Danny Rimer: The Biggest Lessons from Missing Snap, Airbnb, Spotify and Facebook | E1166

1. 0:00 – 1:07

   Intro

   1. DRDanny Rimer0:00

      The main thing is to keep the main thing the main thing. If the person's extraordinary, throw all theses out the window and just back the founder. One of our tenets is definitely that market-sized TAM is noise. I do believe that the best companies, at that stage when they are ready to go public, can go public in any market. I'm not a huge fan of sector funds. With sectors, you're not looking for the best companies, you're looking for the best company in that sector. Most companies create brands as a byproduct of a great product. So scarcity and brand really go hand-in-hand.

   2. HSHarry Stebbings0:32

      Ready to go? Danny, I am so excited for this. I just said to you beforehand, you know, I'm the luckiest guy ever because I would pay to have discussions like this. And, and also, you say incredible wisdom and I get the credit for a lot of it.

   3. DRDanny Rimer0:53

      Of course.

   4. HSHarry Stebbings0:54

      So first, thank you for joining me.

   5. DRDanny Rimer0:55

      Thanks for having me back. Um, you know, it was such a pleasure last time, I can't wait for being under, under this interview process this time.

   6. HSHarry Stebbings1:05

      (laughs) D- you know, I was, I was much younger then. But I wanna

2. 1:07 – 3:31

   Background

   1. HSHarry Stebbings1:07

      start with a little bit of actual, kind of, real background context. But when you think back to a 10-year-old Danny, how would your parents or teachers have described you?

   2. DRDanny Rimer1:16

      They would have described me as s- probably very close to my mom, at my mom's side very consistently.

   3. HSHarry Stebbings1:25

      You can always trust a mama's boy. (laughs)

   4. DRDanny Rimer1:27

      Exactly. So definitely a mama's boy. Um, already into art. I was definitely already sort of, like, looking at art books and talking about art and trying to sort of learn as much about artists as possible. And then, um, hanging out and, and watching as many James Bonds as I could-

   5. HSHarry Stebbings1:47

      (laughs) I love James Bond.

   6. DRDanny Rimer1:48

      ... on a couch.

   7. HSHarry Stebbings1:49

      So favorite James Bond?

   8. DRDanny Rimer1:51

      Uh, prob- well, you know, they're impossible to watch now. I'm trying to show them to my kids and they are so canceled, it's absurd.

   9. HSHarry Stebbings1:57

      Really?

   10. DRDanny Rimer1:58

       But... Oh, yeah.

   11. HSHarry Stebbings1:58

       Oh, wow.

   12. DRDanny Rimer1:58

       Yeah, yeah. They're- you can't, you can't watch them. But at the time, Goldfinger was, was really pretty amazing.

   13. HSHarry Stebbings2:04

       Hi there, Sean Connery is my favorite by far.

   14. DRDanny Rimer2:06

       Yeah. Oh, yeah.

   15. HSHarry Stebbings2:06

       Um, no, I'm totally with you. Weird one, did you know that you would be successful? I know that sounds strange but when you were younger, did you kind of have this inevitability of success?

   16. DRDanny Rimer2:17

       I haven't really thought about it. Uh, I would say probably I knew that I was comfortable in being a little different and odd, but I didn't really thinking about it in terms of success. I was just gonna my- do my own thing, uh, which was slightly difficult to do when I had three elder brothers who were really focused on, on also doing their own thing.

   17. HSHarry Stebbings2:42

       (laughs) Pretty patient mother.

   18. DRDanny Rimer2:44

       Exactly.

   19. HSHarry Stebbings2:45

       Did you, and do you care what other people think?

   20. DRDanny Rimer2:47

       Yeah, of course.

   21. HSHarry Stebbings2:48

       You do?

   22. DRDanny Rimer2:49

       Of course. I mean, it depends what... I guess I care about whether or not, um, I'm, they can, they can see that I'm as transparent as possible and that I'm staying true to what I subscribe to, um, in terms of priorities.

   23. HSHarry Stebbings3:09

       Is that change with success? Like, do you care less about what other people think because you're more selfish?

   24. DRDanny Rimer3:12

       Um... I mean, I guess it's, I guess it's a question of, like, what is it that other people are thinking about? I, you know, I, I think it's important from a personal standpoint to make sure that I follow through on what I'm, on what I'm about and that I don't wanna lose or I don't wanna take for granted, and I'll always

3. 3:31 – 7:17

   Takeaways & Learnings from James Barksdale

   1. DRDanny Rimer3:31

      care.

   2. HSHarry Stebbings3:31

      You had many great influences early on in your career. One was Jim Barksdale. Can I ask, what are one or two of your biggest takeaways from that experience with him and learning from him?

   3. DRDanny Rimer3:41

      I really did get to learn so much from Jim. Um, two of the most pertinent ones, clearly one is what we've really adopted at, at Index from the beginning, which is, "Danny, the main thing is to keep the main thing the main thing." Um, you know, that has been so important to, to reflect on repeatedly.

   4. HSHarry Stebbings4:02

      Can I ask, what was the hardest thing to turn down that was a distraction? It could be a growth fund, it could be an India fund, it could be a deal, it could... What was the hardest thing which you had to say no to to keep the main thing the main thing?

   5. DRDanny Rimer4:15

      You know, you're right, I think that, uh, reflecting back, not going to, not jumping on the bandwagon and going to China or India was, was actually a really important, uh, lesson for us in maintaining, uh, maintaining our focus. So I would put it up there. I don't know if it's the m- the most important one, but it's absolutely one that I, that I remind myself frequently about.

   6. HSHarry Stebbings4:41

      What was the second big takeaway?

   7. DRDanny Rimer4:42

      Uh, second big takeaway is another one that I talk to my entrepreneurs about all the time, uh, which is the snake rule. So, uh, Jim, when he... Jim was an incredible, uh, executive. You know, he was the COO of Federal Express during its heyday for 14 years. Then he became the CEO of AT&T, which was Macaw Cellular. And then at the beginning of the internet, literally the first company of import was Netscape. I mean, in some ways, it was probably the OpenAI of its, of its day and, and Jim was tapped to become CEO of Netscape. And, uh, he had the most, uh, he had the pick of the pack of the smartest young talent joining, and they were running around trying to figure out what Netscape should be. Should it be an enterprise play? Should it be a consumer play? Should it do this partnership with Cisco and get paid? Should it reinvent, um, you know, the security socket layer and, and build a company or should it create a new company called Verisign? They had so many people running around with so many opportunities that he was looking around and he was seeing that all these people, all these young folks, lot of management consultants, a lot of business school folks were constantly in meetings and constantly reevaluating the same thing. And so, he created an all-hands, and at the all-hands, he said, "Folks, I grew up in Mississippi and we have snake rules."... that are very important, and I want you to think about this. The first one is if you see a snake, you kill it. You don't stick around and look at it. You actually have to kill it, 'cause otherwise it's gonna kill you. The second one is that, uh, you don't play with dead snakes. In other words, they might have venom in them, they might still be alive. So as soon as you've killed it, don't play with it. Um, and then he said the third one is all opportunities start out looking like snakes, which really made people scratch their heads. So he's really saying that once you... that your job is to make a decision. That's the concept of seeing a snake and killing it, you make a decision. The most important one is don't revisit that decision. Once you've made that decision, once you have commit, you're all in. You're not gonna, it's not up for debate, it's not up for folks discussing it or disagreeing with it. Everyone is committed. And then the third one is, I do understand that it's gonna be tough to make decisions s- because they look like opportunities, but your job is to assess them and make a decision.

4. 7:17 – 11:42

   Decision-Making Approaches in Investing Partnerships

   1. DRDanny Rimer7:17

   2. HSHarry Stebbings7:17

      Different investing partnerships have different approaches to decision-making, and I'm just intrigued. Given now the scope of the team and many different personalities, how do you think about the most effective decision-making that you've landed on at Index, and does that change by check size and stage?

   3. DRDanny Rimer7:33

      We have gone through so many iterations, but we actually landed on something which I probably would say has, has stayed with us for over a decade, which is, um, every investor has a vote and we have a voting system that, uh, goes from, um, one to four and from seven to ten, um, so you can't do a five or six, and you need a certain threshold of positive votes, uh, north of six, so it's more like 6.5, to, um, to get an investment, uh, passed through the partnership.

   4. HSHarry Stebbings8:10

      Do you worry about losing outliers?

   5. DRDanny Rimer8:12

      Always.

   6. HSHarry Stebbings8:14

      Like some- Yeah, like sometimes-

   7. DRDanny Rimer8:15

      Always.

   8. HSHarry Stebbings8:15

      ... it's just a batshit crazy idea of Justin TV which turns into Twitch.

   9. DRDanny Rimer8:20

      Absolutely. I think the voting is, is, is twofold. The first is to make sure that the partners who are really bringing a deal in have an enormous amount of conviction. So if they're coming in and it's like a, a seven, you know, it's gonna be really difficult unless it's unanimous. Our best, our best decisions, our best investments have always been unanimous, which has a lot to do with the dynamic of the partnership being so varied and diverse in terms of who we are and how we approach things. But the, really the point is to see whether the partner has so much conviction that they're gonna get us to be positive about it. And so the outlier is going to be welcome, but we're gonna look at the partner who's bringing it in, the sponsor, to ensure that they really wanna do this. They're not sort of saying, like, "I'm scratching my head. I don't know whether we should do this or not." If that's the case, we'll have a healthy conversation about it and unlikely we'll do it. But if the person comes in and it's crazy and we really are, are looking for that partner to show how excited they are, that will have a huge amount of influence on us.

   10. HSHarry Stebbings9:32

       It was interesting, Brian Zingerman said, actually, they deliberately don't have any form of investment committee or any investment meeting because you have to be so desperate to do a deal that you literally have to drag Danny out of the office, drag other people to get it, almost like create friction to doing deals because if you really want to do it, you have to really go out of your way to make it happen. Similar in some respects.

