EVERY SPOKEN WORD
45 min read · 8,720 words- 0:00 – 0:54
Intro
- ASAngela Strange
Anyone international, whether you're building primarily in your home country to start, but that you have global ambitions, you're a borderless founder.
- GVGabriel Vasquez
They tend to have a chip on their shoulder. It's the desire that they want to become the benchmark and prove something to the world, that regardless of where they were born, they can still achieve greatness.
- ASAngela Strange
Unlike in the US where you can get everything as a service at every layer of the stack, in many other markets, you just can't do that. There's no fraud as a stack, KYC as a stack, so you end up having to build everything. There's this interesting dichotomy, and this technology is very democratic. It distributes the ability to get it anywhere in the world. It opens up other markets, but then it also concentrates the kind of epicenter of where things are moving the fastest to the Bay Area.
- EBElena Burger
10 years from now, what do you hope to see in the global topology of startups everywhere in the world?
- ASAngela Strange
Um, I think-
- 0:54 – 6:35
Who Borderless Founders Are & the Origins of a16z's Global Strategy
- EBElena Burger
Welcome back to the a16z podcast. Today, we're here with Angela Strange and Gabriel Vasquez, two of the architects of a16z's global investing strategy. So, uh, today, on the day that we're publishing this podcast, uh, we're also running a piece on this idea of borderless founders and, and who borderless founders are. Just to get to our first question, venture historically has been really, really situated in Silicon Valley. So what makes borderless founders interesting and, um, sort of what is the story of international investing?
- ASAngela Strange
Yeah. I remember when, uh, very early in my career at a16z, I was investing primarily in financial services-
- EBElena Burger
Mm-hmm
- ASAngela Strange
... or, or fintech. And one of the first articles I wrote was around just how to get distribution in financial services.
- EBElena Burger
Mm.
- ASAngela Strange
It can be very difficult. You need to find a consumer at exactly the right moment in time when they're ready to change from, from their incumbent services. Like-
- EBElena Burger
Mm
- ASAngela Strange
... there's just a lot of inertia.
- EBElena Burger
Yeah.
- ASAngela Strange
And at that same time, uh, my brother had just joined Nubank down in Brazil.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And I remember him saying that, uh, that David had said, "Yeah, you know, you could compete to be the fifth financial services for every customer in the US, or you could go to a wide-open market with five fat, happy banks that only serve 20% of the population."
- EBElena Burger
Mm.
- ASAngela Strange
"And yes, it's much more difficult to get things going because you've got to get licensed, you've got to build all the infrastructure, but there's just these wide, wide-open markets." And that is what initially got me interested in looking at Latin America. And the, the first check I ever wrote at a16z was actually into Santiago Suarez, the CEO of Adi-
- EBElena Burger
Oh, wow
- ASAngela Strange
... which now serves a quarter of the Colombian population for banking and payments. Um, and so that kickstarted our international strategy, which initially focused on LatAm.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And not long after, I remember I get a WhatsApp from Gabriel, who had joined a16z, totally on a different team.
- EBElena Burger
Mm.
- ASAngela Strange
And he's like, "Hey, you haven't met me yet, but I just see this huge opportunity in Latin America. I've gone and met 25 of the most important CEOs."
- EBElena Burger
Wow.
- ASAngela Strange
"I've, like, got them all in a WhatsApp group."
- EBElena Burger
Wow.
- ASAngela Strange
"Like, we should probably do something here."
- EBElena Burger
That's... And at the time, Gabriel, were these all fintech founders, or were they, like, working in every single, you know, industry under the sun?
- GVGabriel Vasquez
Every single industry-
- EBElena Burger
Yeah
- GVGabriel Vasquez
... but historically in LatAm, you see more fintech founders-
- EBElena Burger
Mm-hmm. Mm-hmm
- GVGabriel Vasquez
... uh, than, than you see in other regions. But that was... The premise was, you know, at the time that I did the mapping, and I ping Angela, there were only 30 unicorns in Latin America.
- 6:35 – 10:26
What International Founders Bring to the Bay Area
- EBElena Burger
Like, you're an international founder. You come to the Bay Area. You know, maybe you do have some connections, you know some investors, you know some customers, you know some other founders, but what are, what are the challenges? And also, what are you bringing with you from your home country to the Bay Area, and what kind of learnings are, are you swabbing?
- GVGabriel Vasquez
I think, you know, one of the things that we notice about these groups is that if you are, for example, from Brazil, you end up mapping, like, the top talent that is in Silicon Valley from Brazil.
- EBElena Burger
Mm-hmm.
