1 00:00:00,040 --> 00:00:03,120 Acquisitions to be successful, my view is they should be small 2 00:00:03,280 --> 00:00:05,880 or they should be large like middle sized. 3 00:00:05,880 --> 00:00:09,320 Acquisitions are the most difficult for both sides to be 4 00:00:09,320 --> 00:00:12,680 successful. I have drunk the kool-aid of Wiz 5 00:00:13,560 --> 00:00:15,960 more than anyone on the planet, right? 6 00:00:16,320 --> 00:00:20,120 And so to then say I'm going to switch to iced tea is super 7 00:00:20,120 --> 00:00:22,120 hard, right? What's the way for somebody to 8 00:00:22,120 --> 00:00:25,160 sort of break into being in your awareness? 9 00:00:25,680 --> 00:00:27,480 Well, I'm not everyone's cup of tea. 10 00:00:27,840 --> 00:00:29,440 Am I crazy? Yes, sort of. 11 00:00:29,440 --> 00:00:31,320 I don't know. When Google announced it was 12 00:00:31,320 --> 00:00:35,960 buying Wiz for $32 billion, one name quietly became the talk of 13 00:00:35,960 --> 00:00:38,880 venture capital. Shardul Shaw, partner at Index 14 00:00:38,880 --> 00:00:41,240 Ventures, was one of the first checks into Wiz. 15 00:00:41,240 --> 00:00:43,440 And it wasn't luck. It was pattern recognition. 16 00:00:43,440 --> 00:00:46,400 Shardul has spent nearly 2 decades at Index building a 17 00:00:46,400 --> 00:00:49,440 reputation for finding the right founders before anyone else 18 00:00:49,440 --> 00:00:50,800 does. Datadog. 19 00:00:50,880 --> 00:00:54,120 Duo, Security Coalition. The list speaks for itself. 20 00:00:54,160 --> 00:00:57,560 Today we get into the Google Wiz deal, his human first approach 21 00:00:57,560 --> 00:01:00,480 to spotting the next generation of great founders and where he's 22 00:01:00,480 --> 00:01:04,160 looking for his next big bet. I'm Eric Newcomer, the author of 23 00:01:04,160 --> 00:01:06,680 Newcomer, the subsect that tracks the inner workings of 24 00:01:06,680 --> 00:01:09,560 startups and venture capital. Follow me and my team's writing 25 00:01:09,560 --> 00:01:12,800 at newcomer.co. And without further ado, here is 26 00:01:12,800 --> 00:01:15,400 my conversation with Shardul, one of the top venture 27 00:01:15,400 --> 00:01:17,040 capitalists in the Business Today. 28 00:01:24,960 --> 00:01:28,800 All right, super excited. This is a big week for you. 29 00:01:28,800 --> 00:01:31,360 I'm here with Shardul Shaw in the Newcomer Podcast. 30 00:01:31,360 --> 00:01:33,520 Thank you for joining me. Thanks for having me man. 31 00:01:33,720 --> 00:01:36,080 Did. So we're here, you know, in 32 00:01:36,080 --> 00:01:38,240 part, I guess it's we should have like, you know, party hats 33 00:01:38,240 --> 00:01:41,080 and stuff. Google's $32 billion acquisition 34 00:01:41,080 --> 00:01:43,800 of Wiz, the cyber Israeli cyber security startup. 35 00:01:44,040 --> 00:01:46,400 Clear, the checks cleared this week. 36 00:01:46,400 --> 00:01:48,640 Is that right? Yeah, closed on Wednesday. 37 00:01:48,800 --> 00:01:53,760 Yeah, and index and you are. You're the largest investor 38 00:01:53,760 --> 00:01:56,200 shareholder, right? Yeah, and so for the party hat, 39 00:01:56,200 --> 00:01:58,200 I'd prefer a Cerebral Valley cap. 40 00:01:58,240 --> 00:01:59,880 I mean, we could have been matching at least. 41 00:02:00,840 --> 00:02:05,000 Yeah, so I guess for for people just paying attention, like 42 00:02:05,440 --> 00:02:09,160 explain you know why Google is spending all this money to buy 43 00:02:09,160 --> 00:02:12,040 Wiz in the first place. Yeah, look, the the best 44 00:02:12,040 --> 00:02:14,360 companies are always bought, not sold, right? 45 00:02:14,360 --> 00:02:16,480 And, and it starts with the founding team. 46 00:02:17,480 --> 00:02:22,280 It it's a remarkable run over six years, but it took over 20 47 00:02:22,280 --> 00:02:25,520 for this to happen. The founders have had so much 48 00:02:25,520 --> 00:02:27,320 trust. They're such different 49 00:02:27,320 --> 00:02:30,760 personalities that when they came together to create Wiz, 50 00:02:30,760 --> 00:02:35,000 they created a culture that could move so fast in a existing 51 00:02:35,000 --> 00:02:38,080 category and really disrupt the market. 52 00:02:38,080 --> 00:02:43,200 So I think ultimately what you're acquiring, whether it's a 53 00:02:43,200 --> 00:02:46,880 small, medium or large acquisition, at the core is a 54 00:02:46,880 --> 00:02:49,000 group of people and a culture that comes with it. 55 00:02:49,120 --> 00:02:53,080 One person close to Google, when this announcement first came out 56 00:02:53,240 --> 00:02:56,560 mentioned to me, it was just like, in a world of AI, cyber 57 00:02:56,560 --> 00:02:58,400 attacks are going to become even more likely. 58 00:02:58,400 --> 00:03:00,520 Obviously, we need to be very aware of cyber security. 59 00:03:00,800 --> 00:03:03,880 In some ways, this deal is a sense that like Google needs to 60 00:03:03,880 --> 00:03:07,360 be ready if there is like a major massive cyber attack, if 61 00:03:07,360 --> 00:03:09,200 they need to defend their customers, obviously it's an 62 00:03:09,200 --> 00:03:12,360 offering that they can provide cloud customers. 63 00:03:12,600 --> 00:03:16,160 I mean, now, you know, since the steel closed, now we're at war 64 00:03:16,360 --> 00:03:19,240 with Iran and that's obviously increasing the risk of 65 00:03:19,240 --> 00:03:22,000 cybersecurity. So like explain, you know, where 66 00:03:22,000 --> 00:03:26,480 Wiz sits in terms of cyber defense, why and why Google 67 00:03:26,480 --> 00:03:27,960 would want and what what they're really. 68 00:03:27,960 --> 00:03:29,640 Delivering the customers, I think you nailed that. 69 00:03:29,640 --> 00:03:32,160 There's a a cloud tailwind, right? 70 00:03:32,400 --> 00:03:34,320 More and more workloads are going to the cloud. 71 00:03:34,320 --> 00:03:36,400 We've been on this transition for over a decade. 72 00:03:36,560 --> 00:03:38,920 Finally, for example, over the last five years, the pharma 73 00:03:38,920 --> 00:03:41,160 industry has moved all of their data to the cloud. 74 00:03:41,800 --> 00:03:45,480 Second, there is a security tailwind, right? 75 00:03:45,480 --> 00:03:50,400 There's more need to secure against risks for large and 76 00:03:50,400 --> 00:03:54,040 small businesses across the world and the amount of risk is 77 00:03:54,040 --> 00:03:55,440 varied. I'll come back to that in a 78 00:03:55,440 --> 00:03:58,720 second. And then third is AI right to 79 00:03:58,960 --> 00:04:03,880 everyone knows we live in an AI era and with more AI workloads, 80 00:04:03,880 --> 00:04:07,880 there is a demand for more security on the back of those 3 81 00:04:08,200 --> 00:04:11,080 tailwinds. It just so happens with is at 82 00:04:11,080 --> 00:04:14,000 the center and like that's not by luck, right? 83 00:04:14,000 --> 00:04:18,120 They've been intentionally crafting their business to be 84 00:04:18,120 --> 00:04:20,560 there. They started with a platform 85 00:04:20,560 --> 00:04:23,040 that serve large enterprises from the get go. 86 00:04:23,840 --> 00:04:27,680 And so it's really complementary with all of the resources and 87 00:04:27,680 --> 00:04:29,920 the AI infrastructure that Google has. 88 00:04:30,120 --> 00:04:32,520 So take me back to the beginning. 89 00:04:32,560 --> 00:04:36,400 I mean you what I think I was reading this was the Claude 90 00:04:36,400 --> 00:04:38,040 synopsis, so hopefully this is correct. 91 00:04:38,320 --> 00:04:41,280 But what you they stood you up for 45 minutes, the founder 92 00:04:41,280 --> 00:04:43,080 before your first meeting or what? 93 00:04:43,280 --> 00:04:45,720 What were you? What did you see when you first 94 00:04:45,960 --> 00:04:47,560 when Wiz was first on your radar and why? 95 00:04:47,560 --> 00:04:48,880 How? It felt like, have have you been 96 00:04:48,880 --> 00:04:52,640 to an Indian wedding? Not a not a huge Indian wedding. 97 00:04:52,640 --> 00:04:55,720 I've I've been to a 50% Indian wedding now that I yeah. 98 00:04:55,720 --> 00:04:57,960 OK, so this story is like 50% true. 99 00:04:58,320 --> 00:05:02,920 Like irrespective of the size, right, People are fashionably on 100 00:05:02,920 --> 00:05:03,560 time. Yeah. 101 00:05:03,840 --> 00:05:08,360 And so my reception of Asaf being a few minutes late was he 102 00:05:08,360 --> 00:05:10,800 was on time. So Claude's got it wrong and 103 00:05:10,800 --> 00:05:13,600 turns. Out you were not offended by the 104 00:05:13,640 --> 00:05:14,920 you, is it? No. 105 00:05:15,480 --> 00:05:19,360 And and I think a lot of individuals have had a similar 106 00:05:19,360 --> 00:05:24,160 experience with ASAF, but you know, what started late really 107 00:05:24,160 --> 00:05:29,720 escalated because in 72 hours we had a term sheet signed ASAF and 108 00:05:29,720 --> 00:05:34,960 I had this unusual kind of chemistry and click from the 109 00:05:34,960 --> 00:05:38,240 first moment that we met. I can't really like I can't 110 00:05:38,240 --> 00:05:41,800 explain it right and you can't like prepare for that. 111 00:05:43,560 --> 00:05:48,240 All VCs are salespeople. I'm not the best as you know, 112 00:05:48,520 --> 00:05:51,440 but you can great VC. Definitely at this point with 113 00:05:51,440 --> 00:05:53,000 Datadog and Wiz, we'll talk about that. 114 00:05:53,000 --> 00:05:55,840 But you're saying not you don't see yourself as a salesperson? 115 00:05:56,080 --> 00:05:59,080 Well, I think salespeople can be really prepared, but you can't 116 00:05:59,080 --> 00:06:03,840 prepare for serendipity, right? And so sometimes you just click 117 00:06:03,840 --> 00:06:06,760 with someone and it was both professional and personal. 118 00:06:06,760 --> 00:06:09,360 And we're finding ourselves completing each other's 119 00:06:09,760 --> 00:06:14,640 sentences. And so that was the first, that 120 00:06:14,640 --> 00:06:17,400 was the first moment for me. It was on the back of another 121 00:06:17,400 --> 00:06:19,920 friendship I had with Michael Sholoff. 122 00:06:20,600 --> 00:06:23,440 Michael was the, at the time, he was the founder of Lacun 123 00:06:23,440 --> 00:06:28,800 Security. Lacun, is this a pretty deep cut 124 00:06:28,800 --> 00:06:31,720 into Greek mythology that clearly Claude didn't tell you 125 00:06:31,720 --> 00:06:34,640 about, but I encourage you to look up afterwards. 126 00:06:34,640 --> 00:06:38,080 He's this like priest involved in the Trojan Horror Story. 127 00:06:38,320 --> 00:06:41,120 So Michael, who became a friend of mine, I invested in his 128 00:06:41,120 --> 00:06:42,560 company. I didn't know anything about 129 00:06:42,560 --> 00:06:44,280 security. And so he's like, I've got to 130 00:06:44,280 --> 00:06:46,280 make use of Shardul as a board member. 