   11. DRDanny Rimer9:53

       Yes, absolutely.

   12. HSHarry Stebbings9:55

       Uh, so don't play with dead snakes. (laughs) I, you know, uh, terrified of snakes. Um, what was the hardest decision that you've made that you found yourself revisiting most?

   13. DRDanny Rimer10:05

       Oh, I have so many. I mean, at- I've, I've-

   14. HSHarry Stebbings10:08

       Mine's the deal seed round. (laughs)

   15. DRDanny Rimer10:10

       Uh, sorry?

   16. HSHarry Stebbings10:10

       Mine's the deal seed round.

   17. DRDanny Rimer10:12

       Yeah.

   18. HSHarry Stebbings10:12

       Yeah.

   19. DRDanny Rimer10:12

       Yeah, yeah, yeah. Oh, no, for sure. I mean, you know, there have been a number of, I mean, thankfully not a huge number, but there have been a number of opportunities that for a reason or another, uh, we passed or we didn't show up in the right way to win the deal. Um, i- th- the ones that will always be in my mind for different reasons and, and we share very openly with, with the team, uh, one is Spotify, another one is Snap, another one's Airbnb, another one's LinkedIn. Those are the, those are the four that we had real opportunity in some fashion or another to manufacture, uh, the opportunity for Index to be in the round and, and we, we failed for different reasons.

   20. HSHarry Stebbings10:57

       We're gonna get to a couple of them, but, uh, tha- tha- that is painful in many respects.

   21. DRDanny Rimer11:02

       It is indeed.

   22. HSHarry Stebbings11:02

       But I did have a nice chat to Shaq before the show.

   23. DRDanny Rimer11:04

       Okay.

   24. HSHarry Stebbings11:04

       And he said, "You are the person they wanted most but never got."

   25. DRDanny Rimer11:08

       Yeah.

   26. HSHarry Stebbings11:09

       And reminded me that you had multiple opportunities. (laughs)

   27. DRDanny Rimer11:12

       By the way, that does not make me feel any better.

   28. HSHarry Stebbings11:14

       (laughs) Literally, he was like, "We so wanted him."

   29. DRDanny Rimer11:16

       Brian, Brian Chesky from Airbnb re- repeatedly loves to say, you know, Index is, is the team that they wish they, they're, it... Sorry. He says, uh, "Index is..."... the best partner that never invested in the, in the company.

   30. HSHarry Stebbings11:34

       Bugger.
5. 11:42 – 16:25

   Thesis-Based Approach in Investing

   1. DRDanny Rimer11:42

      every day.

   2. HSHarry Stebbings11:42

      Yeah, yeah, yeah, yeah. We mentioned the decision-making process there. Before when we were chatting, you mentioned to me about the thesis-based approach that you have today.

   3. DRDanny Rimer11:49

      Yeah.

   4. HSHarry Stebbings11:49

      Can you talk to me about that and what that actually looks like in reality?

   5. DRDanny Rimer11:54

      I think it's, in, in the case of Index, it is, it is a story of discipline, and it's a story about manufacturing discipline in as many different ways as possible. And so for us, creating investment theses are a way of making sure that we are building conviction and that we can support the conviction that we have. And so everyone is encouraged to have a major and a minor. And when it comes to investment thesis on the major or the minor, it's taking a new approach at looking at a specific area. Whether we're right or wrong is actually less important. It's a way of sifting through opportunities and figuring out what we're looking for, and whether once we see it, we're gonna be able to pounce or not. So having that clarity around a thesis is helpful.

   6. HSHarry Stebbings12:43

      Well, so what would an example of that be though?

   7. DRDanny Rimer12:45

      Okay. So an example that I would think about is when we decided that fashion might replace music as a social lubricant.

   8. HSHarry Stebbings12:53

      Right.

   9. DRDanny Rimer12:53

      So when I was growing up, you know, I could go to, uh, Nairobi and sing a Michael Jackson song, and a guy who spoke Swahili would sing the same song, and we would bond over that. And then with Spotify, actually, you know, music has become more pervasive, but albums have shifted. Albu- the focus on albums is less important. So we were thinking maybe fashion becomes that lubricant. Maybe people are gonna identify and become part of communities around the brands or around the style that they align to. So that led us to Net-a-Porter and End Clothing and ASOS and Farfetch and GOAT and Anina Bing. And so it was really helpful to have this crazy idea, um, about, about fashion replacing music.

   10. HSHarry Stebbings13:42

       Are people able to select their major and minor?

   11. DRDanny Rimer13:44

       Yes, absolutely. I mean, we want them to be really passionate about the major and minor, so.

   12. HSHarry Stebbings13:49

       And then how do they pursue it? And sorry, I'm mentioning it, I'm building a firm too.

   13. DRDanny Rimer13:52

       Yeah.

   14. HSHarry Stebbings13:52

       So like how do they pursue it? Do they-

   15. DRDanny Rimer13:54

       I heard that you're building a firm.

   16. HSHarry Stebbings13:55

       Do they, do they do like, uh, you know, lunch-and-learn style where they share their knowledge with teams, or is it more isolated learning and development?

   17. DRDanny Rimer14:03

       It's a combination. I would say that, uh, probably you start by doing a lot of work on your own and, um, making sure that you're actually committed to it and that it's gonna, it's, it's gonna stand for something, uh, stand the test of time, and then bring in colleagues and, and spar with them and bat it around. And then once it's more mature, then pitch it to the partnership and see, see if they, if they think this is a helpful thesis in terms of looking at things.

   18. HSHarry Stebbings14:34

       What's the biggest challenge to having this approach? Like I, I always take the view that I can't predict markets, and if I could, I'd be a founder. Um, and so I'm open to the creativity and whims of whatever brilliant founder comes in the door.

   19. DRDanny Rimer14:48

       Yeah.

   20. HSHarry Stebbings14:48

       What's the biggest cons of the thesis-based approach?

   21. DRDanny Rimer14:51

       Probably, um, being quite categorical on not backing certain founders that are phenomenal but don't really fit the thesis.

   22. HSHarry Stebbings15:07

       And is this not a game of anomalies? Like you mentioned Spotify.

   23. DRDanny Rimer15:10

       Yeah.

   24. HSHarry Stebbings15:10

       I mean, I think Daniel has been quite open before about saying like, he, you know, he went to series A investors and almost said, "Do you have a CEO replacement 'cause I'm not too-"

   25. DRDanny Rimer15:16

       Right.

   26. HSHarry Stebbings15:16

       "... keen on this job" (laughs) .

   27. DRDanny Rimer15:18

       Yeah, yeah.

   28. HSHarry Stebbings15:18

       Like the best are often anomalies.

   29. DRDanny Rimer15:20

       Right. No, I agree with you. I mean, I think that in the case of, in the case of Spotify, for instance, actually, you know, I was able to know that Daniel was exceptional from the work that he did for a previous startup in his spare time when he was still a high school student. He, he built the backend in, in a matter of weeks. Uh, so I knew that he was extraordinary. That was a big lesson is if the person's extraordinary, throw all theses out the window and just back the, back the founder. But it was really more a case in, in that situation of having dealt with so many music opportunities and they were so challenging, you know, selling Last.fm to CBS, being an investor in SoundCloud that wasn't quite clear what they were, being an investor in Joost, which was a shit show-

   30. HSHarry Stebbings16:11

       (laughs)
6. 16:25 – 19:12

   Balancing Founder Enthusiasm with Market Concerns

   1. HSHarry Stebbings16:25

      This was gonna be my big question to you, which I find more and more common. The founder is exceptional, incredible founder. God, I hate the market they're going after. Why did you choose property management or CRM or any of these kind of, bluntly, I think quite difficult and challenging industries.

   2. DRDanny Rimer16:42

      Yes.

   3. HSHarry Stebbings16:43

      But what do you do when you have a founder where you love them but hate the market?

   4. DRDanny Rimer16:45

      You know, that's probably been a big learning over the years, uh, and I would like to think that Index has learned from its mistakes. I would say that we would back the founder, period.

   5. HSHarry Stebbings16:54

      Regardless of stage?

   6. DRDanny Rimer16:56

      Well, it depends on the stage, obviously. But if it's seed and series A, um, and w- and it is what you're sh- you're talking about an exceptional founder, we would throw away any preconceived notions of, of market, um, especially if they already have a really good instinct of the team that they're bringing on board and clearly have a high bar for colleagues. Um, we would, we would back that.... that founder. I'd like to think that we'd back, back that founder every time.

   7. HSHarry Stebbings17:27

      It's been my biggest lesson to suspend belief on the market itself.

   8. DRDanny Rimer17:30

      Yeah.

   9. HSHarry Stebbings17:30

      Um, so I, I totally agree with you there. Do you do market sizing?

   10. DRDanny Rimer17:34

       We do, absolutely.

   11. HSHarry Stebbings17:36

       How does that look? Like, you outcome scenario plan, and what... uh, 'cause I-

   12. DRDanny Rimer17:39

       I mean, we don't really do outcome scenario planning, um, but we absolutely try and get comfort on the size of the market. And sometimes it's helpful. Most of the time, it doesn't really mean much.

   13. HSHarry Stebbings17:54

       My worry with it is like when you look at, especially at Bessemer, who very kindly published their, you know, uh, investment memos, you consistently underestimate the size of your winners. Twilio was 500 million to them. Procore was 300. Snap was 500. We always underestimate the size of our winners, and I worry that by almost doing market sizing, it can constrain our thinking.

