The Twenty Minute VCGetYourGuide CEO & Founder, Johannes Reck: The Wild Story Raising $450M From Masa and Softbank
EVERY SPOKEN WORD
150 min read · 30,001 words- 0:00 – 0:33
Intro
- JRJohannes Reck
I would have not raised as big of a series A. Looking back, I think it was too much dilution. What did change was that suddenly, I felt like a celebrity. That was the moment when I made the biggest mistakes. If you have a Sequoia Capital or an Index or a Spark Capital on your cap table, the reality is that your next round will be so much easier.
- HSHarry Stebbings
Ready to go? (upbeat music)
- 0:33 – 2:16
Start Episode
- HSHarry Stebbings
Johannes, dude, it is so good to make this happen. I have been a fan and follower from afar for a long time. So thank you for joining me, man.
- JRJohannes Reck
Thank you for being here.
- HSHarry Stebbings
Now, I would love to start with the beginning, 'cause I hear that Get Your Guide is actually the result of great friendship. It's you and Tao coming up with an idea from university together. Can you just take me back to you and Tao sitting in a room together, deciding you were gonna start a company together?
- JRJohannes Reck
Yeah, totally. So this is actually 2007, 2008. Um, you know, Tao and I were both students at the Swiss Federal Institute of Technology. He was doing physics, I was doing biochemistry and neurobiology, so something very remote from online travel. And, uh, we both led a student delegation to Beijing in China, uh, at the time. And I made a pivotal mistake in that I booked my flight ticket a day early and arrived in Beijing, uh, without the group. And, you know, I was trying to, you know, do stuff then in my hotel room, I logged on the internet, you know, I was, like, going on Google trying to find things to do, going to the Beijing Wall and, like, doing something with the day, and I couldn't find anything, I was stuck in the hotel room. Next day, Tao shows up, you know, he, he shows me the city. Um, you know, we go and see, um, the Beijing Wall, the Great Wall, you know, we have Beijing duck, you know, in the hutong. So it was, like, a really special day. And, um, you know, from that epiphany really of, like, having seen the, the city through the eyes of a local, someone who speaks the language, we went back, um, to Switzerland, to ETH, and said, you know, "We have to build a website. We have to build a community for people, uh, so they are able to do that." A- and we did that. And, like, the prequel to, to Get Your Guide was, like, we were building a travel community for everyone to be a guide. No one actually used that, you know, I think we had 100
- 2:16 – 7:34
“We Had 5 Bookings in 2 Years. 3 Were My Mum.”
- JRJohannes Reck
guides at the-
- HSHarry Stebbings
'Cause that's what I read. I read that you pivoted three times before you found real product market fit.
- JRJohannes Reck
Totally, it was terrible. So-
- HSHarry Stebbings
So what was the first iteration?
- JRJohannes Reck
First iteration was literally a peer-to-peer websites for guides. You know, s- small, like, untold story is we also considered doing something, uh, like couch surfing at the time. So, so homes and we, you know, we thought, you know, "No one is gonna stay at someone else's home." So, like, you know what, discarding that idea. You know, someone else in San Francisco picked that up, uh, very successfully. And then, you know, we went to guides and we're like, you know, gui- like, guiding is such an important thing in travel, so can't we bui- build a community of guides? But we're thinking this, you know, from the lens of the student. We didn't do any market research or anything. So we built a social network, only 100 students signed up. Most students don't have time to be guides. And we, we had, I think, three to five bookings in the first two years of our prototype. Three of which was my mother because she took so much pity on us students. (laughs)
- HSHarry Stebbings
Three to five bookings?
- JRJohannes Reck
In two years, yeah. But then, like, what, what we realized through that prototype was that there was this gigantic market out there for experience providers, particularly in Europe. I mean, Europe has 60% of the global inbound travel. I mean, just walk out of, outside of the studio here in London and you see, you know, anything from the London Eye to the Thames River cruise to all of the hop-on, hop-off buses. Uh, you know, you see Madame Tussauds, you know, the Harry Potter tours. Like, there's just so much to do in any city. And none of that was digitized in 2009, 2010. So we went back to the drawing board and said, you know, "Look, like, we clearly didn't find product market fit. Like, this first iteration was terrible. Let's pivot into this much bigger market that's out there and that's just not digital."
- HSHarry Stebbings
In those two years, what are you doing? I mean, you have three to five bookings and three is your mother. God loves your mother. Mo- mothers are brilliant, aren't they? But, like, what are you doing?
- JRJohannes Reck
Completing our degrees.
- HSHarry Stebbings
Ah.
- JRJohannes Reck
So we were still at uni at the time. So we're still at uni living, honestly, off very little money at the time. But the, the great thing about it was, um, you know, we could fail. Like, there was no problem i- in failing. And, um, even more so, it was just a lot of fun. Like, you know, we didn't do that really to build a company, even at the time. It was more like, you know, this is a great space. You know, we wanna build, like, a really successful web product. You know, Facebook was going viral at the time, or s- so, so those were, like, the days of Web 2.0. And we're really working at night, to be honest. Like, we were studying throughout the day and then at night we'd do this.
- HSHarry Stebbings
That, that is a common mantra that, like, if you wanna win, you've gotta go all in. You've gotta go all in. Respectfully, you kind of had the, the nice landing pad of being at university. You were working alongside it. You were doing both at the same time. You didn't leave university to do Get Your Guide. In a similar way, I was at law school when I, like, started the show, and it wasn't actually that risky. If the show didn't work, I'd just carry on being a lawyer. Luckily the show worked and so I could drop out. But, like, my question to you is, do you think you have to be all in or can you do the, "No, I'm gonna build it alongside university and see what works"?
- JRJohannes Reck
No, uh, respectfully, you have to be all in and we had an all in moment. Um, so the first iteration of the product actually failed, right, as I told you, and then we had to go out with the second iteration. And with that s- second iteration, you know, we were done with our degrees and, like, we really needed to try to make this work because it was clear you can't just do this on the side. You really need to sign up supply now, you need to sort of, like, build an online marketing function on, need to do online marketing. And at that point in time, um, we really needed to go full time with a prototype that was unproven and two years of failure, right? (laughs) So i- in, in a weird way, it was a very stressful moment. A- and even worse, I needed to go to my parents and basically say, "Hi, you need to fund me for, like, another year after university so, you know, can you please, you know, put a mortgage on your house and, like, fund me?" Because there was no seed capital available. No one would give a bunch of students money at the time for an idea that wasn't proven.
- HSHarry Stebbings
What gave you the conviction? Respectfully, you've had two years of it not working. (laughs) Where did you get the conviction to say, "Hey, parents, remortgage the house, fund me, it's gonna work"?