131 00:06:46,440 --> 00:06:51,840 So he sent me hunting for customer relationships and help 132 00:06:51,840 --> 00:06:53,600 building out his management team. 133 00:06:54,360 --> 00:06:58,440 Again, accidentally, Michael and I became friends after Fanny and 134 00:06:58,440 --> 00:07:01,200 he had their first kid. I, I was on the I was on the top 135 00:07:01,200 --> 00:07:04,360 three of of folks who got a phone call right because we 136 00:07:04,360 --> 00:07:07,960 really cared about each other. And so Michael by pure chance 137 00:07:08,000 --> 00:07:13,720 introduced me to Asaf and Asaf and I by pure chance clicked. 138 00:07:15,360 --> 00:07:19,120 Fast forward a decade, Asaf calls me on my birthday and he's 139 00:07:19,120 --> 00:07:23,120 like, hey, let's go and. It was much time for the deal. 140 00:07:23,280 --> 00:07:24,000 It was. It was done. 141 00:07:24,080 --> 00:07:27,480 It was clear like that this was going to be like it's you and 142 00:07:27,480 --> 00:07:29,640 Sequoia are doing the first round, right? 143 00:07:29,800 --> 00:07:33,600 Gilly, Doug Leoni. Well, no, Gilly, Doug Leoni and 144 00:07:33,600 --> 00:07:35,840 I all joined the board at the first round. 145 00:07:36,240 --> 00:07:39,720 And so when Asaf called, he's like, let's like we're working, 146 00:07:40,240 --> 00:07:41,600 we're working on a new company, let's go. 147 00:07:41,600 --> 00:07:43,440 I was like, I'm in. He's like, do you want to hear 148 00:07:43,440 --> 00:07:45,920 what we're doing? And I was like, it's a detail, 149 00:07:47,080 --> 00:07:53,000 which is a true story. And a week after we had wired 150 00:07:53,000 --> 00:07:55,800 the money, we were together in San Francisco, he said, hey, 151 00:07:55,800 --> 00:07:56,760 sure. We pivoted. 152 00:07:56,760 --> 00:07:59,840 I was like, OK, great. Like we didn't write a memo 153 00:07:59,840 --> 00:08:01,720 anyway. Like what, what are we working 154 00:08:01,720 --> 00:08:04,000 on? And, and and so there was the, 155 00:08:04,120 --> 00:08:09,000 the only, the only thing to invest in was like belief in the 156 00:08:09,000 --> 00:08:10,840 founders. And again, we had this the 157 00:08:10,840 --> 00:08:14,320 benefit of having a front row seat 10 years ago. 158 00:08:14,320 --> 00:08:17,600 So we knew their character. We knew the lessons they had 159 00:08:17,600 --> 00:08:21,040 learned within Microsoft after they sold the Adalim. 160 00:08:21,320 --> 00:08:23,600 And as a consequence, we knew how they were thinking about 161 00:08:23,840 --> 00:08:26,800 building a a culture and a platform from the gecko. 162 00:08:29,000 --> 00:08:30,840 How much do you remember? How much money you put in right 163 00:08:30,840 --> 00:08:33,559 at the beginning? No, I I couldn't give you dates. 164 00:08:33,559 --> 00:08:35,200 I couldn't give you numbers. It was like us. 165 00:08:35,200 --> 00:08:38,320 It was like, I imagine it was small relative to the overall 166 00:08:38,320 --> 00:08:41,640 investment over time. Yeah, exactly it, it was like a 167 00:08:41,960 --> 00:08:48,640 a standard seed investment. Later that year it was a we we 168 00:08:48,640 --> 00:08:52,520 led the series. A a few months later, we let Co 169 00:08:52,520 --> 00:08:56,480 led the next round and then like we kept going and, and so over 170 00:08:56,480 --> 00:08:58,000 time we broke a lot of rules, right. 171 00:08:58,000 --> 00:09:01,320 We invested out of four funds, which is the first time we've 172 00:09:01,320 --> 00:09:04,960 done that in in index's history. First time that many funds or 173 00:09:04,960 --> 00:09:09,080 across funds? First time that many funds with 174 00:09:09,080 --> 00:09:12,880 Datadog, for example, we'd also invested across funds with a 175 00:09:12,880 --> 00:09:14,320 number of. I realize this used to be out of 176 00:09:14,320 --> 00:09:16,560 vogue and venture, and now everyone's concluded you have to 177 00:09:16,560 --> 00:09:19,280 double down on your winners to succeed, right? 178 00:09:22,120 --> 00:09:26,480 I think it's more complicated. So let's see if I, if I break it 179 00:09:26,480 --> 00:09:30,920 down in the, in the industry, one of the things that's unusual 180 00:09:31,000 --> 00:09:34,360 about index is we have one team across strategies. 181 00:09:34,360 --> 00:09:37,600 So like many other large firms, we have a seed fund, a venture 182 00:09:37,600 --> 00:09:40,240 fund and a growth fund, right? But most other firms have 183 00:09:40,240 --> 00:09:42,200 specialization, which makes a lot of sense. 184 00:09:42,200 --> 00:09:45,640 Like, people who think about early stage risk are often 185 00:09:45,640 --> 00:09:48,360 different than those who think about late stage risk. 186 00:09:48,840 --> 00:09:53,920 And so for those businesses, often doubling down requires 187 00:09:53,920 --> 00:09:56,080 like convincing a different group of people, right? 188 00:09:56,080 --> 00:09:59,480 And they have a different apparatus to make decisions. 189 00:09:59,920 --> 00:10:03,000 And that's not all bad, right? Because when? 190 00:10:03,000 --> 00:10:04,880 When? Holds you, it makes you honest. 191 00:10:04,880 --> 00:10:06,880 It's like somebody else has to review and say, are we doubling 192 00:10:06,880 --> 00:10:08,800 down on sort? Of a bad investment. 193 00:10:08,800 --> 00:10:11,720 It's it's like a type of check and balance and it's a type of 194 00:10:11,720 --> 00:10:15,360 specialization that ought to support like high quality 195 00:10:15,360 --> 00:10:17,280 judgement calls. So it's a, it's a way of doing 196 00:10:17,280 --> 00:10:21,000 business doesn't work at index. At index every time we've had a 197 00:10:21,000 --> 00:10:24,800 silo, it hasn't worked. So we converged, I think in 198 00:10:24,800 --> 00:10:28,520 2010, we converged our venture and growth teams into a single 199 00:10:28,520 --> 00:10:31,120 team. So all of us are responsible for 200 00:10:31,120 --> 00:10:34,720 all of our distinct fund strategies all over the world, 201 00:10:35,600 --> 00:10:38,240 globally, yeah. Because that's another area 202 00:10:38,280 --> 00:10:40,480 where firms also divide it up sometimes about. 203 00:10:40,480 --> 00:10:42,120 Yeah, absolutely. And we can come back to like why 204 00:10:42,120 --> 00:10:45,560 that's super hard and why we're like unusual in that dimension. 205 00:10:46,160 --> 00:10:48,360 And it's not for everyone. This is not like a pitch on like 206 00:10:48,360 --> 00:10:52,080 redesign your venture firm like it's just our culture supports 207 00:10:52,080 --> 00:10:53,960 one team across GI. Do you have? 208 00:10:54,120 --> 00:10:56,920 Given that you don't have separate growth investors, does 209 00:10:56,920 --> 00:11:00,480 that make you more reluctant to do this sort of multi fund so 210 00:11:00,480 --> 00:11:02,640 within? Within index it it's it's so 211 00:11:02,640 --> 00:11:06,480 personality driven, right? So for me, in order to develop 212 00:11:06,480 --> 00:11:09,360 deeper conviction time, I require contacts, right? 213 00:11:09,360 --> 00:11:11,240 So I spend a lot of time with the management team. 214 00:11:11,520 --> 00:11:14,760 I really like have a log into the product and I'm testing it 215 00:11:14,760 --> 00:11:17,240 frequently. I spend time with the go to 216 00:11:17,240 --> 00:11:18,960 market team. I spend time with the marketing 217 00:11:18,960 --> 00:11:22,120 team without crossing the boundaries of a board member 218 00:11:22,120 --> 00:11:24,600 kind of getting involved. And fortunately I'm not an 219 00:11:24,600 --> 00:11:26,720 operator, so I can't really tell anybody what to do. 220 00:11:26,960 --> 00:11:30,280 But I can learn a lot from contacts for a company that 221 00:11:30,280 --> 00:11:33,640 helps because I can make high quality judgement calls on like 222 00:11:33,640 --> 00:11:37,520 who to recruit, when and how and why, which can change the 223 00:11:37,520 --> 00:11:40,760 trajectory of businesses. But for index, it gives me more 224 00:11:40,760 --> 00:11:44,880 context now Second, as a personality, when I'm in the 225 00:11:44,880 --> 00:11:47,680 sausage making, I see the warts, right? 226 00:11:47,680 --> 00:11:52,160 And so as optimistic as I am as a natural born venture 227 00:11:52,160 --> 00:11:55,240 capitalist of a fair amount of skepticism, right? 228 00:11:55,240 --> 00:11:59,840 And as a consequence, I can get really close to warts. 229 00:12:00,160 --> 00:12:02,520 And when I see flaws, I really study them. 230 00:12:02,520 --> 00:12:08,080 So no, it's not easy for me to develop deeper conviction over 231 00:12:08,080 --> 00:12:10,160 time. It's it's actually really 232 00:12:10,160 --> 00:12:12,240 challenging right you? Understand what the potential 233 00:12:12,240 --> 00:12:14,160 risks are of the business. No. 234 00:12:14,280 --> 00:12:17,080 That's actually not true. I think far more about the 235 00:12:17,080 --> 00:12:19,800 opportunity in the upside than risk calculus. 236 00:12:20,000 --> 00:12:23,840 I actually think it's a fool's errand to to, you know, try to 237 00:12:23,840 --> 00:12:27,080 attempt risk calculus. I think it's overweighted in our 238 00:12:27,080 --> 00:12:29,560 industry, right? And it's like human nature, it 239 00:12:29,560 --> 00:12:31,160 make the. Bet you have to see sort of the 240 00:12:31,160 --> 00:12:33,880 big upsides, but I I thought you were saying by seeing the 241 00:12:33,880 --> 00:12:36,560 awards, that's that's what gives you this sort of yeah, but. 242 00:12:36,560 --> 00:12:41,960 When, like when you imagine if, if you start to see blemishes in 243 00:12:41,960 --> 00:12:44,280 the room and they start attracting your attention, all 244 00:12:44,280 --> 00:12:46,320 of a sudden it's harder to see beauty, right? 245 00:12:46,560 --> 00:12:50,320 So it, it can be more difficult and challenging to see the whole 246 00:12:50,320 --> 00:12:52,920 picture when you're attracted to awards because you want to talk 247 00:12:52,920 --> 00:12:54,360 about problems to fix them, right? 248 00:12:54,800 --> 00:12:58,680 So it's hard for me. However, the, the good news 249 00:12:58,680 --> 00:13:01,240 about index is I don't make any decisions. 250 00:13:01,240 --> 00:13:04,960 It's it's a true partnership. And as a consequence, at every 251 00:13:04,960 --> 00:13:07,800 single phase, we're having debates, right? 252 00:13:07,800 --> 00:13:11,560 We debated the market, we debated the product, we debated 253 00:13:11,720 --> 00:13:14,040 the quality of the execution and attraction. 254 00:13:14,160 --> 00:13:17,080 We debated gross margins, we debated strategy. 255 00:13:17,080 --> 00:13:22,280 We debated so many things. And very few of our investment 256 00:13:22,280 --> 00:13:24,320 decisions were actually unanimous. 257 00:13:25,120 --> 00:13:27,560 What does that tell you? It tells you we have a culture 258 00:13:27,560 --> 00:13:31,280 that promotes dissent because we want to get to the highest 259 00:13:31,280 --> 00:13:34,240 quality judgement calls. We shouldn't confuse like the 260 00:13:34,240 --> 00:13:37,040 judgement calls that we serially made with the outcome. 