   14. DRDanny Rimer18:14

       Absolutely. So, I mean, one of, of our tenants-

   15. HSHarry Stebbings18:16

       Which is, which is why as someone who hates Excel is the reason I don't do it. (laughs)

   16. DRDanny Rimer18:20

       (laughs) Yeah. Well, you have a good excuse. I mean, one, one of our tenants is definitely that, that market size TAM is noise. That is a clear viewpoint that we learnt early on, that we were not gonna be able to charge. As you said, you can't judge the, the market, and so therefore it's crazy to make, assess an investment based on the size of the market. I mean, you know, when one of the big lessons on Airbnb was when we were evaluating it, we were thinking, "How many hotel rooms is Airbnb gonna cannibalize?" Rather than thinking, "Actually, Airbnb is gonna create an entirely new market, an entirely, entirely new amount of inventory that has never hit the market prior."

   17. HSHarry Stebbings19:05

       I totally agree. Do you prefer category creation plays?

   18. DRDanny Rimer19:08

       I would say yes. Uh, as a, as a, as a firm, we love category

7. 19:12 – 24:07

   Preventing Bias from Past Investment Outcomes

   1. DRDanny Rimer19:12

      creators.

   2. HSHarry Stebbings19:13

      In many ways, they're very difficult. It's hard, it's expensive-

   3. DRDanny Rimer19:16

      Yes.

   4. HSHarry Stebbings19:16

      ... you gotta reeducate people, but in other ways... The one thing I do wanna touch on is you mentioned that you had seen many different music companies before, Last.fm, SoundCloud. Hardest thing is how do you prevent prior, uh, successes or failures impacting future decision-making?

   5. DRDanny Rimer19:32

      It's really difficult. Uh, I guess what I would say is, um, we're, we're trying to get to the essence of why we made a mistake, so, so w- we really learn more from our mistakes, right, than our successes.

   6. HSHarry Stebbings19:45

      Do you think we do or we just don't analyze our successes in the same way?

   7. DRDanny Rimer19:48

      I would suspect that we're pretty good at analyzing, at least as a firm, as a partnership, our successes.

   8. HSHarry Stebbings19:55

      Mm.

   9. DRDanny Rimer19:56

      Probably have a tougher time than we should at celebrating our successes. I think we, we all, you know, anyone who's competitive and driven has a difficult time at celebrating successes. It's one of the aspects that I really focus on my entrepreneurs to do, because they're so... they're, they, they have such a high bar and such high ambition that they forget to really celebrate the success in the journey. And it's a tough journey, so you should really take advantage of those successes. Uh, I, I really do believe that we can get better and better at this, at this craft, and the way that we get better and better is at analyzing our mistakes. And as an institution, understanding those mistakes and making sure that we don't do the same thing the next time. As uncomfortable as it may seem, we make sure that we don't fall into the same pattern the next time.

   10. HSHarry Stebbings20:46

       What pattern do you think you most want to avoid?

   11. DRDanny Rimer20:48

       There are many, but clearly, TAM is one of those that, that always raises its head, and, and we always sort of like bash it down, and, and remind ourselves how often we've gotten that wrong. So, one is, one is TAM. The other one is valuation, right? Like, so many times, that seems to-

   12. HSHarry Stebbings21:11

       Trigger-

   13. DRDanny Rimer21:11

       ... use, yeah, it's a trigger for you.

   14. HSHarry Stebbings21:12

       What happened was, was, it was, it was deal. (laughs)

   15. DRDanny Rimer21:14

       (laughs) Yeah.

   16. HSHarry Stebbings21:15

       And now they talk about nothing, it was a 30 million post, and I was like-

   17. DRDanny Rimer21:17

       Right.

   18. HSHarry Stebbings21:18

       ... "Come on."

   19. DRDanny Rimer21:18

       Yeah, yeah. So that's the other one, which is, uh, we always evaluate the, the multiple that we're paying based on the current snapshot of comps, rather than thinking out, what is, what is it going to be worth if every company continues to grow? And if this specific sector grows, what are the implications of it? I mean, you know, honestly, I hadn't really thought about companies being worth multiple trillions until, until Apple hit that trillion number. And it's like, "Oh, yeah. Of course."

   20. HSHarry Stebbings21:53

       Yeah.

   21. DRDanny Rimer21:53

       So we're now into the trillions. So we're now into the hundreds of billions. So we're now into the billions. And so every evaluation-

   22. HSHarry Stebbings22:01

       But are we actually, 'cause there is... Sorry.

   23. DRDanny Rimer22:03

       Yeah.

   24. HSHarry Stebbings22:03

       I agree with you and I love that thinking, and I hope I'm an optimist. I'm not seeing that. You're seeing the languishing of Box and Dropbox and all the kind of traditional SaaS providers and software providers, and then you're seeing the pull away of the seven.

   25. DRDanny Rimer22:15

       Yeah.

   26. HSHarry Stebbings22:15

       And NVIDIA's there and Microsoft's there. And I worry that actually the world is like in-

   27. DRDanny Rimer22:20

       Well, it used to be five and now it's seven, right? And you're making it sound like NVIDIA's a no-brainer that's been around and valued at trillions for a long time.

   28. HSHarry Stebbings22:28

       Totally true.

   29. DRDanny Rimer22:30

       So, I would say, you know, the, the reality is that set of highly valuable companies in the trillions, but also in the hundreds of billions is, is going to change. Certainly the hundreds of billions ones. And the ones that are languishing probably is more a reflection of execution and product market fit at this point, rather than, uh, rather than the fact that they're languishing for other reasons.

   30. HSHarry Stebbings22:58

       What outside bet do you have for the next multi-hundred billion-dollar company?
8. 24:07 – 27:36

   Evaluating Market Timing Risk in Investments

   1. DRDanny Rimer24:07

   2. HSHarry Stebbings24:07

      Are you willing to take market timing risk? Different investors have different appetites as to market timing risk. How do you feel about it?

   3. DRDanny Rimer24:13

      It's critical. So, uh, no credit for being too early. However, what has been a truism is that companies that are excellent can go out in any market. So, I don't really believe in these IPO windows for exceptional companies. I think that the best companies can go out in any market, and they can even do stupid things. I mean, you know, Google went out in the worst of markets and did a Dutch auction, which there was absolutely no need for. So many entrepreneurs want to reinvent Wall Street and the mechanism of going public in a similar way than they're doing... they're taking on their, their sector. I wish they would leave that alone. That is such a distraction. But I do believe that the best companies, at that stage when they are ready to go public, can go public in any market.

   4. HSHarry Stebbings25:04

      Are you willing to take market timing risk when investing in companies, be it VR, be it, you name it, emerging categories where consumer adoption is a question mark, and where it is a real timing game and you have to be patient?

   5. DRDanny Rimer25:19

      Probably more patient on the technology and the amount of time that it takes to come to fruition, rather than a question of whether the market is gonna be excited ab- uh, you know, that I have to... I would call that a second derivative play. Not only does the product or service have to be excellent, but I'm also assuming that once the product and service is out there, there's gonna be a new interest in that product or service. I wouldn't do that.

   6. HSHarry Stebbings25:49

      Yeah.

   7. DRDanny Rimer25:50

      I don't know if that's helpful to you.

   8. HSHarry Stebbings25:51

      Yeah, no, it absolutely is.

   9. DRDanny Rimer25:52

      So, so, uh, so an example is, in the case of Figma, clearly it was gonna take three years plus to come up with an, uh, with an alpha. But that was more a question of, uh, were they gonna be able to deliver the product of significance enough to be relevant and to dominate the market? And Sketch was the best example of what Adobe, what, um, sorry, what Figma could become. Uh, you know, I'm still PTSDing on the Adobe thing-

   10. HSHarry Stebbings26:21

       (laughs)

   11. DRDanny Rimer26:21

       ... clearly. Um, so that was more a question of product development, but the market was clearly there, rather than product development, and I have to assume that the market's gonna be there.

   12. HSHarry Stebbings26:32

       Was Figma always a clear winner?

   13. DRDanny Rimer26:34

       I, n- I mean, nothing's always a clear winner, is it? Come on.

   14. HSHarry Stebbings26:38

       No. Snap moreso. Snap is one where actually there were little... I mean, post-IPO (laughs) it's, it's had challenges. But in the trajectory up, it did seem, and maybe internally, but internals have still told me actually it looked pretty straight up and to the right. (laughs)

   15. DRDanny Rimer26:53

       Yeah.

   16. HSHarry Stebbings26:53

       That's a weird one. But like, again, three years in the dark. Respectfully-

   17. DRDanny Rimer26:57

       Yeah.

   18. HSHarry Stebbings26:57

       ... and I, you know, we, we both know Dylan very well.

   19. DRDanny Rimer26:59

       Yeah.

   20. HSHarry Stebbings26:59

       Amazing. But it's a long time. You must be sitting in the investment partnership going, "Has he come out with anything yet?"

   21. DRDanny Rimer27:05

       I mean, that, that... though they were very clear on, on how much time... Um, maybe, maybe my ignorance is bliss on that one. You know, they were very clear on how long it was gonna take to actually come up with the technology, and I had no reason of disbelieving them as, as the more and more I learnt about Evan and Dylan and the team that they were putting together, the better the team was and the more confidence I had that they were developing great product.

   22. HSHarry Stebbings27:31

       It interesting you should say more confidence. One thing that I always oscillate on is reserves.

9. 27:36 – 31:24

   Key Lessons on Managing Effective Reserves

   1. HSHarry Stebbings27:36

      How do you think about effective reserves? And having done this so effectively, what are some of your big lessons?

   2. DRDanny Rimer27:42

      You know, we're very fortunate, right, because we have a seed, a venture, and a growth fund, and we've had the same in LPs for a long time. And so, they give us enormous amount of latitude. And it's the same folks who invest across multiple funds. So, it's really as soon as we have signal that we think is better than our peers, and that validates what we're betting on, and that we can convince the team to take our money, is as soon as we wanna double down.

