Mike Chalfen: How to Build Anti-Fragile Venture Portfolios Today | 20VC #904

1. 0:00 – 0:44

   Intro

   1. HSHarry Stebbings0:00

      (beeping) Three, two, one, zero. You have now arrived at your destination. Mike, this is such a joy to do. I've wanted to do this one for about seven or eight years. But thank you so much for joining me today, first.

   2. MCMike Chalfen0:16

      Thank you so much for having me, and, you know, I'm sorry that, uh, I didn't join when you first, first asked me. But, um, you know, I'm a slow learner but I- I eventually made it.

   3. HSHarry Stebbings0:26

      Listen, it was only my mother that actually listened back then, so I think it was a strategic-

   4. MCMike Chalfen0:30

      (laughs)

   5. HSHarry Stebbings0:30

      ... and wise move for you to do. And for those the actually can't see, and would see on TikTok, Mike has the most brilliant bookshelf behind him, um, which just shows how wise he is. But we're gonna start (laughs) today with Mike's intro. And

2. 0:44 – 4:45

   How did you get into venture?

   1. HSHarry Stebbings0:44

      so, tell me Mike, how did you make your way into the world of venture? And then how did you come to found Chalfont Ventures; obviously, most recently?

   2. MCMike Chalfen0:50

      I- I- I grew up sort of quite nomadically. We moved around a lot. And I was very interested in sort of fairness and in sort of how the world ought to be. Because wherever I went, I was a fish out of water and nothing seemed to be how it should be. Um, so I did the obvious path to get into venture, which is I started studying civil rights history. And, um, got a fellowship from the US to pursue more, more history. And, um, when I arrived, um, went to meet the guy I thought I'd study with who said, "You know, I hate this career. I can't recommend it. I read your submission, you could spend your whole life doing that and I cannot recommend it. Good luck. I'm going on sabbatical." So off I went, and started doing two things: uh, playing with the web, a little bit very early, but mainly sort of going and hanging around at the business school and ending up at BCG, which I didn't enjoy. Um, and I left, much to everyone's surprise, at BCG to join vent- a venture capital firm called Apex Partners, which was then a venture firm, in 1996. So, um, you know, I- I was sort of a believer in bottom-up change and that the- the web could enable it. And Apex was an unusual place, um, at the time. Partly because there were only three firms in London that did VC. Um, but it was a very sort of strong, analytical culture. Um, from the beginning, I had to sort of do all my own legals, do all my own numbers, um, write my own recommendations. And so it was very good training, in fact, for what I did later and do today. Um, sort of learned the craft very well. Um, and although the funds got very big, you sort of learned the value of- that every dollar counted. Like we didn't sort of walk away and just lose money casually, even though the funds were pretty big by the time I left after 10 years. But also, it peaked at, I think I was the 31st and youngest partner, but it peaked at 41 partners, so there was this sort of... I learned quite a lot about big partnerships. And, and lastly, um, you know, I- when I look back, I was managing my career rather than managing sort of the money I was investing. And everyone else in the building below sort of the very top level was similar. And, you know, that was something, again, I only realized much, much later. But it was, it was an unusual experience, and, um, really set me up well, both good and bad.

   3. HSHarry Stebbings3:20

      What do you mean by, "Managing your career, not your investments"? Just so I understand.

   4. MCMike Chalfen3:23

      Well, if you're- if- if- if you're a- if you're a mid-level per- if I were... If you were a mid-level person at Apex, you would do the right thing in order to look good, further your career, rather than optimize returns.

   5. HSHarry Stebbings3:39

      Hmm.

   6. MCMike Chalfen3:39

      Sometimes the two completely coalesced, and overlapped, but sometimes they, they didn't. For example, there were winners that I invested in in 2000 or 1999, and as this sort of upswing in the market happened a few years later, and I remember very distinctly suggesting that we reinvest in one of those businesses. At sort of, I don't know, €80 or €90 million euros was the valuation, I think. And the answer was, "No." Like, "We're really, we're past that. We've left that one behind. We've moved on." And that ended up as a €1.5 billion outcome that Apex missed on because it sold. And I sort of didn't fight my corner. Even though I had conviction, I just sort of went with it. That's an example of, you know, managing my career rather than sticking to my guns.

   7. HSHarry Stebbings4:41

      Do you not find there's a misalignment with GPs and LP? We're just diving straight

3. 4:45 – 6:05

   Misalignment with GPs and LPs

   1. HSHarry Stebbings4:45

      in. I much prefer a chat. Do you not find there's misalignment with GPs and LPs today, though? Where I often speak to GPs and I'm like, "This company is a fucking winner. Why are you shipping it to tier one multi-stage firm?" And they go, "Harry, when I tell my LPs that X did this company of ours, I look great." Well, I don't give a fuck. I would like to have more ownership in that company and actually double-down. But there is a misalignment there, no?

   2. MCMike Chalfen5:11

      Yeah, I mean... I'm in a different position because, you know, I don't have a growth pool of capital by design. So, for me, the question for the company is, "Wh- what suits them best?" Does a round with Chalfont Ventures piling in help them? What are the risks from their perspective? And sort of like, sort of rather than the sort of, "What's my incentive?" It's like, "What's best for the company?" is always the first question. And it may be... I'm having one discussion right now with a portfolio company where it may be actually the best thing is for me to price around, and for the, the best possible co-lead to join, and for us to crystallize that round. And that may be better than sort of a multi-stage fund investing kind of too early, which we've seen quite a lot of.... but that sort of seems to be, be the alternative.

   3. HSHarry Stebbings6:03

      No, we totally have. Sorry, I interrupted,

4. 6:05 – 9:58

   From APEX to Chalfen Ventures

   1. HSHarry Stebbings6:05

      and I do, I do just want to get to the founding of Chalfant Ventures.

   2. MCMike Chalfen6:07

      That's no problem. It's okay.

   3. HSHarry Stebbings6:09

      So tell me, Chalfant Ventures, (laughs) how did that come from Apax?

   4. MCMike Chalfen6:13

      Yeah. So, look, the first thing was becoming an angel. And, you know, at Apax, e-, you know, the culture was, (sighs) you know, focused on the business rather than the entrepreneur. And as an angel investing day one, even very small dollars, as I did after I left, you know, it's a sort of Damascene conversion. It was one of these sort of fulcrum moments where I sort of went from focusing on the business to focusing on the entrepreneur and, and the business opportunity sort of together. And, um, that was a very important moment. Um, and you know, when I thought about the lessons from Apax, I decided I wanted to go and be a partner at a smaller firm where I could have significant influence on the firm more. So I thought... I joined a firm called Advent Venture Partners, and it was hard to sort of move, um, different people in and out of the firm to create the best possible team. And so I left, did more angel investing, sort of at more scale. And this is kind of an interesting period, because without necessarily really hustling hard, I was finding very, very good opportunities. Like, I was the first person to commit to Ilumio, which turned into a very good, good business and investment. And, you know, I led some seed rounds personally, and I sort of realized that I didn't need to be at a, someone else's platform, and instead formed, uh, Mosaic Ventures with a couple of people who I knew, knew well. And it was a Series A fund when, uh, Series A funds were scarce on the ground and there weren't yet the sort of multi-stage funds, uh, in quite the same number as there are today. (smacks lips) And at the end of fund one at Mosaic, basically decided that almost having AB tested it as an angel, I decided that I would really sort of prefer to work on my own at Chalfant Ventures. So that's, that's what happened. I can sort of give you sort of more, more context if you, if you like, but that's the story.

   5. HSHarry Stebbings8:28

      I totally understand your perspective there. (laughs) Um...

   6. MCMike Chalfen8:32

      No, look, I mean, it's, it's, it's not actually about, you know, good and bad platforms. It's just, w- what do you want to do and how do you want to express yourself? And, and, and, you know, we're, we're lucky, you and I, where we can sort of express ourselves in our, in our work. And I think there's, there's a Freud saying that's sort of love and work are the cornerstones of our humanity. And, and so for me, that's, that's very true. And you know, you can really express yourself fully i- in, in, as a solo VC in a way that is a little harder as a partner in a firm and responsibilities to other people and building that firm. So that's sort of a big part of it. When I sort of go down a level, I wasn't that great at building a firm, and actually, I think a lot of VCs are not good at building firms. And, um, I certainly decided I wasn't. You know, there are people who are very good builders, they're operators, but they actually often join VCs because they don't want to operate anymore. There are other, you know, there are people who do say they want to operate, but most VCs don't.

   7. HSHarry Stebbings9:39

      Why did you, why did you say that? Okay.

   8. MCMike Chalfen9:40

      And those are the ones, and those are the ones who are capable. I'm not... I wasn't, I wasn't good at building a firm.

   9. HSHarry Stebbings9:44

      Right.

   10. MCMike Chalfen9:44

       So I think if you take away all of those... Sorry, Harry. If you take away all of those sort of activities, I can devote a lot more time to what I think I am good at, which is working closely with entrepreneurs.

   11. HSHarry Stebbings9:56

       Right.

   12. MCMike Chalfen9:56

       So that's sort of what I want to do.

5. 9:58 – 11:20

   Why most VCs aren’t good at building firms

   1. MCMike Chalfen9:58

   2. HSHarry Stebbings9:58

      Why do you think most VCs aren't good at building firms? I agree with you.

   3. MCMike Chalfen10:02

      It's a very reflective role. You know, you're sort of sitting back a lot of the time, deciding when to act and when not to act. And it's, I think it's quite hard to sort of combine being very, very good at that, very, very good at supporting companies, and being a sort of operator with a plan and sort of who can lead large numbers of people or, uh, uh, even a handful of people in one direction. So I think it's sort of, it's a bit of a mix of characteristics. I don't always, I don't, I think they don't always fit well with each other.

   4. HSHarry Stebbings10:42

      I mean, I, I think for me, the biggest thing is 'cause I'm building obviously more of a firm and a team as well.