- JRJohannes Reck
So honestly, I have no idea, looking back.
- HSHarry Stebbings
(laughs)
- JRJohannes Reck
Um, I think, like, the best thing, um, that happened to me at the time was that I had this group of co-founders that was really strongly, tightly knit after this, like, you know, one of, one and a half years, two years of, like, doing this prototype, and we just really got along so well. And it was just so joyful to go to work every morning with them and, like, create something. So it was really more of a gut feeling that this is the right thing to do, it just felt right, than anything else. Um, but the way how we operated at the time was really being in this deep tunnel. Uh, you know, I, I once met, uh, great race car driver Nico Rosberg, like, Form- Formula 1 champion, and he said, you know, "When you go and race, right, you look at the road. You don't look at the wall. Because if you look at the wall as a race car driver, you're gonna hit the wall, like, so stay focused, focused on the road." And I think that's very much what it, what it felt like at the time. Like, we weren't even considering failing. Like, for me, like, failure was non-optional. It was like, you know, that, that's not a valid option. We will stay the course. We will win this.
- HSHarry Stebbings
I, I, I love that, and Nico is a fantastic dude and friend, so I'm pleased to hear you dropped some wisdom from him.
- 7:34 – 8:08
“I Asked My Parents to Remortgage Their House for a Pivot”
- HSHarry Stebbings
Um, I do wanna go back to that. So then when you said to the parents, "Hey, you know what? Fund me for another year. This is gonna work," what happens then?
- JRJohannes Reck
Well, then, um, what happened was a miracle because we signed up the first couple of suppliers, and we got very lucky with a few of them.
- HSHarry Stebbings
How do you do that?
- JRJohannes Reck
Literally cold calling and, like, you know, going to people. Like I, um, I remember I traveled to Salzburg and signed up the Hop On & Hop Off bus tour. It was very random. There was, like, no CRM or anything like that, right? So it was very much, you know, what looks good, you know? So, like, what's nearby? Whom can we address?
- 8:08 – 13:28
The Vatican Tour That Changed Everything
- JRJohannes Reck
And, um, we got very lucky because we got a very good tour agency which did tours to the Vatican very early on. And the Vatican's like one of the major sites in all of Europe. And no one had sold the Vatican online at that point in time. And I still remember the day when they went live, and suddenly the bookings started to tick in. And then we had more and more of these types of experiences, you know. We, you know, signed up Madame Tussauds. We signed up the London Eye, you know, Merlin Entertainment Group. Um, it was just so many of these suppliers that had never sold online, and for them it was very foreign to even think of online bookings in 2010, right, which is, like, very foreign. And, um, you know, then the, the revenue just came and, and, like, you know, we're growing and growing. I think we did something like half a million then in, in the first year, in 2010, in net revenues or commission revenues. More or less profitable. But we didn't have any cash because we were just living off the mortgages from our parents, so we were constantly looking into the abyss. A a- and that was also the first time when I realized there's actually seasonality in travel, so it actually goes up in the summer, and then November, it really goes down.
- HSHarry Stebbings
(laughs)
- JRJohannes Reck
So for the first one or two years without any type of VC funding, we're literally going bankrupt every winter and needed to somehow survive. Um, so it was very tough early years.
- HSHarry Stebbings
So take me through that. So we're starting to see actually relatively good early numbers, and we're profitable enough. At that point, you must be getting inbound from VCs, no?
- JRJohannes Reck
No. This is 2010, 2011. There was basically no venture capital scene whatsoever in Europe, and the, the biggest problem was, um, that we didn't have a US original that we were a copy of.
- HSHarry Stebbings
Hm.
- JRJohannes Reck
So, uh, I remember I was talking to Oliver Sambur at the time. You know, we had started to relocate some of the staff from Switzerland to Berlin because Switzerland was just too expensive for us to survive in our bootstrap mode. And, you know, he looks at me, and he's like, you know, "So, so what's the equivalent here? You know, so like in the US, like, you know, what, what... You're, you're the copy of what exactly?" And I was like, "There is no exact copy, you know. We're trying something new here. Like, you know, experiences, marketplaces don't really exist right now, but I believe it's the future of travel." And he was like, "So do you, do you wanna join Rocket Internet, or do you wanna work on your own startup?" And I was like, "No, I'm gonna work on my own startup." And he was like, "Okay, thank you very much. See ya." (laughs) And, you know, this is really the spirit of the time. It's very hard to, like, recollect because things are so different today, but we couldn't raise funding.
- HSHarry Stebbings
How do you feel about this? I know it's, like, a, a bold one, but how do you feel about that Sam was in Rocket? Part of me is like, amazing what birthed this, like, ecosystem, and then part of me is like, God, it's a bit of a dodgy way to go about innovation, just r- blatantly ripping off American consumer trends and selling back to them.
- JRJohannes Reck
I think, um, the three of them are incredibly smart dudes, and I think they have created the Berlin ecosystem so handily.
- HSHarry Stebbings
They have? You were there. Is it really there?
- JRJohannes Reck
And, and, and it is that. I never did business with them, um, but I must say that without them, um, even GetYourGuide probably couldn't exist.
- HSHarry Stebbings
Wow. That's amazing. It's, it's, it's interesting for me, obviously not being in Berlin, not seeing that kind of firsthand impact that they've had. So it's super to hear. Okay. So there's now the VC ecosystem that exists. We're going through this seasonality where suddenly actually, oh shit, we're going bankrupt every, uh, once every or twice every year. When do we start to raise money? When, when was your first VC meeting?
- JRJohannes Reck
So first, uh, VC funding was, uh, from Brent Hoberman who invested, like, you know, small seed check alongside with a, an outfit called ProFounders, um, here out of, uh-
- HSHarry Stebbings
Shaun.
- JRJohannes Reck
... out of London. Shaun Seaton Rogers, exactly. And that was actually really weird because, you know, I got a ticket, um, you know, sponsored ticket, I think, through some, like, lottery or something to go to LeWeb, which was like a big-
- HSHarry Stebbings
Yeah.