- GVGabriel Vasquez
So we started seeing this trend happening in pretty much in every country. You know, you can extrapolate it to Europe or, or Asia, and it's pretty much the same, which is like, where are, where are the smartest people from my country, because they're gonna understand where I come from. So the things that, that you bring in is, is less about the, the local knowledge, because now you're gonna go play at the global stage, but it's the connectivity that you can have with some- somebody that you don't know. And the fact that they're in Silicon Valley, you know, Angela and I discuss this a lot, which is, is, is this culture of giving. You know, people-
- EBElena Burger
Mm
- GVGabriel Vasquez
... people help you a lot even before they know you, but there's an, a closer affinity if you're from that same country because-
- EBElena Burger
Yeah
- GVGabriel Vasquez
... people can see themselves through that journey. So that actually ended up, uh, leading to us organizing this, this... what started as a small community, these Borderless Dinners, and we call them the Borderless Dinners because, uh, at the beginning was very focused. We tried to focus on the niche, so it was very focused on only Latin Americans-
- EBElena Burger
Mm-hmm
- GVGabriel Vasquez
... at that point in time. So what we did is that con- we mapped out the most successful founders from Latin America, and every time that we had people come in and visit, we will create a dinner for them, and it would be, like, 20, 30 people at these dinners, but they will get to see what the journey of a, of a person from Latin America was in Silicon Valley and that ended up succeeding, right? So a big part of this strategy was, uh, Guillermo Rauch from Vercel.
- EBElena Burger
Mm.
- GVGabriel Vasquez
It's a, it's a persona that obviously ha- has succeeded and has done really well in Silicon Valley, but he was very excited to meet people from Latin America and help them out in that journey. We have, uh, people from the founder of Brex do this as well, uh, Pedro Franceschi. We, we also had, you know, a lot of other founders that came along. Um, but the other interesting thing about this is that, um, that group also has matured now-
- EBElena Burger
Mm-hmm
- GVGabriel Vasquez
... where people that were early attendees of that, of that group has now graduated into unicorn founders, and now-
- EBElena Burger
Wow
- GVGabriel Vasquez
... they're speakers. So, like, we can give the example of Victor Cardenas from Slash or-
- EBElena Burger
Mm-hmm
- GVGabriel Vasquez
... Ana Reyes from Factory. So it has created this, this, this amazing, uh, connectivity.
- EBElena Burger
Yeah. Yeah.
- ASAngela Strange
It's interesting. The very, um, sort of relatable American version of this is if you think of, like, some of the schools, the alumni networks around the top schools are incredibly powerful.
- EBElena Burger
Yeah. Yeah.
- ASAngela Strange
I might argue that the international country-specific diasporas are even more powerful. They just often lacked the sort of organization.
- EBElena Burger
Yeah.
- ASAngela Strange
And now lots of these diasporas are, are also organizing, right? Like, we're not, we're not the only people that, uh, that help here.
- EBElena Burger
Yeah.
- ASAngela Strange
But I think what we saw was this opportunity... Like, if you came from a country and you landed in the US, you figured out how to get your visa, you figured out where to live, you sort of made yourself into the network, you got your customers, you have this desire to pay it forward.
- EBElena Burger
Yeah.
- ASAngela Strange
But there's not really an easy way to do that-
- EBElena Burger
Mm-hmm
- ASAngela Strange
... in the same way that you can just go back and speak at your college.
- 10:26 – 18:04
Borderless vs Immigrant vs International Founder
- ASAngela Strange
in the room.
- EBElena Burger
Yeah. Yeah. No, that, that makes a, a ton of sense. I, I think for, for someone who's n- like, listening to this and they're wondering maybe what is, what is the difference between, you know, a borderless founder and an immigrant founder, or a borderless founder and somebody who just happens to be an international person who's coming and starting a company in the United States? Like, how do you, how do you help them understand, like, how we define or how we understand what a borderless founder is?
- ASAngela Strange
I like to take the most inclusive view ever, which is just anybody who's trying to build a global company.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And so, you know, like Americans technically could be borderless founders, but they tend to be connected here anyways.
- EBElena Burger
Yeah.
- ASAngela Strange
And so, um, anyone international, whether you're building primarily in your home country to start, but that you have global ambitions, you're a borderless founder.
- EBElena Burger
Yeah.
- GVGabriel Vasquez
Yeah. And I think that, that there's something unique about these people as well that, like, they, you know, not all of them, but they tend to have a, a chip on their shoulder. So, like, they either grew up in a country that was overlooked.
- EBElena Burger
Mm.