   5. MCMike Chalfen10:45

      Yeah. Yeah.

   6. HSHarry Stebbings10:46

      Um, is, is a movement from like time spent. Like, I used to spend all of my time investing, and now I spend half of my time investing because you're managing a firm and a team and everything that comes with it.

   7. MCMike Chalfen10:56

      Yeah.

   8. HSHarry Stebbings10:56

      It's a big transition. Um, so I totally agree. You know, my... I, I love so many things about our relationship. I think (laughs) one of the things I love is, is bluntly drawing on your wisdom and experience, given my lack of. Um, and so I want to start top down. We're going to move into Chalfant Ventures, but I want to start bluntly on the correction that we're seeing now. It's quite unnerving for many younger people who haven't seen

6. 11:20 – 13:45

   Is the correction as bad as it seems?

   1. HSHarry Stebbings11:20

      it before. Is the correction as bad as it seems? And how does it compare to prior crashes that you've seen?

   2. MCMike Chalfen11:27

      Yeah. So, as bad as it seems is obviously in the eye of the beholder, but, um, I do think that it's a pretty serious correction. Um, it... I think it feels worse in a way than 2000 did because the reflexivity in the market is just much faster.

   3. HSHarry Stebbings11:48

      Yeah.

   4. MCMike Chalfen11:49

      Stuff happens faster, and that's because of information flow in the web, like root cause. So I think it's hard to know whether it's worse or just, or just things happen faster. So anyway, that's the first observation.... if you sort of divide up a correction into financial and fundamental economics, sort of the f- obviously the two are related, but yes, errors come out of the valuations of risk assets, including tech. In 2000, it was just tech that, tech and telecom, that really had the air taken out of them. But the very, th- th- the web businesses were very mature then, immature then. The cost of capital went way up and they didn't have, you know, stuff like EBIT. And we now know today that the best web businesses can generate enormous profits. So the losses, you know, th- the losses then were a little higher, I think, for most of these st- essentially public startups, which is what, what they were, than some of the businesses today. But there is definitely a sort of risk-asset-specific decline that we're getting today. And then what's I think harder to call, which is, um, compared to 2000, is it looks like there's significant economic headwinds beyond tech valuations. Um, which obviously it's all interlinked with some of the causes of the depression of, well, r- r- retreat in tech, tech valuations. Um, but you know, between war and inflation and sup- supply chain instability and, um, yeah, there's a, a lot to take, a lot to take in. It looks like there's gonna be economic headwinds for a couple of years. In, in 2000, it was really a sort of our, our, our corner of the market was suffering, but the wider world didn't suffer in quite the same way.

   5. HSHarry Stebbings13:44

      Uh,

7. 13:45 – 16:52

   How have prior busts change how you invest

   1. HSHarry Stebbings13:45

      having seen the prior busts in the way that you have and having lived-

   2. MCMike Chalfen13:49

      Yeah.

   3. HSHarry Stebbings13:49

      ... through them as an investor, how does that impact how you think about investing today? And actually-

   4. MCMike Chalfen13:55

      Yeah.

   5. HSHarry Stebbings13:55

      ... Steph Kurgan, a mutual friend of ours, said, "How does that change how you deploy today?"

   6. MCMike Chalfen14:01

      Okay. There's two, obviously, two different questions. So I think my reflection on the sort of early busts w- is that good companies are still good companies, but it might just take longer and maybe more dilution for them to sort of come out the other side. And so it means that I no longer, you know, I, I don't believe in sort of the fast payday. That's sort of one, I, I've sort of mentally just don't count on timing. I can't, you can't time a winner. Um, secondly, and this is very fundamental actually, very fundamental lesson. So one of my t- I had two great mentors at Apex, wonderful people, Barbara Manfrey and Peter Englander. And Peter was my direct manager. Um, and in 2001, when we were sort of catching our breath and wondering what to do next and which portfolio companies to save, he said, "The first question is would you put a single dollar into each of these companies at a zero valuation?" And what he was asking was, is this a fundamentally good business or was, were you just playing the market? Were you just playing the dot-com boom? And that has always stayed with me, and that definitely has affected h- how I invest and how I think of, um, which en- which businesses to invest in. There's a, you know, there may not be fashionable, may not benefit from some of the sort of momentum in the, uh, a wider market if there's a sort of bubble growing. But, you know, you know you're building real value. So that was a huge lesson. To answer Stefan's question on deployment, um, you know, there are two different ways of deploying capitalists, first investments and follow-ons. So in first investments, I've definitely moved faster in 2021 than before or, or, or after. And I've sort of reverted to the mean, which for me is three or four investments in it a year. Um, but what I think I'm investing in hasn't, hasn't changed. So, um, y- you know, I'm still looking for the same kind of businesses, which we can, we can talk about. But basically I invested, you know, day one to series A in software businesses selling to business. And, um, we'll talk about the different characteristics I, I look for, but I haven't really changed what I'm looking

8. 16:52 – 18:30

   Do you regret your pace of deployment in ‘21?

   1. MCMike Chalfen16:52

      for.

   2. HSHarry Stebbings16:53

      Do you regret your increased pace of deployment in '21?

   3. MCMike Chalfen16:56

      No.

   4. HSHarry Stebbings16:58

      Why?

   5. MCMike Chalfen16:58

      I don't. I don't think that the proportion of mistakes was out of whack with the normal proportion of mistakes for me. So I still feel that there were some very, very good businesses, um, that I backed. They cover still a range of different kind of go-to-market motions, end markets they sell to. Um, you know, I don't think that any of them were se- uh, are selling to other businesses that are gonna be significantly hit by the current downturn any more than the rest of the market. So I don't feel, I feel it's a sort of relatively robust crop that I happen to have picked relatively quickly.

   6. HSHarry Stebbings17:46

      I-

   7. MCMike Chalfen17:46

      And then the other way of looking at it, by the way, is am I doing them a disservice by m- investing a little faster? And the answer is no. Again, not really. I feel I'm sort of devoting the right time to, to the companies and to the entrepreneurs that I've promised my time and, and, and sort of service to.

   8. HSHarry Stebbings18:05

      I know, Mike. I've had the joy of working with you. You put craftsmanship at the center, which is, um, a little different to my approach. (laughs)

   9. MCMike Chalfen18:15

      (laughs) You're- you're- you're a craftsman, just, you know-

   10. HSHarry Stebbings18:17

       Ah, yeah, yeah, yeah, absolutely. I mean, what was it? It was... Who said it? It was like, "If Warren Buffett and Lance Armstrong had a love child, it'd be Harry." (laughs) Which I thought was quite insulting.

   11. MCMike Chalfen18:28

       I don't... I'm not sure you're that old.

9. 18:30 – 21:12

   How do you advise new investors seeing this crash?

   1. HSHarry Stebbings18:30

      Uh, no, this is true.

   2. MCMike Chalfen18:31

      (laughs)

   3. HSHarry Stebbings18:31

      Um, t- t- tell me though, like you know, we mentioned kind of the advice you've given me over time.

   4. MCMike Chalfen18:35

      Yeah.

   5. HSHarry Stebbings18:35

      We think about, you know, this new generation of investors who are seeing this crash for the first time. How do you advise them? How do you talk to them in seeing-

   6. MCMike Chalfen18:45

      Yeah.

   7. HSHarry Stebbings18:45

      ... this crash for the first time, and how do you solve their insecurity?

   8. MCMike Chalfen18:50

      (sighs) Um, so if you probe carefully enough, most people were feeling insecure before the crash, but obviously it's come to the fore. Look, I- I enjoy mentoring. So, um, you know, I'm- I have- these are live conversations I have not only with you. I don't want to sound sort of promiscuous as a mentor, but, um, I do enjoy it. And sort of what I've been trying to communicate is, you're not alone. And that there's a big difference between being uncertain, which is completely natural, and in fact it's built into the experience of being a VC or an early stage entrepreneur. Like there's a difference between b- between being uncertain and insecure or anxious. And you can embrace your uncertainty and actually that, if you face up to it, can reduce the level of anxiety. So that's the first point. The second point, I think, is that you need a framework. You need a f- everyone needs a framework. You need, you need a framework to figure out which way is up, which companies am I going to spend time with and why? And again, if you look at, if you create a framework that makes sense to you, everything else flows from that and you no longer have to look at every single decision by itself and sort of be a first principal thinker every single time. Now, you'll still find that there are some situations that don't easily fit into the framework, and it's not a bad thing, it just means it's forcing you to acknowledge you might be about to make a decision which goes against sort of what you set out as how you- you do things. And that may take a different level of conviction to break your own rules. But if you have- if you embrace uncertainty and you have a framework that allows you to sort of understand where each company fits in your world, then... And if you communicate early with your portfolio so that everyone's on the same page and understands the reasoning for that, then you're just systematically reducing the opportunity for excess anxiety as opposed to completely legitimate, um, not legitimate but completely understandable uncertainty.

   9. HSHarry Stebbings21:10

      You said there about embracing

10. 21:12 – 22:45

    Keith Rebois’s acid test

    1. HSHarry Stebbings21:12

       uncertainty. I do want to ask-

    2. MCMike Chalfen21:13

       Yeah.

    3. HSHarry Stebbings21:13

       I had Keith Rabois on the show recently, and he said his acid test for whether he's still a good VC is whether at least half of his friends laugh at all of his deals.

    4. MCMike Chalfen21:25

       (laughs)

    5. HSHarry Stebbings21:27

       Would you agree with that?

    6. MCMike Chalfen21:29

       Um, well, it depends what your strategy is. I mean, there- there are sort of, there are businesses that aim to take share in an existing market, often it's a more efficient service or whatever it may be. There are businesses that aim to, um, create a new market and sort of if you're at the create a new market sort of end of- of- of- of things, then quite often it will appear to be completely strange. But I learned early in my career, um, that any- any business opportunity where I or my partners thought was a very good service that they would definitely use, that was almost certainly addressing way too small a market opportunity.