   3. HSHarry Stebbings28:15

      Do you worry about signaling? It is the thing that all stage-specific firms use against you. Well, not you, but any multi-stage firm. "Ah, the signaling risk is real." How do you baton that back?

   4. DRDanny Rimer28:26

      It's, it used to be more of a concern. I think there's so much money sloshing around and so many folks have so many different funds that signal risk is ha- ha- is more of the past. I mean, if you look at the continuum of entrepreneurial power versus investor power over the last couple of decades, it's only gone in the, gone in the entrepreneurial direction. If you want to raise at this point, and you are capable, you're gonna be able to raise irrespective of who's been in previous rounds. Uh, uh, you know, it sounds self-serving, but I really feel like it's happened. It's really rare that we ever not get to invest because folks are concerned about signaling any longer.

   5. HSHarry Stebbings29:10

      Do you think there's too much money in venture today? You mentioned everyone has these different funds. Is there too much cash in the game?

   6. DRDanny Rimer29:16

      I think so. I think so. I think it's probably more a question of, how thoughtful are folks being about putting that money to work? Uh, w- we've talked about this before. I'm not a huge fan of sector funds because I think that with sectors you're not looking for the best companies, you're looking for the best company in that sector. I'm not a fan of impact funds because you're rationalizing a mediocre investment because you're doing something good for the world. Um, I'm not in- a fan of, like, geographic funds, because again, you're looking for the best companies in a geo. So, um-... those are all compromises on the caliber of entrepreneur and company that you're backing.

   7. HSHarry Stebbings30:00

      Can I ask, in terms of, like, the scaling of the different fund programs, how did you think about that? 'Cause you could have raised much more, I'm sure.

   8. DRDanny Rimer30:07

      We could have.

   9. HSHarry Stebbings30:08

      Why- why did you not?

   10. DRDanny Rimer30:10

       Um, because, uh, first of all, 'cause we have plenty of resources. Um, it's more a question of making sure that we have enough resources to continue to back the entrepreneur. The second one, it would have probably changed the whole dynamic and culture of the firm.

   11. HSHarry Stebbings30:28

       How so?

   12. DRDanny Rimer30:28

       Well, the larger the funds, the more folks you have to hire, the more partners you have around the table. We really, everyone at Index, you know, there, we have very varied personalities but we all really enjoy working with one another, and it's a relatively small crew that fits around a table, and we really enjoy that. And so the more funds we have, the larger the organization, um, the strategists that we would have, would have to have bigger teams, and they also like being smaller, so it just changes the configuration and possibly it changes also the motivation that, you know, we've always been focused on getting to carry as soon as possible, um, and the larger the funds, the- the- the- the longer it will take and the more attractive the management fee is, so it just doesn't

10. 31:24 – 36:06

    Massive Funds vs. Boutique Specialists

    1. DRDanny Rimer31:24

       sit right.

    2. HSHarry Stebbings31:24

       Many people speculate in, like, the future of venture you'll have kind of the Costcos, which is, like, the large money providers-

    3. DRDanny Rimer31:30

       Yeah.

    4. HSHarry Stebbings31:31

       ... which is all the big brands that we know who scaled into asset gatherers, not disparagingly but just raising huge funds-

    5. DRDanny Rimer31:38

       (laughs) Yeah.

    6. HSHarry Stebbings31:38

       ... and boutiques, which is your specialist providers like a Benchmark, a USV, even a Ribbit, which although large but, like, is very fintech focused and absolutely owns their niche. Do you agree with that? You're either massive or you're a boutique.

    7. DRDanny Rimer31:52

       I mean, of course, we're trying to wedge ourselves in between.

    8. HSHarry Stebbings31:55

       Yeah.

    9. DRDanny Rimer31:56

       Right? That's-

    10. HSHarry Stebbings31:56

        That's not what I'm thinking. (laughs)

    11. DRDanny Rimer31:56

        That's the plan, but I agree with you, I think there- there will be asset aggregators and artisans. And what we're trying to be, what we talk about internally is scaled artisans. So the- the parallel that, you know, obviously we have to come up with examples of how to think about it, and I do have Swiss roots, right? I grew up in Switzerland and- and- and-

    12. HSHarry Stebbings32:15

        Wonderful.

    13. DRDanny Rimer32:15

        ... Index started in Switzerland, so we were thinking that the Apple Watch is actually the most successful luxury watch out there. It has many more SKUs than Rolex, that sells a million watches. However, Rolex actually sells more, uh, from a- from a- from a profit standpoint, Rolex and used Rolexes are a much better business than Apple. So maybe we could, maybe we could be the scaled artisans.

    14. HSHarry Stebbings32:44

        Interesting you said there about kind of the scaled artisans and Rolex in particular. I spoke to Georgia-

    15. DRDanny Rimer32:49

        Yeah.

    16. HSHarry Stebbings32:49

        ... you know, one of your partners, and she said that Dani understands brand and scarcity-

    17. DRDanny Rimer32:54

        Yeah.

    18. HSHarry Stebbings32:54

        ... better than anyone else.

    19. DRDanny Rimer32:55

        Yeah.

    20. HSHarry Stebbings32:56

        I thought that was a really interesting comment from her. What does she mean, do you think, by that, and how do you think about that?

    21. DRDanny Rimer33:02

        It's nice of her to say. Thanks for talking to Georgia.

    22. HSHarry Stebbings33:05

        She said you're a total tosser too (laughs) .

    23. DRDanny Rimer33:07

        (laughs) There you go. Okay.

    24. HSHarry Stebbings33:08

        That was all for our Georgia.

    25. DRDanny Rimer33:10

        (laughs)

    26. HSHarry Stebbings33:11

        (laughs) But what did she mean by that?

    27. DRDanny Rimer33:12

        If I think of our industry, you know, we're really privileged, right? I mean, you- you talked about the fact that regardless of whether you're getting paid to do these interviews or not, you would still be doing it-

    28. HSHarry Stebbings33:24

        Yeah.

    29. DRDanny Rimer33:24

        ... because it's a key part of what drives you, and I- I feel the same privilege just working with entrepreneurs and- and building companies. And so my sense is that ironically the technology space, it's been so lucrative, it's been such an incredible industry, that most companies create brands as a byproduct of a great product or service. I- I really couldn't tell you what Google's marketing strategy has been from the get-go, other than a cool white screen with, like, a cool couple of colors with their- with their logo and maybe a drawing. I really have no idea how they've impacted me from a marketing standpoint, and most companies that have been successful, be they enterprise or consumer in the tech space, the marketing has been a byproduct of a great product or service. Really, the exception to the rule would be Apple and probably Airbnb, and I'm- and I scratch my head to try and think of others.

    30. HSHarry Stebbings34:24

        Yeah.
11. 36:06 – 42:21

    Sourcing, Selecting, Servicing: Strengths & Weaknesses

    1. HSHarry Stebbings36:06

       said the word relevant there, and it made me think of a show I did with Keith Raboy, um, and we talked about sourcing, selecting and servicing, like kind of three cool pillars of venture. Um, and he said his biggest weakness is sourcing because it's just staying-

    2. DRDanny Rimer36:23

       Sourcing, selecting and-

    3. HSHarry Stebbings36:24

       And servicing.

    4. DRDanny Rimer36:25

       ... and servicing.

    5. HSHarry Stebbings36:25

       Help- helping companies.

    6. DRDanny Rimer36:26

       Yeah.

    7. HSHarry Stebbings36:26

       Um, and he said his biggest weakness is sourcing, staying relevant, and he's like, "It's a young person's game." If I were to ask you, sourcing, selecting, servicing, where are you strongest and where are you weakest?

    8. DRDanny Rimer36:39

       I think probably one of the things that Index is best at is the exiting part. I'm sort of happy that Keith is not even considering it. That's a good sign.

    9. HSHarry Stebbings36:48

       (laughs)

    10. DRDanny Rimer36:48

        Um, 'cause we spend a lot of time thinking about exiting.

    11. HSHarry Stebbings36:51

        Just unpack that then. Uh, it was gonna be one of my questions, but, like, true. But, again, I was talking to many of your LPs as well as part of this. They're like, "Gotta love Index. The DPI is real." And, like, you know, I always hear, you know, "I can't eat IRR, and with Index, I don't need to." That should be a billboard or tagline, by the way. I'm happy to-

    12. DRDanny Rimer37:09

        That's very kind. Thank you.

    13. HSHarry Stebbings37:11

        I'm happy to provide you with ideas.

    14. DRDanny Rimer37:12

        (laughs)

    15. HSHarry Stebbings37:13

        Um, but, like, how do you think about when to sell?

    16. DRDanny Rimer37:15

        Back to the discipline, our LPs are... We have no family offices in sovereign wealth funds, so they're all institutions, and they're mostly non-profits or their customers are non-profits. So we're really trying to make sure that our fiduciary responsibility is creating the most amount of returns as possible because they're professionals at giving it away. And so we're not gonna sacrifice the quality of the company based on anything but trying to create the most amount of revenue as possible, or, or, sorry, most amount of, of carry as possible. When it comes to exiting, it, it really clarifies things, right? Like, we're just trying to make sure that we don't believe our own BS, we don't get emotional about our own entrepreneurs, and that we stay true to creating the, the biggest exits possible, or getting to a decision of exiting the company as quickly as possible when it's not working. So exiting is both for successes and failures, and being very honest about that.

    17. HSHarry Stebbings38:25

        How does it diff- how does it differ? Talk, talk to me about that.

    18. DRDanny Rimer38:27

        In the case of a failure, you wanna make sure that you're aware of that failure as quickly as possible, you've learnt those lessons, and you convince the entrepreneur to shut down shop and start something new with the scar tissue at hand. Um, with a success-

    19. HSHarry Stebbings38:44

        Would you rather they start something new with the cash that they've got, say 50% of the last round, or would you rather, hey, let's just get a landing pad for this and return cash?