- GVGabriel Vasquez
So, you know, my, my story is, like, I grew up in El Salvador.
- EBElena Burger
Mm.
- GVGabriel Vasquez
Right? So, like, a small country. Nobody-- When you come to the US, nobody's like, "Hey, I met this other great guy that came from El Salvador." You're kind of, like, creating the, the benchmark on your own. And I think a lot of these people either grew up in, you know... We have, we have backed a, a German founder that grew up in a really, really small town in Germany, and Germany's obviously well known, and everybody has respect for the country. But, you know, the fact that he came from this small town, it's like, you know, "I'm gonna, I'm gonna make the most out of this opportunity." So, like, e- even in the US, you know, we have seen people that grew up in And yeah, like small rural areas and, and that, that's what drives them. And I think it's the desire that they want to become the benchmark and prove something to the world that regardless of where they were born, they, they can still ach- achieve greatness, right? And, and I think that that's, that's the m- the, the mindset that these people have that wanna go and create, uh, yeah, dominate globally.
- EBElena Burger
Yeah. Yeah. When... Like I, I liked what you were saying earlier, Angela, about sort of how, how it, it does function almost like an alumni network in a college or, or something like that. How do, how do founders sort of find both, uh, like the a16z borderless founder community, but how do they find other communities and kind of how do we find them even?
- ASAngela Strange
Yeah. I think, um, it's interesting, maybe a little bit, um, I'll an- answer your question, but, um, I think that there's a interesting history of countries doing this.
- EBElena Burger
Yeah.
- ASAngela Strange
And, and part of the reason I became so passionate about working on this with Gabriel is I'm from Ottawa, Canada originally, uh, which is very much not far from Silicon Valley. But it was also a country where lots of companies were started-
- EBElena Burger
Mm-hmm
- ASAngela Strange
... but very few got to scale.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And so maybe 15 years ago, a group of me and several other Canadians in the Bay Area started this organization called C100, and what it was was 100 Canadians in the Bay Area who had founded, you know, very large companies or who are in influential positions where they could help, and it was creating this forum for them to give back, but by that help Canadian companies scale. And it was really two things. It was, one, helping them find some design partners.
- EBElena Burger
Hmm.
- ASAngela Strange
And so obviously the startups would have to be good enough to, to land the contract, but we would open the door. Um, and then two, helping them find executives that would very much help them scale, because that I think is one of the tougher things of getting ecosystems going, is you can have very, very smart people, you can land your customers, but then when you look around for who's my sales leader that's gonna take me from 50 million to 500 million, you probably have to find them in another market-
- EBElena Burger
Hmm
- ASAngela Strange
... until your market gets to be a little bit more mature. And I think with the Canadian network for say, like now there are lots of unicorns around the globe started by Canadians. Shopify is a big one, but, you know, OpenEvidence, the founder was, uh, founder was Canadian.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And so these markets start to go, and it means that those diasporas become easier to break into-
- EBElena Burger
Mm-hmm
- ASAngela Strange
... and easier to find.
- EBElena Burger
Mm-hmm.
- 18:04 – 23:08
The Three Native Advantages: Talent, Brand & Customers
- ASAngela Strange
interesting.
- EBElena Burger
Yeah. Yeah. That's, that's super cool. I, I... That actually, I mean, that, that sort of leads into the next question, which is, I, I wanna talk about the piece you wrote, and you talk about these three native advantages that borderless founders have. Uh, as you said, they, they have talent and access to talent, and these really deep local talent networks, um, and can even call people back from living internationally. They have brand, and then they have a really strong customer base that they can sell into as well. Um, I, I'd love to hear you sort of talk what, talk about maybe brand and customers, 'cause we've already touched on talent, and, and what you're seeing from, from these kinds of founders there.
- GVGabriel Vasquez
Yeah. I, I think in term, in terms of brand, you know, an example that is, is in our portfolio is Eleven Labs.
- EBElena Burger
Mm-hmm.
- GVGabriel Vasquez
So, you know, this is, this is a company that started out of Europe in, in the UK, but it has Polish founders. And one of the things that has happened is that for Poland, E- Eleven Labs have become such an important name for them to be representatives in... You know, th- there's a founder that, that we know that calls this the AI Olympics. So every, every country wants to, wants to have their, their own candidates winning medals, right?
- EBElena Burger
Yeah.
- GVGabriel Vasquez
So, like, for Poland, Eleven Labs have become that candidate, right?
- EBElena Burger
Mm-hmm.
