we, we're all men. And then, and then, and then, and then Kevin and I went on a board together and a company that was not particularly successful. And I was wondering why he's Kevin doing this investment. And you know, it was, I'd say about benchmark. And then, he later confessed that he felt the same way. But, you know, and then, and then you get, you get to work with the firm. And there's something that I would say underneath it, which is that, the, the totality of like, I would do the job, even if I didn't get paid, that sense of all in, this is a craft. And I so am oriented towards that. When I first met Matt in 2005, when he, around the time he presented Facebook to us at, at Excel, you knew immediately that he was going to be in the entrances. The wasn't like, well, one day maybe no, Matt was going to be a great venture capitalist. Because the single most important thing we have to do in our job is to partner with, earn the trust and respect, earn the ability to be a partner and a God. In his case, to both Reid Hoffman and to Mark Zuckerberg. So you think, okay, he's overqualified at some level because he's, these are giants of our industry. And if you're doing that, if you're really close to one of the great, and you were doing with Bennett Pinterest, and I course knew about Sarah because we both tried to invest in GitHub. And that's a funny story for another, maybe before drinks later. Yeah, so I think if I remember right, another firm did that at a very high valuation. And that's a moment that seemed, that that seemed crazy and was actually good idea. It was like a hundred on 750, I think was the post. A hundred, a hundred million on 750 post. But like at the time for a series, like that was the first institute for capital. There might have been secondary selling. One of the things I found is that when the secondary selling, it does tend to clarify. People's interest in price. One thing you're just selling is, you know, equity on the CAD table. But when you're selling your own shares, you start to get really focused on them. But you know, we're not running an auction, but it is the highest price. You see all the sudden, you know, that seems to be the right answer. Anyway, so the point is that, you know, we orient towards extraordinary. So to get close to benchmark, get close to extraordinary. Who are the best entrepreneurs? You know, build that rapport in relationships. And the single best thing that we can see is that you've earned that trust and respect and to be a confidant, to be a partner to the great ones. You know, or serve on a board with us with one of those entrepreneurs. I guess there's some self-serving interest we could say, send us your best investments. That will help. But our responsibility is to be, you know, the best introduction that you make if you're looking at a great company and for you. If we don't, if we fall short of that, we deserve to be told and punched in the stomach. Maybe I can ask a related question, which gets to Eric's, this is what we love to do and wake up and focus on every single day. And that's, if each of you have a sort of bias on things you're obsessed with, like, Chathen, you wake up in the morning and you look at net retention rates. Like, it's just your, I don't know, what I'm trying to call it was I'm boring and our price software thing. But like, what the hell did you say? Yeah, no. Like, Chathen just like eats leaps and breathes sales kickoffs. Yeah. This is getting better for me. You're just taking it away. Yeah. Chathen is so far underground right now that you know. Well, he showed up. I'm really grateful for it. He did. He came all the way here for this. Are you looking for, there are, there are probably a dozen people on a short list that you're like, gosh, we would kill the work with that person. And ultimately, a factor in that probably needs to be, there's a thing that they're obsessed with that we need on our team at this moment in the technology industry. Is that part of the calculus? Like, do you look for where do we need additional strength? Loosely. I mean, I, I think about it and it happened. It didn't, it didn't, it wasn't intentional. At least for the part, when I joined benchmark in 2014 at the end of the fab four era or at the, whatever, as, as you called it, you know, the partnership, the four were predominantly consumer investors. Like Peter was working on Twitter at the time, obviously, Bill with Uber, you know, Mitch with Snapchat and, and Discord and Matt having just come off Instagram among others. And, and like, which that's just, all that just that you just listed is ridiculous. And, and so you join that group and in a way, it was just like the perfect time as someone who had some enterprise exposure. You know, you're a conflict. And, and then the, you know, lucky enough, the first investment that walked in the door was confluent and for me. And, and so. But now if you look at the group, it's almost like, it's almost turned, right? In the sense that there's a lot, lot more enterprise heaviness. That wasn't intentional, I don't think. I don't, like it didn't come up, but it happened over time, naturally. And I think this is just a big element of benchmark overall, which is the entrepreneur's lead the way and the markets lead the way. And, and we're, we're following that in, in some sense. And hopefully seeing it in conjunction with the market evolving. But it's less intentional. So when, when Chathen joins and, and does modern treasury as an example, like, or Sarah joins and does chain analysis, like you're, that wasn't intentional. Like, oh, there's like this big crypto thing and Sarah's an expert in crypto. I don't think she knew anything about crypto at the time, or maybe she knew a little bit. I don't know. But that wasn't a, that wasn't part of it. And so I think the, the, the firm evolves. And if you go back even further, obviously, the firm had semiconductor expertise. Like, we have no semiconductor expertise anymore. Like it's you do. Oh, no, no, no, I have a semiconductor