    7. HSHarry Stebbings22:16

       (laughs)

    8. MCMike Chalfen22:16

       Right? So really, what Keith has- has discovered is that his friends don't represent a big enough market opportunity.

    9. HSHarry Stebbings22:24

       (laughs)

    10. MCMike Chalfen22:25

        It's probably true.

    11. HSHarry Stebbings22:27

        Th- that on-demand helicopter service through Miami really is a big TAM these days, Mike.

    12. MCMike Chalfen22:31

        (laughs)

    13. HSHarry Stebbings22:31

        I think you're mistaken. (laughs)

    14. MCMike Chalfen22:34

        You- you- you know much more about that than me, Harry.

    15. HSHarry Stebbings22:37

        Sa- sadly, I don't. I mostly sit in Fulham these days. (laughs) But, um, I- I do want to move to Chalfant Ventures and one kind

11. 22:45 – 26:23

    What problem is Chafren Ventures solving?

    1. HSHarry Stebbings22:45

       of layer deeper.

    2. MCMike Chalfen22:46

       Sure.

    3. HSHarry Stebbings22:46

       And when we chatted before, you said to me, "Chalfant Ventures is the solution to a problem." Um, what did you mean by this?

    4. MCMike Chalfen22:55

       There's two different things about it. One is that I think, um, I think Frank Rotman from QED captured it about Solar VC, is that sort of we deliver quite a lot of bang for buck. We should deliver a lot of value for compared to the dollars we invest. So I think that's a product that entrepreneurs want, and they know that by having someone like Chalfant Ventures, a firm like Chalfant Ventures involved, we're not going to try and dominate the cap table for the next three rounds. We're sort of giving them maximum advice and help and support now, and then hopefully setting them up for success. So that's the sort of product I think entrepreneurs would like, and- enough entrepreneurs. And then in terms of what it means financially, it means that I'm not trying to own 20% of every company. I'm not trying to dominate each round. Most entrepreneurs have a specific sort of set of goals for a given round, especially early stage. Like, what are the milestones they want to reach? Why are those the right milestones? How do we get there? And they ought to craft a syndicate around those goals.... what's the syndicate that will support me in reaching those goals most effectively and efficiently? And I may say, "Look, I'd love to be your only investor, and this is why y- you might pick me to do that. But there may be a better solution which is a split round, or you may decide that you just want me as a follower." But let's just talk about what your goals are and what the best round is as a result, and how does Chalford Ventures fit into that becomes a derivative rather than the goal of the question. Then you, you know, you're problem-solving together from the beginning, which is how it should be. So quite frequently in the last year or two, I've made offers, um, term, you know, issued term sheets to companies saying, "I can underwrite the round," or, "And I want to invest at least X," which is typically half. And so they've got a choice. And actually, what's come back is probably half and half where entrepreneurs wanted me to take the whole round, and half the time, they wished for me to share a round with a very different kind of investor. So that's what I meant by that statement.

    5. HSHarry Stebbings25:22

       I always say to founders, actually, kind of construct your cap table like you would a sports team and every person has to be world-class at just one thing. I think people also try and solve for too many things in one person-

    6. MCMike Chalfen25:32

       Yeah. (laughs)

    7. HSHarry Stebbings25:32

       ... but if you have f- five different people, actually, you can solve for many different things. (laughs) So I totally-

    8. MCMike Chalfen25:39

       Yeah. Yeah, and, and actually, when you say five, it's interesting. So like there's, there's a, uh, there's been this fashion of inviting lots of angels, and, you know, you really wanna know exactly what each person's gonna bring, whether it's a fund or an angel. And you've gotta sort of ask them, "What will you do for me?" Or, "Will you do this one thing for me?" And then if, as long as you know that, then it's great to have someone at the cap table. But I think, um, I, I suspect not every cap table is, is, is, um, created like the, like the team that you just described.

    9. HSHarry Stebbings26:11

       I always say it's lucky number seven. You have one lead, you have one smaller fund, and then you have five angels, and that's it.

    10. MCMike Chalfen26:17

        Yeah.

    11. HSHarry Stebbings26:17

        You have a WhatsApp group, and that's how you communicate. Ideal, I think. But changes

12. 26:23 – 29:02

    Diversification in your portfolio

    1. HSHarry Stebbings26:23

       according to different environments. I do wanna discuss, well, many different elements, but I wanna start on your picking. Mike, you have quite concentrated funds.

    2. MCMike Chalfen26:32

       Yeah.

    3. HSHarry Stebbings26:32

       You are clearly very good at picking. Um, how do you think about the right number of lines in a portfolio and the right level of diversification?

    4. MCMike Chalfen26:41

       I agree with what Oren said, um, on the show, that LPs don't need diversification, right? They get it naturally in their portfolio. So it's really a question of what's the right construction for, for the, the fund. I was, talked a little bit earlier about having, uh, no r- no real regrets about sort of what I'd invested in in 2021. And what I was saying was that there was a right mix of end markets, go-to-market vectors. You know, there's freemium. There's, um, small business SaaS. There's marketplaces. Um, you know, there's, yeah, there's a range of, of, of, you know, there's enterprise sales. There's a sort of range of, of go-to-markets. And, you know, I think what's important to me is that you sort of have a, a reasonably sort of anti-fragile portfolio construction, not by virtue of having 30 or 20 or whatever number of investments, but by virtue of having different kinds of risks that you're taking, um, with your investments. So-

    5. HSHarry Stebbings27:52

       Well, what, what are those different kinds of risks? Is that different verticals? Is that different go-to-market motions? Is that different stage? Because it, there's many variants that it could be.

    6. MCMike Chalfen28:01

       Yeah, it's, it's all of those things. Less stage because I'm naturally a sort of seed, Seed Two, Series A investor.

    7. HSHarry Stebbings28:08

       Yeah.

    8. MCMike Chalfen28:09

       Um, it's, it's also, however, um, like how much capital's required to learn, so that, that matters a lot. And it's also how many, uh, investments require a completely new market to emerge. So I think you sh- you've gotta have markets. You've gotta have some investments where that's a question. You actually don't know if the market will emerge. You may have a hypothesis to why and why now. And then some markets where you're attacking a, a, a large market which has, you know, for some reason, vulnerable or weak or lazy incumbents, um, or incumbents with incredibly high margins which are beautiful to attack with tech businesses.

    9. HSHarry Stebbings29:01

       Brazilian

13. 29:02 – 32:28

    How do you think about market timing?

    1. HSHarry Stebbings29:02

       banks, the worst. Um, tell me, how do you think about market timing? You mentioned that kind of-

    2. MCMike Chalfen29:07

       Yeah.

    3. HSHarry Stebbings29:07

       ... you know, going after new markets. How do you think about market timing?

    4. MCMike Chalfen29:10

       Mm-hmm.

    5. HSHarry Stebbings29:10

       It's always one that I'm afraid to take risk on.

    6. MCMike Chalfen29:13

       The web is such an incredibly efficient discovery mechanism for needs that you can usually find some kind of indicator as to whether there's an unmet need that exists even if it's not called a market yet, it's not coalesced into a kind of clear market. So, you know, I've, I've got one company in stealth where, um, its service hasn't been announced. Um, it's sort of you've got to really hunt it down to find, to find it, and then you need to describe how you would use the service as a, as a customer, um, before they decide whether they can help you and wanna engage with you on a sort of private one-to-one basis while they sort of build their, build and perfect their product and their onboarding and make sure they're adding value. And that business...... um, gets about 25 inbounds every day of businesses. So like, that's, that's a, that's an unmet need, right?

    7. HSHarry Stebbings30:33

       Mm-hmm.

    8. MCMike Chalfen30:34

       So, you know, I think you can... There are ways of, there are ways of triangulating these unmet needs, I think. Um, I think if you're talking to yourself and you're persuading yourself that there's an unmet need, um, I would sort of catch that.

    9. HSHarry Stebbings30:54

       Going back to the di-

    10. MCMike Chalfen30:55

        Does that make sense?

    11. HSHarry Stebbings30:56

        Yeah, no, it totally does. Going back to the diversification, just so I know-

    12. MCMike Chalfen31:00

        Yeah. Yeah.

    13. HSHarry Stebbings31:00

        ... traditional, like, venture portfolio theory suggests 25 to 30. For you, where do you sit in terms of number of lines that you feel comfortable with?

    14. MCMike Chalfen31:09

        Yeah, so it's nine or ten investments in a fund. Core investments.

    15. HSHarry Stebbings31:14

        Okay. So what does that look like on a capital concentration per company basis? I remember having Brian Sigmund on the show, and he said the great line of-

    16. MCMike Chalfen31:20

        Yeah.

    17. HSHarry Stebbings31:20

        ... capital concentration limits the enemy of great returns. Uh, what does that look like?

    18. MCMike Chalfen31:26

        Like, within the sort of day one to Series A kind of bracket, um, you know, day one, it might be a sort of one to $3 million first investment, and a Series A could be up to eight from my funds. And, um, the... So, so that's the, the first thing. The second thing is, from a follow-on perspective, um, how quickly can you learn whether to really concentrate on, on one business? So I think you wouldn't want to get over your- you wouldn't want to get over, I don't know, 10% of the fund, 10, 11% of the fund with a first check, my view. But if you can pick two businesses which you want to become 15 to 20% of the fund, then that's, that's sort of a very positive outcome.

14. 32:28 – 34:35

    How do you think about reserve allocations?

    1. MCMike Chalfen32:28

    2. HSHarry Stebbings32:28

       Can I ask, Mike, my biggest fuck-ups in venture have always been, um, "No, I'm not, I'm not putting in more money. Have you seen the price on that? That's crazy."

    3. MCMike Chalfen32:38

       (laughs)

    4. HSHarry Stebbings32:38

       And I've missed the next round, and the next round turned out to be cheap. How do you think about reserve allocation, reserves management really efficiently today, with all the years of experience that you've had, respectfully? (laughs)

    5. MCMike Chalfen32:51

       Um, you've got to believe that the new money is 10X money.