- GVGabriel Vasquez
And, and I think, you know, the Polish government just invested in Eleven Labs, and it's gonna do a bunch of initiatives with them. So we see this motion happen, uh, quite often. Um, you know, in, in Sweden, we have seen a lot of happen where the, the Swedish government has supported a lot, uh, Lovable and Nagora. And when, when this happens, it gives you such a jumpstart in validation with, uh, all the large enterprise companies that are part of your, of your country. And not even your country, even, even countries that are ancillary to it. Because everybody sees the support of the government. They're like, "Okay. Wow. That's, that's, that's a, that's a stamp of validation. I wanna really work with them." Um, so that's on, on the, on the branding side, some of the things that are not very obvious when, when you invest internationally. I think on the, on the other point on, on customers is, you know, we have had several examples of our companies at very early stages where there are just a, a design partnership that eventually converts into a multimillion dollar contract, but they start working with the largest enterprises in companies. You know, we invested in, in a, in a company called Factor Labs. They started working with, with the largest conglomerate of all, of all Latin America, which is, like, the, owned by the Slim family. And, um, you know, that, that introduction has led them to other type of workflows that they can tackle, so expand within that, that, that corporation. And then we also see this kind of playing out, too, from what Angela was describing before is, like, okay, if I'm a founder, let's say, born in Spain, like the, the case of Supersonic, um, who, who's the smartest person that went to my university, and what are they doing now? And in their case was, you know, who used to be the CRO of Salesforce and now is the COO, and they connected with him. And then Salesforce actually became the first de- design partner, and eventually converted now into a customer. So this disadvantages is, is, are, are not very obvious, so it might seem actually a- at times when, when you haven't studied quite, quite, uh, random. But, but it's, it's all connected to, to the same root.
- ASAngela Strange
The other way that brand can help is eventually, as I mentioned, these, um, you know, global companies need to recruit global talent.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And so I'll use Adi as an example. Scaled very quickly, and then, okay, how do you find a credit officer that can do billions of dollars of GMV? The gras credit- best credit people tend to come from Capital One. How do you attract somebody from Capital One in Virginia to wanna work down in Bogota?
- EBElena Burger
[laughs]
- ASAngela Strange
You become the hottest company in Colombia.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
So versus joining one of 50 companies that kind of look the same in the US, why don't you join the winner that by brand is very clear? And so I think as you're trying to attract international talent, that can be very interesting. The other element of brand is you can build, a little bit to Gabe's point, relationships with the government. And so Jeeves has done, um, a lot with the central bank in Brazil, and so they are helping corporations move money internationally via stablecoins. And so they're starting to get that reputation with enterprises as being sort of the most trusted, compliant, speedy way to do that. And then as a result, they attract more talent, and that starts to compound on top of each other.
- EBElena Burger
Yeah. This, this compounding loop I think is really interesting. So something we talk a lot about at the firm, I think Mark kind of first introduced i- this idea, is the idea of preferential attachment. So the idea that, you know, if you signal very early that you can attract the best talent and the best, you know, the best customers, and you really get kind of that attention and that flywheel going, the next incremental person, the next incremental customer, becomes that much easier to attract.
- 23:08 – 27:08
Do Borderless Founders Have an Edge in Silicon Valley?
- EBElena Burger
Do you think that really, really strong borderless founders or international founders, um, you know, assuming, [laughs] assuming the company is, you know, strong and, and sort of they're, they're a great startup, do you think that they have an easier time of this in some way? Or, or just maybe a more differentiated time of this in some way?
- ASAngela Strange
I think, um, you know, in some ways you could argue all of a16z was founded to accelerate our founders'-
- EBElena Burger
Mm-hmm
- ASAngela Strange
... preferential attachment.
- EBElena Burger
Yeah.
- ASAngela Strange
And so how do you get that flywheel moving as quickly as possible?
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And I would argue borderless founders have more levers at their disposal-
- EBElena Burger
Yeah
- ASAngela Strange
... to get that going.
- EBElena Burger
Yeah.
- ASAngela Strange
And so if you start with talent, like this is the fiercest talent market I've seen, like, in my [laughs] career as, as an investor, um, and, and also as an operator. They have insight and access to differentiated pools.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
So we have a insurance, a AI insurance company in Brazil. And so you might think, "Oh, the best talent is at the top most well-known universities there." Actually, for AI talent, it's at a, you know, university that you haven't heard of. And then how do you find it? Well, you actually go to the scholarship programs that scour the country for the best students-
- EBElena Burger
Mm-hmm
- ASAngela Strange
... and get them there, and it's actually these robotics competitions. And so if you are a company that gets 10 incredibly smart people really early, the 11th that you might be trying to recruit from the US that has 100 other offers meets your team, is like, "Holy shit, like how do they get people that are that good there?" And that starts the talent flywheel. On the customer side, anytime you wanna land a large customer, the first question they're gonna ask is, "Who else is using you that's in my industry at my size?" Um, and there's lots of opportunities in the US to sell into banks and insurance companies. Nobody wants to be the first bank or the first insurance company. But via Borderless Founder network, you can get a large bank and a large insurance company in another country much more quickly, and that will very much accelerate your thing in the US. And so I think you just have these levers to make things move faster.
