From BoxGroup to Benchmark and Back | Greg Rosen, Partner at BoxGroup | Ep. 22

1. 0:00 – 0:47

   Intro

   1. GRGreg Rosen0:00

      you are better off just focusing on the thing that you are outlier in. And like, I think the biggest thing is just figuring out what that is.

   2. JAJack Altman0:06

      Which of the archetypes you are, and then-

   3. GRGreg Rosen0:08

      Which of the archetypes. Like, if, if you have, like, hyper-networker, philosopher, uh, and specialist, like, there's probably more, but, like, of those three-

   4. JAJack Altman0:16

      Yeah

   5. GRGreg Rosen0:16

      ... like, which one are you?

   6. JAJack Altman0:17

      Yeah.

   7. GRGreg Rosen0:17

      Where do you have an advantage? And then just focus all your energy and effort on being amazing there.

   8. JAJack Altman0:22

      [music] All right, Greg, I am very happy to be here with you, and I'm gonna give a little disclaimer that I cajoled you into doing this, and you normally wouldn't, but, uh, you're one of my best friends, and so you're doing this favor for coming on.

   9. GRGreg Rosen0:33

      [chuckles]

   10. JAJack Altman0:34

       So thanks for doing this. Is this, like, your first podcast?

   11. GRGreg Rosen0:36

       This is my first podcast. I heard this is like a small boutique. No one really knows about it, right?

   12. JAJack Altman0:41

       It's a small little thing, and you agreed to do it once, and then you're, you're never-

   13. GRGreg Rosen0:44

       Never again.

   14. JAJack Altman0:45

       Never again.

   15. GRGreg Rosen0:45

       Yeah. Don't invite me back.

   16. JAJack Altman0:46

       Okay,

2. 0:47 – 5:47

   The collaborative venture model

   1. JAJack Altman0:47

      so I wanna start with one of the things that you've taught me a lot about, which is the idea of collaborative venture. What's interesting about it to me is it used to be the case in venture that s- funds were smaller and collaborative was, like, the nature of how the whole world worked, and funds would, like, sort of, like, team up and, like, do rounds together. And then at some point in the last ten, 15 years, I think it swung to a place where funds got huge, people got sharp elbows, people wanted lots of ownership and whatever, and so a lot of that went away. Um, and so in some sense, that declined. But Box is, like, bigger than ever, doing more than ever. And so I wanted to just start by hearing your overall view on this, like, collaborative venture model.

   2. GRGreg Rosen1:27

      Yeah, collaborative venture is hard, um, and almost by definition, it has to be anti-scale in certain dimensions, right? And so for us, like, if we started leading seed rounds or Series-A rounds, and, and certainly beyond that, we would lose our collaborative Switzerland nature.

   3. JAJack Altman1:47

      Yep.

   4. GRGreg Rosen1:48

      So instead, what we said is, "Okay, that is an easy way to scale capital, is start leading rounds, writing larger and larger checks." Um, and that's what others have done and why it's, like, hard to stay collaborative.

   5. JAJack Altman1:59

      That's, like, usually what happens, right?

   6. GRGreg Rosen2:01

      That's usually what happens, right? Everyone starts a new fund and, uh, or new firm, and they say: "We're gonna be super collaborative, we're gonna work together," and then all of a sudden, they start leading one, two, three deals, and the second that happens, it's this binary moment, right?

   7. JAJack Altman2:14

      You either make it or you don't?

   8. GRGreg Rosen2:15

      Ro- because if you're, if you're col... If we're collaborative, right, we're BoxGroup, and then let's say we make 80 investments a year, and let's say we only lead two or three seeds of that. Now, when I'm sharing a deal with you or anyone else in the market, you're gonna be thinking in the back of your mind, "Is this fully being shared, all the deals, or is it the one or two deals that they're leading and actually most excited about I'm not getting shared, I'm not seeing?" And so it's this binary moment that, like, the second you start leading those rounds, you just can't be Switzerland. And for us, we have been, you know, since the beginning of BoxGroup, f- you know, 15-plus years ago to now, it is like we are not doing that. We are Switzerland, and, and, and that's, I think, what's enabled us to, like-

   9. JAJack Altman3:01

      So just as, like, a little sidebar on that, does that mean no matter how excited you are at a seed, you think it's amazing, crazy differentiated access, it's long-term not worth it for you to break the model and just, like, lead a seed?

   10. GRGreg Rosen3:11

       Correct. It's why we... Like, our check size from, you know, the beginning to now has gone up, but it's basically scaled directly with, like, the inflation of rounds. And so, you know, seed rounds a decade ago might be... Like, a fully loaded seed round might have been $2 million. Now, that's $5 million, and so our check size started at, you know, way back in the day, 50, 75K. Now, I would say it's, like, 750 to a million, and the reason we do that is that we wanna make it as easy as possible for a founder to say yes to us. And so that means if we get to a founder first, uh, we can commit a million dollars or 750K and be like, "Hey, you don't have a lead. We are aligned with you. You're raising three, four, or five million bucks. Y- we're gonna be your first yes, and let's go help you find an amazing lead." Or we could meet a founder, and they'd be like, "Hey, we already have Jack Altman as a lead," and we're like, "Great! We can sort of round out a syndicate very quickly here, and we can also get to a yes." And so the, the design for us is make it as easy as possible for a founder to say yes in whatever the round structure is, uh, but it is not, um, writing a three, $4 million lead check.

   11. JAJack Altman4:18

       Why do you think that more people haven't scaled it up? 'Cause there's, like, a lot of funds out there that are 20 to 75 million, that do, you know, 250K, 750K checks, but most don't scale it. Most basically get to this jumping point that you've talked about where you're either, like, "I gotta go lead rounds and, like, compete to lead seeds," or not.