    6. HSHarry Stebbings32:57

       Hmm.

    7. MCMike Chalfen32:57

       Or I do. That's how I think of it. And if it's not, then you need to understand whether in the portfolio you've got whether it's sort of more growth return of 3 or 4X, or whatever the number is, is, is... has a place in the portfolio.

    8. HSHarry Stebbings33:20

       So I get you tot- Sorry, I'm interrupting again, but I g- I get you totally, and I'm with you on the 10X, but it's not always that simple. And I'm a founder. To you, my investor now. "Mike, it, I need you to put in another million. It, it really signals a lot to the rest of the syndicate, and it, it signals to new investors. Come on, you led the last round."

    9. MCMike Chalfen33:39

       Right, right. So it's very rare... Oh, right, so it's very rare that the answer is, um, "This is never gonna be 10X." So it's about probability weighting. So I'm very unlikely not to contribute. I'm much more likely to put in an amount that suggests what I think the return opportunity is. So the, the, the reality is that the, the fund sort of small, solo VC, well, I'm not Oren. I'm not expected to lead the next round or hope t- to, to lead the next round, typically. Um, so by sort of removing that possibility from, from my funds, by virtue of size, you know, they're sort of sub-hundred million dollars, um, you know, it's, it's, it... I'm under less pressure to invest a lot in the next round, typically.

    10. HSHarry Stebbings34:32

        I'm just using this for advice now. What do you

15. 34:35 – 37:45

    What do you do if you lose trust in a founder?

    1. HSHarry Stebbings34:35

       do when you lose trust in an entrepreneur or lose faith in their ability to execute? How do you communicate that? It's not like a relationship where you can walk away. You are invested.

    2. MCMike Chalfen34:45

       No, for sure.

    3. HSHarry Stebbings34:46

       What do you do?

    4. MCMike Chalfen34:48

       Well, I mean, how, how I work generally with early-stage entrepreneurs is pretty, we're in, we're in touch pretty frequently. So there's typically, like, we have typically a weekly or biweekly call, and it's a standing call. And most of those calls are devoted to what is the problem that we're trying to address, rather than updating me. So it's like 30, 40... 30 seconds, 60 seconds on, quick update, here's a problem we're trying to deal with. So, both ways, there's openness, um, as a result. And with just that cadence, you know, you know, you... The entrepreneurs are not constantly in sales mode. Like, they're sharing, and we're hopefully resolving problems together. So when a problem comes up, which is p- a performance problem by the founding team, i- you know, among- amongst the founding team, you know, you, you sort of first of all need to start by saying, "This is a hard, this is a hard one." You acknowledge it's hard. You sort of say, "Look, here's some things I've learned. This is how I've learned it. Um, do we agree to stop on that?" And you can sort of say, "Look, this is, this is now a... It's a shared problem. It's a problem for the company, so what's the best way to resolve it?" And you sort of, w- y- you rightly... I mean, I'm not... it's not, not just a presentation

    5. NANarrator36:18

       (laughs)

    6. MCMike Chalfen36:18

       ... but you rightly sort of present it as a shared problem. And-... you know, you need a sort of get well plan for the company. That may involve-

    7. HSHarry Stebbings36:30

       But-

    8. MCMike Chalfen36:30

       ... it may involve-

    9. HSHarry Stebbings36:31

       But I, I don't trust you anymore.

    10. MCMike Chalfen36:34

        Why?

    11. HSHarry Stebbings36:35

        How do you say that to an entrepreneur? It's fucking hard. (laughs) I'm going through this-

    12. MCMike Chalfen36:40

        No, I don't-

    13. HSHarry Stebbings36:41

        I'm going through this now, to be fair.

    14. MCMike Chalfen36:41

        You don't say, you don't say, "I don't trust you anymore." You say, "This hasn't happened, and that's a problem." It's just, it's just facts, and you, you say it with, with empathy. You say, "This, I understand this is hard."

    15. HSHarry Stebbings36:54

        Hmm.

    16. MCMike Chalfen36:55

        And then you sort of make it their... It's like, it's a decision maybe th- that they need to take with their team about how to reallocate responsibilities or may give them the support they need to perform better, but you sort of, y- you know, you sort of give them a, a sh- a window of time to sort of resolve, resolve matters. And the answer is, you, you've got to give, give people their dignity, right? So you find a way to do that.

    17. HSHarry Stebbings37:28

        You said about feed-

    18. MCMike Chalfen37:29

        So I think it's-

    19. HSHarry Stebbings37:30

        You said about feedback with empathy there and understanding.

    20. MCMike Chalfen37:33

        Yeah. Yeah.

    21. HSHarry Stebbings37:34

        The thing that strikes me there is parenthood, actually, listening to you.

    22. MCMike Chalfen37:39

        Yeah.

    23. HSHarry Stebbings37:39

        And obviously, I know you have wonderful children.

    24. MCMike Chalfen37:42

        I do.

    25. HSHarry Stebbings37:42

        Did becoming a parent help you

16. 37:45 – 39:47

    How did becoming a parent change you?

    1. HSHarry Stebbings37:45

       communicate with founders, be more patient, and how did becoming a parent change you as an investor?

    2. MCMike Chalfen37:52

       So actually quite a few things changed me, not just being a parent. But a lot of things fed into it. Like one prob... So, I think even more important than parenthood actually was just significant things going wrong in my life. So in a short-ish period of time, you know, unfortunately, you know, my father died very suddenly, quite young. Um, there was the sort of dotcom bust and so do I had been the glory, you know, the, not the glorious, you know, internet kid, but you know, like the king of, of, of APACS internet, and that was all wonderful, and then it all kind of, it turned out I was a prince, and it turned out I was the pauper.

    3. HSHarry Stebbings38:34

       (laughs)

    4. MCMike Chalfen38:35

       And, um, you know, I, I got divorced and then dumped. Like APACS fired me. So, you know, and it was not personal, it was just through a stage. But like, you go through cr- like a period of time like that, and you know, you, you don't do things from a p- a position of be- of feeling like you're better than other people. Like, life's a great leveler. What worries me in the venture business to a degree is people for whom nothing's ever really gone wrong and life's been pretty easy. And so I think going through those things that I described was incredibly impactful and sort of my ability to start with the people in the room rather... and feeling, understanding what they're feeling like rather than just sort of analyzing a situation and telling them the answer, which is rarely the most effective path to communicating well.

    5. HSHarry Stebbings39:41

       I don't know how bad it is of me, but there are some questions I, I, I would love to ask on the back

17. 39:47 – 45:55

    How do you manage ego?

    1. HSHarry Stebbings39:47

       of that. (laughs)

    2. MCMike Chalfen39:47

       Okay.

    3. HSHarry Stebbings39:47

       Which makes me... I feel like a vulture journalist now, but it's like you mentioned like prince to pauper and like being in the heyday of heydays-

    4. MCMike Chalfen39:56

       Yeah.

    5. HSHarry Stebbings39:56

       ... at APACS. Was ego management a problem for you? You were young and you were doing really, really well. Was ego management challenging? And how have you learned to control ego over time?

    6. MCMike Chalfen40:12

       It was definitely a problem.

    7. HSHarry Stebbings40:13

       Hmm.

    8. MCMike Chalfen40:16

       Um, you know, there were very tiny differences between, you know, me and other people who were on the way up in the organization, and I'm not sure I always

    9. HSHarry Stebbings40:28

       (laughs)

    10. MCMike Chalfen40:28

        ... wore that, those, you know, I think I, those people felt their differences more than they, more, more than was appropriate and I probably also did. So that created tension. Um, you know, I was, I was dealing with more volume than anyone in the building had ever experienced. You know, in the dotcom, like this, the, the pace of company creation was pretty intense. And, um, you know, that was a, you know, I was under a fair amount of pressure. Um, I had two small kids. My marriage wasn't great. Like, I was definitely not sort of optimally placed to, um, sort of have perspective on life at that time. And I'm, it was definitely, it was definitely a problem. What made a difference was actually one of the most experienced people in the business, actually an operator who became a very, very good investor, a telecom investor called John McModigal, he's called me into his office and said, "I just want to talk to you because I think you're very good, but if you continue as you are, that will be less important than sort of whether we want you to stay here." (laughs)

    11. HSHarry Stebbings41:43

        What did he mean by-

    12. MCMike Chalfen41:43

        And he was very-

    13. HSHarry Stebbings41:44

        What, what did he mean by continue as you are, in terms of the high volume, fast pace?

    14. MCMike Chalfen41:48

        No, in terms of sort of behavior with colleagues.

    15. HSHarry Stebbings41:51

        Ah.

    16. MCMike Chalfen41:52

        And it wasn't senior colleagues, it was sort of peers.

    17. HSHarry Stebbings41:57

        Hmm.

    18. MCMike Chalfen41:57

        So, you know, it was very helpful. And he wasn't sort of... He didn't say, "Look, this is a terrible threat." He's just saying like, "Just calm down. Just calm down." And it was, it was very well taken.

    19. HSHarry Stebbings42:12

        Did you believe you were better than them? And the trouble is, and I'm asking this because I see a lot of, you know, the younger generation of VC at every fucking conference, at every event, at every dinner. And, uh, I mostly, I've been successful, Mike, because I sit in one room (laughs) and type and continue to type and then go to bed. (laughs) ... but I look at him, I'm like, "Actually, I do work harder. And actually, sometimes I, I do think I am better." Which is wrong. You're not. But do you know what I mean? Like, did you think you were better?