- EBElena Burger
Yeah.
- GVGabriel Vasquez
And even to, to Angela's point, this is like when you're trying to s- get started in, in that specific country, but we also see in the cases of really hot companies in Silicon Valley, like Cognition, where their early go-to-market was actually Brazil, and it represent their really high share of their revenue early on-
- EBElena Burger
Mm
- GVGabriel Vasquez
... because this, this, these companies or these enterprises really desire to adopt AI as quickly as possible and, and they don't, they don't get as, as many providers to do that. And, and in the case of, of Cognition, they, they, they, they, they build a really strong network in, in, in Brazil to do that.
- EBElena Burger
Interesting. Interesting. So by, by that sort of point, does that mean that, you know, you can also pursue a borderless founder or borderless strategy just by like selling into markets that, that might not necessarily see kind of-
- GVGabriel Vasquez
Yes
- EBElena Burger
... like-
- GVGabriel Vasquez
I, I think that the best way to think about it is, is like, you know, there's the bridge to Silicon Valley, and then there's... That same bridge can be used on the opposite direction as well.
- EBElena Burger
Yeah. Yeah.
- GVGabriel Vasquez
And, and that's the way that we try to position, which is this, this, these borderless founders come to Silicon Valley, but they obviously have global ambitions. They might have a strong network if they're from Germany, in Germany, but they probably have no knowledge about Brazil or Japan, and those are things that we can be very, very helpful to be like help them, uh, dominate.
- EBElena Burger
Yeah.
- ASAngela Strange
Yeah. No, it's interestingly, we started this by, you know, connecting diasporas amongst themselves, and now almost the bigger power is the, the intra diaspora.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
Right? Like the German company first design partner in the largest Spanish conglomerate.
- 27:08 – 33:15
How a16z Approaches a New Country or Geography
- GVGabriel Vasquez
from the get-go.
- EBElena Burger
Yeah. Yeah. Uh, at the, at the beginning of the conversation, Gabriel, you mentioned that, you know, your first market map of, of Latin American unicorns was, was 20 companies or something.
- GVGabriel Vasquez
30. 30, yes.
- EBElena Burger
30, 30 companies. W- Now, when you go about sort of approaching a new geography or, or a new country, like, like how do you, how do you even start doing that? Like what is, what is that process like now?
- GVGabriel Vasquez
Yeah. So we have this term that we use, uh, called local luminaires. So it, it, it goes back to what we alluded before, but it's like people that are highly respected in the local ecosystem that have built companies. The, the scale of the company and the success of the company doesn't really matter, but it's people that try really hard to make their ecosystem, uh, you know, valid, right? So like they, you know, in the, in the case of Sweden, we, we have a, a founder that we met, the founders of Voi, which is Fredrik Hjelm and, and Adam Jaffer. And, you know, from, from... Looking from the outside, you wouldn't think that, you know, because what they built was like a, a co- like a company very similar to Lime, which is like a scooter company. You wouldn't have thought that they will be, uh, in the middle of, of the AI boom in Sweden.
- EBElena Burger
Mm-hmm.
- GVGabriel Vasquez
Right? But, but if you look at, at all the angel investments that, that Fredrik did, he's pretty much in all the relevant companies-
- EBElena Burger
Yeah
- GVGabriel Vasquez
... that came out of Sweden. And the reason why is because he's very well connected with the younger groups of founders, but also with, with experienced ones, and he tries to bring them all together and kind of make a case for Sweden on why Sweden should be part of this, going back to the analogy of the AI Olympics.
- EBElena Burger
Mm-hmm.
- GVGabriel Vasquez
And, you know, you, you kind of see this persona across every different market that, that we mapped out. So our first job is how do we understand who these people are? How do we help these people, right? Because they, they, they clearly... There, there are multiple ways that we can help them, and one of them is just validating their message.
- EBElena Burger
Mm-hmm.