investment. Yeah. Different thing. Then having a expertise in it. And so I think that, I think it's just the, the market takes us and entrepreneurs take us. There's, we make a mistake repeatedly, probably once a week in the portfolio of confusing phenotype and genotype. Meaning we hire people because of the phenotype that it's been, you know, expressed because they have experience in areas x, y, or z. And the underlying genotype doesn't actually get our attention. So you tend to lower your, your solitivity when someone has some background of relevance. The issue that you're seeing at benchmark today is sort of a question of where is the equity value been created? Where, where the 10 to $100 billion outcomes of the last seven to 10 years. Well, consumer has been a little more femoral in that regard or a little harder to capture because of the income and see effects. So what's going on in the phenotype of the firms that may look more tilted enterprise. But I can tell you the genotype is we are total generalists. So I can say very explicitly, I think that somewhere between AI, crypto, and not ARVR, sorry for the future ARU. But I think those areas don't have the income and see of some of the traditional, you know, network effect, giant trillion dollar market cap companies. And so our genotype is such that we will then go populate those arenas. And you'll see us become what looks like experts in those areas. But that's not who we are. So is our next partner likely to have some background and experience in an area with high disruption? Absolutely. Yeah. And it'd be great. We got Kohler to join the firm at the still the beginning quarter of the social and the social over who knows. I mean, you could say the issue with like a social over is like we have a big problem with income and see. And distribution being constrained on top of that. Yeah, I mean, it's, you know, capitals was at least for a long time limitless. So you're looking at things that are a little increments at the end. It's sort of like, you know, a fineman complained about this in physics, which is like if you came 30 years after the theoretical activity, you were sort of cleaning up the mess. The mess. You know, yeah, whereas the people are there the first three years look like geniuses even there were third rate physicists. We're working on first rate problems. We're, we can be first rate, you know, whatever we're working on third rate problems if we're not in areas of high disruption. So what are the areas of high disruption now is something that we obsess over. You're a tow. And, and you know, but you don't think about it as like we need expertise in that area. I think the genotype is we want somebody that is a roving, curious. There's no great venture capitalist in my view that isn't aspiring to be wide dynamic range. This is why Eric is going to become one of the great consumer internet investors of the next decade. It doesn't know this. No pressure. But, you know, John Doar, Mike Meritz, we so my former partner in Jim Gatz, those are the people who shown that you can do both. Because the underlying connection with the entrepreneurs, they're not so different. They're similar gestalt and they're Chathen's next to the heel probably beat air just in terms of. Chathen's looking to be the sales kick. So they're already crossed the line with SAS. Yeah. Like the game is awesome. I think even if you look at the greatest companies, right, Amazon, Microsoft, Shopify, Adobe, Square, like they're all crossover, right? Like, and even if we took something of high disruption like AI, right? And we're happening in generative media and large language, it's unbelievable. Our LLM's just going to be a consumer thing absolutely not. Exactly. For the first version of it might be something like Jasper, right? Which is actually a B2B product. But there's really interesting opportunity of what is a, what's the version of a Twitch relationship that starts to form and sort of a parasocial relationship that is with a bot potentially, right? An artificial character that has a relationship with you. And is that a consumer thing or is that an AI thing? We've seen an LP episode with Mutiny and they're using GPT-3 to like generate landing page content. I think the technical, like, it's not our, the founders and entrepreneurs know the product. They know the technology. Like that's what they bring. That is the thing they bring. That's their invention. And they've discovered the insight. And they've discovered the insight. But there's a whole bunch of things that come to turn that technology into a product. And that product into a company that's really valuable. And like that's the part that we can partner on. How many success stories are there in venture or even through benchmark history of that market was dead. That market is done. Or that market doesn't exist. That market isn't real. That's the best time to invest. Yeah. And it's like the founder figuring something out. And having that insight. That's the part where you're like, you're sitting in the meeting. That's right. You're sitting in the meeting and you're like three minutes in. And the founder says something that you've never heard anywhere else. Nobody's all has said nobody's put a blog post down on it. Nobody, it's an insight. And that insight is, that's the magic. I think like, if you did it. Yes, that's obviously how it should work. And that's why I think I would say, like to say there's a specific sort of set of experience one need it. Like what imply would be maybe thesis driven. That's like, I don't think anyone here is terribly thesis driven. But like we're very change aware. And there's the question of that pulling the curiosity and sort of roving into it. Not like with physicists with a set of rules we've got a checker and net dollar attention. That's got to be a set of like, I was like, $5. I think it's net dollar retention. I'm kind of going to dollar a rub. How do you guys deal with so? In my prior life, I was trying to do that for a living poorly. One of the hardest parts I found about