    20. DRDanny Rimer38:53

        The preference, I'm sorry to be so, uh, so unclear about this. It's really going to be based on how much conviction they have on what they're starting up afresh-

    21. HSHarry Stebbings39:02

        Mm-hmm, yeah.

    22. DRDanny Rimer39:02

        ... rather than trying to come up with something because they feel like they have-

    23. HSHarry Stebbings39:08

        They have to.

    24. DRDanny Rimer39:08

        ... to have another shot at it, or they don't wanna disappoint people. We're not disappointed ever if a company, uh, if a company shuts down, they've given it their best shot. God bless. Thank you for letting us be part of the ride, and let's move on. So, uh, that's, that's a really important part of it.

    25. HSHarry Stebbings39:28

        And your, and your winners, will you sell-

    26. DRDanny Rimer39:30

        Yeah.

    27. HSHarry Stebbings39:30

        ... in increments over time?

    28. DRDanny Rimer39:32

        Yes, we will. I mean, in our winners, it's a question of, first of all, just being disciplined about when to exit, and making sure that we are not, sort of falling into the trap of thinking that because they've been successful, they will naturally be succ- more successful over time. And making sure that, uh, we hold the partner who's associated with a company, uh, very honest by insisting that they have, uh, one vote rather than the primary vote on deciding when to exit. So, that's a, that's a really tough thing, but it's, it's made an enormous amount of difference, you know, from Adyen, to Datadog, to Roblox-

    29. HSHarry Stebbings40:18

        When do you think you did it well, and when-

    30. DRDanny Rimer40:20

        Yeah.
12. 42:21 – 44:24

    Reflecting on Missed Investment Opportunities

    1. DRDanny Rimer42:21

    2. HSHarry Stebbings42:21

       But when have you done it and, in hindsight, you did it wrong? In other words, you sold and actually it skyrocketed, it continued to go up, and what did you not see?

    3. DRDanny Rimer42:31

       I'm trying to think about that. I, I, the biggest mistakes that we've done as a firm is holding on too long rather than selling too early.

    4. HSHarry Stebbings42:40

       Which one would that be?

    5. DRDanny Rimer42:41

       Holding on too long, um, they were sort of earlier investments. I'm, I'm trying to think about, um, think about ... There was one company that was in the IP space, I'll have to look it up.

    6. HSHarry Stebbings42:54

       Mm-hmm.

    7. DRDanny Rimer42:54

       I can't remember it. But, you know, another one probably where we, I mean, as I reflect on it, another one where we sold too early was definitely Etsy. We didn't take into consideration the fact that Josh Silverman was gonna come in and totally transform the organization, and that obviously we left a lot of money on the table. Um, and at that point, we weren't on the board as ... and so therefore, we didn't have the same knowledge of, of the company, but that, you know, back to your earlier question, I guess, not in all cases have we, have we lost money by s- by holding too long. It's been mixed, but it's mostly been holding too long.

    8. HSHarry Stebbings43:34

       You, you mentioned Etsy there, we mentioned Figma earlier, the kind of hits that you have are incredible. What do you-

    9. DRDanny Rimer43:40

       It's all me, by the way.

    10. HSHarry Stebbings43:41

        Yeah, all you.

    11. DRDanny Rimer43:41

        Has nothing to do with my partners or the companies.

    12. HSHarry Stebbings43:44

        You are a true-

    13. DRDanny Rimer43:45

        Just remember that.

    14. HSHarry Stebbings43:45

        ... you are a true venture capitalist. (laughs) Uh, what do you consider your biggest winner? I'm being crude, so I am asking for a name.

    15. DRDanny Rimer43:54

        My biggest winner, I, uh, you know, it's gonna be really tough to, uh, I mean, I have so many stories, come on, Harry.

    16. HSHarry Stebbings43:59

        No, no, no, no, no, I, I-

    17. DRDanny Rimer44:01

        I don't, I don't know, I would like to think that my biggest winner is something that's, that's sort of, like, gestating right now. There's no reason why they shouldn't be bigger. I mean, you know, Charmaine at Get Harley, that should be a huge winner.

    18. HSHarry Stebbings44:13

        Okay, so we have Charmaine at Get Harley, which is a huge winner. What is your big-

    19. DRDanny Rimer44:17

        Tom at Motorway.

    20. HSHarry Stebbings44:19

        Okay.

    21. DRDanny Rimer44:19

        Come on-

    22. HSHarry Stebbings44:20

        Okay.

    23. DRDanny Rimer44:20

        ... Harry.

    24. HSHarry Stebbings44:21

        I know, we're, we're gonna choose one.

    25. DRDanny Rimer44:23

        I'm not gonna choose one.

13. 44:24 – 49:58

    What is a Big Success

    1. DRDanny Rimer44:24

    2. HSHarry Stebbings44:24

       What is your biggest takeaway from those?

    3. DRDanny Rimer44:27

       From-

    4. HSHarry Stebbings44:27

       Like, I, going back to analyzing successes and failures and-

    5. DRDanny Rimer44:30

       Yeah.

    6. HSHarry Stebbings44:30

       ... learning from them, when you think about, that's kind of what I'm going for, which is, like, when you think about your biggest success, what is that, and then when you analyze it, what are the big takeaways from it?

    7. DRDanny Rimer44:40

       Big successes, you know, King was an amazing lesson in the sense that King was a company where, uh, the market, um, really collapsed on them. So at first it was, uh, it was skill-based games on the web. That didn't happen. Then it was skill-based games on mobile, but it wasn't quite working. Then they had to reinvent themselves and be on Facebook mobile games channel, and they had some successes there. It's such a great lesson of an incredible team, like Ricardo, Sebastian, um, and then eventually Stephan, who-

    8. HSHarry Stebbings45:21

       Mm-hmm.

    9. DRDanny Rimer45:21

       ... you know well, coming in and, and just grinding away at excellence. That was an amazing story of success. When I think about it, um, it was also a lesson for Index because, you know, we wanted to lead that round and then, um, the Apex folks who didn't really play in our, in our space came in and offered w- a much bigger, uh, valuation, Michael Chalfen and Mike Rismon, uh, and then we decided to actually make an exception to the rule and still put in a f- smaller check. So, we were gonna lead with 15 million, which at the time was a huge series A, and they came in with 25 million, and we had an opportunity to put in an incremental five million at their valuation, and we decided to hold our breath and do it. Um, and it was, it was clearly a great, great decision. That was really based on the team.

    10. HSHarry Stebbings46:21

        When do you stretch on price versus when do you not?

    11. DRDanny Rimer46:24

        Stretch on price in the early rounds. You know, when, when we have conviction on the early rounds, I think you, there's a lot of room to stretch on price. In the later stage growth rounds, when the multiples are gonna be more challenging to get, y- uh, we have much more discipline on, on valuation.

    12. HSHarry Stebbings46:43

        It's one thing to stretch on price, it's another thing to stretch on price and ownership.

    13. DRDanny Rimer46:47

        Right. Yeah.

    14. HSHarry Stebbings46:47

        'Cause you can pay more-

    15. DRDanny Rimer46:48

        Yeah.

    16. HSHarry Stebbings46:49

        ... but just have the same ownership.

    17. DRDanny Rimer46:50

        Yeah.

    18. HSHarry Stebbings46:51

        That's one thing. But in that case, you were also stretched on ownership, like you're putting five in of that.

    19. DRDanny Rimer46:56

        Well, you don't have Shardul as an, as a partner.

    20. HSHarry Stebbings46:58

        (laughs)

    21. DRDanny Rimer46:58

        So Shardul is always like, "Do you like this company or not?" Like, why are we, why are we not increasing our ownership even though it's a later stage round? Um, so, you know, again, it's, it's back to the, it's back to the dyna- You know, I, I mean, you and I have talked about this, the dynamic of having peers around a table who think very differently from you, but are emphatic about their perspective, and it's clearly different from yours, you just get to a better decision.

    22. HSHarry Stebbings47:30

        I, I, I totally agree with that. Okay, so we have, like, King is an example there. How does that make you advise founders on when to give up versus whether to continue? As you mentioned, multiple iterations didn't work, and it, not it was a surprise, but, like, it was a multiple iterative moment when they hit the winner.

    23. DRDanny Rimer47:47

        It really depends on the story. In the case of King, they kept on reinventing themselves. They reinvented the team, or members of the team, they reinvented the org structure, they reinvented the approach they were taking to the market. So, it was almost as though they were hitting the reboot button every 12 to 14 months, with a new approach getting further convection, uh, conviction about the market and about the fact that they were gonna win irrespective of what everyone else was saying. Um, so that, that is such a great team to continually give them, uh-... give them more time to figure it out.

    24. HSHarry Stebbings48:27

        How important do you think it is for an investor to have early wins in their career? You had quite a few early hits.

    25. DRDanny Rimer48:33

        The recommendation that I always give new partners who join, like Vlad from Airbnb just joined us. I'm super excited about working with him. And the first th- the visceral desire is to put points on the board, get involved, make a lot of investments, develop that muscle, meet as many companies as possible, kiss every frog, et cetera. And my recommendation is always the antithesis of that. Like, take your time, make very few bets, really think through every meeting, d- don't see that many folks unless the bar is maintained.

    26. HSHarry Stebbings49:18

        But you don't have a bar.

    27. DRDanny Rimer49:20

        Well, the bar, the bar is, the bar is the Index bar.

    28. HSHarry Stebbings49:23

        Sure, I- I get that, but what, so what I say is, don't do many deals but meet many people-

    29. DRDanny Rimer49:28

        Yeah.