- JRJohannes Reck
... startup conference at the time. And Brent was on stage and, you know, I couldn't raise VC funding. We had this business that was constantly going bankrupt but growing really fast. And then, you know, I, I just hit Brent up after he was on stage and said, "Like, I'm in travel. You founded last minute. We should talk." And he was like, "Okay, interesting. Here's my business card." And, you know, picked up the business card, uh, you know, wrote him a, an email, just, like, cold email basically, and he said, "You know, come and see me in London." But I think, so, like, I don't even know whether he really knew who I was or what I was doing. So I remember I, I went to see Brent at the Made.com offices, um, you know, back then. This is probably, like, 2011, 2012.... and I had to wait for four hours to get, like, a 10-minute meeting, uh, with Brent. And I still vividly remember the meeting. I think he does too. A- and it was basically, you know, "This is what we're doing. You know, we're creating, um, you know, the Experiences Marketplace. You know, this is the, you know, next biggest thing in travel. It's the last big greenfield. No one has conquered it." And Brent looked at me, and he said, "You know, I made one pivotal mistake at Lastminute.com. I had the opportunity to buy Booking.com at the time as a seed stage company. I still regret that to the present day. I'm not gonna make that mistake twice. I'm gonna invest in you." And that was the moment really we got our first funding, and, you know, the rest from there is history.
- HSHarry Stebbings
How much did you raise then?
- JRJohannes Reck
It was a million bucks (laughs) .
- HSHarry Stebbings
A million bucks. At- at what price?
- JRJohannes Reck
It was, um, I think at, like, a five or six million pre-money, so you did very well.
- HSHarry Stebbings
Wow. A million at five or six. Okay. Fantastic.
- 13:28 – 16:06
Why VCs Rejected GetYourGuide 100+ Times
- HSHarry Stebbings
But that wasn't the first VC meeting. I heard that you got rejected 100 times.
- JRJohannes Reck
Yeah. I tried to raise capital, but, like, we got rejected everywhere because, you know, again, like, we were not the copycat of anything. We're first-time founders. No one likes to invest in travel. Like, you know, this is a very weird industry for a lot of people in Silicon Valley. Um, for the people that I met in the US, most people said, you know, "Move over here," or, "We're not gonna give you funding." And you know, I said, "No, we're very happy in Europe. Like, we don't wanna move to the US."
- HSHarry Stebbings
What advice do you have to founders who are on the 50th meeting with VCs and it just doesn't seem to be hitting, it does not seem to be resonating? To what extent are you like, "Go back to the drawing board, it's your story, you're not resonating," versus, "It's just a game of numbers, keep going"?
- JRJohannes Reck
It's very hard to compare the days back then to, you know, what w- we have today. I think that the constant is you have to have tremendous tenacity, and you will have to pitch 100 times, and it will only work once, maybe. But I think what's different is you can refine your story, and you can refine your product-market fit so much more these days, and you have s- so much bigger of a community of mentors and best practices, all of which I didn't have at the time. I didn't have anyone to talk to who had done that before, and I think that's really the big difference that I would really lean into today. Like, lean into the ecosystem and, um, get that help, uh, that is out there because today, there's just so many people who have done it before, who have had the lessons, and who can help you succeed.
- HSHarry Stebbings
So, we raise this million at whatever, five or six, whatever the price was. What happens then? That's our first bit of money. Where do we go and double down, and how does that change?
- JRJohannes Reck
So from there on, um, you know, we continued with our, you know, I would say, like, bootstrapping mode, but, you know, with a little bit more money and s- like, not going bankrupt all the time, whi- which is positive. But, um, what Brent actually then did is he pretty much immediately afterwards set up, um, you know, a meeting with a bunch of, uh, VC funds in the US, and that referral from him as a proven travel e- entrepreneur made all of the difference, so suddenly we're starting to get meetings, and then people got more interested and just, m- you know, there was just a much better reference for me as a first-time founder as well. And, uh, ultimately, there was a, a partner called Alex Finkelstein at Spark Capital who took, like, a very keen interest i- in GetYourGuide, and he was like, "You know, this is interesting. Like, there's something there." And then he led the A round in 2013, and that was really the moment that GetYourGuide was transformed.
- HSHarry Stebbings
Where was the business at that point?
- JRJohannes Reck
The business was doing somewhere around two million net revenue at that point, and growing, I think, uh, 2X to 3X year over
- 16:06 – 23:04
“I Regret Our Series A — Too Much Dilution” - The $14M Series A That Nearly Killed the Company
- JRJohannes Reck
year.
- HSHarry Stebbings
Got you. And your blended take is, like, 10, 20%?
- JRJohannes Reck
25%. Yeah.
- HSHarry Stebbings
25%. So it's kind of doing eight million in bookings then?
- JRJohannes Reck
Yeah.
- HSHarry Stebbings
Okay. Got you. And he does a series A. What was the series A?
- JRJohannes Reck
Series A at the time was actually very big for European standards, at the time, um, so it was, um, somewhere around 14 million, uh, a- as a total, as series A at, like, I think, like, 30, 35 million pre-money.
- HSHarry Stebbings
Wow.
- JRJohannes Reck
Yeah.
- HSHarry Stebbings
Can I ask you, that's quite a lot of dilution. How do you think about and advise founders on dilution today?
- JRJohannes Reck
I would have not raised as big of a series A. Looking back, I think it was too much dilution. Ultimately, it all worked out because, you know, if you're in the company for long enough, you know, there's also founder re-ups and all of that, so I would say personally, uh, it didn't matter, but I do think, um, you should actually manage dilution, um, because otherwise you end up, you know, with problems with your employees, you know, with the, you know, other investors, and also the, sort of, like, t- share of, like, early-stage investors just gets too large, uh, which m- might be a problem later down the road. We, fortunately, at GetYourGuide got all of that fixed over the years, but, uh, I do think at the time, it was a little bit too much.
- HSHarry Stebbings
I'm gonna get in shit for this. Do you think founder re-ups are kind of fair? I mean it in the nicest way. Like, as you said that, with hindsight, you would've not raised as much and not diluted as much. It's like me as an investor going, "Well, my bad. I paid too much. I want a better, better price now," with three years of data down the line and then me wanting a better price. Well, no. I agreed to that, and that's the deal.
- JRJohannes Reck
Totally. I don't think that you should walk back and you cannot correct, um, mistakes.
- HSHarry Stebbings
I'm just seeing so many founder re-up packages now, and, like, investors are getting screwed. And it's like, well, why are we, why are we getting screwed (laughs) ? Do you know what I mean?
- JRJohannes Reck
Totally. No, look, I think the, the founder incentives, uh, that you see, uh, first and foremost should happen after a longer period of time, right? So, so, you know, if I look at myself, I think the first founder incentive package that I personally, um, got awarded, um, by the board with, um, I think happened after, like, a decade or so.
- HSHarry Stebbings
Wow.