our early stages, but I totally agree with everything you're saying. You guys can vote with your feet. You only have one of those moments in the first three minutes of a pitch. Once maybe twice a year, maybe zero times a year. The rest of the day is getting kind of depressing. You can learn something in every moment. That's the amazing thing about the job is every day people come in and talk to you about something they're experts in. Or you can help someone who is great. Maybe you don't see it entirely, but like someone who's fantastic and help them. And they, and they, they'll teach you something and you'll learn something. And you'll just ask questions and, you know, they'll tell you. And you'd like learn. There's a firm that show our main nameless came in and they said, why don't you have a clock in your wall? I'm like, I don't know. Because then maybe we were in a meeting with all the BNM. And we look at it. It's not so good. And this person said, no, no, no, no, we move all our clocks six minutes forward. So if it's a bad meeting, we can get out. So that's the only deal with it. We didn't do that. Like people suggested this. And they said, I would just say any time you go to an enter firm, check the clock in the wall and look at you. And then you know, are they playing this clock? This clock doesn't work. Yeah. I was looking at it earlier and David and I made a comment to each other. Like, that is a really subtle way to put a clock in the room. But if it doesn't work, that doesn't work. It doesn't work. Oh, Lord. No, it's too third. It's time for dinner. All right. It's right to us today. We got to ask before we can't. Another thing we can't let go, what's the purpose of the principal program? To honor the statement that forced consistency is the hob goblin of little minds. Because it's a row. Okay, you got to unpack that. God, Peter says on another level. I mean, I feel like. For context for everybody who does it. So you all are deeply committed to the equal partnership model. Clearly, we don't have principles. So we have principles. No, I think it's a way to surround ourselves with a person who we want amongst us all. It pushes us to challenge us as well. Yeah. Maybe I'll loosen up the response. We don't know what we're doing. Blake is amazing. And you meet Blake. You want to work with Blake. Do you find a way? I find a way. And I think that is it a program? No. No. But, you know, Miles seems to like, Miles has got a British accent. It's a little hierarchical. So he should hire a associate. I don't want to work with that associate. Bless his heart. But, you call him a junior partner, baby partner. Even to hire a baby partner. But you won't become too much for you. Blake is amazing. And see me, Blake, can you say? You find a way. Yeah. It's been a pretty good launch pad that turns out for people to come in for our non-principle principal program. You don't talk about that you're talking about. Yes. Because you don't have a core of millions of people. Is it false consistency or forced consistency? It was Theroux. Where is it Emerson? It's exactly right there. Which is that when you have a little inter-fundamentalist, you need to have a conversation with that person and tell him to calm down. Because, you know, that doesn't mean we're going to have eight partners and a growth fund. And then there's some hard lines. We just say, but this is getting closer to people who are in body or values, but at a different stage in their career, that's okay with us. You got to break your rules when you find any set of encircumstances. You do. I've definitely found two. Maybe this is an institutional version of this. Like, the times in my life when I've held too tightly to something is when that's your gift. Like, and so is this a way to like hold tightly to the thing that's like a core value of the firm, but not too tightly. I think we should call it a fellow. But it is. It is. It is. And we constantly orient it to special people. Yeah. Sometimes there's a special person like Blake. I'd wanted to work with Blake for quite some time and I'm Sarah had two. And we said, Blake, you want to come work together? Yeah. Like, let's do it. I would say that we don't have associates. But one of us made higher and associate. We don't have principles. We have a principle. We have EIRs. We have venture partners. It's just. You're trying to figure stuff out. We have a venture partner. You know, it's a very tried investing, but you guys did Dropbox. Like, it's just, you come to the table and you say, I want to, I want to do this. I want to go explore this area. I want to go work with this person. And you just kind of figure it out. And like, it's not always straightforward, right? Because there's. People have their own constraints. And so you're trying to fit their own model of how they can engage with you. And so you just figure it out. And so. None of that should violate the authenticity of what we do. And how we interact with people. And I think that's the biggest thing that we have to be protective of. And that is what we're protective of. And the relationship we all have. And how we work together as a team. And I think if we preserve that than anything else. The fees are to be used for exactly those kinds of experiments. And. And those types of traps. And then. And you can do anything you want with that. I think this is the longest discussion we've had on the idea of a principle program. Wait, we're here for my value. You guys. This is the most possible. How can we help? Yeah. And then, you know, I also think about how we think about ERR. So, you know, I think it's a very important thing. And then, you know, I also think about how we think about ERR. So, you know, Eric had worked with Josh, a benching. And Josh was going to leave benching and just explore ideas. And it was like, okay, well, why doesn't he just come hang out with us and explore some ideas? And we call it an ERR. I knew Ravi from he. And he had left he and he wanted to explore ideas. So I brought him in. Those two knew each other