261 00:13:37,040 --> 00:13:39,440 Like that doesn't mean the judgement calls were right. 262 00:13:39,960 --> 00:13:43,720 But we went as a group into really high quality judgement 263 00:13:43,720 --> 00:13:47,120 calls, which unlocks the ability to double down against 264 00:13:47,120 --> 00:13:49,120 conviction. And you can see there were like 265 00:13:49,400 --> 00:13:52,960 the some of the best firms on the planet with the best minds 266 00:13:53,240 --> 00:13:56,200 that took a different view. They were not like wrong. 267 00:13:56,640 --> 00:13:58,240 They just took a different view. Right was. 268 00:13:58,240 --> 00:14:00,960 There so you end up in the largest position even though 269 00:14:00,960 --> 00:14:03,600 there are three investors there Yeah absolutely right so that's 270 00:14:03,600 --> 00:14:06,800 key So what was the next key decision like was there a 271 00:14:06,800 --> 00:14:10,000 particular round or when do you think you really like put more 272 00:14:10,000 --> 00:14:13,120 money in a way that others might have missed or that you're 273 00:14:13,200 --> 00:14:14,680 you're proud of every single. One right? 274 00:14:15,120 --> 00:14:16,240 Just like. Continuing. 275 00:14:16,240 --> 00:14:19,280 Yeah, well. So so the Series A, what's the 276 00:14:19,280 --> 00:14:22,040 context that maybe I rotated against? 277 00:14:22,680 --> 00:14:26,960 There were two key customers, one of the two I had introduced 278 00:14:27,320 --> 00:14:32,320 and the the buyer at that company is a he'll remain 279 00:14:32,320 --> 00:14:34,440 unnamed, but he's an intellectual snob, right? 280 00:14:35,400 --> 00:14:38,000 And, and he doesn't do any, do me any favors, right? 281 00:14:38,000 --> 00:14:42,640 So when he made $1,000,000 purchase order decision in four 282 00:14:42,640 --> 00:14:46,840 weeks and sent me a voice message that sounded like a 283 00:14:46,840 --> 00:14:52,240 country song, I had distinct asymmetric information. 284 00:14:52,800 --> 00:14:56,520 And I read into the qualitative of that signal more than the 285 00:14:56,520 --> 00:15:03,000 quantitative #2. Soon after that company received 286 00:15:03,000 --> 00:15:06,200 like conventional wisdom, which is like, hey founders, you guys 287 00:15:06,200 --> 00:15:08,800 have sold some, some customers, right? 288 00:15:09,040 --> 00:15:10,640 That's great. Now you should hire a couple 289 00:15:10,640 --> 00:15:13,720 sales people, right to see if we can scale the apparatus of the 290 00:15:13,720 --> 00:15:17,360 business and right place, right time. 291 00:15:17,360 --> 00:15:19,160 There's an individual Colin Jones. 292 00:15:19,800 --> 00:15:22,040 He was previously at Duo Security, a company I had 293 00:15:22,040 --> 00:15:24,080 happened to invest in many years prior. 294 00:15:24,560 --> 00:15:28,560 And I knew Colin Jones's mentor Jim Sib and I knew Sib's mentor, 295 00:15:28,560 --> 00:15:30,960 Zac Urlacher. Urlacher is now a venture 296 00:15:30,960 --> 00:15:34,520 partner with Index. Sib had joined another one of 297 00:15:34,520 --> 00:15:38,640 our companies subsequently and I knew both Urlacher and Sib were 298 00:15:38,640 --> 00:15:43,240 telling CJ don't join a company. Pre product market fit the way 299 00:15:43,240 --> 00:15:46,600 to define pre product market. If it is $10 million of revenue, 300 00:15:46,960 --> 00:15:52,320 I was like CJ they are wrong. Asaf was being told hire 2 sales 301 00:15:52,320 --> 00:15:55,080 people and I was like Asaf that is wrong. 302 00:15:55,600 --> 00:15:58,440 And so I got involved and CJ joined, right. 303 00:15:58,720 --> 00:16:01,680 That gave us asymmetric information because we need the 304 00:16:01,680 --> 00:16:05,200 personalities that unlocked the next round of financing. 305 00:16:06,080 --> 00:16:08,880 I continue to spend a huge amount of time with, you know, 306 00:16:08,880 --> 00:16:11,080 Kostick and, and, and AMI Ludwick. 307 00:16:11,760 --> 00:16:15,920 AMI is this like genius who lives in the future, right? 308 00:16:15,920 --> 00:16:19,680 And it's so challenging to talk to him because he's, he's like 309 00:16:19,680 --> 00:16:22,640 always, right? But it's like Socratic and he's 310 00:16:22,640 --> 00:16:25,760 like trying to lead you to truth because he's such a teacher. 311 00:16:25,760 --> 00:16:27,240 What's what's? His role, What's he do? 312 00:16:27,240 --> 00:16:28,520 He's ACTO. OK. 313 00:16:29,720 --> 00:16:34,160 And Kosticka is world class product, right? 314 00:16:34,160 --> 00:16:37,400 Like top 2-3 product leaders I've ever come across. 315 00:16:38,080 --> 00:16:43,160 He's able to shape a promise that is current that he will 316 00:16:43,160 --> 00:16:46,760 deliver on. He's also challenging. 317 00:16:46,840 --> 00:16:49,400 And so there's there's constantly tension between the 318 00:16:49,400 --> 00:16:51,560 two. And when I started talking to 319 00:16:51,560 --> 00:16:55,040 them in depth about what the product road map and what the 320 00:16:55,040 --> 00:16:59,240 product vision would be, the opportunity that was present for 321 00:16:59,240 --> 00:17:03,040 Wiz just kept expanding. And so my view of what was 322 00:17:03,040 --> 00:17:05,280 possible for the business continued to grow. 323 00:17:05,400 --> 00:17:10,839 So we had to get more involved and, and like I can keep going 324 00:17:10,839 --> 00:17:13,839 with like individuals like Dolly Rajeek who have been trying to 325 00:17:13,839 --> 00:17:17,720 recruit for a decade when he joined the company, the impact 326 00:17:17,720 --> 00:17:21,119 he made on the business or Fossil Merchant who literally 327 00:17:21,119 --> 00:17:23,839 had introduced us off 2 years before he joined. 328 00:17:24,280 --> 00:17:27,359 Like I, I knew the inflections of the business, the. 329 00:17:28,200 --> 00:17:30,960 I'm going to stay on Wiz, but I want to digress for one second 330 00:17:30,960 --> 00:17:33,400 for sure. I mean, you're clearly like, I'm 331 00:17:33,400 --> 00:17:36,600 convinced, like a scholar of the people like has this, has this 332 00:17:36,600 --> 00:17:39,080 like a sort of philosophy of really just like analyzing the 333 00:17:39,080 --> 00:17:43,080 team ever LED you like a stray or like, I imagine it's tempting 334 00:17:43,080 --> 00:17:45,880 to be like, these are great people, the numbers. 335 00:17:46,520 --> 00:17:50,040 They don't say what the people should or like what, yeah. 336 00:17:50,040 --> 00:17:52,280 What do you do in sort of other investments where you've have 337 00:17:52,280 --> 00:17:55,120 you found this sort of disconnect between the people 338 00:17:55,120 --> 00:17:59,800 and the money, you know? Where where I've I've been wrong 339 00:17:59,920 --> 00:18:04,680 and I'm most insecure is making judgements of people over Zoom. 340 00:18:05,600 --> 00:18:10,160 I think I have a really hard time finding connection and like 341 00:18:10,160 --> 00:18:13,160 feeling someone over Zoom. And it's reciprocal, I think. 342 00:18:13,160 --> 00:18:15,960 I mean, I think the first time we were on together, it was over 343 00:18:15,960 --> 00:18:17,760 Zoom. This is way more fun, right? 344 00:18:17,760 --> 00:18:18,400 Yeah. Exactly. 345 00:18:18,440 --> 00:18:21,400 You sort of, yeah. And I, I think it's like body 346 00:18:21,400 --> 00:18:23,360 language, it's micro expressions. 347 00:18:24,120 --> 00:18:28,360 I have more comfort with pregnant pauses and like space 348 00:18:28,360 --> 00:18:31,440 in a room. And so it's very interesting 349 00:18:31,440 --> 00:18:33,240 Craddock for me. I have partners who are 350 00:18:33,240 --> 00:18:35,680 phenomenal at like reading people over Zoom. 351 00:18:36,080 --> 00:18:40,600 And so I don't make decisions now like I won't, I won't invest 352 00:18:40,600 --> 00:18:44,520 in a founder over Zoom. An example, Asaf introduced me 353 00:18:44,560 --> 00:18:46,760 to someone. Actually, I met them on Thursday 354 00:18:46,960 --> 00:18:48,840 morning over Zoom. And I was like, guys, you know, 355 00:18:49,080 --> 00:18:51,600 there's something here, but I don't make decisions over Zoom. 356 00:18:52,040 --> 00:18:55,560 And I had some health stuff going on in the family. 357 00:18:55,560 --> 00:18:57,840 So they were like, we're on the next flight. 358 00:18:58,000 --> 00:19:01,480 And I was like, whoa. And they're going through Italy. 359 00:19:01,480 --> 00:19:02,880 I'm like, I could just buy you a better flight. 360 00:19:02,880 --> 00:19:06,880 And they're already in air. And so they land in New York 361 00:19:06,880 --> 00:19:10,920 City. And 6:00 AM on Saturday we start 362 00:19:10,920 --> 00:19:16,000 with a walk around Central Park. We hang out, lunch, you know, 363 00:19:16,000 --> 00:19:19,320 drinks, etcetera. 2:00 AM we finish at Mckittrick Hotel. 364 00:19:19,320 --> 00:19:20,600 Oh my God. I don't know if you've been. 365 00:19:20,600 --> 00:19:21,560 To is that. What? 366 00:19:21,600 --> 00:19:24,360 Isn't that where they used to do the those live shows? 367 00:19:24,360 --> 00:19:26,440 The am I crazy? Yes. 368 00:19:26,440 --> 00:19:28,760 Sort of. I don't know, but you are. 369 00:19:28,800 --> 00:19:31,200 Crazy, but I'm not sure. About this story I'm thinking. 370 00:19:31,200 --> 00:19:32,680 Of sleep no more. But Oh yeah, no. 371 00:19:32,680 --> 00:19:34,560 That's totally that is that is I thought that. 372 00:19:34,560 --> 00:19:36,560 Was called the Mckittrick. Maybe I'm. 373 00:19:37,040 --> 00:19:41,400 Mckittrick hotel became sleep no more that I would not recommend 374 00:19:42,000 --> 00:19:44,600 as like founder dating or like dating in real life. 375 00:19:44,600 --> 00:19:45,840 Don't even talk. It'd be terrible. 376 00:19:45,840 --> 00:19:48,800 Just found new dating dude my. Wife was so creeped out when I 377 00:19:48,800 --> 00:19:51,240 took her there. I mean, for some people it's 378 00:19:51,240 --> 00:19:53,760 like a it's a terrific experience. 379 00:19:54,360 --> 00:19:57,000 Not your not not my scene. Yeah, but it's shut down now. 380 00:19:57,160 --> 00:20:00,600 Kit trick, what I'm referring to, OK, has this incredible, 381 00:20:00,600 --> 00:20:03,960 like Speakeasy bar, OK, where you walk up and they don't have 382 00:20:03,960 --> 00:20:06,520 a menu and you tell them the direction of the drink that you 383 00:20:06,520 --> 00:20:07,400 walk. OK, OK. 384 00:20:07,400 --> 00:20:11,760 And then you walk next door and you you get into this like full 385 00:20:11,880 --> 00:20:15,680 laundromat and you walk through the laundromat to get to the 386 00:20:16,360 --> 00:20:19,680 like basically a mahjong parlor in the back, which has an 387 00:20:19,680 --> 00:20:22,960 incredible mood and ambiance. And you get to see five 388 00:20:22,960 --> 00:20:24,280 different. I think it's about 5 different. 