- JRJohannes Reck
So this is, like, much, much later, and then there's a lot of market best practices and standards and, you know, if you're a more mature company, you know, an, an investment bank can come in and, like, benchmark that against peer companies, and then it works up. But at the end of the day, you know, at that point in time, you get awarded as a founder CEO, right, or, like, as a founder management team, um, you know, for the work that you're doing, um, in terms of driving share price for shareholders over the next decade.
- HSHarry Stebbings
Totally get you. Okay, so Finkelstein leads the A, and that's a US fund leading a European company. That's a big moment. How does that change the company?
- JRJohannes Reck
Completely changed our life because at the time, the series A was very large, uh, in terms of total quantum, so we had a lot of money, and also very few US VC companies were investing in Europe at the time, so we went from a nobody to a superstar, literally overnight, and-
- HSHarry Stebbings
Could you feel that in the ecosystem, in the presence, how people respond?
- JRJohannes Reck
... 100%. I think the only equivalent, uh, at much greater scale happened in 2019 when we raised from SoftBank Vision Fund, like that massive round. So, so those were, like, the two, I think, defining rounds of, of, of the company. But with the A, (clears throat) it was really going from being a complete nobody to someone who was, like, very present on the startup radar and, and, and the scene. We could hire, like, completely different people. But also, I must say, um, that was the moment when I made the biggest mistakes, uh, in hindsight, in, in, in building the company. So we almost lost the company after raising that A round.
- HSHarry Stebbings
Well, what were the biggest mistakes that you made in that period?
- JRJohannes Reck
So f- f- ... We first and foremost, um, listened way too much to the VCs. You know, we were, like, these young founders not having a clue, and we completely lost our way. And, you know, going to the board meetings literally, uh, looking for advice of what we should be doing and our strategy, instead of pushing for the strategy that we saw working in the day-to-day.
- HSHarry Stebbings
That's interesting. What did VCs want you to do, and how did that compare to what you would've done if you'd followed your gut?
- JRJohannes Reck
Well, they had a much longer term vision, um, around, you know, hey, you should build, you know, SaaS products for your vendors, uh, you know, should do multi-market, uh, you know, should go into all of these new customer segments, into all of these new supply segments, and most importantly, you should hire all of these senior people to do all of that. A- and that's about the worst thing you can do as a series A company without really, like, you know, proper management experience. Um, it's much better to stay very narrow and go very deep and continue to drive the growth that you're seeing from the core customer segments that you have, and do m- much less but do that much better. So we, we were going way too broad, hiring a bunch of people that were completely wrong for the stage of company, no culture fits, and growth then started to really come down while expenses spiraled up like crazy. And I remember, like, a year or so after raising that A round, I needed to lay off 30% of the company and completely rejuggle GetYourGuide to refocus us on the core.
- HSHarry Stebbings
Did you do that quick enough? 'Cause sometimes you can leave it quite late.
- JRJohannes Reck
I did it ... Thankfully, I did it quick enough, and I got incredibly lucky that at the time, a, um, person that's not, actually not very well-known in the European startup, uh, ecosystem, uh, probably one of the most successful European founders of all time, called Kase Kohlen, uh, called me up.
- HSHarry Stebbings
Amazing.
- JRJohannes Reck
Um, you know, one Friday night, I was watching Netflix with my wife, you know, we're sitting there and, you know, he called me up, and he said, you know, he is Kase Kohlen, and I obviously knew him because he was the founder and CEO of booking.com. And he said, you know, "Look, Johannes, I just left booking.com. I've heard about your company. I think you're onto something. Um, give me your numbers." So I run him through the numbers. He wa- was like, you know, giving me, like, every cohort and, like, you know, every kind of like supplier, and it was just, like, really going deep, like, on the first call. And by the end of it, it was like, you know, one and a half hours in, he said, "This is interesting. I'm gonna be in Berlin tomorrow morning, 9:00 AM at your office." This is Saturday morning, right? (laughs) And, you know, next m- morning, I s- ... 9:00 AM, I'm there. So then Kase is there, and, like, he goes to the meeting room with me and to the whiteboard, and, like, he basically maps out, like, the entire journey of, like, in a way he sees value and, like, where I see value. Asked a ton of questions. It was literally like, you know, being in the room with the Jedi Grand Master, you know, for, like, you know, almost, I'd say, the full day. And then he leaves, and he's like, "I'm gonna come on board. Like, I'm joining your board of directors, and I'm gonna personally invest a million bucks in the company." That was incredibly pivotal because it happened exactly at the point of time, like, when I was laying off the 30% of the people, when I needed to reboot the company. At that point in time, I had someone alongside with me who had done this before and who was, like, a really good mentor, and that, that truly transformed me. And, you know, I told Kase two, three years later when the company was successful, "I probably learned more from you than from my dad."
- HSHarry Stebbings
(laughs)
- 23:04 – 24:37
Recruiting Netflix’s Head of Growth Nearly Killed Me
- HSHarry Stebbings
When we look at those bad hires, what do you wish you'd known then that you know now about what makes a good hire and what you did wrong there?
- JRJohannes Reck
I think you need fundamentally different people for a series A to series C, D stage company than, you know, for a pre-IPO or public company with billions in revenue. And I do see it today being on the other side of that. People who are incredibly effective at Netflix or Meta or Google or, you know, even GetYourGuide today are not the type of people who really thrive, um, you know, with a 30 or 50 people company where you still need to continue to refine that core product market fit, uh, where the way how you manage and do things is so different because you're in the weeds every day with the team. You need to ship stuff. You need to be really opinionated about what's going on. And then, the muscle that you have later on around, you know, managing multiple teams, managing organizations, doing roadmaps and, you know, creating more structure in the organization, which you need at some point, otherwise things don't work anymore, um, when you're at a certain scale. Those are just fundamentally different skill sets and typically also different types of people. Oftentimes, VCs mix these two phases. So you really need to have these very entrepreneurial people, um, in the early days who oftentimes, by the way, don't work out in the late days. Um, so when you're going public and, you know, that stage of, of your life, those are not the same type of skill sets, so it's really about can you find these people who are strong culture fits and who are right for your company at that point in time?
- 24:37 – 34:45
“I Hired All the Wrong People – Then Laid Off 30%”
- JRJohannes Reck
- HSHarry Stebbings
What are some of the other big mistakes? Hiring the wrong type of people, maybe listening to the board too much. Anything else?