   12. GRGreg Rosen4:37

       Everyone wants scale. Like, anyone who's doing this is ambitious, right, and wants to get to scale. And so there's really only two paths that we've seen to, like, scale the craft of what we are doing. One, scale AUM and then go further up the stack, start leading seeds and As and Bs, write larger checks. Or, and sort of the approach that we have taken, is do more deals, right? Uh, scale velocity in terms of early deals with this collaborative Switzerland structure. And why do more people, you know, choose the f- you know, former versus the latter? It's really hard, right? Like, i- [chuckles] if you took a look at any one of the people who work at BoxGroup's calendar, the sheer number of net new deals-

   13. JAJack Altman5:27

       Is ridiculous

   14. GRGreg Rosen5:27

       ... is ridiculous. And I think if you audited the average partner or-

   15. JAJack Altman5:32

       Yeah

   16. GRGreg Rosen5:32

       ... general partner or managing partner-

   17. JAJack Altman5:34

       Yeah

   18. GRGreg Rosen5:34

       ... of a lot of other firms, and you looked at how many net new deals they are meeting a week, I think you would be shocked.

   19. JAJack Altman5:41

       Yeah. Yeah, I-

   20. GRGreg Rosen5:41

       Like, truly shocked.

   21. JAJack Altman5:43

       I wanna come back to the calendar audit, 'cause that's, like, one of my favorite topics with you, and I think everyone gets this super

3. 5:47 – 11:59

   Adverse selection vs coverage

   1. JAJack Altman5:47

      wrong. But o- on the scaling, what is it, like, um... I guess, first of all, I think implied in what you said is that one of the big deals here is not getting adverse selection, right?

   2. GRGreg Rosen5:57

      Yeah.

   3. JAJack Altman5:57

      And, like, I guess when you're thinking about scaling and what makes this work, to what extent do you think it's about you not getting adverse selection, and to what extent is it just about you seeing tons and tons of deals?

   4. GRGreg Rosen6:08

      ... look, it's both, but it's primarily not getting adverse selection, right?

   5. JAJack Altman6:11

      That's like the big thing to solve, basically?

   6. GRGreg Rosen6:12

      That is the big thing, right? Like, every strength has a corresponding weakness, and vice versa. So the knock on, that I hear from other people knocking on our model is, like, you need to own a ton of the companies that work in order to make venture work. And for us, what we would say is, that is true, but also you've gotta be in the right companies, and it's much harder to be in the right companies. And so what we do is we trade ultimate ownership percentage points for a more collaborative, flexible model that lets us just see better companies and hopefully get into more companies.

   7. JAJack Altman6:48

      And then the math basically is, you gotta get into the thirty billion dollar companies, not just the three, but by doing a bunch of companies, your odds of that go way up.

   8. GRGreg Rosen6:55

      Exactly. Like, we are... You know, the, the other thing that I hear sort of as a knock against our model is like, well, this is an index, right?

   9. JAJack Altman7:02

      Mm.

   10. GRGreg Rosen7:02

       And, um, you know, again, we are holding such a high bar. We are, like, always asking ourselves, "Is this gonna be the most important company started over the next decade?" But it's really hard, and so we take more shots on goal to try and get those outcomes, and then when we capture them, it, you know, it's our job, you know, to continue supporting them and piling money in.

   11. JAJack Altman7:23

       Gary Tan talked a lot about this. Like, he said this on Twitter, I think we talked about it here, that he was like, basically, if you look at all these funds that just do very big baskets of YC, they outperform, like, ridiculously.

   12. GRGreg Rosen7:34

       Yeah.

   13. JAJack Altman7:34

       And it's, like, hard to believe that it could work like that, but it somehow seems to work like that.

   14. GRGreg Rosen7:38

       Yeah, I mean, I don't know the exact statistics, um, and, you know, someone from YC should correct me, but it was like the class sizes were about a hundred, and I think it was like you would get two to three billion dollar companies per batch, at least historically. Um, and so let's call it whatever it is, one, two, three percent. Where else can you get a w- you know, one in a hundred, two in a hundred, three in a hundred chance of hitting, you know, a unicorn or a multi-billion dollar company? And that's what makes it so great, because that pool is sort of a really elite pool.

   15. JAJack Altman8:12

       Yeah.

   16. GRGreg Rosen8:12

       Um, and that's sort of what we think about internally at BoxGroup. Now, we have to sift through a lot more than a hundred deals to get there, but, but that's sort of the BoxGroup machine that we talk about in terms of trying to just see as many deals as possible.

   17. JAJack Altman8:27

       I think implied in your worldview about adverse selection is that at seed, it is somewhat knowable what's good. In other words, like, you're saying, like, you'd rather get to go alongside Sequoia than have to compete with Sequoia or whatever. There's, like, other views that, like, seed is, like, super unknown and nobody can tell, but I think your view is that, like, some, it m- tell me if this is a fair characterization. Something like picking is actually... You know, most people can see a good thing when they see it, and you actually just have to, like, see the stuff and just, like, get in some way, somehow.

   18. GRGreg Rosen8:58

       Yes. I would say, um, especially as venture shifted from a cottage industry to, like, you know, a machine [chuckles] ah, industry with tons and tons of capital and tons of firms, I think there's no such thing really as a proprietary deal, and if it is, it lasts for, like-

   19. JAJack Altman9:16

       A day

   20. GRGreg Rosen9:16

       ... literally a blink of an eye.

   21. JAJack Altman9:17

       Yeah.

   22. GRGreg Rosen9:18

       Like, not even a day anymore. And so what that means is, is just, like, it's the whole, you know, inner workings of venture is just way, way harder. Yeah, like, competition has gone through the roof, and I think what's interesting to me is that most, most people, if not everyone, limited partners, general partners, employees, founders, I think everyone ag- would agree that venture has gotten more competitive-

   23. JAJack Altman9:43

       Yeah

   24. GRGreg Rosen9:44

       ... has gotten way harder, right? And what's interesting then is that if you look at the math formula of venture, the, like, seeing, picking, and winning a deal, and then equals enterprise value output, everyone says, like, "Okay, those are the three things, and venture's gotten harder," but if you don't change any of those variables, what are you accepting? You're accepting that returns are gonna go down. Like, you're just gonna perform worse as a, as an investor. And so then what the counter is for most investors-

   25. JAJack Altman10:10

       We'll be better at picking.