389 00:20:24,480 --> 00:20:27,040 Acts of close up magic through the night. 390 00:20:27,240 --> 00:20:29,520 So I'm a nerd. I love you guys. 391 00:20:29,560 --> 00:20:32,120 Love magic I. Absolutely do this is 1. 392 00:20:32,120 --> 00:20:34,680 Of the things I definitely know about Index, you were like 393 00:20:34,760 --> 00:20:36,800 magicians at parties. I love it at our. 394 00:20:36,840 --> 00:20:40,240 Opening at our office opening in New York, I insisted that we 395 00:20:40,240 --> 00:20:43,240 have a magician from Mckittrick come over. 396 00:20:43,520 --> 00:20:48,680 So we finished the night at 2:00 AM at Mckittrick, my favorite 397 00:20:48,680 --> 00:20:52,920 place perhaps on earth. And we shake hands on working 398 00:20:52,920 --> 00:20:56,320 together, right? The day of the next day, we talk 399 00:20:56,320 --> 00:20:58,240 about numbers, like, what is the deal? 400 00:20:58,320 --> 00:21:00,480 Yeah. The next day, I tell my partners 401 00:21:00,480 --> 00:21:03,200 I've done this right? And I ask for forgiveness, not 402 00:21:03,200 --> 00:21:05,760 permission. And like, I think approximately 403 00:21:05,760 --> 00:21:08,040 2 two weeks later, the company actually incorporates. 404 00:21:08,040 --> 00:21:10,360 And what company is this? It's still in style. 405 00:21:11,200 --> 00:21:12,840 Wow, it's the next one people should be chasing. 406 00:21:13,040 --> 00:21:16,880 If if a founder gets you to be out till 2:00 AM, they're gonna 407 00:21:16,880 --> 00:21:19,480 get your money. They're like, what, what, what 408 00:21:19,480 --> 00:21:21,200 time in the day? You're like, this wouldn't still 409 00:21:21,200 --> 00:21:23,760 be going on. If he's not, he's not ready to 410 00:21:23,760 --> 00:21:25,680 check. Like I I want to learn that from 411 00:21:26,280 --> 00:21:30,640 Olivier A a dated dog. He told me about the concept of 412 00:21:30,640 --> 00:21:32,640 a no battery. Okay, right, So like at the 413 00:21:32,640 --> 00:21:36,360 beginning of the day, your no battery is completely full. 414 00:21:36,560 --> 00:21:38,520 By the end of the day, it's like wiped out. 415 00:21:38,760 --> 00:21:40,560 So the way to get money for me, you try to get. 416 00:21:40,560 --> 00:21:41,600 Information at the end of the day. 417 00:21:41,600 --> 00:21:43,480 Exactly, exactly. Just keep talking. 418 00:21:43,480 --> 00:21:45,080 To me, and eventually I just can't. 419 00:21:45,080 --> 00:21:48,840 I can't hold it. So, so we're, we're sort of 420 00:21:48,840 --> 00:21:51,480 telling the Wiz story. We, we learned the lesson of 421 00:21:51,480 --> 00:21:55,040 like, you know, keep investing and sort of the firm deciding on 422 00:21:55,240 --> 00:21:57,360 conviction. Like I guess another key point 423 00:21:57,360 --> 00:22:00,680 in the company's history, which maybe you fit in as a board 424 00:22:00,680 --> 00:22:03,800 member, I don't actually know, is sort of the will they won't 425 00:22:03,800 --> 00:22:06,520 they with Google and sort of like, oh, do they go public? 426 00:22:06,520 --> 00:22:08,440 Do they sell at a lower price? Like what? 427 00:22:08,440 --> 00:22:11,760 What can you share about sort of that decision and how you 428 00:22:11,760 --> 00:22:13,040 thought about things? Yeah. 429 00:22:13,440 --> 00:22:17,080 You know, at a high level I've been on both sides right on on 430 00:22:17,440 --> 00:22:20,440 supporting Wiz, for example, with acquisitions, supporting 431 00:22:20,760 --> 00:22:23,240 Datadog with acquisitions, supporting Coalition with 432 00:22:23,240 --> 00:22:27,080 acquisitions. And on the other side, 10 plus 433 00:22:27,080 --> 00:22:29,920 companies of mine have been acquired by other businesses, 434 00:22:30,040 --> 00:22:34,680 Duo by Cisco Signal Sciences by Fastly and and and and many 435 00:22:34,680 --> 00:22:36,600 more, right. So I've seen both sides. 436 00:22:37,560 --> 00:22:42,600 I, I think for acquisitions to be successful, my view is they 437 00:22:42,600 --> 00:22:44,480 should be small or they should be large. 438 00:22:44,800 --> 00:22:48,880 Like middle sized acquisitions are the most difficult for both 439 00:22:48,880 --> 00:22:52,720 sides to be successful, right? And I think it's really 440 00:22:52,720 --> 00:22:56,800 important for there to be a shared concept of success, 441 00:22:56,800 --> 00:22:58,840 right. So small, small and large is 442 00:22:58,840 --> 00:23:02,520 kind of the most important zip code to plan mid size. 443 00:23:02,760 --> 00:23:05,000 Just because people don't get excited and they just walk away 444 00:23:05,000 --> 00:23:07,360 or I'm trying to understand, you're asking what are the 445 00:23:07,360 --> 00:23:11,840 common reasons that mid size yields fail or how come? 446 00:23:12,120 --> 00:23:14,200 Yeah. So the most common reasons are 447 00:23:14,200 --> 00:23:19,040 like integration #2 is notation. Enough to the company or 448 00:23:19,040 --> 00:23:20,520 exactly? It's neither here nor there, 449 00:23:20,640 --> 00:23:22,720 right? So it doesn't reserve the does 450 00:23:23,160 --> 00:23:28,200 receive, excuse me, the, the TLC needed to make it successful #2 451 00:23:28,480 --> 00:23:33,720 because it's neither small nor large, the acquired entity 452 00:23:33,960 --> 00:23:36,800 doesn't have the space to make an impact, right? 453 00:23:36,800 --> 00:23:38,880 Those are the two most common failure modes. 454 00:23:38,880 --> 00:23:42,320 And, and so as you can tell, it's more human psychology than 455 00:23:42,320 --> 00:23:45,000 like how does the product fit into the, you know, the, the 456 00:23:45,000 --> 00:23:50,840 strategy. So small and large is #1 #2 I, 457 00:23:50,840 --> 00:23:54,440 I, I learned this from Roy Resnick, who's one of the other 458 00:23:54,440 --> 00:23:58,240 Co founders of, of Wiz a decade ago at Adelum. 459 00:23:59,400 --> 00:24:05,160 One of his mentors is a is who's now passed is Zohar Zisopel. 460 00:24:05,360 --> 00:24:09,480 A, a legend in like the early tech scene of Israel. 461 00:24:09,840 --> 00:24:12,160 And when Adelum had an acquisition offer from 462 00:24:12,160 --> 00:24:16,200 Microsoft, the first question Zohar asked the founders was, 463 00:24:16,240 --> 00:24:19,080 what do you want to do? And I actually think it's a 464 00:24:19,080 --> 00:24:22,080 profound, profoundly important question. 465 00:24:22,720 --> 00:24:26,320 And I do subsequently tell founders what I think. 466 00:24:27,760 --> 00:24:29,560 But the first question is always what do you want to do? 467 00:24:29,800 --> 00:24:32,680 What? I mean, you know, Datadog is 468 00:24:32,680 --> 00:24:34,960 public, you know, that's your one of your other huge 469 00:24:34,960 --> 00:24:37,000 investments. It's I just checked, it's like 470 00:24:37,320 --> 00:24:39,120 44 billion right now or something. 471 00:24:39,160 --> 00:24:41,080 I have to check. Yeah, 4044. 472 00:24:42,280 --> 00:24:45,120 I mean, at some level, yeah. It's, I mean, it's bigger than 473 00:24:45,120 --> 00:24:48,640 the price we're talking about with Wiz, but I assume you make 474 00:24:48,800 --> 00:24:51,520 more money off, I don't know how much you're still letting things 475 00:24:51,520 --> 00:24:54,760 ride with data Datadog, but you know, a clean acquisition, you 476 00:24:54,760 --> 00:24:56,840 get paid in cash as a venture capitalist. 477 00:24:56,840 --> 00:25:00,080 That's a very desirable outcome. Or how do you think about the 478 00:25:00,080 --> 00:25:03,040 advice that VCs give of, you know, go public, go the distance 479 00:25:03,040 --> 00:25:07,120 versus everybody getting paid is, you know, a a great outcome. 480 00:25:07,680 --> 00:25:09,560 Oh. I so I don't think about 481 00:25:09,560 --> 00:25:13,880 optimizing exit like obviously from a fiduciary standpoint, as 482 00:25:13,880 --> 00:25:16,560 a board member, one of your responsibilities is to try to 483 00:25:16,560 --> 00:25:19,480 maximize shareholder value. So you see, you think about 484 00:25:19,480 --> 00:25:22,400 that, but I wouldn't confuse that with the shareholder 485 00:25:22,400 --> 00:25:26,240 interest of in what period of time, how much return do you 486 00:25:26,240 --> 00:25:28,720 generate? I think that's you have to be 487 00:25:28,960 --> 00:25:30,840 used as a founder. You should be really 488 00:25:30,840 --> 00:25:36,440 conscientious if a partner, an investor, a board member that 489 00:25:36,440 --> 00:25:40,040 you involve cannot distinguish the two. 490 00:25:40,840 --> 00:25:43,000 I'm not sure I can, so you have to dumb that down a little bit 491 00:25:43,000 --> 00:25:44,240 for me. What do you say as a board? 492 00:25:44,240 --> 00:25:47,480 Member, I'm responsible for everybody, OK, right. 493 00:25:47,680 --> 00:25:50,160 As a shareholder, I'm responsible for myself, right? 494 00:25:50,520 --> 00:25:57,000 Different OK, So you, you have to be able to acknowledge like 495 00:25:57,000 --> 00:26:00,120 your own interest and what's in in the collective interest. 496 00:26:01,480 --> 00:26:06,120 But it's it's which is speaking to one part of your question, 497 00:26:06,120 --> 00:26:07,280 right. One part of your question is 498 00:26:07,280 --> 00:26:10,640 like, well, for your, for the investor, like it can, it can 499 00:26:10,640 --> 00:26:16,360 look very different. You know, part of I think the 500 00:26:16,360 --> 00:26:21,600 job of an investor board member is to push entrepreneurs past 501 00:26:21,600 --> 00:26:26,680 their limits, right? And remove anything that's in 502 00:26:26,680 --> 00:26:32,080 the way to really experience the fullness of ambition and even 503 00:26:32,080 --> 00:26:37,360 sometimes, you know, kind of bring the goal posts further 504 00:26:37,360 --> 00:26:40,440 apart. And so the same has been true 505 00:26:40,440 --> 00:26:44,480 for for Datadog, right? Like years ago, they actually 506 00:26:45,160 --> 00:26:49,280 years ago we we talked about like a billion in revenue as a 507 00:26:49,280 --> 00:26:53,640 far off milestone. Right now we're talking about 508 00:26:53,640 --> 00:26:58,560 like a completely different level of revenue as a achievable 509 00:26:58,560 --> 00:27:02,680 milestone. So you're constantly kind of 510 00:27:02,760 --> 00:27:07,240 pushing where the company can be, whether it's AM and a or an 511 00:27:07,240 --> 00:27:11,240 IPO is more of like a moment versus a strategic, you know, 512 00:27:11,840 --> 00:27:13,560 direction to push ambition. Does that make? 513 00:27:13,560 --> 00:27:16,360 Sense it does, but they're also, you know, there's subtlety to it 514 00:27:16,360 --> 00:27:19,560 in that. So it's like, OK, you, you're 515 00:27:19,560 --> 00:27:21,520 like a shareholder, you're a board member. 