    30. HSHarry Stebbings49:28

        ... 'cause you need to develop a benchmark of what great entrepreneurs look like.
14. 49:58 – 52:48

    Lessons & Takeaways from Snap

    1. DRDanny Rimer49:58

       be doing.

    2. HSHarry Stebbings49:58

       Totally agree with you there. Um, yes. It's, uh, and, uh, congrats on Vlad. It's, uh, awesome news-

    3. DRDanny Rimer50:04

       Thank you.

    4. HSHarry Stebbings50:05

       ... about that one. Um, uh, we mentioned earlier Snap. Um, I heard about Snap in, when I did some calls, and I don't know if I realized it. Apparently it was a loss. Hit me. What happened?

    5. DRDanny Rimer50:18

       Well, I don't, it's clearly a loss. I mean, we didn't make the investment.

    6. HSHarry Stebbings50:21

       Did you try and they chose someone else, or did you say no?

    7. DRDanny Rimer50:25

       What happened there was, um, we, to my recollection, we had the opportunity to invest but we had a growth fund and we were unwilling to put the amount necessary to lock in the round. And so as a result of that, we didn't do the deal.

    8. HSHarry Stebbings50:43

       Why were you unwilling?

    9. DRDanny Rimer50:45

       I mean, it was naivete, right? We, it was one of our first growth funds and it was gonna represent north of 10% of the fund in one investment, and we didn't think creatively on how we could justify that amount. I remember it distinctly as $61 million dollars, and we were willing to invest $40 million dollars. And that incremental 21, we should've just said, "Yes, we're in for it," and figured out on the back end how we were gonna do that. So-

    10. HSHarry Stebbings51:18

        That's a hard one. Like-

    11. DRDanny Rimer51:20

        It's a hard one.

    12. HSHarry Stebbings51:20

        ... over 10% is a lot.

    13. DRDanny Rimer51:22

        Yeah.

    14. HSHarry Stebbings51:22

        In a consumer social company, which is, has more volatility than an enterprise company. Is it-

    15. DRDanny Rimer51:26

        Yeah.

    16. HSHarry Stebbings51:26

        Uh, I, to your kindness earlier, I'll give you yourself a bit of credit on that one.

    17. DRDanny Rimer51:30

        Clearly, we could appreciate how brilliant Evan was.

    18. HSHarry Stebbings51:35

        Was it really obvious?

    19. DRDanny Rimer51:36

        Brilliant. I mean, had such clarity on what Snap was and what it wasn't and how he was doing it. And to my recollection, which is pretty good on this stuff, 'cause I, I really try and learn from the past. I mean, w- you know, there's, so much of this for me, and I think for, for the, for the, certainly our firm, but I think for the discipline, is about learning from past mistakes. That was really a case of having full conviction about him, but d- not having the courage of investing north of 10% of our fund in the company. And you know how I was talking about valuations? At the time, we thought the peak amount that a social platform would be worth was a billion dollars because Instagram sold to Facebook for a billion dollars. So we were like, "Okay, we're talki- how big can Snap really be, fundamentally?" You know, and, and YouTube was $600 million dollars, or, you know, how big can Snapchat truly be? Is it realistically going to be another social media platform? Can you be worth hundreds of millions of dollars, uh, of hundreds of millions, uh, hundreds of billions, um, as a social media platform? We were very naive about

15. 52:48 – 56:24

    The Facebook Calls Discussion

    1. DRDanny Rimer52:48

       that.

    2. HSHarry Stebbings52:48

       Hundreds of billions dollars as a social media platform. Another discussion that I was told-

    3. DRDanny Rimer52:53

       Yeah.

    4. HSHarry Stebbings52:53

       ... that I had to go to. You're like, "God, I wish you hadn't done all these fucking calls." Apparently there was a discussion at Facebook-

    5. DRDanny Rimer52:59

       Yeah.

    6. HSHarry Stebbings52:59

       ... at four to five billion.

    7. DRDanny Rimer53:01

       Yeah.

    8. HSHarry Stebbings53:01

       And you guys decided not to do it.

    9. DRDanny Rimer53:04

       So, gosh, it's interesting what you're digging up here.

    10. HSHarry Stebbings53:08

        (laughs)

    11. DRDanny Rimer53:08

        No, we, um, so this was a funny one. So we raise the growth fund, the first growth fund. The first call was to Facebook, and so Owen Vanara and Chamath came to London, and Gideon, and they presented, it was the first company that presented. And we offered them what we thought was an incredible term sheet, which was to put in 50 million at five billion, and they came back and st- and, uh, to their credit, you know, went to Microsoft and got, um, they got an offer for 10 billion, um, valuation. And they came back and said, "Look, you can't do 10, but we'll take it. We'll, you know, we're willing to have you invest at, uh, we won't do five, but we'll do it at 10." And we said, "Absolutely no way." That's, there's just no way that we'll (laughs) that we can justify doing it at 10, and so we passed on that. Thankfully, um, to Owen's credit, he f- he felt so appreciative of the fact that we helped him get that Microsoft deal that he ended up selling us some pretty significant secondary, um, of, and so it turned out to be a great investment for Index.

    12. HSHarry Stebbings54:23

        Oof. (laughs) To be fair, though, everything in hindsight looks so- is like, oh, my God, like, ugh. But it's like, that was a nuts price at the time.

    13. DRDanny Rimer54:31

        Yeah.

    14. HSHarry Stebbings54:31

        I remember when Yury did the DST round, I'm really going back here, but I- I- everyone was like, "Nine billion. This guy doesn't get it."

    15. DRDanny Rimer54:38

        Yeah. Yeah.

    16. HSHarry Stebbings54:38

        And it- what an investment.

    17. DRDanny Rimer54:39

        Yeah. Yeah.

    18. HSHarry Stebbings54:40

        What an unbelievable investment.

    19. DRDanny Rimer54:42

        Yeah. I will r- I'll never forget meeting Tomaž. He was at DST at the time, and we met up, and it was sort of a year after we had done that Facebook investment, and it was still pre-IPO, and, uh, and, uh, we were exchanging notes and, and he asked me, "So how have you been spending your year?" And so I told him about the new companies that I was excited about and, uh, and the new investments that we made. And I asked him, "So how's your year been? What have you been doing?" He's like, "I've literally spent my year just trying to scoop up as much Facebook secondary as possible."

    20. HSHarry Stebbings55:16

        (laughs)

    21. DRDanny Rimer55:16

        And I promptly paid for that lunch and went back to the partnership and said, "Guys, we've wasted a year." That was a brilliant understanding of where to double down on value and where to spend your time.

    22. HSHarry Stebbings55:30

        Do you think venture is about the hundreds of decisions you make per day or the one to two that you make a year?

    23. DRDanny Rimer55:36

        Clearly the one or two that you make per year. So my wife, who's a spiritual student, but really she's a teacher more than a student, but she probably would not acknowledge that. You know, she talks about the fact that we are constantly at forks in the road, and really, our, our path is just making decisions at different forks in the road. So we make hundreds of forks in the road every day. And so whatever our path is, is based on this, this ledger of what we've done, whe- whether we've gone left or right. And so a lot of luck and a lot of decision-making, I think, is aligned with those forks in the road.

    24. HSHarry Stebbings56:23

        I

16. 56:24 – 1:02:19

    Unlikely Founders Who Became Incredible

    1. HSHarry Stebbings56:24

       like that way of thinking. I, I do wanna go back to, you mentioned Ev just being naturally, like, incredible. I think what I worry about with founders is sometimes they look at these incredible leaders today and they go, "Well, I'm not that." And it's like they look at them at the end point or kind of 10 years in and go, "Well, I'm not that." Were there any founders that were maybe not obviously incredible, you mentioned Daniel being obviously incredible, Ev, uh, but have turned into obviously incredible founders?

    2. DRDanny Rimer56:52

       By the way, what I would say about Evan is he spiked in certain areas. I mean, he was not great in other areas, and I'm still not sure that he's great in the other areas. So I think it's more about having a really clear spike in a particular s- part of your personality or vision rather than the full product. And part of the reason why, at Index, we love working in the US and in Europe is that, you know, those spikes, uh, manifest themselves in very different ways. In the US, folks are super confident, and so, you know, they will not only spike in certain areas, but they're actually not that good in certain areas, but they'll still think that they spike in those areas.

    3. HSHarry Stebbings57:38

       (laughs)

    4. DRDanny Rimer57:38

       And so the level of polish and sophistication that you have to sift through is really significant. In Europe, of course, it's the antithesis of that, right? Like, they're not even aware at how good they are in particular areas, let alone the fact that they're much better than they think they are in other areas. So it's really sifting through and being able to actually, um, recognize that spike in Europe and, and celebrate that spike and get them to continue to focus on it.

    5. HSHarry Stebbings58:10

       We're gonna get to US and Europe. I just wanna ask one more thing on kind of the deal reviews. We mentioned kind of, you know, not doing Snap and just not doing it. We mentioned some of the winners. In terms of actual, like, zeros, I had a painful zero, um, in Pakistan. Don't ask. I get triggers. (laughs)

    6. DRDanny Rimer58:28

       (laughs)

    7. HSHarry Stebbings58:28

       My family's like, "Pakistan Harry's, like, just triggered badly." Um, and I had learned a lot of lessons. What was the zero that caused you the most lessons?

    8. DRDanny Rimer58:37

       Zero that caused me the... Did you hear that? 'Cause it's more than one zero.

    9. HSHarry Stebbings58:41

       Mm-hmm.

    10. DRDanny Rimer58:42

        But the one that I learned the most lessons from that immediately comes to mind-

    11. HSHarry Stebbings58:45

        'Cause I think you're like, "Danny just has so many hits."

    12. DRDanny Rimer58:46

        Exactly.

    13. HSHarry Stebbings58:46

        And this person went, "Oh, trust me, he's got some zeros."