- JRJohannes Reck
... not having a really tight strategy. You know, founders typically think that they have way more capacities that they really have, so being really tight on what's the core thing that we wanna be doing and how can we deliver value to the customers and how can we obsessively focus on that? So it was really the core lesson from Case and Booking.com was don't do too much. He told me at Booking, you know, they had looked at experiences for, you know, many, many years and, you know, he said, you know, on these type of innovation projects, um, you know, people had to go to the innovation department. The innovation department had one person, that was himself, and it was called the no department because he was always saying, "No, go and refocus on the core." Because typically people underestimate the runway that they have with their core products, and really improving that and, and, and achieving product market fit and scaling that over a longer period of time is much more valuable than doing 10 things that are all sexy but you're gonna be mediocre at all of them.
- HSHarry Stebbings
I totally agree with that. I often see it with kind of founders who wanna go into enterprise too early, and I'm like, "SMB is so much larger than you think. Fuck, HubSpot did it for, you know, 15 years. Uh, you can too." So I totally agree with you there. Okay, so we have those three learnings. What happens then? We've got the 14 million, it's probably like eight now. We've laid off 30%. We're refocusing. Pressure's on because now, like, you gotta perform.
- JRJohannes Reck
Absolutely, and we did perform. So the beautiful thing was we had a lot of really good people in the company, so instead of hiring expensive new execs, I just promoted the best people in the company, which was the best thing I ever did, and gave them responsibility. Although a lot of them were very junior to their jobs. But they were just incredibly motivated and they were in the trenches, so they knew what was going on. We refocused, uh, the company really on all core segments of attraction tickets and guided tours, and just the core European capitals. So we weren't looking worldwide as we did after series A, but just looked at Rome, Paris, London. And we went and acquired, you know, all of the supply there, and, and you know, no- no- no big magic but, um, you know, suddenly demand was coming back and growth was coming back. We're going back to more than 100% year-on-year growth at much better unit economics, and just, you know, I think six to 12 months after that we could raise a really good series B.
- HSHarry Stebbings
What was the series B?
- JRJohannes Reck
Series B was, uh, co-led by Spark, uh, Capital and Highland Europe. So Spark Capital was so impressed by us going through that roller coaster of like dropping off the cliff, you know, reshaping the company, bringing Kase Kolen in, that they said, "Hey, you know, you guys are clearly onto something. Um, you know, you're doing this right." And, and this by the way, another advice for a lot of founders, we gained so much more respect when we went against the board and said, "We're not gonna do this. We're not gonna do that. We'll focus on this. This is my opinion, this is where I stand." You know, suddenly we were seized, they were like, "Yeah, you know, we follow you. You're right." Instead of just saying, "Oh, this is a great idea, we're gonna do it." You know, really shaping the opinion of the board and of the investors was something that I really learned during that, uh, period. And that is something that I would also say, um, then afterwards helped us actually raise the subsequent rounds because we were so much more opinionated about what we were doing.
- HSHarry Stebbings
Series B's often said to be a very hard round. You- you need to have a very clear proven model and say about s- kind of edging into the scale capital phase. When you think about the series B and getting Highland, how many meetings did it take to get the series B together?
- JRJohannes Reck
It was very easy because Highland, um, actually co-invested with Spark and, you know, those guys actually really liked each other. And, um, the partner who actually joined from, uh, Highland, uh, Fergal Mullen is a tremendously great guy and we had immediate kind of product market fit with him. You know, he loved GetYourGuide, he was a customer. You know, he sat down and I vividly remember, you know, when- when he invested, he literally, uh, let us pitch for 30 minutes and then he pitched for 30 minutes. So we were like, "You know, this guy is like something special." Like I had never seen that in VC before. Uh, you know, he showed me through his fund deck, he was like, "This is my strategy for the fund. I wanted to do something for Europe, you know, Highland Europe." You know, he just came back from the US and it was really about creating that ecosystem here in Europe, so we felt it was such a good connection. So it was actually th- that was a very easy one.
- HSHarry Stebbings
How big was the series B?
- JRJohannes Reck
Series B was I think roughly 25 million if I remember correctly.
- HSHarry Stebbings
Out of like 100?
- JRJohannes Reck
Yeah, a little bit less than that, but 90, 100, yeah.
- HSHarry Stebbings
Okay, any lessons on that, on price dilution? 'Cause we're still in a safe zone here, aren't we?
- JRJohannes Reck
Yes.
- HSHarry Stebbings
In terms of like not crazy price.
- JRJohannes Reck
No, it's still... I mean, and those were also still the days where, you know, there were no crazy prices. That- that only happened, you know, from 2015, '16 upward to 2021. For us that was an easy one because we had such a strong comeback, that was one of the easier rounds, uh, that we had raised. But, um, I would say what really was the difference is that we had a strategy, we had a good team, not the team with like the big CVs, um, you know, but a team that was really onto it, that was entrepreneurial, that was hustling every day. And then lastly we had the traction, the numbers to prove it.
- HSHarry Stebbings
Huh. Love that. To what extent do you think series B is traction versus story?
- JRJohannes Reck
It's all in the numbers I think from the series B and C onwards. If you don't have the numbers to prove it, it's very hard to raise that round.
- HSHarry Stebbings
Fascinating. Okay, so we have that and we're now like totally looking great again. We've got 25 million, we've got Highland, we've got Spark, the numbers are good, strategy's perfect or better. Um, what- what happens then? Like we continue to just c- like nail European cities? How do you think about going broad versus deep? Talk to me about that.
- JRJohannes Reck
So from then onward, uh, we basically rinse and repeat for a number of years, uh, and, you know, we're obviously growing our supply base, we're growing the demand base, we're growing to more European countries, we're doing a little bit in the US. Um, but it was basically rinse and repeat all-
- HSHarry Stebbings
Why did you do the US? That's an interesting one. It's a big...... big one to take hold of.
- JRJohannes Reck
It was a big one to take hold of, and to be honest, probably we did it prematurely. If I'd go back in time, it's another lesson for a lot of founders, I would have not gone as early. I would have done more in Europe. I think we would have had even more growth and more profitability. But we did all of it in the US. It wasn't detrimental, so we weren't overextending ourselves and we were building a good foothold there. And, um, then all of that leads up to raising a massive round from SoftBank Vision Fund and Tim Masak in 2019.
- HSHarry Stebbings
How does the SoftBank round come together?
- JRJohannes Reck
At the time, there was a small team there, uh, with Jeff Hausenblatt, Ted Feig, Andrew Sloto, um, some of which have worked at Airbnb. Airbnb had tried experiences from 2015 onwards. They had failed. They had seen GetYourGuide as being, you know, clearly the innovation leader in the space and, you know, they were like, "This is a big market. We just raised this massive vision fund. Let's put some dollars behind it and make that market a reality." And to be honest, the vision fund, in- in a way, actually did do that. So, so with that funding, our market, you know, went on to, like, a completely different stratosphere. And we had the catch-
- HSHarry Stebbings
How did those meetings go? The, uh ... people often talk about SoftBank where it's like, "$500 million in 30 minutes." Was that how it went? What was the experience like?