   26. GRGreg Rosen10:11

       We're gonna be better at picking.

   27. JAJack Altman10:13

       We're just gonna, I mean-

   28. GRGreg Rosen10:13

       Like, it's gotten harder, and we're just like, "Oh, we're-

   29. JAJack Altman10:15

       I'm gonna just think harder.

   30. GRGreg Rosen10:16

       Yeah, we're gonna... Exactly. We're gonna be thought boys.
4. 11:59 – 14:44

   How to see a ton of companies

   1. JAJack Altman11:59

      So then the game is, like, see a ridiculous amount.

   2. GRGreg Rosen12:01

      Exactly.

   3. JAJack Altman12:02

      So how do you see a ridiculous amount? Like, what is the body of work that goes into saying, "We can't get better at picking, but we can see a bunch more stuff?"

   4. GRGreg Rosen12:08

      I would break it up into inbound and outbound. Um-... inbound is like the icing on the cake that, you know, tastes really great, it's awesome, but you can't just eat icing, right? You need the actual body of the cake, and that is outbound. So we really focus on a bunch of great outbounding activities. That looks like running a ton of different events, um, across the country, so intern events, events on campuses, um, and it, it, you know, engineering leaders. And again, these things aren't unique in terms of like, oh, we've figured out unique alpha here, no one else is running events, but, like, quality matters here, right? Again, back to, like, empty calories, it is very easy to do a bunch of events that return nothing because you didn't curate great people and do all the hard legwork, and I think, you know, our, our team does an exceptional job at running and doing these events. I think probably 25%, maybe slightly more, uh, of deals is, is from the sharing and sort of Switzerland work that we do-

   5. JAJack Altman13:13

      Mm-hmm

   6. GRGreg Rosen13:13

      ... with other investors and people. And why do they share openly with us? It's because we're not gonna snipe a deal. We're not gonna, like, compete with them for a lead position, and more so, they wanna be preferred partners for, you know, when a company that we are fortunate to back in the pre-seed or seed in Flex, we can, you know, say like, "Hey, we've loved working with Jack Altman, and so you should go take," you know-

   7. JAJack Altman13:37

      Tom Hill.

   8. GRGreg Rosen13:38

      Ex- exactly, uh, his money for the Series A.

   9. JAJack Altman13:40

      You don't just have somebody for the most part, who's just, like, reaching out to people. Like, it is to some extent this inbound, outbound mix, where you're kind of like warming up groups of people that you think are interesting and you're talking to your network, or are you also, like, really reaching out and, like, just, like, you know-

   10. GRGreg Rosen13:54

       You, you-

   11. JAJack Altman13:54

       machine gun type ways, too?

   12. GRGreg Rosen13:55

       Like, we built some software to do, like, LinkedIn scraping when someone, like, changes their-

   13. JAJack Altman13:59

       Yeah

   14. GRGreg Rosen13:59

       ... job title or whatever. It would be great if someone, like, posted on Twitter, "Hey, I'm amazing and, and awesome, and I'm starting a new company." Like, that doesn't happen, and usually, when that does, it's like way too late. There's already probably been two rounds into the business. Um, and so for us, like, we really think about, like, uh... We have this saying internally, like, "If there's a deck, it's too late."

   15. JAJack Altman14:21

       Hmm.

   16. GRGreg Rosen14:21

       Right? It means that not only has there been, like, a team coalesced, but enough work has gone in to think to build an actual deck, and that means we're late to the party. And so, so much of our outbounding and work gets to, like, before there's a company, there's a human being.

   17. JAJack Altman14:36

       Yeah.

   18. GRGreg Rosen14:37

       How do we get that human being oftentimes before they've even left the company? And that's what earns us the right to be that first check, that first

5. 14:44 – 21:10

   Getting to founders early

   1. GRGreg Rosen14:44

      yes.

   2. JAJack Altman14:44

      How do you do that part? Because this is one of the things I've always- and you've invest mostly a lot earlier than I do, but, uh, you know, I've always wondered, like, how do you get to people at some re- in some reasonable way that will make sense at a top of funnel? 'Cause I, I, in my mind, you'd need to be talking to, like, thousands and thousands-

   3. GRGreg Rosen14:59

      Hmm

   4. JAJack Altman14:59

      ... of people-

   5. GRGreg Rosen15:00

      Yeah

   6. JAJack Altman15:00

      ... that hopefully someone's gonna leave at some point, at some way. Like...

   7. GRGreg Rosen15:03

      Yeah.

   8. JAJack Altman15:03

      How do you do it?

   9. GRGreg Rosen15:04

      The almost, like, tactics aside, getting to the mentality, 'cause I think that's, like, most important here, um, back to the calendar audit, there is no substitute for your time, right? And most people, um, especially check writers, do not spend time with someone who, like, hasn't left their job yet, who may never start a company. That's, like, primarily how every single one of us at BoxGroup spends our time, is, like, trying to meet and curate those people before they've even left their job, right? And so step one is, there's no substitute for putting in the time, and you have to be okay with taking a lot of really... I don't wanna say bad meetings, but, like, bad meetings. And, and they can exist in different ways.

   10. JAJack Altman15:50

       It's not that it's bad people, it's that it's meetings w- with s- a director of engineering at a cool company, and you spend an hour with them, and it turns out they just love being a director of engineering.