- GVGabriel Vasquez
Right? When you have been, um, you know, an evangelizer, and then you get some sort of validation from, you know, a, a firm like us, that, that, that helps them a lot to, to kind of prove their point. So they get closer to us. We start working with them, doing events, helping their companies recruit, and that gives us access to the best people that, that are within their network. And I think the, the second step is, okay, so once you have mapped out these people, you kind of map out the equivalent of the rising stars, or who are these, these, uh, luminaires in Silicon Valley from that country, right? So, you know, one of these rising stars was, uh, in Sweden is, is Gabriel Peterson.
- EBElena Burger
Mm.
- GVGabriel Vasquez
Right? So this was a high school dropout from Sweden, came to the US with no education, got a job at Midjourney, then became one of the youngest researchers at OpenAI, and now he started a company. But every time- That, um, there's a Swedish founder that wants to move to Silicon Valley, they wanna get in touch with him.
- EBElena Burger
Mm-hmm.
- GVGabriel Vasquez
Right?
- EBElena Burger
Yeah.
- GVGabriel Vasquez
So, like, if you, if you build this, this network where you mapped out when they are in Sweden, and then when they move to Sweden, you kind of help them connect with successful people from their country, you're pretty much in the flow.
- EBElena Burger
Yeah. Yeah.
- GVGabriel Vasquez
And, um, you know, that, that's how we, we build each eco-ecosystem. You know, the, the joke a lot of people usually tell us that, like, "Hey, Gabe, you're so well known in, in Sweden or in Germany or in Brazil." And I, and I tell ... the joke that I tell them is, like, in every country I make them feel like it's the only country that I look at.
- EBElena Burger
[laughs]
- GVGabriel Vasquez
Right? Because, uh, you know, we, we try to derive at a, a very, very local level-
- EBElena Burger
Yeah
- GVGabriel Vasquez
... for these luminaries and these ecosystems.
- EBElena Burger
Yeah. Well, I think the other thing, sort of phase three as ecosystems get a little bit more mature-
- GVGabriel Vasquez
Mm-hmm
- EBElena Burger
... the executives at the sort of rising next set, um, one of the things that makes it so powerful is that it's really mission-driven.
- GVGabriel Vasquez
Yeah.
- EBElena Burger
So they saw how hard it was, and so they then see sort of heads of sales, like founding engineers that have a little bit of liquidity-
- 33:15 – 36:50
Repeat Founders & Building Long-Term Relationships
- GVGabriel Vasquez
be there early.
- EBElena Burger
I would love to talk about some of the, the repeat founders who we've identified and, and kind of like spoken to and, and built relationships with and, and how, how do you guys think about that? Um, just because it is ... It's, it's something that we've now done a couple of times, so, so curious.
- GVGabriel Vasquez
Yeah. So, you know, uh, it was pretty much like the ... Continuing to execute on the WhatsApp strategy-
- EBElena Burger
Yeah. [laughs]
- GVGabriel Vasquez
... funny enough. But, um, you know, we ... I, I think these, these local ecosystems had a wave, a first wave of entrepreneurs that got to some sort of scale that was meaningful, let's say within the 1 billion to 5 billion range, usually. And but they didn't get to see the ... all the way through, right? So there were, there were things, because it was the first time around, because the ecosystem itself was really, really hard. There was a lot of lessons that they had that they couldn't f- see and fulfill their vision. That gets them going and thinking about, "Okay, I'm gonna do a next business, but this time around I'm gonna apply all, all the knowledge that I have, all the network that I build, and, and, and go build something even bigger, because I know I can." Right? So that, that has been, you know, the way that we identify these people because the, the, of, of their drive to be like, "Okay, this, this $5 billion exit or $5 billion outcome wasn't enough for me. I, I wanna do something greater from my local ecosystem." And the way that we build these relationships is, you know, we, we track them very, very closely. We, we help them to come to events. What these people usually want is they want to reactivate their network at times, right? They, they ... Especially in AI, they wanna get connected with the smartest, uh, engineers at Stanford, right? Like, they wanna be in the flow of talent, and we give them that, that bridge to them, right? So, like, we, we map out these, these people. We put them in touch, and we, we kind of help them ideate about their ideas as well. Uh, in, in that case along where, like, we introduce them to customers so that they can have these advanced conversations and kind of validate what they're thinking through. And then we're very intentional as well when it comes to putting it all together for them, right? So, like, the, in the case, I'll give you an example. We invested in, in, in Frederick Guillaume. He has a, a new company. When they were ... The company name is, is pit.com. So when they were, um, coming to Silicon Valley, we put them in touch with the top execs from DoorDash, the top execs from Lyft, the top execs from bunch of our portfolio companies, and we kind of helped them ideate about the, the idea. And then after they came back from that trip, they, they had a pretty clear vision of what they wanted to do and prosecute, and then they decided to go with us because despite them having preexisting relationships, because at that point a lot of, you know, it's not, it's very obvious that a lot of investors want to invest in them- But we kind of, by differentiating ourselves on the ideation side, they, they, they decided to go with us.