- JRJohannes Reck
It was not with us. I think that group of people, um, which was doing marketplace investments at the time out of San Francisco, they invested in DoorDash, they invested in GetYourGuide, they were much more like traditional growth equity investors who are very metrics-oriented. It was a very deep diligence process. And ultimately I, while I did get to meet Masa, you know, he was just one meeting, uh, you know, along the- the road of raising that investment. It was very much a growth equity investment process, so there was nothing crazy about it.
- HSHarry Stebbings
Dude, how was meeting Masa?
- JRJohannes Reck
Very interesting. So, so interestingly, Masa was very, um-
- HSHarry Stebbings
Was it in London, or-
- 34:45 – 36:30
The $450M SoftBank Deal... Then COVID Hit
- HSHarry Stebbings
- JRJohannes Reck
Between SoftBank Vision Fund and Tim Masak, we raised an aggregate of, uh, roughly $450 million, uh, dollars at the time. We did take some of that capital to buy out earlier shareholders, so not all of that was primary.
- HSHarry Stebbings
Do you think that was the right decision? It's a lot of money. Do you think you needed that much money?
- JRJohannes Reck
For us, uh, it was the decision that ultimately made GetYourGuide into what it is today, because just six months after we raised that money, COVID hit.
- HSHarry Stebbings
Ooh.
- JRJohannes Reck
So we would be bankrupt without that round.
- HSHarry Stebbings
Pfff... okay. And so we have that. What was the price of that round?
- JRJohannes Reck
I think that was, at the time, 1.5, 1.6 billion.
- HSHarry Stebbings
D- did you feel the weight of that, at that point, 1.5, 1.6 or...
- JRJohannes Reck
No, not really, to be honest. Um, at that time I was already, um, so used to tremendous amounts of pressure and, you know, being at the helm of this company. Wha- what did change was that suddenly I felt like a celebrity. Um, you know, i- it was like you're going into rooms, like everyone was trying to please you or, you know, it's like, you know, everyone wanted to do business with you, all of like, you know, the VPs of like the Googles and Metas, like, were calling me up and, you know, all of the VCs in the world wanted to have a meeting and were suddenly speaking of you as- as if you were, like, the greatest and, like, smartest person on the planet. That's when I actually s-
- HSHarry Stebbings
Did you believe the hype?
- JRJohannes Reck
Hm. To be honest, um, I had too little time to really reflect on that because six months later, we were managing the biggest crisis, uh, in the history of online travel. So that was such a brief honeymoon period that, to me, it was very surreal, uh, looking back. Um, but I actually did learn the hard way that when you're down, then none of these people call,
- 36:30 – 40:12
“We Went to $0 in Revenue in 3 Weeks”
- JRJohannes Reck
so... (laughs)
- HSHarry Stebbings
(laughs) Okay, so t- six months go by. We have this honeymoon period, great period to have, and then COVID happens. And there was this kind of week or two-week period where it was like, "Mm, like, what is this coronavirus it started off with?" Take me to that, the internal discussions there around how bad is this gonna be and then how it transformed.
- JRJohannes Reck
So in February, um, 2020, we have this board meeting with SoftBank, uh, Temasek. Those are obviously, you know, Asian funds, um, and they're already seeing what's going on in Asia where you have lockdowns and everything. And they were saying, "We better build some contingency plans, you know, if this actually spreads to Europe and the US." And, you know, the naive like, you know, still very gung-ho founders that we were, we said, you know, "Look, we've managed crises before. We've had the Bataclan attacks in Paris in 2015 which hit us hard and we, we managed to survive and all of that. We're gonna manage." Famous last words. It took three weeks from that board meeting, uh, to us being at zero revenues, literally zero. Like, I was going on the website and-
- HSHarry Stebbings
Three weeks?
- JRJohannes Reck
... I think there was like maybe 15 bookings a day, down from like, you know, tens of thousands. You know, there was no one on our website. I looked at Google Analytics, it was just really no one. There was just no traffic. You know, we had, we had, you know, 600, 700 employees, we had no revenue.
- HSHarry Stebbings
What do you do?
- JRJohannes Reck
That's a really good question. (laughs)
- HSHarry Stebbings
(laughs) Are you getting to room with Tom and go, "Fuck."
- JRJohannes Reck
I mean, the closest I can describe to the feeling that I had was like having a car crash on the highway at like 100 miles an hour, just straight on hitting a wall basically. So it was like...
- HSHarry Stebbings
You're almost like, "My analytics must be broken." Um...
- JRJohannes Reck
I was like, for, for like two or three days, I, I felt like, "This is surreal. This can't happen, this can't happen to me. I did this for more than a decade and, and this is just not right." I felt like, you know, the world is not right. There's something wrong in the world right now. But then I quickly turned into, um, a mode that in retrospect I describe as being the surgeon. Um, so I tried to put myself out of, outside of the car and the car accident and just said, "Okay, everything is broken. Like, the car is completely destroyed. The patient needs to survive. I need to help the patient survive." So I put my strategy hat on and thought about, you know, what are the potential scenarios that we have from here and how am I going to survive, and not only survive but also thrive after this crisis? And the good thing was, I had you know, a lot of cash on the bank. Um, the bad thing was, I had a lot of investors who basically called me up and said, "You have to lay off the entire company immediately to save all of the dollars you have on the balance sheet, and then afterwards, we'll rebuild." You know, with these different pieces of information, I needed to build a picture of what the right solution was for GetYourGuide at the time, and, you know, Tal, Niels, the CFO, and I, we all huddled in a room for multiple days to work out that crisis plan. In hindsight, thankfully, I think we made all of the right moves at the time, which was, number one, not to listen to the investors who wanted to lay off the entire company, but to rather focus on different scenarios of how long this crisis could take and then how we could build a company that is actually prepared for the rebound. Because already in March 2020, we thought that this is a massive crisis, but there's also tremendous opportunity in here. We have the cash on the bank, so if we're the first ones out of the gates afterwards, if we do really well by our suppliers in the interim and we help, help them sur- survive as well, if we're really agile, if we continue to build our product,
- 40:12 – 1:05:38
The Sequoia Tree Mindset: Grow Through Fire
- JRJohannes Reck
you know, we could be a much better company actually coming out of this pandemic than going in. And that was really the mindset that we took. That same week, I sent an email to the entire staff and I told them about something that I had learned, uh, you know, a year or two years earlier when I did a tour with my wife, Annika, through Sequoia National Park. And one of the interesting things about the big sequoia trees, uh, is that they actually grow after wildfires. So when the park is devastated, the biggest trees grow because, um, they have the nutrient-rich soil after the wildfire and they have full exposure to the sun. And I said, "I want to be that sequoia after the COVID crisis, so let's build that sequoia now."