   11. GRGreg Rosen15:58

       Exactly. Like, we, you know, we have different sort of verbiage internally when we meet on, like, how we describe and talk about, um, you know, founders or companies. And, like, sometimes you get, you know, someone who is an amazing big company person who's not a founder. Sometimes you get an extremely technical founder who's not commercial. You get all these things, and by the way, you then have to line up those different archetypes with what are they working on. So, like, you can't make these blanket statements. But more so my point is, when you go super early and nothing is formed, you cannot look for perfection, you cannot look for cohesion even in ideas, right? Like, oftentimes we've missed and passed on companies because we were like, "We met this human, they were really interesting and amazing, but, like, they were all over the place. They're talking about 10 different ideas." And it's like, that's a feature, not a bug. That means we're getting to them before they've actually figured out exactly what they wanna work on. And ideas are not precious, you can work on anything. And so now we've sort of iterated away from that and said, like, "Okay, that's, that's actually a sign that we're doing our job and getting to there early."

   12. JAJack Altman17:02

       I guess it's also not just people leaving companies, you're probably getting people out of school and stuff like that too, which is another big body of work, I guess.

   13. GRGreg Rosen17:08

       Absolutely. Absolutely. Like, the number... And, and look, I think that has increased dramatically with the rise of AI, mean-

   14. JAJack Altman17:15

       'Cause it favors younger founders?

   15. GRGreg Rosen17:17

       It favors younger founders. Like, whenever you get new technology, right, like, it's always the younger generation that figures out the most native ways to use that technology.

   16. JAJack Altman17:27

       And even the old ways of building a company become less relevant, so the advantages of experience decline.

   17. GRGreg Rosen17:32

       Yeah, like, the rules get rewritten.

   18. JAJack Altman17:33

       Mm-hmm.

   19. GRGreg Rosen17:33

       Um, and I've, I've, like, you know, certainly felt that with, like, codegen and other areas. Now it just feels like every day something new comes out, some new piece of technology, is what makes the job so great. But, like, that, like, favors young folks, and I, I think, like, if you charted the number of, like, 18, 19-year-olds that, like, we are funding now versus 10 years from now-

   20. JAJack Altman17:53

       It's way up

   21. GRGreg Rosen17:54

       ... is, I, I mean, I don't know off the top of my head, but it's, like, at least one order, if not two orders of magnitude higher.

   22. JAJack Altman18:00

       Wow! Yeah. When you're bringing people in, or I don't know, you know, to the extent you, like, bring them in for a partner meeting, but, like, um-

   23. GRGreg Rosen18:07

       We don't do partner meetings.

   24. JAJack Altman18:08

       You don't do part... Yeah.

   25. GRGreg Rosen18:08

       I think partner meetings make no sense.

   26. JAJack Altman18:10

       Why?

   27. GRGreg Rosen18:11

       One, like, a partner meeting is designed so that you get multiple, like, partners or decision makers to, like-... give you an opinion on the person. And what we've found is, one, um, very few founders like doing that-

   28. JAJack Altman18:28

       I hated it.

   29. GRGreg Rosen18:28

       -because you're, you're just regurgitating the same thing. You're getting everyone's like-

   30. JAJack Altman18:31

       It's super performative, too.
6. 21:10 – 23:25

   Helping teammates get to a yes

   1. GRGreg Rosen21:10

      And so instead, what we've found is that we should design a model that... Like, we are trying, as a team, instead of sort of poking holes and trying to figure out all the ways that it can't work, which, like, I could do, by the way. I could have every single company that comes in, even the good ones, I could find a million reasons why it's gonna fail and not work, and be very negative and try and talk all my partners and team out of it. We take the opposite view, which is, we have to help the sort of person that's dreaming with the founder, or squinting, is sort of the term we use internally, to sort of get to their own version of yes. And so what you hear is that the sort of individual stakeholder that's meeting the company will sort of talk about it as, as the group, and then all of us, instead of poking holes... And it's not that we're not critical, we try and pull on the thread on, "Hey, like, you mentioned this language. That seems pretty outlier to me. Like, can you expand on that, on, like, what you saw in this founder?" And so we're all trying to help them basically get to a yes in our model-

   2. JAJack Altman22:13

      Yeah

   3. GRGreg Rosen22:13

      ... which is very, very unique, and then we are, you know, single trigger.

   4. JAJack Altman22:17

      I feel like that's your whole orientation. Like, e- even when I call you, which I do all the time, about, like, a deal, you're often trying to help me get to a yes, when, like, almost the whole industry is trying to get you to a no in some weird way.

   5. GRGreg Rosen22:29

      Yeah, and this is the, you know, cost of omission versus, you know, commission, and-

   6. JAJack Altman22:33

      And it goes back to you doing a lot of companies per fund as well.

   7. GRGreg Rosen22:35

      Ex- exactly. It's like you just... The, the number one thing that matters, uh, is just being in the right companies.

   8. JAJack Altman22:40

      Yeah.

   9. GRGreg Rosen22:41

      And, and, you know, and I remember, you know, I, I won't mention the name of the company, but, like, you called me on a, on a deal that you were looking at, and the first conversation, I was like, "Here's the critical pieces of the market, and product, and, like, the competitive landscape," and sort of I was like, "You should think about that." And then I remember you called me again, uh, later that week, and intuitively, I didn't realize I was doing it. We were just debriefing earlier than this. But then I swapped in that second meeting to like, "Oh, you now are seeing something. You're squinting and seeing something that's not obvious in the market. Let me, like, help pull on those threads to help you get to a yes," and you ended up investing in the company. Um, and, and I think that's what we aim to do as an entire

7. 23:25 – 27:57

   Why there aren’t more BoxGroups

   1. GRGreg Rosen23:25

      team across the board. Not just partners, but, like, a associate or analyst who just joins. It's like all, everyone, that's the mission and ethos of, like, someone at BoxGroup.

   2. JAJack Altman23:35

      So you've described now, like, a few attributes of doing, like, super early-stage investing-

   3. GRGreg Rosen23:39

      Mm

   4. JAJack Altman23:39

      ... which include, like, a big basket, an orientation of trying to get to a yes, not trying to get to a no-

   5. GRGreg Rosen23:45

      Yep

   6. JAJack Altman23:45

      ... looking for people, not ideas.

   7. GRGreg Rosen23:47

      Yep.