- ASAngela Strange
Yeah. I think the other opportunity that closed the gap, especially for the repeat founders, is, um, they probably don't have a network of the smartest 18, 19, 20-year-olds all in AI. And these are amazing engineers who probably want to be founders, but they might want one job in between. And sometimes these repeat founders are the be- like, especially the really hungry, going in again, they've learned so many lessons, and it is great CEO school-
- EBElena Burger
Mm-hmm
- ASAngela Strange
... to come work for their companies for two, three, four years. And so this kind of collaboration that we get through the networks ends up being very powerful on both
- 36:50 – 40:30
The Journey from Seed to Growth for International Founders
- ASAngela Strange
sides.
- EBElena Burger
If I, if I'm a founder, I'm an early stage, I'm a seed stage founder, what is, what is my experience like as I'm coming into this ecosystem, and how do you sort of gr- grow through with these companies from, you know, Series A to growth?
- GVGabriel Vasquez
Yeah. So the, the first thing that we focus on is visas.
- EBElena Burger
Mm-hmm.
- GVGabriel Vasquez
This is ... This might not sound like a big deal, but it's the, the most stressful process when it, when it comes to moving to, to the US, is like, what is the right visa? What do I qualify for? Like, you know, who, who, who's gonna write a recommendation letter for me? And those are things that we can, we help a lot of founders with. Uh, we're actually investors in, in, uh, in a visa company, AI native visa, uh, company called Extraordinary.
- EBElena Burger
Mm-hmm.
- GVGabriel Vasquez
And through Extraordinary, we partner a lot on helping these founders come to, to the US to make sure that they have the right qualifications or help them understand what are the things that they need to-
- EBElena Burger
Mm-hmm
- GVGabriel Vasquez
... to come to the US as, as fast as possible. Um, you know, the other thing is that there's a lot of hacker houses that started abroad, but now they have created campuses to, to use, uh, [laughs] Angela's analogies, campuses in the US where, you know, they offer free, free, uh, rooms for people to stay for a, a short period amount of time. You know, we, we sponsor this one called Palo House. So this company, we, we met them at Slush, which is a big event that happens in, in Finland. And, you know, there was this really four smart students from CDTM, which is one of the best programs in Germany. And they had this idea of like, "Hey, we wanna have a house in Palo Alto, and we wanna bring the smartest people that we know to stay with us in Palo Alto and help them ideate." So we decided to, to sponsor this house and, you know, over the, over a period of four months. And over four months, they, they, they crowded the house too much. They, they, they receive, uh, I believe, three dinners and everybody that stayed is, it was like 1,200 people-
- EBElena Burger
[laughs]
- GVGabriel Vasquez
... that end up staying there. You know, through, through that, we actually ended up, you know, ended up meeting really exceptional people that-
- EBElena Burger
Yeah
- GVGabriel Vasquez
... the, the, that we stay in touch with.
- EBElena Burger
Nice. They really were, like, running a small-
- GVGabriel Vasquez
Yeah
- EBElena Burger
... small college. [laughs]
- GVGabriel Vasquez
Yeah.
- EBElena Burger
Small liberal arts college. [laughs]
- GVGabriel Vasquez
And, and now they, they actually ... It's funny now. They wanna find a way to keep that alive-
- EBElena Burger
Yeah
- GVGabriel Vasquez
... independently. But, but like that, there's, there's so many cases of, of campuses from different countries. So we, we kind of help them connect on, on the way that they say. And then through, through our borderless communities as well, it's like, "Hey, you're here for, like, a, you know, a couple weeks. Why don't you come to this dinner and meet all the really, really smart, uh, uh, founders and operators that, that just went through the, the similar journey." So.
- ASAngela Strange
Yeah. And I think as, as, um, you know, the founders start to start their companies, the next step is often, often they're very technical founders who have an idea that are looking for, uh, which market or which use case should I go after.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And one of the things that I think is pretty particularly interesting internationally is there's a lot ... Like, many countries have, um, you know, several powerful families that control a lot of the enterprises, and the next generation in those families is very, very motivated to become AI native.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And we've brought them into our borderless founder group.
- EBElena Burger
Mm-hmm.