from prior lives. And then they were like, oh, we're both at benchmark exploring ideas. Why don't we like share ideas that we're exploring? And then they decided to start a company together. It was like, if you were to... Which is airplane, which Eric is on the board of. And, you know, that wasn't sort of like this. We have a hyper like thesis. You're a familiar managing. Yeah, yeah. The thesis. And we need to go attack this thesis. So let's go recruit some EIRs and let's go set them up. And let's give them a... None of that. There's so much beauty and amazing things that can come out of just like organic development. And opening yourself up to organically finding cool things is I think ultimately the goal. Yep. All right. What did we get wrong on the episode? Or what could we have done? I think that was our job. I'll start. I think one of the things that you all talked about on the episode was swim lanes. Oh, yeah. And the area is a focus. And I think what we had just... Which I got to say, it felt extremely weird to be naming each of you in that episode. Like when we did our Sequoia and Andreessen episodes, like these things were about firm strategy and like institution building and programmatic thoughtful. And then we got to the end of the episode and I was talking about each of you as individuals and articulating things that like you care about and invest in. And on the one hand, I'm like, I feel gross. Like this feels really reductive and strange and pointed. And then on the other hand, it's kind of the point of benchmark that like it actually is just about you as humans and not about this like institution and strategy. So I think like if you look at even when it was Bill, Peter, Mitch, Matt, you know, it's... If you just look at the kind of work that they did, they were all generalists then. I mean, Peter was doing consumer and deep developer tech. And, you know, Matt was working with consumer companies and he was on the board of duo, which was a security... And a song. And a song, right? And so... Hey, I company. And I think you need a little bit more. And I think if you... You're all in the pool with no... Yeah, and if you just look at the kind of companies and ideas that were bringing to the table on Mondays, that's the thing that you see. And there's a lot of encouragement around the table, which is like if you're interested in something, something's like really hitting you at the moment, just go for it. Go meet all the relevant people, bring them in. Let's all learn together. Let's figure this out. And it's never the conversation that I've seen in other places, which is like, whoa, whoa, whoa, whoa, whoa. Stay in your sector. Like... Well, I went on a drone kick and definitely... Peter was like... Stop. Stop droneing up. The only way to kill the conversation about drones is we brought in D-drone. And... Oh, he said... That's the shooting down the drone. Yeah, that looks like, okay, I got the point. Then we didn't do that. That's probably done pretty well. Yeah, probably was a little... All right, other stuff we missed? You know, when you look at anything from the outside and you were there, you can't help but say, oh, particularly like books are written, because journalists tend to write the story from perspective of a loner who's projecting this sort of Shakespearean plot. If I was there, what was the intention? I read these books about us at Uber or Twitter or we work on like, it was so much more interesting. You guys did a remarkably good job of capturing the essential primitives of the firm. I don't know if it's interesting to other people, but it is right that this, you know, deep commitment to equality that Bob feels permeates to this day through everything we do. And from the way we treat our people that aren't in the investment team and to the notion that, you know, we book most of our own meetings. Like, we do see ourselves because we're not below anything or above anything. And I think that that's the through line that you captured so well. And I think it was, as you say, asymmetric. And was it in reaction to the era's leading venture capitals? I don't know, but I can tell you that there was a humanity to it that always felt to me, at least, that something you really... You want to honor. Like, if benchmarks anything, it's that we're available, we're flat. There's no arrogance. And it's, you guys got to the central core of that. And that comes from now, really, from Bob's history. And you know, to say it's about our company. It's the founding two or three employees set the culture. And it doesn't change unless there's some catastrophic event where it has to get reborn. But good luck with Elon at Twitter. You know, that culture was set in motion. And the root system goes so deep. We'll see what happens. I'm very interested. It's a good lesson. And if it does transform, then that's an example of one form of transformation. If it doesn't, then you'd say, OK, this... Believe me, people have been trying. It's a fuck of the benchmark culture. And we haven't done it yet, but we're trying. I think Twitter, I was like, yeah, we had to... No, we can't, we can't. No, no, Twitter. We have a... Actually, there's been a lot of discussion in the choir. It's like, I'm like, why have you guys not covered Elon and Twitter? And just like... No, that's not what we do here. We're not the TMZ of Silicon Valley. We all have eight years of experience there. We're in the bear. Oh, boy. All right. Well, we should end it on that now. Yeah. Thank you all. Thank you. Thank you. Thank you. Thank you. Well, with that listeners, our thank you to Fundrise and Pilot. Ah, so fun, David. Man, what a special experience. Thank you to benchmark partnership too for inviting us, doing this. Having a pretty candid conversation with us. That's not what I was expecting going in. Oh, no. They were great. They were very gracious hosts. Yes. Well, we love your feedback too. Please chime in at slash slack. Coming out with us. Please take the survey. 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