    14. DRDanny Rimer58:49

        That's right. Yeah. That's right. It's probably Nasty Gal, this company that, uh, was in the US. It was an e-commerce company. Actually, the founder, Sophia, wrote a book, um, that was really popular sort of about her journey as, as an entrepreneur. Um, I can't believe I can't think of the name of the book right now. It's, it's actually, it was a bestseller. But what I learned about the Nasty Gal situation the most was the fact that I was trying my darnedest to make it somewhat successful, just money back or just, um, an ongoing concern, even though my partners were saying, "Danny, please let this go. You are spending so much time thinking about it." I'm like, "Guys, I hardly have any more board meetings." They're like, "Yeah, but how much time at night are you thinking about this? You know, before you go to, you go to bed, how much time are you trying to figure out how Nasty Gal is gonna work? What is the first thing that you're thinking about when you wake up?" And it was a big lesson that I had to just let go of the failure and move on, and that was the biggest lesson that I learned.

    15. HSHarry Stebbings1:00:05

        Letting go of the failure and moving on?

    16. DRDanny Rimer1:00:07

        Yeah.

    17. HSHarry Stebbings1:00:07

        Why was that so difficult to do?

    18. DRDanny Rimer1:00:09

        'Cause it's, it's difficult for anyone. I mean, that's part of the reason why I think that operators are not necessarily the best investors, because-

    19. HSHarry Stebbings1:00:17

        But do you think because it was earlier in your career, it was more important to you not to have a big loss?

    20. DRDanny Rimer1:00:23

        It's possible.But it was really more the fact that I, it was one of those, it was... Okay, so great question. As I reflect on it, it was a big check that I had written. It was a growth investment, I had pounded the table on it, and not only did I, I got full support, unanimous support, so it felt good in the first round, but then I came back because the company needed more money and I pounded the table there, and the partners were like, "Mm, you sure about this?" And I did get a positive vote, but it was not the high average that I got on the first one. And so I felt responsible to the partners that I didn't put good money after bad, and not only did I put good money after bad, but the opportunity cost of spending time trying to turn around Nasty Gal versus focusing on the next great opportunity was very expensive.

    21. HSHarry Stebbings1:01:29

        Did you let your emotions get in the way of your rational financial decision making on the reserves check?

    22. DRDanny Rimer1:01:35

        Absolutely. Absolutely.

    23. HSHarry Stebbings1:01:37

        Have you found a way to detach emotions from investing?

    24. DRDanny Rimer1:01:41

        Yeah, I mean, just... The only way I can do it is by trying to remember all the mistakes that I've done as much as possible, trying to remember what our true north is, what we're trying to do, and making sure that my partners keep me honest.

    25. HSHarry Stebbings1:01:56

        Your best companies don't need you. Agree?

    26. DRDanny Rimer1:01:59

        For sure.

    27. HSHarry Stebbings1:02:00

        So why spend time on them?

    28. DRDanny Rimer1:02:02

        They don't need us to be a success, but our contribution can create another multiplier, another multiple. So if I can take a certain 10X and make it a 12X or a 14X, it's well worth the time.

    29. HSHarry Stebbings1:02:18

        Georgia

17. 1:02:19 – 1:07:48

    Giving an Effective Feedback

    1. HSHarry Stebbings1:02:19

       told me that you are one of the best for giving effective feedback. She's like, "They don't often want to hear it (laughs) but, uh, he's very good at effective feedback with empathy." How do you do that, Danny?

    2. DRDanny Rimer1:02:32

       You know, one of the ways that we talk about Index is compassionate ass-kickers. So I prefer the term compassionate to empathetic. And I-

    3. HSHarry Stebbings1:02:41

       Wha- wha- why?

    4. DRDanny Rimer1:02:42

       And I credit Jeff Weiner, um, who is definitely one of the best CEOs that has ever been in this industry, who, if you haven't interviewed, you should. He was the CEO-

    5. HSHarry Stebbings1:02:51

       Do you know what, he said no.

    6. DRDanny Rimer1:02:52

       Really? Okay, we should talk about that.

    7. HSHarry Stebbings1:02:54

       So we should, we should keep that in.

    8. DRDanny Rimer1:02:55

       Yeah, exactly.

    9. HSHarry Stebbings1:02:55

       And have a little social pressure.

    10. DRDanny Rimer1:02:56

        'Cause he's such an amazing coach for-

    11. HSHarry Stebbings1:02:59

        And an investor.

    12. DRDanny Rimer1:02:59

        ... for founders. And an investor. Amazing investor. Um, but he explained to me the difference. So empathy, you're taking on an understanding, you're like literally taking on the pain of the other, which is not really helpful. Compassion means you understand what the person is going through, but there's a distance between you and the other person. So you can actually be much more helpful 'cause you're not taking on all of that difficult energy and that difficult emotion that is coming from the other person. So compassionate ass-kickers means that you're compassionate, and ass-kicker means that you get stuff done. So if things are not happening, you actually push someone out of the way and you make sure that you execute on the plan. So back to that true north, when it comes to giving feedback to entrepreneurs, uh, I'm being very transparent, I'm very vulnerable and explain my issues, I always ask for feedback on what I am doing well, but more importantly, what I could improve on, on what I'm, how I'm supporting the company or how I'm delivering the message, um, and I don't hold back from making sure that they understand what I'm recognizing and what patterns I'm seeing repeat themselves which I've seen 10 times before.

    13. HSHarry Stebbings1:04:29

        So for me, I'm like, if you have a partnership, it has to be all in one place. Like the team that I'm building will always be in London or where I am, I hope (laughs) uh, as long as they keep me in the partnership. Um, but that's really important. W- just because you could be the best partnership in the world but when you're in SF or New York, boom, communication's lost.

    14. DRDanny Rimer1:04:49

        I think that, um, it is much easier out of one office. That's why when we open offices, we don't actually hire folks to open the office. We actually take partners from one office and move them. So Mike and I moved to San Francisco to open that office, and Shardul and Martin moved to New York to open that office, and it's not in either situation as though this was a family-led decision. There was a lot of revolt with families to do what was right for the firm, but we felt that was the only way to make sure that we understood body language through Zoom calls and screens by bringing that culture to those new GOs.

    15. HSHarry Stebbings1:05:27

        You are literally the only European firm that's been able to scale into the US and really do as well as you have done. What do you think you've done to enable that?

    16. DRDanny Rimer1:05:37

        Thank you.

    17. HSHarry Stebbings1:05:37

        No, I mean this was references as well.

    18. DRDanny Rimer1:05:39

        Okay, okay, okay.

    19. HSHarry Stebbings1:05:40

        Many attributions, but it's true.

    20. DRDanny Rimer1:05:41

        Okay.

    21. HSHarry Stebbings1:05:42

        What do you think you did to enable that?

    22. DRDanny Rimer1:05:44

        A lot of it is, you know, I mean making the tough calls.

    23. HSHarry Stebbings1:05:48

        It's you.

    24. DRDanny Rimer1:05:48

        It's m- it is, again, me.

    25. HSHarry Stebbings1:05:50

        It's me (laughs) .

    26. DRDanny Rimer1:05:50

        It is, no, y- you know, it's making the tough calls as a partnership, like y- you know, the fact that, um, the partners in London, uh, were holding the fort while we set up to, to, to start San Francisco and they gave us the time to actually, you know, make a presence but also invested. I mean Jan was flying there back and forth, you know, once a month for a long time, uh, as we were setting up San Francisco.

    27. HSHarry Stebbings1:06:19

        What was the hardest thing about building the SF office? 'Cause people are like...... all these Index guys from Europe.

    28. DRDanny Rimer1:06:24

        Making sure that we didn't fall into the herdlike mentality, and, and staying true to our roots of being outsiders. That was really tough because basically it's a one-industry town and folks have been there for a long time, or s- folks scream from mountaintops incredibly loudly. But we do have a differentiated approach, so just making sure that we weren't falling prey to what everyone else was doing. You know, and those are some of the proudest moments of Index, right? Like, when we didn't invest in crypto when it was more contrarian to not invest rather than to invest in crypto. That was, that was tough, but it, it felt right.

    29. HSHarry Stebbings1:07:03

        Talk to me about that partnership discussion.

    30. DRDanny Rimer1:07:05

        You know, it was many discussions because we were trying to squint and figure out who was going to be the champion, was gonna lead us to the promised land of being excited about (laughs) crypto, and none of us could do it. There were many approaches. Martin is really good at being disciplined and process-oriented and really thinking through new areas, and so he dabbled, tried to get excited, but he couldn't. So, the baton was passed to Mike at the time, and he couldn't. And then the baton was passed to me, maybe on the consumer side, maybe on the gaming side, and I couldn't. And so at the end of the day...

18. 1:07:48 – 1:14:20

    Assessing Europe's Startup Landscape

    1. DRDanny Rimer1:07:48

    2. HSHarry Stebbings1:07:48

       The interesting thing with crypto is, like, the best outcome is you just bought Bitcoin in most cases.

    3. DRDanny Rimer1:07:51

       Exactly. That's right.

    4. HSHarry Stebbings1:07:52

       Yeah, I totally get you. Uh, you know, Europe is a question mark for a lot of US LPs, um, and I think more so than ever right now. Everyone is down on Europe.

    5. DRDanny Rimer1:08:02

       Huh.

    6. HSHarry Stebbings1:08:02

       Um, a lot of the US firms have retrenched. I was with one of the best partners in Europe, who will remain nameless, um, but, uh, one of your biggest competitors, and they were like, "I can't think of a great fucking company that's come out of Europe in the last three to four years, and that's the first time ever in my career I've felt like this." How do you feel about-

    7. DRDanny Rimer1:08:21

       I mean-

    8. HSHarry Stebbings1:08:21

       ... when you hear that?