- ASAngela Strange
And so if you want, you know, heads of operations, finances around the world to ideate with, talk about their problems, and they're very willing to talk to the smartest people in our community about what they should build-
- EBElena Burger
Yeah
- ASAngela Strange
... and so that can be a really interesting kind of connection also.
- 40:30 – 42:25
Advice for Founders Thinking of Moving to Silicon Valley
- GVGabriel Vasquez
... initiatives.
- EBElena Burger
Very cool. So if, you know, I'm an international founder right now listening to this, I'm thinking about moving to Silicon Valley, um, what, what should I know? What should, what should I keep in mind? And also, I'm ... Should I, should I be thinking about just coming for a month or three months? Should I be thinking about moving altogether? Like, what are the kinds of questions that I should be asking myself?
- GVGabriel Vasquez
I think there's, there's ... You know, the, the answer varies a lot-
- EBElena Burger
Mm
- GVGabriel Vasquez
... for, for, for everyone. But, um, I think one of the things that is very common is definitely come and spend time-
- EBElena Burger
Mm-hmm
- GVGabriel Vasquez
... in Silicon Valley. And I, I think this is one of the things that we highly encourage, because even if you're gonna go back, you, you go back with a lot of insights, and you go back ... I never met somebody that came to Silicon Valley and was like, "This was such a waste of time." Everybody goes back excited. And it helps them calibrate as well on the level of speed. I think this is one of the things that Silicon Valley continues to be ahead of every other ecosystem, is the level of speed that people operate. And I think just calibrating on the speed is, is, is really, really important. And, you know, one of the things that, that I personally would recommend is like, at the very least three to six months so you can kind of emerge. Because a couple of weeks can be, I, I, I don't think as, as influential because you, you have to go through the depth-
- EBElena Burger
Mm-hmm
- GVGabriel Vasquez
... of the network and kind of realize. And in a couple of weeks, some people get discouraged because sometimes it's really hard to connect with people. But, but I find that people that spend time a little bit longer, they come with the, come back with the right connections, even if they decide to go back or finally decide to move here.
- EBElena Burger
Yeah.
- ASAngela Strange
I'd say lean on your diaspora
- EBElena Burger
Mm.
- ASAngela Strange
Like either via us. We've posted about a lot of the things that we can do. Like it is way deeper than probably you think in the Bay Area, and very much primed to help you build your company.
- 42:25 – 44:34
10 Years From Now: The Global Topology of Startups
- EBElena Burger
10 years from now, um, what do you hope to see sort of the, the results of this, not just in a16z and our portfolio companies, but kind of just in the global topology of, of startups, you know, everywhere, everywhere in the world?
- ASAngela Strange
I think this trend is just gonna continue.
- EBElena Burger
Yeah.
- ASAngela Strange
Like we, we actually ran the stats, and out of our apps, 40% of our investments were in international founders.
- EBElena Burger
Wow.
- ASAngela Strange
You know, half of them were based here, half of them were based in other countries.
- EBElena Burger
Wow.
- ASAngela Strange
Um, I think, you know, all nationalities, internationalized mix, um, and so a more diverse set of minds builds bigger and bigger companies, and I think it is great for consumers, it's great for enterprises, and we are just 1% scratching the surface of what we can do with AI.
- EBElena Burger
Hmm.
- GVGabriel Vasquez
Totally. I, I, I would, I would second that. And I, and I think that there's the statistics that a lot of people in, in Silicon Valley before, uh, used to, to, to frame a lot, which is like, you know, 90% of the returns in venture capital come from Silicon Valley companies. I think that if, if that share goes from 10% all the way to 20% to 30%, that's something that I would like to see because that, that builds that case. And I think the, the other thing why that I never really quite liked that statistic is because it doesn't fully tell the story. There's a lot of, of these borderless founders, which is a lot of them are based here, but a lot of the engineering team might be actually back in their home country.
- EBElena Burger
Mm.
- GVGabriel Vasquez
And a lot of disadvantages were never really told. So there's a lot of these companies that actually are claimed by two different countries.
- EBElena Burger
Mm. Yeah.
- GVGabriel Vasquez
Right? And, and that story was never actually really told, and you have seen that historically, and I think it's gonna continue, but hopefully now from like this, this perspective of like, yeah, like, you know, we're, we're this global company that have headquarters in s- at, at the very least, it's two different countries.
- EBElena Burger
Yeah. Yeah. Well, Angela, Gabriel, thanks so much for, for joining me today. This was a ton of fun. Um, and when this episode releases, everyone will also be able to read your piece on, on the subject. So check it out on Substack and the a16z blog.
Episode duration: 44:48
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