   8. JAJack Altman23:48

      All of those things are, like, extremely different than everything about how, like, a big firm operates.

   9. GRGreg Rosen23:53

      Mm-hmm.

   10. JAJack Altman23:53

       Like, those are, like, opposites on all dimensions.

   11. GRGreg Rosen23:55

       Yep.

   12. JAJack Altman23:56

       I'm curious, uh, how you think about, like, a big firm trying to do this, like, I don't know if you wanna call it pre-seed or first round or whatever, but, like, they're just such different sets of work. Everything about it's opposite.

   13. GRGreg Rosen24:09

       Yeah, and it's... Look, it's why I always ask myself, like, "Why are there not... Venture is so competitive. Why are there not more BoxGroups?" And it's so counter to how so many people run their business and do their, you know, work, and I think, you know, for us, it's just the only thing we know. And I, I come back to, like, if, if your ultimate goal and orientation is not, um, how do we maximize ownership, and then-... hopefully we are in some really good-

   14. JAJack Altman24:41

       Yeah

   15. GRGreg Rosen24:41

       - companies there, and instead say, "How do we, i- if we look at all the good companies that get started in a year, we think about how many of those did we see? And then how many of those did we, like, actually get right versus wrong?"

   16. JAJack Altman24:56

       Yep.

   17. GRGreg Rosen24:56

       And the way that we look at it, and I think, you know, my partner, David Tisch, who started the firm, owns a lot of cre- uh, like deserves a lot of credit here, which is like the failure mode is: we didn't see it. If we made the wrong decision, okay, let's de- like, figure out and debug that. But what is unacceptable is, like, we didn't see this deal, and if we didn't see it, we've got to figure out why. And, and what I would say is, like, most people, I think, would look at venture and say the most important thing out of the see, pick, win, is pick.

   18. JAJack Altman25:25

       Yeah.

   19. GRGreg Rosen25:26

       And for us, the ethos of BoxGroup is like, we don't earn the right to pick or win unless we see it.

   20. JAJack Altman25:30

       Yep.

   21. GRGreg Rosen25:31

       And by the way, seeing it late versus early can be the difference of winning or losing.

   22. JAJack Altman25:35

       Mm-hmm.

   23. GRGreg Rosen25:35

       And so we are obsessed as an organisation on seeing everything as early as possible.

   24. JAJack Altman25:41

       You mentioned the single trigger thing-

   25. GRGreg Rosen25:43

       Mm

   26. JAJack Altman25:43

       ... which I think is, I don't know if it's completely rare, but it's less common than-

   27. GRGreg Rosen25:47

       Mm-hmm

   28. JAJack Altman25:47

       - trying to get to some amount of group consensus.

   29. GRGreg Rosen25:49

       Yep.

   30. JAJack Altman25:49

       How structurally important is that?
8. 27:57 – 31:46

   What’s learnable about picking

   1. JAJack Altman27:57

      You've talked about how picking is, like, not the thing.

   2. GRGreg Rosen28:00

      Well, it is.

   3. JAJack Altman28:02

      You are-

   4. GRGreg Rosen28:02

      It is.

   5. JAJack Altman28:02

      But, but I was going to say [chuckles] empirically, you're a good picker.

   6. GRGreg Rosen28:04

      Mm.

   7. JAJack Altman28:04

      Like, you just, you just have been. And I guess my question is, is there anything describable about picking people or spotting... You know, I'm not- we won't use spiky, we won't use taste, but is there anything about what goes into seeing something special about a person early that is describable? Or is it only learnable through lots of time, or is it just not a learnable thing?

   8. GRGreg Rosen28:26

      I hate giving, like, half answer, but the, the truth is, it's like half and half. Half of it is just you can't teach taste. Like, certain people just, like, have-

   9. JAJack Altman28:36

      Yeah

   10. GRGreg Rosen28:36

       ... inherent deal taste. And what is that? It's like the human taste. It's like, who do I like spending time with? Who, like, do I think can just, like, do the impossible and-

   11. JAJack Altman28:43

       I've actually always thought about that, that, like, people just, like, have their preferences-

   12. GRGreg Rosen28:46

       Yeah

   13. JAJack Altman28:46

       ... about who they like. For some people, that set of preferences is just going to overlap with super talented people, [chuckles] and for some, it's just not.

   14. GRGreg Rosen28:52

       Talent clusters, by the way, like, always. Um, and so, like, if you're a high-performing human, like, you are going to spend time with other high-performing humans. So I think, like, there's a natural clustering there that, like, you just can't, you can't teach.

   15. JAJack Altman29:05

       Yep.

   16. GRGreg Rosen29:05

       The other is, like, you can get reps, you can practice, right? Like, you know, we, we both love playing golf. There are certain-

   17. JAJack Altman29:13

       No, we do

   18. GRGreg Rosen29:13

       ... natural athletes, [chuckles] um-

   19. JAJack Altman29:15

       Oh, yeah. In a big way

   20. GRGreg Rosen29:15

       ... you know, in, in a big way.

   21. JAJack Altman29:16

       Yeah.

   22. GRGreg Rosen29:17

       But there's no substitute for just lots and lots and lots of reps.

   23. JAJack Altman29:20

       Yeah.

   24. GRGreg Rosen29:20

       BoxGroup is, like, I don't know how else you can get as many reps of seeing companies and, like, across all different stages and sectors. We're generalists, we're not specialists. That's, I think, the other half of the equation.

   25. JAJack Altman29:34

       You mentioned something to me that I... It's really stuck with me, which is, you said basically, if you looked back, any time you took a third meeting with a founder, you should have done it.

   26. GRGreg Rosen29:42

       Yeah.

   27. JAJack Altman29:42

       And I thought that was, like, a really interesting tidbit, that basically, like, one of the ways to get better is to simply be more observant of your own intuitions, and the act of you continuing to spend time with somebody, even if you're not sure, is your intuition trying to tell you something.