    20. MCMike Chalfen42:46

        Well, you're, you're ... Y- you've put yourself in a position where you're the best person to do what you are doing, in various ways that we could talk about if you, if you wished. You know, 20 Minute VC is exactly what you should be doing, both as a media platform and, and as a fund. And w- whe- whether I felt I was better than people or they felt they were better than me, which I'm sure happened a lot, um, definitely a couple of people who were normally one or two years behind me a- at Apex sort of said over drinks, "You know, I just don't understand what you invest in. What's that? What's this? It's kind of crazy." Um, so there's definitely two-way, two-way street. Um, the question is not, am I better than you? The question is, given what I think I'm very good at, is this place the right place for me? And actually, a lot of w- the last few years at Apex, when Apex scaled and I ended up, I think, as the last remaining venture pa- focused partner in, in, in what was becoming a growth and buyout and then a buyout shop, y- you know, it's always, always sort of isolated. And it ... You know, I shouldn't have been there, and it was right that I didn't get to stay and that I left. And, you know, the beauty of what you and I do is that we're doing exactly what we should be.

    21. HSHarry Stebbings44:20

        I, I totally agree. Um, can I ask, you know, you mentioned l- leaving Apex there and, and Apex kind of firing you. Uh, so much of our identities are tied up in what we do. Did, did you find that challenging from an identity perspective?

    22. MCMike Chalfen44:36

        No.

    23. HSHarry Stebbings44:36

        A- And how did you deal with that, Mike?

    24. MCMike Chalfen44:40

        It had been a long time coming, just from a stage perspective, so it didn't feel unnatural. It was, nevertheless, pretty hard. Um, you know, we had the conversation, I think I was doing jury service.

    25. HSHarry Stebbings44:58

        (laughs)

    26. MCMike Chalfen44:58

        And, uh, I was perhaps uncharacteristically quiet that week. Um, but I had a coach at the time who kind of really helped me figure out that it was just a fit problem. It wasn't like there was something wrong with me. It's just there was a fit problem. What I was and what Apex was becoming was, had become, was two very different, different things. So, it was okay from an ego perspective, but it wasn't, it wasn't easy. But it was okay.

    27. HSHarry Stebbings45:38

        Yeah. I find so much of kind of what we do is, is tied up, you know, our, our work identity is tied up in our personal identity. That's why I hate going on holiday, 'cause then I just don't know (laughs) what to do or who I am. Um, I, I, I do wanna ask, though, Mike, you know, when we think about kind of how you've changed as an investor over, like,

18. 45:55 – 48:26

    How have you changed as an investor?

    1. HSHarry Stebbings45:55

       20 years-

    2. MCMike Chalfen45:56

       Sure.

    3. HSHarry Stebbings45:56

       ... have there been one to two professional things that've changed the way you are as an investor? Often, it can be the most painful or challenging th- uh, the catalyst.

    4. MCMike Chalfen46:07

       Yeah. So I think, I think, um, the, the dot-com crash, that ... being faced with, like, "Is what you have invested in actually a good business?" Like, that was very, very tricky. That was a very, very important question. Um, and as part of that, I remember turning down, in fact, not one, but two entrepreneurs. Um, so there's this company that was being, uh, th- th- these two companies that were competing. They decided the best com- the best idea was to combine. And it was two entrepreneurs, um, who were good and would be complementary. And for the combination to happen, all that was gonna take was for Apex to say, "Yes, we would put, from a very large fund, from a 1.8 billion euro fund, that we put a million euros in." And th- these two entrepreneurs were Mark Schuster from Upfrontnow and a guy called Matin Negren, who I respected a lot. Um, and we said no. And that was my recommendation, was not to put a dollar in. And it wasn't ... It was a mistake in the sense that Mark built a business. And it was probably not a mistake in the sense that where we did concentrate capital ended up as bigger, more valuable businesses. That's a very hard discussion with, you know, entrepreneurs who are very good. So, that was a sort of painful moment.

    5. HSHarry Stebbings47:47

       Did it change you? Like, did you change anything about the way you did this role?

    6. MCMike Chalfen47:53

       Yeah, it made me more upfront, li- having gone through that. Like, you know, there's a big difference between someone building a business and someone building a business y- y- you think you should put money in.

    7. HSHarry Stebbings48:07

       Hmm.

    8. MCMike Chalfen48:08

       And, um, the most important thing was being very upfront about it, and it was a very sort of clear decision process. And it was, it was very hard, and it wasn't even ... 'Cause I didn't think they were gonna build a good business. It was just a business which fell below others where we wanted to concentrate capital

19. 48:26 – 50:54

    Are VCs upfront today?

    1. MCMike Chalfen48:26

       at a time of, of scarcity.

    2. HSHarry Stebbings48:30

       Do you think VCs are upfront today?

    3. MCMike Chalfen48:33

       It's very, very hard because it's such a social business.... and there are referrals, and people take blind references and, "Should I work with this person?" And, you know, it's f- I think there's a lot of smiling and nodding. And this is part of, it's part of the, sort of... it's part of syndicates coming together quickly. It's part of rounds happening quickly, sequentially for com- for companies. It may be that in the next year or two, we all are a bit more up front, because we kind of have to be.

    4. HSHarry Stebbings49:07

       Yeah. I hope so. (laughs) Um, uh, I- I've become a fan of the direct comms a lot more over the last few years. Um-

    5. MCMike Chalfen49:15

       I know. You've, y- and you've been very helpful to me in that respect too, so, yeah. You, you, you, you are practicing what you preach.

    6. HSHarry Stebbings49:21

       Uh, not at all. I- I wanna dig in on something in particular, which a lot of, like, our mutual friends said. I mean, uh, specifically Richard, Trey, and Charlie. But it's... Plenty... When a lot of others pass, you dig deeper, and so I just want to understand, really, your mindset around, what does it take for you to turn over another card when others don't want to and will go, "Nope," on first glance?

    7. MCMike Chalfen49:45

       So in sort of diligence-wise?

    8. HSHarry Stebbings49:47

       Yeah.

    9. MCMike Chalfen49:47

       So, to me the question is sort of, when something's not obvious, can I imagine how it could become very, very interesting and possibly dominant? Right, so very different and possibly dominant. And, um, you know, that is a... That's always worth, to me that's always worth, worth a look. So, it- I probably wouldn't take another look if it looks like it's the tenth business making, um, you know, sales force data more freely available to salespeople. I mean, or, or, or whatever it may be that's a sort of... where there's a low barrier to c- compete. But if I think that a business is genuinely, has a different view of the world, ideally both in a, terms of its technology choices and the business outcome that's possible for

20. 50:54 – 54:27

    Outcome scenario planning

    1. MCMike Chalfen50:54

       customers, that's worth a look.

    2. HSHarry Stebbings50:57

       How do you think about outcome scenario planning? The big lesson I have from speaking to some of the best is, uh, you can never predict the size of your winners-

    3. MCMike Chalfen51:04

       Yeah.

    4. HSHarry Stebbings51:04

       ... in which case, surely outcome scenario planning leads you to the wrong decision?

    5. MCMike Chalfen51:08

       Very acute question. Um... I think that's true. However, I think that there are two different kinds of good businesses that, broadly, that we could, we could invest in and support. One is a business that you just don't know how big it'll be, but the economics are gonna be very strong. And if... And, and that's just got a very, it's got a fundamentally different trajectory than a business which needs to be very big in order to have spectacular economics. And I think it, the mistake in the last couple of years in our market has been a lot of businesses, that could be good businesses at prices that they could be enormous businesses with unbelievable economics.

    6. HSHarry Stebbings52:01

       Hmm.

    7. MCMike Chalfen52:02

       And so they've been mis-sized in terms of their cost base as a result because they've been o- they've been over-capitalized, therefore mis-sized in terms of their cost base, and, you know, then, then we're in sort of a world of pain as investors and founders suffer as a result. Employ- employees don't make the money they, you know, could have made if they'd sort of taken different decisions. So, I think if we categorize those two right from the start accurately, then that helps a lot in terms of not being over-specific in terms of out- outcome planning. But you sort of say, I know that this is the sort of business which, if it's doing well, you know, I won't need to put endless amounts of money in and, um, if it doesn't become that big, it'll at least c- compound very, very profitably. So, you know, an example is a winner for me from 11, 12 years ago called The Foundry, which was making 35 or 40% margins when it was really not very big. And it didn't grow that fast, but it produced 40% margin, 35, 40% margins, for 10 years. Growing at, you know, growing at 30, 40% a year, requiring no capital. And that's, that's a sort of very interesting model. Y- you need to know, I mean, that, that's not a great investment necessarily for a huge fund. But for most funds that's actually, that's a really interesting model. Ideally they're growing faster than that, the businesses, but that's sort of a different point. And then there are businesses where you, you know, which are real moon shots. And the trick there is, I think, not getting sucked into imagining that they're sort of huge and ready to scale when they're not. And that's a way that the whole market, in my opinion, in the last two years, is they've over-funded businesses as if they're ready to scale. And, you know, if only that money had been held back for a year or two, then maybe it would have been a great decision to, to capitalize them well. But, unfortunately we sort of, I think as you said, foie gras-ed them.

    8. HSHarry Stebbings54:12

       (laughs)

    9. MCMike Chalfen54:13

       (laughs)

    10. HSHarry Stebbings54:14

        I mean, at the core of, of both sides really, it is unit economics-

    11. MCMike Chalfen54:17

        Yeah.

    12. HSHarry Stebbings54:17

        ... in terms of what builds a sustainable business or what doesn't.

    13. MCMike Chalfen54:21

        Yeah. Yeah.

    14. HSHarry Stebbings54:21

        You know, this is something where you've been incredibly strong. I do wanna-

    15. MCMike Chalfen54:24

        Mm-hmm.

    16. HSHarry Stebbings54:24

        ... kind of double-click on this because I don't think (laughs) that our generation actually

21. 54:27 – 57:16

    How do you approach unit economics?

    1. HSHarry Stebbings54:27

       fully appreciates and understands unit econ to the extent that we should.

    2. MCMike Chalfen54:30

       (laughs)

    3. HSHarry Stebbings54:31

       How do you approach u- unit economics? How do you look at them? When's the right time? Can you just walk me through your thinking around it?