516 00:27:21,640 --> 00:27:25,800 You also, you know, I imagine being an index and like a you're 517 00:27:25,800 --> 00:27:28,360 playing a repeat game. So even as a shareholder with 518 00:27:28,360 --> 00:27:31,640 LP's, you're like, listen, doing great by founders and like 519 00:27:31,640 --> 00:27:34,920 honoring the founder of vision in some ways is also in our like 520 00:27:34,920 --> 00:27:37,480 fiduciary interest. So you have that sort of 521 00:27:37,480 --> 00:27:41,200 complicated calculus. They're like the founders 522 00:27:41,200 --> 00:27:43,680 themselves have like how much more do I want to keep working 523 00:27:43,680 --> 00:27:46,840 on this versus exit? And then they also have the sort 524 00:27:46,840 --> 00:27:49,280 of obligation of like, well, is this so much a better deal? 525 00:27:49,480 --> 00:27:52,920 I mean, it's just is do you try to turn this into like a math 526 00:27:52,920 --> 00:27:55,200 calculus or like how much is it pretty soft? 527 00:27:55,480 --> 00:27:58,040 This sort of oh, how much more is this than I would have 528 00:27:58,040 --> 00:28:00,000 thought first? How much do I want to do it? 529 00:28:00,200 --> 00:28:02,400 You try and turn that into numbers or you just sort of live 530 00:28:02,400 --> 00:28:05,160 in this sort of soft squishy thing it. 531 00:28:05,280 --> 00:28:07,960 It, it does depend on the relationship with each 532 00:28:07,960 --> 00:28:11,040 entrepreneur. So last year, there's one 533 00:28:11,040 --> 00:28:13,000 entrepreneur who's got a terrific business that's growing 534 00:28:13,000 --> 00:28:18,280 super well that was, was attracting acquisition interest. 535 00:28:18,280 --> 00:28:20,520 And I was like, Hey, ask yourself 2 questions. 536 00:28:20,840 --> 00:28:25,560 Like 1. Can you 10X your company and #2 537 00:28:25,560 --> 00:28:27,080 do you have the stamina to do so? 538 00:28:28,160 --> 00:28:32,000 If the answer to both questions is no, you should probably sell, 539 00:28:32,520 --> 00:28:34,360 right? If the answer to the first one 540 00:28:34,360 --> 00:28:37,760 is yes and the second one is no, maybe we think about building, 541 00:28:38,080 --> 00:28:41,960 you know, a succession plan. If the answer to both is yes, 542 00:28:42,080 --> 00:28:43,600 what are we even talking? Stop wasting my time. 543 00:28:43,640 --> 00:28:44,520 Interesting. And those were. 544 00:28:44,520 --> 00:28:46,400 Sincere. It wasn't like, oh, I'm leading 545 00:28:46,400 --> 00:28:48,960 him to what I want. You were like, it depends on 546 00:28:48,960 --> 00:28:49,800 which one. Well. 547 00:28:50,040 --> 00:28:53,000 It can be, it can still be a conversation, right? 548 00:28:53,000 --> 00:28:54,360 Which is like you sort of have a. 549 00:28:54,360 --> 00:28:57,520 Theory, of which it is. The starting point is like, 550 00:28:57,520 --> 00:28:59,560 well, what is again? What do you think? 551 00:28:59,560 --> 00:29:02,720 Like, OK, you think it can be 10X, right? 552 00:29:03,000 --> 00:29:05,480 Like let's talk about that. What what is the plan to like 553 00:29:05,480 --> 00:29:07,680 10X? And I might disagree and say 554 00:29:07,680 --> 00:29:09,520 like, well, I don't think the opportunity is here. 555 00:29:09,720 --> 00:29:12,720 I think it's there or at you're staying at 10X. 556 00:29:12,720 --> 00:29:15,360 That sounds to me like 50X, right? 557 00:29:15,560 --> 00:29:18,440 So it's still a conversation, but the starting point is like 558 00:29:18,440 --> 00:29:21,320 it's AI think it's a sincere and useful framework. 559 00:29:21,640 --> 00:29:25,400 If someone does not see the opportunity, right, then it's 560 00:29:25,400 --> 00:29:28,640 like, OK, we need to like search for the opportunity. 561 00:29:29,080 --> 00:29:32,000 Like it's a again, it's always a conversation in terms of 562 00:29:32,000 --> 00:29:35,400 stamina. It it's so introspective, right? 563 00:29:35,400 --> 00:29:40,440 Like, you know, we, we debate like how much is our job to 564 00:29:40,440 --> 00:29:43,920 listen to and not to put an intention, but how much of our 565 00:29:43,920 --> 00:29:47,880 job is to inspire entrepreneurs? Super interesting question, 566 00:29:48,000 --> 00:29:50,360 right? When someone doesn't have 567 00:29:50,400 --> 00:29:56,160 energy, what do you do right? And I think you have to like see 568 00:29:56,160 --> 00:29:58,480 the whole person. And that's why to me, it's 569 00:29:58,480 --> 00:30:01,400 really important to understand someone's flaws, right? 570 00:30:01,400 --> 00:30:05,440 And and have context and have like a real relationship so that 571 00:30:05,800 --> 00:30:09,200 I can be more objective about. Have you had founders who lost 572 00:30:09,200 --> 00:30:11,640 steam that you were able to resuscitate? 573 00:30:11,640 --> 00:30:14,960 Or it feels like once they've sort of lost the energy, it's 574 00:30:14,960 --> 00:30:17,040 like, OK, we need to change gears. 575 00:30:17,040 --> 00:30:18,480 That's a really interesting question. 576 00:30:19,560 --> 00:30:22,360 I'll have to think about that. OK, Yeah, the. 577 00:30:22,720 --> 00:30:26,000 All right. So I mean people care about this 578 00:30:26,400 --> 00:30:28,800 for a lot of reasons with the money being so large is 579 00:30:28,800 --> 00:30:31,160 obviously a piece of it. What's it like? 580 00:30:31,280 --> 00:30:35,520 So it's $32 billion sale, right? It is cash. 581 00:30:35,840 --> 00:30:39,000 What does that? And is 2.8 billion the number 582 00:30:39,080 --> 00:30:42,640 coming to index? No, I don't think we've talked 583 00:30:42,640 --> 00:30:44,480 about it. I I saw is that the larger 584 00:30:44,480 --> 00:30:47,160 numbers, larger numbers that we're talking about the? 585 00:30:48,320 --> 00:30:52,360 All that money, it goes into a bunch of different bank accounts 586 00:30:52,360 --> 00:30:55,000 or it first goes into like one bank account and then you 587 00:30:55,000 --> 00:31:02,000 disperse it. So yeah. 32 billion gets sent in 588 00:31:02,000 --> 00:31:04,920 a number of a number into a number of different places. 589 00:31:05,720 --> 00:31:10,200 We have, you know, a group of limited partners, largely great 590 00:31:10,200 --> 00:31:14,800 causes, right, that receive distributions. 591 00:31:15,400 --> 00:31:22,000 We have a team including inside of index rather that receives 592 00:31:22,000 --> 00:31:24,560 distribution. So ultimately, there's lots of 593 00:31:24,560 --> 00:31:26,760 so it goes. To like if you're some 594 00:31:26,760 --> 00:31:30,360 foundation isn't limited partner in an index, they get it sort of 595 00:31:30,360 --> 00:31:32,760 directly. You get sort of the carry or 596 00:31:32,960 --> 00:31:35,040 whatever the fund and so it goes. 597 00:31:35,160 --> 00:31:38,760 You're not like routing. It's not like some billions of 598 00:31:38,760 --> 00:31:43,000 billions comes into one pool. You should probably talk to Jan 599 00:31:43,120 --> 00:31:46,560 or Martin about like payment. Infrastructure like money flows 600 00:31:46,560 --> 00:31:49,600 and it's just fascinating that it's like I have an employee 601 00:31:49,600 --> 00:31:52,480 much smaller scale, you know, it's like she just started, she 602 00:31:52,480 --> 00:31:54,880 wired, you know, the 70K. It's just funny, like the actual 603 00:31:54,880 --> 00:31:58,000 money movement when it gets so large, like I have friends in 604 00:31:58,000 --> 00:32:00,920 private equity, you know, they'll send the actual check 605 00:32:00,920 --> 00:32:02,920 and it's like you got to like make sure I think it's. 606 00:32:03,160 --> 00:32:06,080 A really relevant question, but like, I was at I went to 607 00:32:06,080 --> 00:32:08,360 Carbone's last night, OK. And I'm. 608 00:32:08,400 --> 00:32:11,240 I'm with a colleague of mine from San Francisco who had flown 609 00:32:11,240 --> 00:32:14,400 in and we're having dinner with an entrepreneur and I'm. 610 00:32:14,920 --> 00:32:16,040 And it's her first time at Carbone. 611 00:32:16,040 --> 00:32:17,400 I'm like, what do you think? She's like, it's great. 612 00:32:17,400 --> 00:32:19,720 This neighborhood's really cool. And I'm like, I have no idea 613 00:32:19,720 --> 00:32:21,560 what neighborhood we're in. She's like, sure, do it. 614 00:32:21,560 --> 00:32:24,320 We're in Greenwich Village. And I was like, OK, cool. 615 00:32:24,320 --> 00:32:26,440 Where is that? I've lived in New York for the 616 00:32:26,440 --> 00:32:27,520 last four years. Yeah. 617 00:32:27,640 --> 00:32:29,800 I'm explaining this to one of my other partners. 618 00:32:29,800 --> 00:32:30,640 This morning. OK. 619 00:32:31,240 --> 00:32:35,120 And she's like, is this consistent for you, like across 620 00:32:35,120 --> 00:32:38,440 countries and geographies? Like do you know if you're 621 00:32:38,440 --> 00:32:41,240 flying out of JFK, Newark or LaGuardia? 622 00:32:41,240 --> 00:32:45,560 I'm like, I don't like I just take the Uber and I get to the 623 00:32:45,560 --> 00:32:48,240 airport and I find my gate like it. 624 00:32:48,240 --> 00:32:52,080 It drives Jan crazy because he's maniacal about knowing like 625 00:32:52,080 --> 00:32:55,480 every single flight alternative and uses FlightAware to like 626 00:32:55,480 --> 00:32:58,360 pinpoint which flight is his on the way to the airport. 627 00:32:58,720 --> 00:33:02,560 But the logistics? I I live in your world as well, 628 00:33:02,560 --> 00:33:06,040 or I'm not proud of this. I'm like geographically inept, 629 00:33:06,400 --> 00:33:09,160 but I think it speaks to like sometimes like logistics and 630 00:33:09,160 --> 00:33:12,400 movements are are are just not very interesting to me. 631 00:33:12,400 --> 00:33:14,520 And and so similarly like how the money flows. 632 00:33:14,520 --> 00:33:18,480 Like we got a great team that, you know, watches and and makes 633 00:33:18,480 --> 00:33:21,200 sure it's appropriately handled and I trust them. 634 00:33:21,560 --> 00:33:24,360 But did you? I've been to. 635 00:33:24,440 --> 00:33:29,080 I went to Carbone one time. We went too late at night and, 636 00:33:29,080 --> 00:33:30,720 you know, it's so it's hard to get into. 637 00:33:30,760 --> 00:33:32,640 So then I was like, all right, like we got to really make the 638 00:33:32,640 --> 00:33:34,880 most of it. We way over ordered. 639 00:33:34,880 --> 00:33:37,200 We treated I Lilia is probably my favorite restaurant. 640 00:33:37,200 --> 00:33:39,400 Have you ever been to Lilia? And like, that's like small 641 00:33:39,400 --> 00:33:42,200 place of town. So we ordered Carbone as if it 642 00:33:42,200 --> 00:33:43,640 was Lilia. So we had like, my wife and I 643 00:33:43,640 --> 00:33:45,960 had way too much food at the end of the night. 