    9. DRDanny Rimer1:08:22

       ... I think, I think it's-

    10. HSHarry Stebbings1:08:22

        Are you like, "Total bullshit"?

    11. DRDanny Rimer1:08:23

        Yeah. I mean, well, uh, uh, bullshit, no, but absurd. I mean, we're seeing so many opportunities. There's n- their, you know, every time we've messed up is when we over-rotate a bet against Europe, and even, here's, here's one that was shocking to us. You know, as a firm, we sort of felt like Brexit is going to have an impact on the UK when it comes to starting companies. So, we have to spend more time in Berlin, in Paris, in Amsterdam, Stockholm, all these other places where entrepreneurs are more likely to kick off companies. Well, guess what? We were totally wrong on that. London has continued to maintain a real, uh, uh, basically an equivalent dynamism of entrepreneurial-ism as it did pre-Brexit, which is a total shock to me, but it's absolutely true. So, we over-rotated against a GO and then we had to... and, and we're, you know, we've proactively fixed that. But it's such an example of how, you know, the, the, the, I don't know, the cat's out of the bag? I don't know what the expression is. You know, Europe is just moving forward, and the entrepreneurs are better, and the, and the teams are better, and the support that's being provided is better, and, um, the ability to be a global phenomenon and be globally successful has only gotten greater.

    12. HSHarry Stebbings1:09:56

        Do you recalibrate your mind when meeting American versus European founders?

    13. DRDanny Rimer1:10:00

        Always.

    14. HSHarry Stebbings1:10:01

        How so?

    15. DRDanny Rimer1:10:01

        I mean... Oh, sorry, did I cut you off?

    16. HSHarry Stebbings1:10:03

        No, no, no.

    17. DRDanny Rimer1:10:04

        Yeah, I mean, as I said, you know, we expect the American founders to be very polished and sophisticated, and so therefore we discount quite a bit of what they say.

    18. HSHarry Stebbings1:10:14

        (laughs)

    19. DRDanny Rimer1:10:14

        And, and we do the opposite for European entrepreneurs. What's sort of cool is that, you know, we feel like outsiders in both continents, and so therefore we have a little distance, but we do understand the cultures well. That's why we, you know, we really invest in, in Europe, in the US, and Israel. We don't really invest in other, in other GEOs because we don't s-... Th- that was why we didn't invest in China or in India or Latin America, because we didn't see what competitive advantage we had to understand those cultures, to understand and have the right filter to be able to truly see what the entrepreneur was saying and sift through, you know, what was true and what was probably an exaggeration.

    20. HSHarry Stebbings1:10:59

        You mentioned being an outsider in SF. Do you prefer founders who are an outsider to a market or insiders to a market?

    21. DRDanny Rimer1:11:05

        I would say n- it's more about whether their passion is true to what they're going after. They might have different reasons. Like, you know, one of the companies that, uh, we've invested in and I'm super excited about, in a new market that we haven't spent any time on in a long time and that sort of felt like a sleeper for us but we're super excited about it is the insurance market, and we invest in Ron from Empathy.

    22. HSHarry Stebbings1:11:30

        Mm-hmm.

    23. DRDanny Rimer1:11:30

        And, you know, Ron, is he an outsider to the insurance industry? Yes. Is he an outsider to enterprise sales, to insurers? Yes. He's an insider to the whole concept of empathy through personal experience that has rocked him to the soul, and I have met very few people who have thought about grief and how to help people who are grieving as much as Ron. So, he's sort of an outsider and an insider, which w- what I'm trying to say, in a sort of (laughs) more (laughs) verbose way than I had planned, is that, you know, the outsider/insider is really based on the passion that we recognize. Is this pla- person placed on this earth to go after this opportunity? In the case of Ron, he's an outsider, but wow has he been placed on this earth.

    24. HSHarry Stebbings1:12:24

        Final one, because I could talk to you all day-

    25. DRDanny Rimer1:12:26

        Thanks, thanks.

    26. HSHarry Stebbings1:12:26

        ... but you mentioned your wife earlier.

    27. DRDanny Rimer1:12:28

        Yes.

    28. HSHarry Stebbings1:12:29

        Dude, like you build Index and you are on planes every week, I'm sure, most of your life, actually, for the last 20 years. How do you do that and have a great marriage at the same time? Really.

    29. DRDanny Rimer1:12:41

        I'm glad that you're saying that I have a v- great marriage.

    30. HSHarry Stebbings1:12:43

        (laughs) I suppose your wife-
19. 1:14:20 – 1:24:03

    Quick-Fire Round

    1. HSHarry Stebbings1:14:20

       uh, are you ready for a quick fire, Danny?

    2. DRDanny Rimer1:14:21

       Sure.

    3. HSHarry Stebbings1:14:21

       I love this. So, what have you changed your mind on most in the last 12 months?

    4. DRDanny Rimer1:14:26

       It really is more of what I'm talking about, uh, which is, it's gonna sound really weird, but there's this whole dimension, this spiritual dimension, that I was sort of holding myself away from. You know, like, what, w- how do, how do I explore that side? How do I explore instinct and gut and how do I look for deeper meaning in things that are not evident and, uh, clear in the same manner?

    5. HSHarry Stebbings1:14:59

       Does that mean you're more reflective?

    6. DRDanny Rimer1:15:01

       Definitely. Well, it, it's twofold. It's, one is just trusting my instinct a lot more and s- and sticking to my instinct.

    7. HSHarry Stebbings1:15:09

       But does that go against strong conviction or strong opinions loosely held?

    8. DRDanny Rimer1:15:12

       Yeah, because, you know, I think, especially in this industry, right, we've been trained to think, uh, to think through first principle thinking, to be analytical, to think of all these other signals that either are the primary driver for our investment thesis or are the primary support for our investment thesis. Um, and I'm sort of saying, actually, you know, what is the first impact, what is the first reaction that you have to the founder, to the opportunity? How does it make you feel? Can you build on that? Like, all of that other stuff is actually gonna help you rationalize one way or another, but try and keep it as far away from your decision-making as possible.

    9. HSHarry Stebbings1:16:01

       What's the most memorable first founder meeting you've had?

    10. DRDanny Rimer1:16:04

        Probably the most memorable was, uh, meeting Jason from Discord, because none of the investors wanted me to meet him. They had no desire to get another investor in, and I finally convinced Christian from Playfish, who was at EA, to make an introduction, and Jason gave me 15 minutes, and I showed up at, at, uh, um, uh, Blue Bottle, and Jason's like, "Okay, well," you know, who's a super nice guy, I don't know if you've ever interviewed him, but he's-

    11. HSHarry Stebbings1:16:31

        No, I haven't.

    12. DRDanny Rimer1:16:32

        ... a super nice guy. A-

    13. HSHarry Stebbings1:16:33

        I've got him coming on, actually, in a month.

    14. DRDanny Rimer1:16:34

        Okay, great.

    15. HSHarry Stebbings1:16:35

        Yeah.

    16. DRDanny Rimer1:16:35

        And he's like, "Jason, um, you know, Danny, I'm here. I have 15 minutes." And I said, "Great." And it was just the day or the week that Nasty Gal going into bankruptcy was announced.

    17. HSHarry Stebbings1:16:49

        (sighs)

    18. DRDanny Rimer1:16:49

        And so I wanted to talk about Discord. He's like, "So, um, tell me about Nasty Gal. Tell me about that experience. Tell me about how it went with the entrepreneur. T-" and literally it was an hour of grilling me on how I had handled and we had handled that situation.

    19. HSHarry Stebbings1:17:11

        (sighs)

    20. DRDanny Rimer1:17:11

        And it followed up with him agreeing to have dinner with myself and two partners the night after. And at that dinner, he showed us two slides. It was actually, so Dick Costolo from Twitter was spending time with us as a venture partner at the time, and it was Shardul and myself, and we had dinner with him and he showed us two slides. And based on the retention, uh, of Discord at the time, we followed up the next day and offered him a term sheet. So, that was a really unusual, unorthodox approach.

    21. HSHarry Stebbings1:17:47

        Discord was not the Discord today, is it?

    22. DRDanny Rimer1:17:50

        Actually, interestingly, it's now back to its roots. So, what happened was during COVID, Discord became much more of a mainstream-

    23. HSHarry Stebbings1:17:58

        Yeah.

    24. DRDanny Rimer1:17:58

        ... platform. So, and now it's going back to what it was when we invested, which is really a communications platform and vertical social media platf- I wouldn't say social media. I mean, they would not like that. A vertical solution for gamers to enjoy themselves. That's really what they're about.

    25. HSHarry Stebbings1:18:19

        Who is your most formidable competition and why them? When you hear that x is around a deal, who are you like, "Oh, I'm gonna have to get my, I'm gonna have to get my A game on"? So like for me, again, it's always helpful, like when Christophe at PointNine is on something, shit, I got to get to work.

    26. DRDanny Rimer1:18:35

        It really depends on the space that we're, you know, the sector that we're talking about, whether it's consumer or enterprise, stage, like, you know-We have to, we have to-

    27. HSHarry Stebbings1:18:46

        Let's get-

    28. DRDanny Rimer1:18:46

        ... worry about a lot of competitors.

    29. HSHarry Stebbings1:18:46

        Let's do bread and butter, consumer at A and enterprise at B.

    30. DRDanny Rimer1:18:48

        I mean, like, clearly, cl- clearly the folks at Sequoia are a big, a, a big, fierce competitor, and the folks at Accel are, are fierce. Um, and, you know, I would say there are a number of different players, but those come to mind for consumer stuff. Certainly, Sequoia comes to mind a lot. Benchmark, we don't see them as often anymore, but, you know, we have to really... I mean, we pay attention to all these folks.

Episode duration: 1:24:03