   28. GRGreg Rosen29:57

       We're always updating our- we don't have, like, any rules, but, like, we have these, like, de facto sort of learnings-

   29. JAJack Altman30:04

       Mm

   30. GRGreg Rosen30:04

       ... and we're always updating them, right? Back to the like, you know, okay, we did a good job. We saw, you know, a bunch of interesting companies. We passed, why?
9. 31:46 – 34:39

   Calendar auditing

   1. JAJack Altman31:46

      I wanna talk about the calendar audit stuff. You and I have talked a ton about how, like, people spend time. The-

   2. GRGreg Rosen31:51

      In very dumb ways.

   3. JAJack Altman31:52

      In very dumb ways. Um, I mean-

   4. GRGreg Rosen31:53

      A lot of empty calories.

   5. JAJack Altman31:54

      It's funny, I think I also... You know, when I was running a company, I also spent time in dumb ways, but less, and I think in venture, it's really possible to spend time in dumb ways because everything is amorphous. You don't know what's actually gonna lead to what, and so it leads to, I think... Like, I think if you compared calendars across venture capitalists, you would see, like, a ridiculously different pie chart of how people are spending time.

   6. GRGreg Rosen32:16

      Absolutely, and look, like, everyone's running a different strategy, right? Um, and so I also understand that, like, for you and the sort of craft that you're doing and, like, leading Series A's and being an amazing board member, like, that is gonna shift the amount of time that you're gonna spend and take on, like, completely net new meetings. However, you are only as good, uh, and this was, like, drilled into me when I was at Benchmark, you're only as good as your last deal. Like, you have it really hard, where you have to both create incredible founder NPS as, like, a great board member, which is also anti-scale, but then you have to be always spending time on finding the, the next great company.

   7. JAJack Altman32:55

      Yep.

   8. GRGreg Rosen32:56

      And what I find is that most people are not honest with themselves, and they hide behind that. They're like, "Well, I'm on 10 boards-

   9. JAJack Altman33:05

      Yeah

   10. GRGreg Rosen33:05

       ... so, like, I gotta spend all my time doing board work." And I'm like, "Okay, but, like, why are you spending, you know, all this time networking with, like, other investors?

   11. JAJack Altman33:12

       Totally.

   12. GRGreg Rosen33:13

       Why don't you go meet founders?"

   13. JAJack Altman33:14

       Yeah, yeah.

   14. GRGreg Rosen33:14

       Um, or, like, "Why are you at this, like, event that's all VCs and no founders," right?

   15. JAJack Altman33:18

       I think that stuff's a massive waste of time.

   16. GRGreg Rosen33:20

       Massive waste of time. And, and people think they're so busy, but, like, there's always more hours in the day.

   17. JAJack Altman33:24

       And it feels good. You feel like you're out and about. You feel like you're doing stuff, you're meeting people, and what did you do?

   18. GRGreg Rosen33:29

       Yep, yep.

   19. JAJack Altman33:29

       Nothing.

   20. GRGreg Rosen33:29

       Yep.

   21. JAJack Altman33:30

       Yeah.

   22. GRGreg Rosen33:30

       Um, and so-

   23. JAJack Altman33:31

       What are the other big time wastes? Like, what... Like, if you had to, like, name the top time wasters, like, I think networking events has gotta be-

   24. GRGreg Rosen33:37

       Yeah, VC networking is like-

   25. JAJack Altman33:38

       That's gotta be at the top

   26. GRGreg Rosen33:39

       ... gotta be number one.

   27. JAJack Altman33:40

       Yeah.

   28. GRGreg Rosen33:40

       Basically, anything that isn't... If, again, you're, [chuckles] you're in the boardroom doing boardwork, like, if you're not helping your portfolio, you should be spending all your time m- trying to meet and find new companies, but again, really individuals and great, like, interesting pockets of people.

   29. JAJack Altman33:59

       Yeah.

   30. GRGreg Rosen33:59

       Like, if you want to find alpha, you have to be people-focused, not company-focused.
10. 34:39 – 37:25

    Focusing on where you’re outlier

    1. GRGreg Rosen34:39

       Yeah.

    2. JAJack Altman34:39

       What can be a big problem, in venture and just in general is-

    3. GRGreg Rosen34:41

       Mm

    4. JAJack Altman34:41

       ... when you start trying to get caught up in other people's games, you, like, don't just make, like, no progress, you, like, go backwards.

    5. GRGreg Rosen34:48

       Yeah, you, like, you spiral and waste a bunch of calories, and what's most dangerous is that it can... Look, the tactics can be the same, um, but the quality can be very different, right? And so, like, again, I don't, I don't tweet, I don't do podcasts.

    6. JAJack Altman35:04

       You do this podcast.

    7. GRGreg Rosen35:05

       I, I, I do this podcast.

    8. JAJack Altman35:06

       That's right.

    9. GRGreg Rosen35:06

       Many other people have tried to create-

    10. JAJack Altman35:07

        I think we just do this once a quarter-

    11. GRGreg Rosen35:09

        Yeah, exactly

    12. JAJack Altman35:09

        ... and that's all you need to do. [chuckles]

    13. GRGreg Rosen35:10

        Um, exactly. But, like, many people have tried to create a bunch of other podcasts, and, like, you know, you came out and did an exceptional job and of quality, and now this is, you know, probably going to hopefully lead to a bunch of really great, interesting companies coming your way. If I tried to do the exact same thing, it wouldn't work, um, and, like, the time spent and all of that, but it, it's, it's alluring to like, oh!

    14. JAJack Altman35:33

        Totally.

    15. GRGreg Rosen35:34

        I could go and have the... And then everyone's gonna come inbound to me-

    16. JAJack Altman35:37

        Yeah

    17. GRGreg Rosen35:37

        ... and it's gonna be so great.

    18. JAJack Altman35:38

        Or he's like... I mean, this is gonna come off as a joke, so sorry, Saam, but, like, you know, our friend Saam-

    19. GRGreg Rosen35:42

        Yeah

    20. JAJack Altman35:42

        ... is like an incredible- he's good at all things, but he's a really good security investor.