644 00:33:45,960 --> 00:33:49,640 We had like, espresso martinis. I literally thought I was gonna 645 00:33:49,640 --> 00:33:51,160 like have a heart attack over that meal. 646 00:33:51,160 --> 00:33:53,480 It was like the IT was just like the most. 647 00:33:53,600 --> 00:33:56,960 It was, you know, yeah, gluttony to the point of real like 648 00:33:56,960 --> 00:33:58,440 suffering over. Yeah. 649 00:33:58,480 --> 00:33:59,240 Did you? But do you? 650 00:33:59,480 --> 00:34:01,440 Do you like Carbone? Do you like I love the spicy? 651 00:34:01,440 --> 00:34:05,760 Rigatoni yeah it's A and the dessert, like the the the way 652 00:34:05,760 --> 00:34:09,280 they demonstrated right is is hard to resist that was the. 653 00:34:09,280 --> 00:34:12,040 Other element, it was my birthday and they didn't bring 654 00:34:12,040 --> 00:34:15,800 the first dessert with a candle and so then my wife was like, 655 00:34:15,840 --> 00:34:18,880 oh, it's his birthday. Anyway, yeah. 656 00:34:19,400 --> 00:34:22,400 Are you celebrating a lot or was your birthday September 7th? 657 00:34:22,840 --> 00:34:27,440 Yeah, noted the candle's. Coming your way. 658 00:34:28,159 --> 00:34:30,920 What is it? Can you say? 659 00:34:30,960 --> 00:34:34,120 How do you stay motivated after like such a huge exit? 660 00:34:34,679 --> 00:34:37,080 It's all. About the next relationship, OK, 661 00:34:37,239 --> 00:34:39,400 We don't think in terms of deals by the way, right. 662 00:34:39,400 --> 00:34:43,280 Like I think most of the industry is geared around deals. 663 00:34:43,760 --> 00:34:46,960 They talk about like the number of deals, the amount per deal, 664 00:34:46,960 --> 00:34:49,679 like they talk about chasing the next deal. 665 00:34:50,239 --> 00:34:53,520 We think in terms of relationship that the next 666 00:34:53,520 --> 00:34:57,120 relationship that we build depth in is the most important 667 00:34:57,120 --> 00:35:01,480 relationship. And that will lead to accessing, 668 00:35:01,680 --> 00:35:05,840 assessing, winning, supporting and exiting great investments 669 00:35:05,840 --> 00:35:08,040 that generate terrific returns for LP's. 670 00:35:08,320 --> 00:35:11,520 But what's motivating is like it's all about the people, 671 00:35:11,520 --> 00:35:14,520 right? And so I just go back to the 672 00:35:14,600 --> 00:35:19,080 this impossible art of, you know, studying, you know, people 673 00:35:19,080 --> 00:35:21,680 like human beings. I'm less of a sociologist and 674 00:35:21,680 --> 00:35:23,680 anthropologist than like a psychologist. 675 00:35:24,120 --> 00:35:26,320 Yeah. But it's like there's nothing 676 00:35:26,320 --> 00:35:27,440 better. It's it's the most fun. 677 00:35:27,600 --> 00:35:31,160 How did I have? If I'm a start up founder, how 678 00:35:31,160 --> 00:35:34,800 do I sort of get on your mind or like how do I sort of start this 679 00:35:34,800 --> 00:35:36,920 relationship where like it needs to be? 680 00:35:37,080 --> 00:35:39,520 I was at a company that you respect through somebody you 681 00:35:39,520 --> 00:35:42,280 know, or like what's what's the way for somebody to sort of 682 00:35:42,280 --> 00:35:45,000 break into being in your awareness? 683 00:35:45,320 --> 00:35:47,600 Well. I'm not everyone's cup of tea, 684 00:35:47,600 --> 00:35:49,680 right? So it it should not be 685 00:35:49,680 --> 00:35:52,800 everyone's mission statement to like get into my awareness. 686 00:35:53,680 --> 00:35:57,400 The fastest path right is through a warm introduction 687 00:35:57,400 --> 00:35:58,960 right, right. Think I don't know how you met 688 00:35:58,960 --> 00:36:01,160 your wife but like we went to. College together. 689 00:36:01,160 --> 00:36:01,880 Yeah. I I. 690 00:36:01,880 --> 00:36:04,120 Went to high school together with my wife. 691 00:36:04,120 --> 00:36:07,000 I took her to homecoming. And so, you know, it just so 692 00:36:07,000 --> 00:36:09,480 happened we had the same last name, not because we're second 693 00:36:09,480 --> 00:36:12,560 cousins or anything, but you know, we, we had lockers next to 694 00:36:12,560 --> 00:36:13,880 each other. So we knew each other for our 695 00:36:13,880 --> 00:36:16,720 lifetime. But when a friend introduces a 696 00:36:16,720 --> 00:36:19,600 friend, you, you just have many more priors. 697 00:36:19,840 --> 00:36:23,280 You likely you're more likely to have shared values and alignment 698 00:36:23,280 --> 00:36:26,520 around a range of different opportunities in the world. 699 00:36:26,520 --> 00:36:29,520 And and so there's it's easier, I think, to find connection, 700 00:36:29,600 --> 00:36:32,200 right, going back to how Michael connected me with this off. 701 00:36:32,200 --> 00:36:36,320 And so it's it's not for me in terms of like being efficient, 702 00:36:36,440 --> 00:36:38,920 right? Cold e-mail me cold LinkedIn me 703 00:36:38,920 --> 00:36:44,600 like I, I like I'm on it. But a warm introduction is, is 704 00:36:44,600 --> 00:36:47,160 the most efficient path. And, and it, it's, it's usually 705 00:36:47,160 --> 00:36:50,480 also the best way for someone to figure out if they even want to 706 00:36:50,480 --> 00:36:53,800 spend time with me. Like, you know, again, most 707 00:36:53,800 --> 00:36:56,320 venture capitalists are terrific salespeople. 708 00:36:56,640 --> 00:36:59,840 The the best thing an entrepreneur can do is 709 00:36:59,840 --> 00:37:03,320 reference, right? So go talk to entrepreneurs that 710 00:37:03,320 --> 00:37:06,360 I've worked with, Like hear, hear what like. 711 00:37:06,560 --> 00:37:09,720 What their side of the story is and then decide like, do you 712 00:37:09,720 --> 00:37:13,280 actually want an introduction to me or or to anyone else totally 713 00:37:13,280 --> 00:37:16,000 changing gears. What, what categories are you 714 00:37:16,000 --> 00:37:19,080 hunting for now? Like you've sold a cybersecurity 715 00:37:19,080 --> 00:37:20,920 startup. Does that mean, oh, I'm free, I 716 00:37:20,920 --> 00:37:23,040 can do the category again, like reinvent it? 717 00:37:23,040 --> 00:37:25,440 Like what? What are you chasing right? 718 00:37:25,520 --> 00:37:27,720 Like in terms of themes, like what? 719 00:37:27,720 --> 00:37:29,240 Are you really looking for it? Yeah, I'll try to. 720 00:37:29,240 --> 00:37:35,160 Parse it into two dimensions. One, obviously we're in the AI 721 00:37:35,160 --> 00:37:40,400 era and everything is related to AI and so I think it's a really 722 00:37:40,400 --> 00:37:42,920 relevant question to think about what categories are interesting. 723 00:37:43,560 --> 00:37:47,520 I'm not a top down thinker. Like it's just not my skill set. 724 00:37:47,520 --> 00:37:51,320 I'm a bottoms up person like and as a consequence, I start with 725 00:37:51,320 --> 00:37:56,520 the people when I met June at simile, right, which is aiming 726 00:37:56,520 --> 00:37:59,280 to simulate. Yeah, you wrote about so like 727 00:37:59,480 --> 00:38:03,360 he's he's got the imagination to simulate the entire planet, yet 728 00:38:03,360 --> 00:38:06,880 he's so focused on delivering value to fortune one hundreds 729 00:38:06,880 --> 00:38:09,680 like in the second sentence and he's talking me through like 730 00:38:09,680 --> 00:38:14,920 Pocs and MO us and different terms like that contradiction in 731 00:38:14,920 --> 00:38:21,720 June was so compelling and then it got like there's so much 732 00:38:21,720 --> 00:38:25,040 depth to the portrait when I learned more about him as a 733 00:38:25,040 --> 00:38:29,040 studio artist, but also his Co founders, Percy and and Michael. 734 00:38:29,200 --> 00:38:33,200 And then I learned even more when I spent a significant 735 00:38:33,200 --> 00:38:35,880 amount of time with Lanie and then he pulled in Mihika, who 736 00:38:35,880 --> 00:38:40,120 we've known for years. And so like the enrichment of my 737 00:38:40,120 --> 00:38:43,440 enthusiasm or on simile starts with the people. 738 00:38:43,760 --> 00:38:45,880 And it just so happens I think it's going to dominate a 739 00:38:45,880 --> 00:38:49,520 category because they have moral authority When when I invested 740 00:38:49,520 --> 00:38:52,480 in Parag at parallel. I don't know if you've had a 741 00:38:52,480 --> 00:38:53,960 conversation with him yet. Yeah, yeah. 742 00:38:54,320 --> 00:38:57,840 He announced one of his stations on stage right, But I. 743 00:38:57,840 --> 00:38:59,400 Wasn't sure if you guys were like one-on-one. 744 00:38:59,400 --> 00:39:01,680 Yet actually I think yes, at a dinner. 745 00:39:01,680 --> 00:39:03,800 I've no, I don't know. We haven't like hung out, but 746 00:39:03,800 --> 00:39:05,720 I've spent time with him so. Prague's amazing. 747 00:39:06,720 --> 00:39:11,320 I love him. When we invested like first we 748 00:39:11,320 --> 00:39:13,680 went on a walk, right? And it was supposed to be 45 749 00:39:13,680 --> 00:39:15,400 minutes instead. Instead it was like an hour and 750 00:39:15,400 --> 00:39:17,040 a half, two hours. And I was like, I don't know 751 00:39:17,040 --> 00:39:20,160 what's going on, but we just like clicked. 752 00:39:21,000 --> 00:39:22,920 I asked him like, how do you learn? 753 00:39:23,320 --> 00:39:25,880 And he's like through adversarial conversation. 754 00:39:26,760 --> 00:39:30,720 And I was like, I can do that. And so we've, we've had a 755 00:39:30,720 --> 00:39:35,000 phenomenal relationship, but leading up to our investment, I 756 00:39:35,000 --> 00:39:37,480 did a lot of references. I, I, I hadn't known him as 757 00:39:37,480 --> 00:39:40,360 like, you know, beyond the, the celebrity of like CTO of 758 00:39:40,360 --> 00:39:43,000 Twitter, CTO of Twitter, like I, I didn't know the human being. 759 00:39:43,320 --> 00:39:46,360 And so I did a huge amount of like referencing, including 760 00:39:46,360 --> 00:39:50,200 talking to his wife when I wrote the memo internally. 761 00:39:50,400 --> 00:39:53,760 There's nothing about his business because he didn't even 762 00:39:53,760 --> 00:39:54,840 know what he was going to work on. 763 00:39:55,240 --> 00:39:59,320 So it's just like 5 pages about notes on Prague full conviction. 764 00:39:59,560 --> 00:40:03,200 We invest together with Vinod and and and Josh in the first 765 00:40:03,200 --> 00:40:08,080 round and and then I, I, Josh a couple minutes ago at. 766 00:40:08,080 --> 00:40:10,640 First round, OK. In the first. 767 00:40:10,640 --> 00:40:13,600 Round at first round, yes. It's a commercial for Josh. 768 00:40:14,360 --> 00:40:15,600 I do. I'm a big fan of both. 769 00:40:15,960 --> 00:40:20,440 But after we invest the wires in the bank, I I ask Prague, I'm 770 00:40:20,440 --> 00:40:22,760 like, hey, like, why'd you let me in? 771 00:40:23,480 --> 00:40:25,920 Like we've known each other for six months. 772 00:40:26,200 --> 00:40:28,640 You've had relationships for a decade, right? 773 00:40:28,640 --> 00:40:30,760 So like, how did I receive this honor? 774 00:40:31,040 --> 00:40:33,200 And he's like, sure, duel, like you made it so painful. 