    4. MCMike Chalfen54:38

       Good unit e- economics, uh, basically mean you can ultimately, at some point, choose to control your own destiny.... what it means is that there's some size, whether it's 10 or 50 or 100, or whatever million dollars of, of revenue at which point the company could choose not to rely on capital to grow.

    5. HSHarry Stebbings55:04

       How much does-

    6. MCMike Chalfen55:04

       So my-

    7. HSHarry Stebbings55:04

       How-

    8. MCMike Chalfen55:05

       So my, so my view is, poor unit economics mean you're always relying on the next investor, and ultimately the greater fool. Now, most businesses, to your point, most businesses don't know if they have good unit economics at very early stages. But you can sort of imagine what good unit economics would look like for a given business. So, you know, if you have a, an enterprise software business, uh, applied AI for, you know, for a given, a given sort of process in the semiconductor industry, you know, if it's addressing an acute pain for fabs, then ... A- a- and if there are very few competitors to that business, even though it's got long sales cycles, and after sales there's, you know, you need to prove that the technology delivers value to customers, you can imagine that once that's proven, really not very many times. The sales cycles and roll-outs will happen relatively fast. So you can sort of imagine what good you can, unit economics will look like for that business. I'm giving you a deliberately sort of specific example that's sort of relatively obscure, but you know, it's not a, um ... Even with a type of business which the broader market doesn't sort of associate with good unit economics, you can imagine what good unit economics looks like for any, for, for most businesses. And then you can assess whether the conditions required for those unit economics to obtain, whether those are really likely to, to emerge. So it's-

    9. HSHarry Stebbings56:58

       Can I ask-

    10. MCMike Chalfen56:58

        Does that make sense? So you don't, you're not looking for proof of unit economics, but you've gotta imagine all the levers clicking into place so that good unit economics emerge over time.

    11. HSHarry Stebbings57:08

        I, I'm t- I'm totally with you. I think in terms of predictability, it's much easier with an enterprise, um, you know consumer's-

    12. MCMike Chalfen57:13

        Mm-hmm.

    13. HSHarry Stebbings57:13

        ... so variable. I do wanna ask-

22. 57:16 – 58:48

    When have you gotten it wrong?

    1. HSHarry Stebbings57:16

    2. MCMike Chalfen57:16

       Yeah.

    3. HSHarry Stebbings57:16

       ... has, has there been a time when you got it wrong, and why did you get it wrong? It could be either for the better or for the worse.

    4. MCMike Chalfen57:23

       (sniffs) Um, do you mean unit economics?

    5. HSHarry Stebbings57:29

       Yeah.

    6. MCMike Chalfen57:29

       Specifically? Yeah, I mean I think, I think businesses that start in cert- in, as services, and the objective is to build out, u- use the service process to build out software to automate, I think that's very, very, very ... I've, I found that very hard to do. And so I've invested in businesses like that a couple of times in my career and just got that transition completely wrong.

    7. HSHarry Stebbings57:55

       Where did they fail in that transition? In terms of just productizing it entirely, and then it just stays as a low, low margin services business?

    8. MCMike Chalfen58:03

       In enterprise in particular, a lot of larger businesses actually want services. Like there's a reason Workday and SAP have big services lines. Like, the customers want the provider, the, the, the vendor to really hold their hands and make sure that value is delivered. And, um, that's sort of the underlying, that stickiness is an underlying reason why it might be hard to automate something even if you wish to. Even if you could, it's very hard to get away from that sort of client need.

    9. HSHarry Stebbings58:47

       I, I, I do

23. 58:48 – 1:01:48

    Fear Of Missing Out - Why Mike doesn’t have it

    1. HSHarry Stebbings58:48

       wanna touch on, on one final thing before we discuss boards, and then, and then do a quick fire. And it's-

    2. MCMike Chalfen58:53

       Sure.

    3. HSHarry Stebbings58:53

       ... FOMO. FOMO dictates-

    4. MCMike Chalfen58:55

       Ah.

    5. HSHarry Stebbings58:55

       ... so much of this industry. I'm riddled with FOMO. I mean, it's incredible how many misses I have for my short career. Really, I'm talented in this respect. Um, my question to you is, when we chatted before, you told me you do not have FOMO. Like, how do you avoid it? And, but help me out here.

    6. MCMike Chalfen59:14

       Look, Chauffin Ventures is a solo VC. It's just me. And I don't want to have a lot of noise in the system. I don't want to be sort of chasing every possible investment, 'cause then I can't provide the service that I think is at the heart of my business to the entrepreneurs that I work with. So, it's a sort of business choice. It's a business model choice. And if I didn't feel I could find differentiated, potentially large businesses that other people don't necessarily see, either at all or see as attractive when I invest, then, you know, without seeing every possible investment, then, you know, I shouldn't be in the business. But I do feel like that. And so it's a sort of combination of a business model choice without which being a solo VC thing is just not pr- not possible. But also the sort of being content with my strategy and how I operate. If I wasn't content with it, which obviously is partly a question of not sort of aesthetics but producing results for our LPs, then, um, maybe I'd suffer from FOMO sort of more often. But when I look back on my career, what I found interesting and maybe my partnerships supported weakly or didn't support or I invested in with my own money...... has been, on balance, pretty interesting, and so I'm sort of reasonably confident that what I see will produce stellar results. And so I'm sort of at peace with that choice.

    7. HSHarry Stebbings1:01:06

       (laughs) I wish I had your peace. (laughs) I'm permanently paranoid, Mike. I think it kind of pervades about 80% of my thoughts, but, um, I think, yeah, I think it's good at this stage actually. I think, I think it's about being hyper competitive and hyper curious, um, as long as it's relatively healthy. Um, but I- I don't-

    8. MCMike Chalfen1:01:26

       Yeah, but I think, but, but I think, you know, you've got to be competitive within your own sort of... on the field you're choosing to play on.

    9. HSHarry Stebbings1:01:35

       Hmm.

    10. MCMike Chalfen1:01:36

        So, you know, I'm not uncompetitive, and I'm definitely not uncurious, but, you know, I'm happy with the trade-offs I- I- I've made.

    11. HSHarry Stebbings1:01:45

        In terms of like, as you said, the trade-offs you make

24. 1:01:48 – 1:04:59

    Do boards add value?

    1. HSHarry Stebbings1:01:48

       there, you choose to do a board seat role often, which is a question now that a lot ask whether they do or don't.

    2. MCMike Chalfen1:01:55

       Mm-hmm.

    3. HSHarry Stebbings1:01:56

       I've, I've sat on boards before, Mike. We sat on boards together. Um, I don't think boards add much value, and I know that's a sweeping statement. How would you respond to, do boards add value?

    4. MCMike Chalfen1:02:09

       Well, there's, do they add value, and do they add the right value at the right time? So, my view is that at seed stage, a board is of limited value. The most value is weekly, bi-weekly, spending time with, with teams, helping them solve problems quickly so that they're not waiting for the board in order to say, "By the way, I've got this problem." And the cadence of the board i- is often a sort of... determines the cadence of reflection by the team. And so at seed stage, I think a board is negative. Even if it's a helpful board, the most valuable thing happens frequently, frequent cadence outside the board.

    5. HSHarry Stebbings1:02:58

       Yep.

    6. MCMike Chalfen1:02:58

       So, um... And then when a board becomes sort of more useful partly perhaps because there are more investors involved, but mainly because a company's plan is clearer, um... You know, I think too many boards are talking shops, but even good boards, I think, are inefficient. So, you know, with a board, you want to clarify any factual questions upfront. So then any- you know, so information should come out early, factual que- questions clarified, and then sort of agenda reprioritized according to what feedback is on what the big issues appear to be. Then you want to focus the discussion on those issues. It shouldn't be a reporting sort of forum. So I think that's one of the reasons why boards aren't, aren't very helpful is that they're misconceived as reporting forums, and you should really split apart facts and reporting from the strategic issues, you know, arising, and that's where you should focus your, your time. And then, you know, a lot of boards, you know, there are people who are sitting around the table very quietly, and sometimes their firm or they could be very helpful on a given issue, um, and I think that we don't always look around the table as a try. We don't always look around the table, VCs, to sort of determine who around the table is the best person to help with this one problem, either because they know it or because they have a portfolio company who's particularly strong in this area or, or who had the problem and overcame it. And I think there's a lot of, um, suboptimal sort of resource offers that, that result.

    7. HSHarry Stebbings1:04:53

       Oh my God.

    8. MCMike Chalfen1:04:54

       And then-

    9. HSHarry Stebbings1:04:55

       The amou- amount of useless intros that get offered to pretty useless people,

25. 1:04:59 – 1:05:54

    What mistakes do young board members make?

    1. HSHarry Stebbings1:04:59

       and you're like, "This is one moron introducing another. This is going to be valuable for this round, this time." Uh, what... I'm intrigued. You sit on boards with very young people. Um, (laughs) uh, what's the biggest mistake that you see young board members make?

    2. MCMike Chalfen1:05:13

       Not distinguishing between opinions, weakly held or strongly held, and not distinguishing between advice that they are in a good position to give or not in a good position to give. And I think it's just... We, we should all... It's not just young inve- young investors. We, we all sort of slightly miscategorize that some of the time. So, you know, I think being very clear when you've got a question and you've got an opinion and you've got advice, those are just three different sort of e- epistemological kind of categories.

    3. HSHarry Stebbings1:05:49

       I think it's helpful to categorize them that way. Speaking of kind of the time allocation and where

26. 1:05:54 – 1:08:40

    Time allocation between companies

    1. HSHarry Stebbings1:05:54

       you focus your time, I think one thing that I, I do struggle with is the head and the heart of time allocation in venture, which is the head says spend your time with your winners. Helping hire a head of sales can move the needle for the company in your portfolio. Um, and then the heart says, actually, you know, it's really hard sometimes and you can't just abandon companies. How do you think about time concentration across the portfolio, and do you have to concentrate time into winners?