    21. GRGreg Rosen35:45

        Really good at cyber.

    22. JAJack Altman35:46

        Really good at cyber.

    23. GRGreg Rosen35:47

        Yeah.

    24. JAJack Altman35:47

        Good at other stuff, too, but particularly good at cyber.

    25. GRGreg Rosen35:48

        But particularly cyber.

    26. JAJack Altman35:49

        And, you know, if we try... Like, if I tried to go be a specialist in something, I'm gonna, like, fall over. It's just not gonna work.

    27. GRGreg Rosen35:56

        Yeah, exactly. Like, he should be better at that one thing. But the trap that I think, um, investors, and especially, like, early investors in their career fall into is, like, you know the thing that you're good at, and then you're like, "Well-... this other thing over here-

    28. JAJack Altman36:10

        I see people doing well with that.

    29. GRGreg Rosen36:10

        I see people doing really well, but the trap is, is like you actually don't know how hard it is.

    30. JAJack Altman36:14

        Yeah.
11. 37:25 – 41:03

    Depth vs breadth of network

    1. GRGreg Rosen37:25

       one. Yeah

    2. JAJack Altman37:25

       ... First and last. One more question, and then I wanna wrap with a couple of your thoughts on just specific areas of tech. As you reflect over your last sort of 10 years of venture-

    3. GRGreg Rosen37:34

       Mm-hmm

    4. JAJack Altman37:34

       ... I'm curious how you've thought about, like, deep relationships, broad relationships, the sort of, like, tight-knit versus professionalized nature of venture. Like, what, what do you see over your sort of time doing this?

    5. GRGreg Rosen37:46

       What was really interesting is I, I feel like te- like, a decade ago, venture had cliques. Like, venture both had cliques, and founders had less power than they have now. Um, and so what that meant is, like, you know, a VC would invest at, like, the Series A and then go tell their f- you know, founder, like, "Hey, here's who's leading your B." Not always, like, and I'm exaggerating a little bit, but, like, it was, like, that dynamic. And then what ended up happening is obviously founders got a lot more power, which is awesome. But then almost the playing field of, of, like, leads and new firms and everything, it, it kind of, like, spread out-

    6. JAJack Altman38:20

       Yeah

    7. GRGreg Rosen38:20

       ... right? Became more democratic. But that also meant that you were getting more sort of random people, um, and sort of j- more junior people doing deals and, and sort of investing in companies.

    8. JAJack Altman38:31

       It was a bit of a mess. You're talking, like, early Zerp?

    9. GRGreg Rosen38:34

       Yeah.

    10. JAJack Altman38:34

        Yeah.

    11. GRGreg Rosen38:34

        Exactly. And, and now what's interesting is I feel like we are going back to, like, not cliques, but almost like, who are the preferred partners?

    12. JAJack Altman38:44

        Mm-hmm.

    13. GRGreg Rosen38:44

        And what's cool is that founder sort of powers continued to go up.

    14. JAJack Altman38:49

        Yep.

    15. GRGreg Rosen38:49

        So what that means is, is that, and we see this all the time, um, in, you know, people that we like working with, is we invest early, we sort of build founder trust and relationship, and then we say, like, "Look, we're not, you know, leading your Series A, who's... Like, here are Series A investors who we really respect, who have done exceptionally well by, yeah, like, other portfolio companies and founders in our portfolio. They are our high rec." And what I would say is, like, when I started in venture, I always thought it was, like, bad to play favorites.

    16. JAJack Altman39:23

        Mm-hmm.

    17. GRGreg Rosen39:23

        And now it's like I'm absolutely playing favorites on the recommendation. And then ultimately, it's on the founder to go and take that recommendation, and if we have high trust, like, hopefully, it means a lot, and then ultimately they're gonna pick and choose what's best for their business.

    18. JAJack Altman39:37

        It's a very interesting observation 'cause it's like a similar net effect, but, um, for opposite reasons, and with an-

    19. GRGreg Rosen39:42

        Mm

    20. JAJack Altman39:42

        ... opposite power balance, where, like, 10, 15, 20 years ago, it was like VCs had so much control that they could just say, "This is the round you're doing."

    21. GRGreg Rosen39:49

        Mm-hmm.

    22. JAJack Altman39:49

        And then it became, you know, founder power grew, venture capital dollars grew, and it became a bit of a mess. And what you're describing now is more a world where part of the job of the ex- existing investors is to help the founder, who does have all these cards-

    23. GRGreg Rosen40:02

        Mm-hmm

    24. JAJack Altman40:02

        ... circumvent a lot of the messiness there and say, "You know, these processes are really quick. We know people that are great, and, like, here's options presented to you."

    25. GRGreg Rosen40:11

        Yeah, and there's so many ways that you can get sucked into a process, um, that's either annoying, a waste of time, or, like, worse, like a partner that has a great brand, but then in reality is, like, annoying to you.

    26. JAJack Altman40:24

        Yep.

    27. GRGreg Rosen40:24

        Right? And I think that's part of venture funds are sort of becoming hyperscalers in their own way and amassing huge billions and billions of dollars building platform teams, all this different stuff. And it's not saying that that's good or bad, but it just means that there's more noise.

    28. JAJack Altman40:38

        Yeah.

    29. GRGreg Rosen40:38

        And so for, like, us, one of the things... You know, I always say, like, VCs love pitching magical value add. Like, we pitch zero. Like, founders are the reason why companies work, not investors. But the one thing that I think we can do a really great job at is say, "Hey, across our, you know, five hundred company active portfolio, here are the partners who have done exceptionally well, you know, by the founders, you know, that we've worked with."

12. 41:03 – 44:00

    The future of code

    1. JAJack Altman41:03

       Yeah. All right, I'm gonna hit you with two quick future guesses, and then I'm gonna let you go-

    2. GRGreg Rosen41:06

       Okay

    3. JAJack Altman41:06

       ... and then we can never go on a podcast again.