775 00:40:34,400 --> 00:40:38,600 And he's like, if you take an easy decision this seriously, I 776 00:40:38,600 --> 00:40:43,320 want you on my side. We subsequently Co led the 777 00:40:43,320 --> 00:40:47,920 Series A with Mamoon and now he's working on web search for 778 00:40:47,920 --> 00:40:51,000 AI agents right. And as the world has become 779 00:40:51,320 --> 00:40:56,760 agent 1st and agentic web search is such a natural requirement 780 00:40:56,920 --> 00:40:58,680 for the best companies in the world. 781 00:40:58,960 --> 00:41:00,400 And so the company has taken off. 782 00:41:00,640 --> 00:41:03,720 But sincerely, it wasn't a category. 783 00:41:03,720 --> 00:41:04,960 It wasn't like a story. I'm. 784 00:41:05,120 --> 00:41:07,680 Following the people. I'm not chasing categories. 785 00:41:07,680 --> 00:41:10,040 Yeah, I don't know. How now the inverse, the second 786 00:41:10,040 --> 00:41:11,920 part of your question, which is like, are you going to do 787 00:41:11,920 --> 00:41:13,160 something else in cloud security? 788 00:41:13,640 --> 00:41:17,200 You know, it's something I, I, I worry about like I've, I've had 789 00:41:17,200 --> 00:41:21,920 so much, I've had such a front row seat that what I think is 790 00:41:22,200 --> 00:41:25,920 the market leading company in cloud security that I'm actually 791 00:41:25,920 --> 00:41:29,800 riddled with bias. So I'm not sure I can be 792 00:41:29,800 --> 00:41:34,720 objective in taking a view on who can. 793 00:41:35,800 --> 00:41:37,200 Now you're like too much of the expert. 794 00:41:37,200 --> 00:41:39,360 You're like, I'm used to trusting that the founder is the 795 00:41:39,360 --> 00:41:41,280 expert. Now you've developed expert. 796 00:41:41,480 --> 00:41:44,000 It's not, it's not expertise, it's bias. 797 00:41:44,000 --> 00:41:49,280 OK, Like I have drunk the kool-aid of Wiz more than anyone 798 00:41:49,280 --> 00:41:52,680 on the planet, right? And so to then say I'm gonna 799 00:41:52,680 --> 00:41:55,480 switch to iced tea is super hard, right? 800 00:41:55,760 --> 00:41:59,480 So the beauty of Index again is we it's a partnership model 801 00:41:59,480 --> 00:42:03,960 right there, super talented investors like Johanvi, who's 802 00:42:03,960 --> 00:42:07,800 also focused on security that can compliment me, right? 803 00:42:07,800 --> 00:42:11,400 And so is there more opportunity in and around cloud security? 804 00:42:11,680 --> 00:42:14,520 Maybe, right. Am I going to be the biggest 805 00:42:14,520 --> 00:42:17,200 bull on competing against Wiz? Absolutely not. 806 00:42:18,000 --> 00:42:18,760 What? Yeah. 807 00:42:18,760 --> 00:42:21,520 What did what did you want index to be? 808 00:42:22,400 --> 00:42:25,520 I don't know in 20 years or like what's we're, we're in such an 809 00:42:25,520 --> 00:42:28,520 odd time in venture. You know, the mega firms like 810 00:42:28,520 --> 00:42:31,440 keep getting bigger. Like there are firms clearly 811 00:42:31,440 --> 00:42:36,280 pursuing sort of AUM and and dollars that they're managing. 812 00:42:36,560 --> 00:42:39,400 Like how do you think about sort of that trend and how much is 813 00:42:39,400 --> 00:42:42,920 index chasing sort of scale of capital and like how do you 814 00:42:42,920 --> 00:42:46,240 really want to distinguish the firm over the next couple 815 00:42:46,240 --> 00:42:47,720 decades? So the. 816 00:42:47,960 --> 00:42:53,840 The core of index is. It's like a machine, right? 817 00:42:54,880 --> 00:43:03,320 We create a culture that can recruit, nurture and develop 818 00:43:03,440 --> 00:43:06,280 great people, meaning investors, right? 819 00:43:06,280 --> 00:43:09,280 And strategists like we can do that with our team. 820 00:43:09,720 --> 00:43:14,000 The consequence is we can attract and nurture and develop 821 00:43:14,000 --> 00:43:21,040 greatness in entrepreneurs. I want to make that machine more 822 00:43:21,040 --> 00:43:24,000 and more effective and outlive me. 823 00:43:24,320 --> 00:43:29,000 That's the most important thing Now, the consequence, I believe, 824 00:43:29,040 --> 00:43:31,720 of raising more and more capital. 825 00:43:31,720 --> 00:43:34,280 It's it's like supply, demand. I'm, I'm a youth Chicago 826 00:43:34,280 --> 00:43:37,840 economist. Like, I get it, right, public 827 00:43:37,840 --> 00:43:41,040 market investors can't access private market companies, right? 828 00:43:41,040 --> 00:43:43,640 You've written about this and therefore the Russell 2000 is 829 00:43:43,640 --> 00:43:47,160 now these private companies. And to get access to that, you 830 00:43:47,160 --> 00:43:49,920 can, you know, invest in, in, in mega funds. 831 00:43:49,960 --> 00:43:51,720 That's part of the the like. Thrive. 832 00:43:51,720 --> 00:43:53,800 I mean, with the rumors, they're like telling on a Brewer, stay 833 00:43:53,800 --> 00:43:56,000 private. Like we we'll just keep doing 834 00:43:56,000 --> 00:43:57,400 rounds. You know, there's like, almost 835 00:43:57,920 --> 00:44:00,480 even even the investors who might want to see an exit seem 836 00:44:00,480 --> 00:44:03,320 to be encouraging founders to say private in certain ways. 837 00:44:04,600 --> 00:44:06,040 Yeah, I don't know. Yeah, that's. 838 00:44:06,320 --> 00:44:08,480 Interesting, but that's. Interesting. 839 00:44:08,960 --> 00:44:13,080 It, it, we can talk about that, but there's a, there's a place 840 00:44:13,080 --> 00:44:16,280 in the world for that, right? And I totally have respect for 841 00:44:16,280 --> 00:44:20,240 individuals who see their business model as like AUM 842 00:44:20,240 --> 00:44:23,200 collection, right? Like respect and and there's an 843 00:44:23,200 --> 00:44:24,480 opportunity and you should go chase that. 844 00:44:24,800 --> 00:44:29,400 I think for us to succeed in attracting, developing and 845 00:44:29,400 --> 00:44:33,000 building greatness. It's about the craft, right? 846 00:44:33,000 --> 00:44:37,360 It's about a the focus on the individuals internally and the 847 00:44:37,360 --> 00:44:41,760 entrepreneurs that we recruit. And so not scaling it is is kind 848 00:44:41,760 --> 00:44:48,040 of the point. But it what what is the fund 849 00:44:48,040 --> 00:44:52,160 size right now or we have like? A few 100 million seed fund, a 850 00:44:52,160 --> 00:44:54,600 billion dollar venture fund, $2 billion growth fund. 851 00:44:54,880 --> 00:44:58,280 So we're like large enough to be really relevant across multiple 852 00:44:58,280 --> 00:45:01,160 stages to some of the best companies in the world, right? 853 00:45:01,360 --> 00:45:05,560 But I think focus, sufficiently focus to attend to the craft. 854 00:45:06,160 --> 00:45:09,200 Have you? Do you do SP VS on top of it or? 855 00:45:09,680 --> 00:45:14,400 I have not I I'm not a fan of SP VS personally. 856 00:45:14,920 --> 00:45:17,080 It's like it's confusing to me, you know? 857 00:45:17,080 --> 00:45:20,520 Like is it my main business or not is how I think about it. 858 00:45:20,720 --> 00:45:23,440 If yes, then like I have high conviction. 859 00:45:23,440 --> 00:45:25,240 I want to invest, set up my main funds. 860 00:45:27,240 --> 00:45:30,160 The SPV is like, well, I've gotten access, right. 861 00:45:30,160 --> 00:45:33,720 Should I monetize it right and make some economics off of it 862 00:45:33,720 --> 00:45:37,640 that that's like how it feels? And so it's like it's it's 863 00:45:37,640 --> 00:45:41,120 satisfying, like, and I don't mean this pejoratively, but it 864 00:45:41,120 --> 00:45:44,320 like it satisfies the greed in me, right, right, more than the 865 00:45:44,320 --> 00:45:46,880 artist in me, right. So I'm in service of the artist, 866 00:45:46,880 --> 00:45:49,960 right? I think that might, yeah. 867 00:45:51,440 --> 00:45:53,040 I think that's one of the challenges covering venture 868 00:45:53,040 --> 00:45:55,360 capital overall. It's like sometimes it's like 869 00:45:55,360 --> 00:45:57,520 it's a money game. On some level. 870 00:45:57,520 --> 00:45:59,840 You're like, oh, shouldn't you be optimizing for the money? 871 00:46:00,040 --> 00:46:03,520 But then there is sort of this aspiration of like, oh, there's, 872 00:46:03,520 --> 00:46:06,120 there's still an art to it. And like that's sort of like the 873 00:46:06,120 --> 00:46:09,080 crass way to make money. But there's an argument some of 874 00:46:09,080 --> 00:46:10,200 these firms, I mean, I don't think it's. 875 00:46:10,200 --> 00:46:12,160 Crass. OK, I I mean, I, I don't think 876 00:46:12,160 --> 00:46:16,080 it's crass at all. OK, I, I, I'm just saying it's 877 00:46:16,080 --> 00:46:19,120 my, it's my personal style and preference, right? 878 00:46:19,120 --> 00:46:23,000 Like if you want to raise SPVS, like God bless, it's totally 879 00:46:23,000 --> 00:46:24,280 cool with me, but there's a limit. 880 00:46:24,280 --> 00:46:28,200 To how much you'd put of a single company in a fund, right? 881 00:46:28,200 --> 00:46:29,640 I mean, at some point, you know, that's. 882 00:46:29,680 --> 00:46:32,040 A it's a really important question and it's still 883 00:46:32,040 --> 00:46:33,800 something I'm trying to develop skill in, right? 884 00:46:33,800 --> 00:46:36,160 This is the question is like asset allocation. 885 00:46:36,160 --> 00:46:39,000 So how much do you concentrate within a given fund? 886 00:46:39,000 --> 00:46:42,640 And, and I've talked to a lot of different folks from Thrive and 887 00:46:42,640 --> 00:46:46,840 Lightspeed and Sequoia, like a bunch of my friends about this 888 00:46:46,840 --> 00:46:49,600 concept of, of how much to concentrate. 889 00:46:51,120 --> 00:46:55,200 I, I, I actually like, I'm still developing that skill, you guys. 890 00:46:55,200 --> 00:46:57,960 Have sidestep the big foundation model companies, is that right? 891 00:46:59,280 --> 00:47:00,920 Or sidesteps? Maybe not the word yeah. 892 00:47:00,920 --> 00:47:03,080 Sidesteps not the not the right word. 893 00:47:04,040 --> 00:47:08,480 We've definitely participated in labs and like Foundation labs 894 00:47:08,480 --> 00:47:14,760 and Neolabs, but we aren't playing statistics with like put 895 00:47:14,760 --> 00:47:18,080 a small or large amount of money into every, you know, team that 896 00:47:18,080 --> 00:47:22,080 comes out of Anthropic or open AI or other maybe labs. 897 00:47:22,360 --> 00:47:24,720 I mean just. So we sidestep, I mean, I guess 898 00:47:24,760 --> 00:47:26,440 portfolio theory. Yeah, I mean, there's a lot, you 899 00:47:26,440 --> 00:47:30,720 know, like Lightspeed, I mean a huge percentage of their fund I 900 00:47:30,720 --> 00:47:32,480 think isn't anthropic now really. 