    2. MCMike Chalfen1:06:23

       So, you need to develop a good enough relationship that when companies mature, it's okay for them to spend less time with you and okay for them to pull you in when it's, when they, when they need you. So, I think the natural... People talk about rounds as sort of the natural demarcators of when an early investor may ch- start to spend less time with a company. In my experience, it's actually not about the rounds, although it's related. It's more about the maturity of the team.So, if you have a pretty... If, if you're a CEO and there's a co-founder and you don't really have a team, the relationship with the early investors is super important, but the more competent people you have around you, the more you in- inherently bring decision-making into the group. And you start... And that... You start to distinguish between stuff that happens inside the business and sort of working on the business, and the investor perspective is working on the business. In those early days, the two kind of really get mixed up. I spend less time with winners because they don't need me 'cause they have good ti- good, good, good teams. But when they come to me with a problem, it's usually a problem that I'm best suited to, to deal with and we can really go into it. That's sort of my experience. And, and where you want to spend time because these are your winners and you wanna feel like you're making a difference, like, that's not very... that's not a good way for the company to get value from you. The company should basically determine when they wanna talk to you. And actually, what, what... I'm going backwards now in the conversation, but by the way, with boards, like, what drives me mad is everyone's accruing the right to be on the boards round by round, one or two board members get added. Like, there should be a statute of limitations that after three years, you no longer have the right to be on the board. Boom. And then if the team wants to invite you back on the board, that's great. And it doesn't... And, and if you're an early investor, they may not exclude you from the next board. They may determine that actually the Series A investor's just not very helpful, and so they wanna lose that person and keep the seed investor. I mean, it should be up to the, it should be up to the companies, Mikey.

    3. HSHarry Stebbings1:08:35

       I totally agree. I totally agree.

    4. MCMike Chalfen1:08:37

       S- Sorry, sorry to sort of go back in the conversation,

27. 1:08:40 – 1:10:16

    How should founders prepare for board meetings?

    1. MCMike Chalfen1:08:40

       but I do have a bee in my bonnet about that one.

    2. HSHarry Stebbings1:08:42

       No, not at all. The final question for a quick fire... I, I find it quite unfair sometimes for first-time founders-

    3. MCMike Chalfen1:08:47

       (laughs)

    4. HSHarry Stebbings1:08:47

       ... to know how to prepare for a board. As a board member, what do you want-

    5. MCMike Chalfen1:08:51

       Yeah.

    6. HSHarry Stebbings1:08:51

       ... going into it? Do you want a 25-page deck? Do you want a one-page "This is my three biggest questions?" What do you want to come prepared to the board in an optimal way?

    7. MCMike Chalfen1:09:02

       It, it, it depends. So, there are founders that are very good at saying, "Here are the two or three big problems right now."

    8. HSHarry Stebbings1:09:08

       Yeah.

    9. MCMike Chalfen1:09:09

       And this is why these are the big problems, even if numbers four, five, or six may look important to you. (clears throat) Um, and there are some founders that really aren't very good at that. And so, I think setting the board agenda with the founder is kind of important. And what we should discuss is, uh, is, is a direct result of the problems that they are encountering or that they can see coming over the... you know, over the hill. And I think most first-time founders are not that good at anticipating, uh, uh, uh, a pr- something that will be a problem in three to six months, but I think that's probably where you and I can be the most helpful in sort of ask, asking them to think that through. Um, so that's probably where I would... ask, ask the most questions compared to the material I'm being supplied with.

28. 1:10:16 – 1:12:09

    How to keep open communication

    1. MCMike Chalfen1:10:16

    2. HSHarry Stebbings1:10:16

       Do you know my biggest lesson is? The weight of words being uneven across boards. And what I mean by that is if you're on a board-

    3. MCMike Chalfen1:10:22

       Yeah.

    4. HSHarry Stebbings1:10:22

       ... with Alfred Lin or Doug Leone or Bill Gurley or you name these guys-

    5. MCMike Chalfen1:10:26

       Yeah.

    6. HSHarry Stebbings1:10:26

       ... and then you comment in real time on a Google Doc. When they comment, it takes a very bold person to comment back, "Totally disagree with you, Alfred, on your views on liquidity within this marketplace." (laughs) And so, what I always suggest is, like, comment in an isolated Word doc. Then you, the founder, can bring everyone's independent thoughts pure, and then discuss them in the board together.

    7. MCMike Chalfen1:10:50

       Yeah.

    8. HSHarry Stebbings1:10:50

       And I find that the best level of discussion, actually.

    9. MCMike Chalfen1:10:54

       Yeah. I mean, th- the... It's then up to the entrepreneur to disagree with Alfred if that is the correct path. But I think, you know, an intellectually honest discussion is the par-... It's sort of saying, "I don't, I don't understand why you said that this is the most important point, Alfred." Or, "This is why I disagree."

    10. HSHarry Stebbings1:11:14

        No, I feel like-

    11. MCMike Chalfen1:11:14

        And then you can, you can go at it.

    12. HSHarry Stebbings1:11:15

        ... I think they should. I think the biggest thing that worries me now is just, like, continuously asking for permission. It's like, you know, you do what is in the best interests of your shareholders 'cause they trust you and they invest in you, but don't go and ask for permission to hire a head of finance, for Christ's sake.

    13. MCMike Chalfen1:11:32

        Mm-hmm.

    14. HSHarry Stebbings1:11:33

        Sorry. I'm get- I'm getting on a high horse. (laughs)

    15. MCMike Chalfen1:11:35

        Is this... Is, is, is this by any chance a current topic?

    16. HSHarry Stebbings1:11:39

        Uh, it's just, like, I'm just pissed off continuously where it's like, "Oh, should we do this? Should we do this?" It's like, just fucking do it. Like-

    17. MCMike Chalfen1:11:46

        Yeah.

    18. HSHarry Stebbings1:11:46

        ... I invest in you 'cause I trust you. Now execute. Do you know what I mean? Sorry.

    19. MCMike Chalfen1:11:52

        Absolutely, I do. No, no, no.

    20. HSHarry Stebbings1:11:54

        Um-

    21. MCMike Chalfen1:11:54

        Absolutely, I do.

    22. HSHarry Stebbings1:11:55

        And I find, like, running a company at the same time, I know how, like, I execute. Do the same. And I know that sounds awful, but like, you know. Uh, anyway, uh, I will get off my high horse. I wanna do a quick fire round, Mike.

    23. MCMike Chalfen1:12:08

        Okay.

    24. HSHarry Stebbings1:12:08

        So, I say

29. 1:12:09 – 1:13:35

    Rapid Fire Round - Favorite book

    1. HSHarry Stebbings1:12:09

       a short statement, you give me your immediate thoughts. Does that sound okay?

    2. MCMike Chalfen1:12:12

       Absolutely. Let's go.

    3. HSHarry Stebbings1:12:14

       (laughs) So, I mean, you've got many books behind you, so what's your favorite book and why? (laughs)

    4. MCMike Chalfen1:12:18

       Well, no, no. So, so, um, I, I, I li-

    5. HSHarry Stebbings1:12:21

       (laughs) Well, I, I, I've read all of these. (laughs)

    6. MCMike Chalfen1:12:24

       So, I like sort of fish-out-of-water books, um, novels, I'm talking about. So, um, I try and kind of keep, keep reading novels, um, you know, where people go through conflict and they have to adapt, and they learn about themselves or they don't adapt, um, and you see what, what results. Um, so, um, very, some very different examples. There's Days Without End by Sebastian Barry I love. Um, Don't Let Go to the... Uh, Don't Let Go To The Dogs Tonight by Alexandra Fuller, sort of completely extraordinary.... uh, memoir. Um, I like Werner Herzog movies. I mean, it's all the same. There's a wide range, but that's kind of the theme.

    7. HSHarry Stebbings1:13:09

       Mike, I really just wanted you to say Sapiens, okay? I just wanted Sapiens-

    8. MCMike Chalfen1:13:13

       I'm sorry.

    9. HSHarry Stebbings1:13:14

       ... and you give me this intellectual shit. (laughs) I mean, I, I-

    10. MCMike Chalfen1:13:17

        It's not intellectual shit. It's vis- L- Like, you should go and watch a Werner Herzog. I'll send you a Werner Herzog movie. It's visceral.

    11. HSHarry Stebbings1:13:23

        I, I, I would love that. Uh, (laughs) I, I'll, I'll, I'll send you my favorite book as well. We can compare and contrast. You will love the Kama Sutra pop-up edition. Uh- (laughs)

    12. MCMike Chalfen1:13:34

        Is it,

30. 1:13:35 – 1:15:14

    Biggest weakness of venture partnerships today

    1. MCMike Chalfen1:13:35

       is it painted by numbers as well? Is it-

    2. HSHarry Stebbings1:13:37

       Yeah, yeah, it's dot-to-dot. (laughs) Um, uh, tell me, what's the biggest weakness of venture partnerships today?

    3. MCMike Chalfen1:13:44

       I'll give you two answers. There's the ex- entrepreneur's experience of them, and then there's how they operate internally. So, the entrepreneur's experience of them, the, it's the process. That you meet someone, you, you, you explain your business. You then meet two people, you explain your business. Then you might meet the partnership, you explain your business again. You've repeated yourself three times at this point. Like, that's, that's not a good customer experience. So that's sort of, um, that's sort of one issue. Um, I understand why it operates like that, but I don't think that's a great experience for the entrepreneur. Um, and, you know, in the world of Loom and video, surely we can do better. Um, and then, you know, I think... the sort of... The venture partnerships solve for stability because it's such a long-term business, and there are these sort of carry handcuffs that sort of, um, you know, vesting, that encourage people to try and stick around. And I think that as a result, dissent is very, like, it's quite a big deal to have act- proper dissent. Um, and I'm not sure the... You know, there are lots of different ways of, of dealing with that, and, you know, a lot of firms change their, for example, their voting processes and approval processes for investments quite frequently because, and they do that 'cause the firms are evolving, but also no one's really got a good answer, properly a good answer for that.