- HSHarry Stebbings
So where did you invest in that time that allowed you to come out stronger post-fire?
- JRJohannes Reck
So we, um, did a couple of, like, very extraordinary matches. First of all, we came back with that vision and that target picture to our entire organization, and particularly the engineering and product org, which is the majority of our expenses on, on the people side. And we told them, "We would love for you to reduce your salary, but we'll give you shares as a compensation. So if this actually works out, financially it will be great for you. Uh, but you'll need to take the short-term hit." And what happened was magical. Um, our product and eng organization, and, and even beyond that into management function, people on average reduced their salaries by more than 30% in exchange for shares. Some people went down to like 80% salary reduction-
- HSHarry Stebbings
Wow.
- JRJohannes Reck
... in, in leadership. I kid you not. It was crazy. It was such a testament, um, to their belief in, in the company. And then for a lot of the other operational staff there was, um, uh, these short-time labor, you know, things in Germany and elsewhere where, you know, the government would actually cover some, uh, of the cost. And with these type of measures, we basically could go very deep into the pandemic and only had to cut marginally. So we only had to ultimately lay off throughout the entire two years roughly 15% to 20% of the staff. Not a single engineer, not a single product person, despite being at zero revenues for more than a year afterwards.
- HSHarry Stebbings
(exhales deeply) What happens then? We start to see the borders open up and we start to see the world come back. 'Cause we, I don't know in Germany quite how it worked for you, but in the UK, we had like the summer of opening up before, like, the winter of closing down again. You had the same?
- JRJohannes Reck
We had the same. So Europe unfortunately was a disaster for, for two years. We had spikes again where people did some domestic experiences and some domestic bookings, there was some travel going on.
- HSHarry Stebbings
And you get some hope come back.
- JRJohannes Reck
That was the hardest part was, you know, the hope coming back and...... you know, as a CEO you want to energize the company, but you also want to be careful in not, you know, giving them false hope. Um, so that was really difficult. And, you know, 2021 is slightly better because the US, um, where we had built up, uh, you know, a presence at that point in time, already had a very robust domestic market. So, so that was actually driving a lot of the demand in 2021. But it was still 50%, uh, below, uh, 2019 in, in 2021. So it's still severely depressed, and we're still burning through oodles of cash every month. And I-
- HSHarry Stebbings
What are the board saying to you at this point? You've not listened to them, you've not cut team, you're burning through oodles of cash and the consumer demands are not coming back.
- JRJohannes Reck
It goes back to the lesson of 2013. I was so opinionated and so straight, as, "This is the path that we're going up. The entire company behind me. People are just sacrificing more than 30% of their salary." We had not a single person in senior leadership leave the company. So there was such sheer determination that they did trust me. At the same point in time, I did cut expenses wherever I could, right? So in territories where we felt, you know, COVID is not gonna come back anytime soon, you know, we did, did cut people. We did cut, you know, all of the SaaS contracts we didn't need. We really went down and, like, turned every dime in the company, and they did see that. And, um, they also felt, at this moment in time, that was the right thing to do, to rally behind the leadership and, and follow the plan. And obviously we had also other alternative plans if things would have gotten to, to last even longer, but, you know, I said, "This is, you know, the, the plan that we're gonna follow, and we should focus on that."
- HSHarry Stebbings
Knowing all that you know now, what did you not do that you wish you had done?
- JRJohannes Reck
To be honest, and I don't wanna praise myself, but we did all of the right moves during, during COVID. And hindsight, and this is not because we knew, it was, a lot of it was also luck. And I think the thing that really, you know, helped our plans was that the recovery then after... I, I forgot it was the Delta virus, like, you know, it was-
- HSHarry Stebbings
Yeah.
- JRJohannes Reck
... the benign virus I think in, um, early 2022. You know, people were storming back to travel, right? And suddenly there was, like, this complete over-demand and we had kept all of our supply. We had even, you know, struck better deals with the supplier during the pandemic because they needed to have more revenue. Everyone was switching to online channels during the pandemic because people were just getting so used to online bookings. So having rebuilt the product, having fine-tuned all of, like, the kinks that were there before, having, you know, streamlined the supply base, better contracts, more direct contracts with all of the major suppliers and attractions and theme parks in the world, we were coming back insanely fast. And, a-
- HSHarry Stebbings
Did you really see the numbers just go whoof?
- JRJohannes Reck
We went, um, from, you know, late 2021 to, um, March 2022, we grew 10X (laughs) . It was-
- HSHarry Stebbings
Wow.
- JRJohannes Reck
... it was crazy. And then all of 2022 we were already double pre-pandemic, uh, volumes. Uh, so it was-
- HSHarry Stebbings
So wait, h- when did you get back to 2019 levels?
- JRJohannes Reck
Uh, literally, like, in 2022 we're double 2019 levels.
- HSHarry Stebbings
Wow.
- JRJohannes Reck
And 2021 was still half 2019 levels.
- HSHarry Stebbings
Wow. Was that quicker and more than you thought?
- JRJohannes Reck
Yeah.
- HSHarry Stebbings
Yeah?
- JRJohannes Reck
I didn't expect the rebound to be as forceful and as quick. But I did expect it to happen.
- HSHarry Stebbings
Can I ask, in mid-2022 when everything's starting to come back and, "Oh, thank God, the world, it looks better," how much cash do you have then?
- JRJohannes Reck
We thankfully, because o- all of the measures still had plenty of cash, and we did (clears throat) another thing during the pandemic which actually helped us quite a lot in that we raised, um, some convertible debt. Uh, on top we raised roughly 100 million, both from existing and some, uh, new investors. So that was kind of like the reserve that we had on the bank.
- HSHarry Stebbings
For people that don't know, what's convertible debt, and how do you-
- 1:05:38 – 1:08:17
US vs Europe: Why European Founders Are Tougher
- JRJohannes Reck
antidote.
- HSHarry Stebbings
I've got a company now, a great company that's raising in series B in Europe, and they're, they've just gone to the US from Europe and they've just raised a little bit in, like, had meetings in Europe and now they're out in the US raising, and they're like, "God, the difference is just insane in terms of series B investors and how they think and how they operate." Would you say that you had a vastly different experience between UK and US investors, or sorry, European and US investors?