    4. GRGreg Rosen41:07

       Great.

    5. JAJack Altman41:08

       One is, um, future of code. Um, I just, uh, posted this podcast with Dwarkesh.

    6. GRGreg Rosen41:14

       Mm-hmm.

    7. JAJack Altman41:14

       He dropped a really interesting stat, which I think has also been shared by one of the Carlsons. Um, you know, Guillermo's talked about this, but basically it was about these tools are not yet that productive. Like, obviously, people are finding ways to be very productive, but they're not yet. You have made amazing early investments in Cursor and Warp, um, which are awesome, you know, sort of, you know, leading products here.

    8. GRGreg Rosen41:37

       Yeah.

    9. JAJack Altman41:37

       So you know more than average about this space. Where are we right now, and where do you think this, this AI code gen stuff is going?

    10. GRGreg Rosen41:43

        I don't think anyone knows, and it's changing so quickly, so I'll caveat by, like, no one knows. The thing that I feel strongly at is that whenever there's a new platform shift... And I started my career with the rise of mobile, right? And I remember when mobile, you know, first came out, people were, like, taking HTML web views and taking their mobile website and saying, "There we go. There's our, there's our mobile app," right? And that was the... You know, I always like talking to, showing how old I am, talking to young, you know, AI founders and being like: Do you know when the App Store came out, what the number one app in the App Store was for, like, the first two years?

    11. JAJack Altman42:18

        Hmm.

    12. GRGreg Rosen42:18

        Do you know?

    13. JAJack Altman42:19

        Uh, I remember, like, the beer drinking game. Was it that?

    14. GRGreg Rosen42:21

        No.

    15. JAJack Altman42:22

        No.

    16. GRGreg Rosen42:22

        Uh, that was, that, that-

    17. JAJack Altman42:23

        That was good

    18. GRGreg Rosen42:24

        ... was quick.

    19. JAJack Altman42:24

        For, like, a day.

    20. GRGreg Rosen42:25

        It was Pandora, right?

    21. JAJack Altman42:26

        Ah.

    22. GRGreg Rosen42:26

        And, and the reason is, like, that's what us humans do. We're like, "Ah!... mo- like, an iPhone comes out, it's a supercomputer in your pocket. What's, what's the most important thing? It's, like, taking the radio that's in our car, putting it on our mobile device, right? And what happens is it takes, like, two, three, four years for people to actually understand the primitives that end up coming out of mobile, right? And then we get Uber, the remote control for, you know, the real world, and Instagram, and Snapchat, and Discord, and all these, like, amazing, great native expressions of mobile. That exact thing is happening, bringing it back to AI and codegen, but it's really hard, right? It's, it's, it's the reason why I think Cursor's done so well, is that they took the IDE form factor that everyone knew and then built on it and made it a lot better.

    23. JAJack Altman43:11

        Yep.

    24. GRGreg Rosen43:11

        What Warp is doing with, like, the ADE and the agentic development environment, uh, is like, hey, this terminal and Claude Code and all these, uh, other components, uh, we can just tell a computer what to do, and maybe the right native expression is not opening up a code file and then hitting Tab a hundred times because you shouldn't even be looking at an individual code file. You should just be t- telling the computer, uh, you know, or machine, what you want it to do, and then sort of auditing all the, like, thought and steps throughout it, uh, throughout the, uh, process. And then eventually, maybe you don't even need to do that. I'm always asking myself, whenever a company is pitching us: What is the most native AI version of this? I don't know the answer, otherwise I would start the company myself, but, like, that's our orientation, and that's been some of the... It's, it's been cool to see the codegen, you know, companies that we've invested in take

13. 44:00 – 45:28

    Brain computers

    1. GRGreg Rosen44:00

       different stabs at doing that.

    2. JAJack Altman44:01

       All right, one more, just for fun. Neuralink, brain computers, what, what do you think about that? [chuckles]

    3. GRGreg Rosen44:05

       We were talking about this earlier, where I was like, "You know what? I don't know if it's harder or easier," but, like, there's so much stuff that's happening in, like, robotics and, you know, humanoids, and all, all these amazing things. Maybe what's actually more fun and interesting is just, like, if we find a way to have input/output to our human brain, like, then you just hook us up, and, you know, it's like Matrix 2.0, and that actually may be easier than having, like, a Westworld environment.

    4. JAJack Altman44:34

       Yeah, that'd be good. [chuckles]

    5. GRGreg Rosen44:34

       So, [chuckles] um, I don't, I don't know. It's, like, a little futuristic, but I'm, I'm surprised that there's not more people that are, like, focused on instead of, uh, sort of changing and almost terraforming the Earth and world as it exists right now-

    6. JAJack Altman44:50

       Just make our... Yeah.

    7. GRGreg Rosen44:51

       Just, like-

    8. JAJack Altman44:52

       Just put it in the brain

    9. GRGreg Rosen44:52

       ... literally just simulate a much better one for ourselves, and really, what is the difference there? It's a little futuristic, but it's just a fun thought.

    10. JAJack Altman45:00

        That's fun.

    11. GRGreg Rosen45:00

        Uh, because it may be... Ultimately, it's like, what is the path of least resistance? I'm talking way out of my-

    12. JAJack Altman45:05

        Yep

    13. GRGreg Rosen45:05

        ... scope of knowledge.

    14. JAJack Altman45:06

        Yeah.

    15. GRGreg Rosen45:06

        But the path of least resistance, rather than that utopia on Earth, might just be we're all, like, hooked up to the Matrix, and, you know, we have perfect input/output to our brain, and that may actually be easier than sort of the utopia with robots running around, and humanoids, and all that stuff. I don't know.

    16. JAJack Altman45:22

        Sounds good. God willing. Greg, you're the best. Thanks for doing this.

    17. GRGreg Rosen45:24

        Thanks. [upbeat music]

Episode duration: 45:28