    4. HSHarry Stebbings1:15:09

       Yeah, I think that's a big challenge on the second one as well.

    5. MCMike Chalfen1:15:10

       Actually not, they don't have a good answer, it's an enduringly good answer. Maybe that's

31. 1:15:14 – 1:16:17

    US VCs entering European deals

    1. MCMike Chalfen1:15:14

       the best way of putting it, 'cause the firms evolve.

    2. HSHarry Stebbings1:15:17

       What about this one? USVCs entering European seed deals. What are the thoughts and advice to founders?

    3. MCMike Chalfen1:15:26

       Um, if they are, if seed is a, an intrinsic part of their business and they're prepared to get up early occasionally rather than have every joint meeting start, you know, uh, on West Coast time, I think it's completely fine. Like this the, well this is the remote, a remote first world. Like, we're 15 minutes away from each other. We're doing this on video. So, as long as this is, you know, this investment is important to them, then go for it. I would be very happy to co-invest with a good USVC on most investments I make.

    4. HSHarry Stebbings1:16:06

       No, I agree. Um, Ed Sim at Boldstart's one of my favorites, and I think he's one of yours, too. So, uh-

    5. MCMike Chalfen1:16:11

       He is. He is.

    6. HSHarry Stebbings1:16:12

       I'm very pleased to hear that. Ooh, I have one hand-

    7. MCMike Chalfen1:16:15

       Miami Ed.

    8. HSHarry Stebbings1:16:16

       Oh,

32. 1:16:17 – 1:18:55

    Selling on the way up

    1. HSHarry Stebbings1:16:17

       I know. He's very cool these days, isn't he? Um-

    2. MCMike Chalfen1:16:19

       Very Miami.

    3. HSHarry Stebbings1:16:20

       Uh, selling on the way up. What did you mean by this?

    4. MCMike Chalfen1:16:25

       Um, it's two different things. Um, and actually, a long time ago, there was an ABC, a Fred Wilson blog about this, uh, about selling Twitter on the way up. Um, but the... We, we're, we build a portfolio, and if you can take money that looks like it's gonna make another 3X and put it into a 10X opportunity that's earlier, uh, that recycling is, is actively good. Now, you might get it wrong. You might turn now that you backed, you know, Twitter, and it was a terrible mistake to have sold early. But, um, you know, you're, you're backing your judgment about where in the portfolio will generate the most alpha cur- you know, today. So, that's, you know, if you, if you're not open to that because you're wedded to not selling 'cause something is a, is, is, is a current winner, then you're sort of not really looking at how to optimize returns in your, in your portfolio as a, as a whole, as opposed to for a given atom. And, you know, there are... you know, there are... We have different LPs and there are LPs that want money returned sometimes. Um, and, you know, if you are looking at holding something fully when there's a chance to get out, if you don't have a f- It may be another three, or four, or five years before you can sell, then you need to look at not just what you think that company might make over the next year, but over the next five years, and determine whether it's fundamentally dilutive to your performance to keep going or whether you should sell some of that stock. So, my point is not that I want to sell. It's that you've gotta sort of as a m- manager, you've gotta loo- look, th- these are decisions. And in fact, a- and arguably, businesses where you are not prepared to invest, logically, if not emotionally, you're a seller. So, you know, you just need to be open to examining these points in time as, as if they're decisions rather than, you know, round is happening, I'm just gonna sit back. Sometimes-

    5. HSHarry Stebbings1:18:50

       And

    6. NANarrator1:18:50

       So-

    7. MCMike Chalfen1:18:50

       ... that's the right decision, but you need to be open to weighing it up.

    8. HSHarry Stebbings1:18:53

       So unfair.

    9. MCMike Chalfen1:18:53

       I'm sorry, you're, you're asking for quickfire

33. 1:18:55 – 1:20:18

    Pro rata investing

    1. MCMike Chalfen1:18:55

       and I gave you a speech.

    2. HSHarry Stebbings1:18:56

       So unfair of me here. Pro rata is a lazy decision. It's in between neutral. For me, I either do it or I don't do it. Agree or disagree?

    3. MCMike Chalfen1:19:08

       I largely agree, but it's... Not every fund can lean in and do more than pro rata. Not every company has the capacity to, you know, r- bring in the investor they really want and allow us to invest more than pro rata. And sometimes not to invest pro rata. So it's a sort of useful artifact in the, in the market, and there's, I think, a difference between what we can do and what we do do. So, you know, I think it's, it's... What you've just said is theoretically true, but not very practical.

    4. HSHarry Stebbings1:20:00

       (laughs) Good. Glad, glad, glad I have your wisdom and advice then, Mike.

    5. MCMike Chalfen1:20:07

       You are.

    6. HSHarry Stebbings1:20:07

       (laughs) Uh, tell me, what do you know now that you wish you'd known at the start of your career in venture?

    7. MCMike Chalfen1:20:14

       Oh, gosh. Um, I think basically

34. 1:20:18 – 1:23:55

    How do you deal with the tough times?

    1. MCMike Chalfen1:20:18

       a lot goes wrong. Um, it'll be okay.

    2. HSHarry Stebbings1:20:22

       (laughs) How do you deal with the really shit times, Mike?

    3. MCMike Chalfen1:20:27

       If you've done your best, there's really nothing else, nothing else you can do. And if you treated people well and with kindness in difficult times, that, that matters a lot. Um, you know, the biggest, the biggest conflicts I think come when you're trying to hold too many different things in your, you know, in mind that aren't really n- not, not compatible with each other. And, you know, the quicker you admit that you've made a mistake, whether it's an investment decision or how you comm- communicated with an entrepreneur or when you prioritize work over family or vice versa. Um, you know, you just gotta be very, very honest with yourself, and I think that removes a lot of, of tension and weight from difficult times.

    4. HSHarry Stebbings1:21:37

       What would you most like to change about the world of venture, Mike?

    5. MCMike Chalfen1:21:41

       Uh, um, I don't... There's enough mentorship.

    6. HSHarry Stebbings1:21:47

       Hmm.

    7. MCMike Chalfen1:21:48

       I think that there's, um... Partly, it's partly because as information flow has accelerated and grown exponentially and you're... As we see with, with your, your business. Um, you know, younger and younger people have incredible access to experience, um, vicarious experience. Um, there's a lot to read and absorb. I mean, young people today are so much better in the industry than when I was the equivalent age in the industry when I was starting. I mean, really, there's no contest. You know, when I started, you know, we had an information department at the, i- in the b- basement at APACS. They had a fantastic woman, Jackie Meeks, who would help find a bit of information about a market if we needed it. And, you know, content pages of, uh, reports are available on CD-ROMs. We faxed to her, and we would decide if we wanted a chapter or the whole thing. I mean, it was like... So much information is available. And yet, I think that people going through the industry still need to talk and to bounce things off other people. So, I, I think that there's a, um... Yeah, people need mentors, I think.

    8. HSHarry Stebbings1:23:21

       That's nice.

    9. MCMike Chalfen1:23:21

       And, um, you know, you, you, you know so much. You've done almost 4,000, I think, of these shows.

    10. HSHarry Stebbings1:23:27

        (laughs)

    11. MCMike Chalfen1:23:27

        And, you know, hopefully some of them were, were, were interesting and useful to you. But, um, yeah, when we meet, there's a lot to talk about.

    12. HSHarry Stebbings1:23:35

        Yeah. No, I mean, listen, I've been a beneficiary.

    13. MCMike Chalfen1:23:37

        And I learned from you, by the way. I learn from you. I learn from you too. It's two-way.

    14. HSHarry Stebbings1:23:41

        I, I, I think, I think that's the best mentorships. But no, I've been, I've been so lucky to have the mentors I have. And I, I wouldn't have been able to get through, I think honestly, the hardest times without them. The good times, you know, you can always do with advice, but I needed them in

35. 1:23:55 – 1:26:16

    Most recent publicly announced investment

    1. HSHarry Stebbings1:23:55

       the bad times. Um, and so I totally agree with you. I wanna finish, Mike, on the most recent publicly announced investment, and why did you say yes and get so excited?

    2. MCMike Chalfen1:24:06

       Sure. Um, so the company is called Opi and Opi is creating, on the face of it, just an ingredients marketplace where manufacturers of, um, small manufacturers of, uh, food brands or drinks brands source the ingredients they need to manufacture their products. But the team views it not just as a sort of how, how, how to enable commodities be bought and sold, but as a messy data problem. And they want, believe that they can create the most transparent, predictive supply chain. So, I love that because it's not just operating on one level, but on the level of sort of data and what that accumulated data, with the right sort of analytics, uh, applied can enable. Um, so that's very interesting to me. You know, what excited me is not just that sort of multiple, playing on multiple levels, but the team is this young team of, uh, you know, two people who are really yin and yang. Um, you know, Helen and, and Martin. And, you know, Helen's just raw intelligence drive capacity to get an enormous am- breadth of stuff done well is, is really remarkable. And then Martin's this completely different character who, um, you know, covers a lot of ground as well, but in a very different sort of different way. And it's just exciting watching them evolve, um, and addressing this really very, very large sort of multi-trillion dollar opportunity.

    3. HSHarry Stebbings1:25:48

       Mike, as I said at the beginning, we first met, like, seven years ago. I remember our first meeting. Um, I c- I'm so thrilled that we made this happen. I can't thank you enough for joining me, for keeping it to 20 minutes. I'm so glad that we nailed that.

    4. MCMike Chalfen1:26:00

       (laughs)

    5. HSHarry Stebbings1:26:01

       Uh... (laughs)

    6. MCMike Chalfen1:26:01

       I think one of my answers might have been less than 20 minutes, yeah.

    7. HSHarry Stebbings1:26:04

       But Mike, I loved it, so thank you so much.

    8. MCMike Chalfen1:26:09

       Thanks so much, Hari. I really enjoyed it, and, um, you know, keep, keep, keep going. We, uh, we all love the show.

Episode duration: 1:26:16