- JRJohannes Reck
Um, I had mostly US investors, so I didn't have many European investors, so I can't really speak too much, um, to what it's like to have a very European board-
- HSHarry Stebbings
You had European engagements though.
- JRJohannes Reck
We had some European engagements, we had some European investors. I think the biggest difference is that the US investors just ha- have had much bigger home runs, and that relieves a lot of the pressure. So TalkSpark Capital, our series A lead, you know, the deal after GetYourGuide was Oculus Rift, right? You know, Palmer Luckey. So, you know, we were basically off the hook a couple of months after they made the investment in us because the fund was already returned. And then afterwards Wayfair was in the same fund, you know, fund got returned another time. And then, you know, if GetYourGuide returns at another time, like that's great but that's, you know, icing on the cake. So that, I think, has a completely different dynamic and VCs in Europe don't have that, and that allows you to think much bigger because your early stage investors don't ha- feel the same pressure. I'd say the, um, on the US versus Europe, um, the, the bigger point is I think we have the same ambition level, uh, among the founders in Europe and the US. I think it's bullshit, to be honest, when people say European-... entrepreneurs don't work as hard, are not a, as ambitious. You know, I've heard Peter Thiel and, like, others say that but I, I think that's BS, to be honest. Like, I think people here, on average, have a much tougher time because it's much harder to raise funds, it's much harder to build a business across Europe than, uh, in the US where, you know, when you raise funding, the addressable market and everything is much bigger. I think where we have a big difference, and that's where we need to catch up, is just the overall flywheel of having had successful in V- VCs, you know, that have raised bigger and bigger funds, and also, and that's very important, having the talent density in the different, you know, startup capitals of Europe. If I wanna hire, let's say, the next chief product officer, at GetYourGuide it's almost impossible to do that in Europe. I need to go to Silicon Valley because the density of people who have done that scale, have served tens of millions of customers a year, built a business that's, you know, 10 billion plus valuation, that just doesn't exist, to build the structures and the processes and everything
- 1:08:17 – 1:12:40
“Germany Spends €100B on Pensions, €7B on VC – It’s Insane”
- JRJohannes Reck
to do that.
- HSHarry Stebbings
Do you think Trump and a less stable America makes it easier for us to bring talent to Europe?
- JRJohannes Reck
Totally. I think that's why both of us are so committed to Europe. I, I think that's the eure- eureka moment of Europe. I think we need to seize that moment a- and I wish, like, um, we had the, the landscape and the leadership to do that. I mean, if I was in charge of Europe and, you know, this-
- HSHarry Stebbings
That was gonna be my question.
- JRJohannes Reck
This is, you know, sort of like completely unrealistic but, no, let's just assume for a moment that's true. I would say pump up venture capital funding to match US levels. You know, we spent 50 billion on VC in Europe. The US is north of 200 billion. Why do we have that gap? Doesn't make any sense. I mean, just to give you an- another number, like, Germany subsidizes its broken retirement system every year with 100 billion, right? (laughs) But we don't, we have 7 billion invested in VC, 100 billion subsidies in retirement system. That doesn't make any sense. That's not the future, right?
- HSHarry Stebbings
But, but I would, I would just push back on that and say we have way too much money in European venture. We have so much money that your execs are getting emails from VCs encouraging them to leave GetYourGuide and start companies, where execs are saying, "Hey, I'm not leaving. This is a weird VC rumor that I'm leaving." Uh...
- JRJohannes Reck
I, I disagree with you, Harry. S- so I agree on, like, the seed and series A and, like, all of that territory, yes, probably there is enough capital, maybe. I don't know but, you know, probably there, there is enough capital. But, you know, when you look at the GetYourGuide stage and, like, our last couple of rounds, like, we had to go round the world, and it is harder to raise as a European company, and that's where the big rounds happen.
- HSHarry Stebbings
I get it. So you're saying kind of CDE.
- JRJohannes Reck
CDE, pre-IPO, and then even public. I mean, like, how can a German company go public in Europe? It's impossible, and like if we go public, it's only with American funds. Like-
- HSHarry Stebbings
Well, you're not gonna list in Europe.
- JRJohannes Reck
So, I mean, we haven't decided that, but the reality is regardless of where we list-
- HSHarry Stebbings
I'm, I'm sorry, I'm n- not being a journalist, being honest, but like, how could you?
- JRJohannes Reck
It's very difficult because we don't have the pools of capital here. That's the problem. And, you know, we don't have these pools of capital pre-IPO, we don't have these pools of capital post-IPO. So that's what I mean with, like, we need to invest a lot more in innovation. It's not just about the next seed round, it's really about scaling these companies and making sure that they stay in Europe, and making sure that they continue to innovate and build in Europe. We need way more budgets for innovation, and that ultimately comes with a lower cost of capital, which means higher valuations for growth stage companies, and that means more money for these companies.
- HSHarry Stebbings
So I agree with you that like, uh, on, uh, what is it when you kind of, uh, meet in the middle. Like, at growth I totally agree with you there and get you that. Okay, so more money at growth for companies in Europe. Agree.
- JRJohannes Reck
Next one as the Prime Minister of Europe that I would recommend here is we should attract talent like crazy right now. We've got the entire immigration debate in Europe just kills me because we have the wrong debate. I mean, of course, like, we cannot have all the refugees in the world migrate to Europe, we need to solve that problem, agreed, but why don't we spend that airtime now discussing how we get the greatest minds in the world (laughs) to Europe? Because that's gonna make or break it.
- HSHarry Stebbings
And this is the best time ever because they're all going, "God, the US is a shit show."
- JRJohannes Reck
100%. It, I would go so far to say anyone who relocates to Europe, um, you know, with a computer science degree or just, like, joining a tech company should get massive tax benefits. I don't know, five years tax free, or like no taxation on stock options, whatever it is. Like, bring them over. Like, we can't compete with less capital, a more scattered European landscape, more bureaucracy, and less talent. Like, it's not gonna work, right? So we gotta solve the talent part. And the great thing is we can turn our weakness into a strength because everyone wants to live in Europe. Like, everyone I talk to, they wanna live here, they wanna live in London, Berlin, Munich, like, you name it. We're a very livable continent. People love to be here. So let's make sure that they come.
- HSHarry Stebbings
That's such an interesting case. You would do, like, tax incentives for great talented people, whatever that is.
- JRJohannes Reck
By the way, I recommended that in Germany and got shot down immediately because, you know, people said, you know, this is not egalitarian, you know, it's like we need to pay the same taxes everywhere, but I think it's so misguided because we have such a-
Episode duration: 1:24:26
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