901 00:47:32,480 --> 00:47:33,400 And a lot of their. Yeah. 902 00:47:33,520 --> 00:47:35,840 So you just made me think of that with this sort of 903 00:47:36,240 --> 00:47:38,080 anthropic. Also, you know, in terms of this 904 00:47:38,080 --> 00:47:42,080 SPV conversation, I understand there are firms where they got 905 00:47:42,080 --> 00:47:45,080 in early like, and you don't have to weigh in all this, but I 906 00:47:45,080 --> 00:47:47,360 think like, you know, like Spark I think got in, in my senses. 907 00:47:47,360 --> 00:47:50,560 They didn't necessarily use the allocation in every way they 908 00:47:50,560 --> 00:47:52,120 could have. And then you have other firms, I 909 00:47:52,120 --> 00:47:55,280 think like Menlo, where they're fairly aggressive and like 910 00:47:55,280 --> 00:47:59,120 having access and doing SPVS. And so that venture capital has 911 00:47:59,120 --> 00:48:02,920 just become in some ways like a different business in that like, 912 00:48:02,920 --> 00:48:06,000 yeah, that because there's so much growth investing happening 913 00:48:06,320 --> 00:48:11,120 adjacent to to venture capital. There are no sacred cows, right? 914 00:48:11,120 --> 00:48:15,720 So maybe I revisit the concept of SP VS in a in a couple years 915 00:48:15,720 --> 00:48:19,240 when I'm exposed to like the next Anthropic, I don't have 916 00:48:19,320 --> 00:48:21,480 enough money. Usually what I do when I go to 917 00:48:21,480 --> 00:48:24,400 my partners and I'm like Max conviction, I'm like, tell me 918 00:48:24,400 --> 00:48:26,920 the maximum amount of dollars we can invest in this company, 919 00:48:27,680 --> 00:48:29,120 double that. That's what I want to do. 920 00:48:29,120 --> 00:48:35,360 And they're like. The do you guys, does everyone 921 00:48:35,360 --> 00:48:38,360 in index have to or what's the level of agreement that you need 922 00:48:38,360 --> 00:48:40,560 across the firm to do a deal we're? 923 00:48:40,560 --> 00:48:44,200 Consensus oriented, OK. So like just majority or yeah, 924 00:48:44,200 --> 00:48:47,280 it's like a it's. A little bit so we can vote one 925 00:48:47,280 --> 00:48:49,600 through 10. You can't vote 5 or 6 if it 926 00:48:49,600 --> 00:48:51,560 passes a certain threshold. The answer is yes. 927 00:48:51,560 --> 00:48:56,240 So if someone were like it's a one right that that makes like 928 00:48:56,240 --> 00:48:58,360 the calculus a little bit more challenging. 929 00:48:58,760 --> 00:49:02,080 Largely it's consensus which largely follows like simple 930 00:49:02,080 --> 00:49:03,240 majority. Can you? 931 00:49:03,240 --> 00:49:05,880 Revote or it's like it's one vote and then it's over. 932 00:49:06,560 --> 00:49:08,960 Great question. We do do revotes. 933 00:49:09,200 --> 00:49:11,960 I recently studied and I don't think we're that great at 934 00:49:11,960 --> 00:49:15,320 revoting Interesting. I think what no matter I don't 935 00:49:15,320 --> 00:49:18,160 know why it is, but our first impressions are pretty are 936 00:49:18,160 --> 00:49:20,520 pretty good like the. Revote, I imagine is like the 937 00:49:20,520 --> 00:49:23,080 partner who likes the deal, like is like, how do I get more 938 00:49:23,080 --> 00:49:25,440 people around this? And no, it's not. 939 00:49:25,440 --> 00:49:27,920 Politicking. It's like, hey, the discussion 940 00:49:27,920 --> 00:49:33,840 we had was based on a set of inputs and two things happened. 941 00:49:33,840 --> 00:49:38,360 1 is like I studied and I think the inputs are slightly 942 00:49:38,360 --> 00:49:41,840 different or we are significantly different and so 943 00:49:41,840 --> 00:49:45,520 we should revote with a different set of inputs, right? 944 00:49:46,760 --> 00:49:52,240 The, the second is, Hey, this is how you interpreted the input, 945 00:49:52,920 --> 00:49:55,600 like partner XYZ, like I want to talk to you about that. 946 00:49:56,120 --> 00:49:59,600 And two things can happen. 1 is like, oh, I hear you now. 947 00:49:59,600 --> 00:50:02,320 And I, you know what, like, I think that's totally right in 948 00:50:02,320 --> 00:50:04,840 terms of this judgement call, like not going to revote, not 949 00:50:04,840 --> 00:50:08,400 going to move it forward. Sometimes in that conversation, 950 00:50:08,400 --> 00:50:11,520 it's, it's a discussion and the person's like, oh, I didn't see 951 00:50:11,760 --> 00:50:15,160 that point of view. Like we, we didn't have that 952 00:50:15,160 --> 00:50:17,800 discussion in the investment committee. 953 00:50:18,160 --> 00:50:21,720 And as a consequence, I want to change my view because now I, I 954 00:50:21,720 --> 00:50:25,600 misunderstood. So we have that like ambiguity 955 00:50:25,600 --> 00:50:29,000 of like conversation. We have a culture that again 956 00:50:29,000 --> 00:50:33,120 supports like dissent, right? And you can only have dissent 957 00:50:33,120 --> 00:50:35,160 and ambiguity when there's a lot of conversation. 958 00:50:35,720 --> 00:50:37,640 Going back to one of the points you made, like one of the 959 00:50:37,640 --> 00:50:41,560 reasons I think most firms have not been successful across 960 00:50:41,560 --> 00:50:45,600 geographies is it requires communication, right? 961 00:50:45,880 --> 00:50:49,440 And and our business is so trust based that you have to 962 00:50:49,440 --> 00:50:52,760 constantly communicate For many people in our industry, 963 00:50:52,760 --> 00:50:56,360 communication feels like a tax. Communication feels like a tax. 964 00:50:56,360 --> 00:51:00,040 You should not join index because we communicate a lot and 965 00:51:00,040 --> 00:51:01,560 we like each other. So it's fun. 966 00:51:01,840 --> 00:51:04,760 But that that supports like dissent and ambiguity and 967 00:51:04,760 --> 00:51:07,920 conversation. I still think though, like 968 00:51:07,960 --> 00:51:11,040 despite those re votes based on like good intent and more 969 00:51:11,040 --> 00:51:13,560 inputs, the first time we vote we're usually right, right? 970 00:51:14,400 --> 00:51:19,520 The I got asked on my last podcast episode by Barry McArdle 971 00:51:19,520 --> 00:51:23,200 at Hex whether I thought the best venture capitalists like, 972 00:51:24,040 --> 00:51:27,880 you know, roughly put, were like obvious at the time or not. 973 00:51:27,920 --> 00:51:29,920 And I'm curious what you obviously know this much better 974 00:51:29,920 --> 00:51:32,480 than I do. Like, I mean, you you look at 975 00:51:32,480 --> 00:51:34,440 Wiz. I mean, it's like you guys, you 976 00:51:34,440 --> 00:51:37,560 know, you're more storied now in the rearview mirror, but like 977 00:51:37,800 --> 00:51:39,720 it's a good set of investors from the beginning. 978 00:51:39,720 --> 00:51:41,440 Like how much do you think your best? 979 00:51:41,440 --> 00:51:46,440 And Prague obviously was already sort of like Twitter famous when 980 00:51:46,440 --> 00:51:48,400 you did that investment. Like how much do you think your 981 00:51:48,400 --> 00:51:50,880 best deals? It's like those were like, it 982 00:51:50,880 --> 00:51:53,080 wasn't clear maybe the price, but they were obviously like 983 00:51:53,280 --> 00:51:56,880 strong deals at the time. Or there are ones where you're 984 00:51:56,880 --> 00:51:59,240 like, people didn't see it. And what's your philosophy on 985 00:51:59,240 --> 00:52:03,200 the sense of like the hot deal? I don't think there's anything 986 00:52:03,200 --> 00:52:07,440 that's obvious to. I'll give you just two examples 987 00:52:07,440 --> 00:52:08,440 of evidence. Right. 988 00:52:08,440 --> 00:52:12,040 Like thank God 20 plus firms passed on Datadog before I 989 00:52:12,040 --> 00:52:16,800 called out the Series A like right? 990 00:52:16,960 --> 00:52:22,320 Not obvious Wiz. There's one investor who 991 00:52:22,480 --> 00:52:25,640 increased ownership at every single opportunity, obviously. 992 00:52:26,400 --> 00:52:29,080 I'm not saying there's no skill, like no, I'm just saying. 993 00:52:29,440 --> 00:52:32,400 If it were obvious, everyone would have behaved in the same 994 00:52:32,400 --> 00:52:34,120 way, right? And everyone didn't. 995 00:52:34,240 --> 00:52:37,400 And again, I'm not confusing those judgement calls with being 996 00:52:37,400 --> 00:52:39,920 right. Let's not. 997 00:52:40,160 --> 00:52:42,640 Let's like there's confidence and humility. 998 00:52:42,640 --> 00:52:48,200 We can both and not crossover to Eric, so if it were obvious, the 999 00:52:48,200 --> 00:52:50,120 counterfactuals would be different, right? 1000 00:52:51,200 --> 00:52:53,640 The and I I assume they're all there's plenty of. 1001 00:52:53,640 --> 00:52:57,320 Deals where it's like I'm not an investor in HECS, right? 1002 00:52:57,400 --> 00:53:01,280 So maybe that one's obvious. Like I, you know, I've never 1003 00:53:01,320 --> 00:53:02,200 met. Right, yeah. 1004 00:53:02,920 --> 00:53:04,360 And there are lots of deals that are hot. 1005 00:53:04,360 --> 00:53:07,600 You have to pick like, you know, which like hot deal also, you 1006 00:53:07,600 --> 00:53:10,280 know, pans out because they're a lot, you know, I I feel like 1007 00:53:10,280 --> 00:53:12,960 covering venture capital. I mean, this is a consumer, but 1008 00:53:12,960 --> 00:53:15,360 far from it. But like I broke the seed in 1009 00:53:15,360 --> 00:53:18,600 Series A of B real. There was also like hop in those 1010 00:53:18,600 --> 00:53:21,600 were both deals where it's like those could sort of like, you 1011 00:53:21,600 --> 00:53:23,600 know, they were sort of like, you know, strong signal. 1012 00:53:23,600 --> 00:53:26,680 You got it at the time and then it doesn't last. 1013 00:53:26,680 --> 00:53:30,680 And so, yeah, the the sense of like a hot deal doesn't always, 1014 00:53:30,760 --> 00:53:32,280 you know, obviously live the test. 1015 00:53:32,280 --> 00:53:34,160 Yeah. You, you know, look, one of one 1016 00:53:34,160 --> 00:53:37,320 of our, I think we've talked about it before. 1017 00:53:37,680 --> 00:53:39,960 We've talked about like sins of omission, right? 1018 00:53:40,160 --> 00:53:45,720 And one of the sins of omission is don't argue with traction, 1019 00:53:45,840 --> 00:53:47,160 right? Another way of saying that is 1020 00:53:47,160 --> 00:53:50,800 like, when there's momentum, like there's there's a higher 1021 00:53:50,800 --> 00:53:53,400 probability that the company might be successful. 1022 00:53:53,800 --> 00:53:57,880 And so that expressed in investing is this potentially 1023 00:53:57,880 --> 00:54:02,960 like deal heat hot deal like FOMO thing I feel like? 1024 00:54:02,960 --> 00:54:05,480 Sometimes there are stories that I should write that they almost 1025 00:54:05,480 --> 00:54:08,000 feel like too straightforward. You know, it's like, oh, that if 1026 00:54:08,000 --> 00:54:10,520 I did that story, it's just like, Oh yeah, that'd be, it'd 1027 00:54:10,520 --> 00:54:11,600 be easy. You know where it's like. 1028 00:54:11,880 --> 00:54:15,160 Just mixing it up but like. In some ways it is the same sort 1029 00:54:15,160 --> 00:54:16,400 of thing. It's like, no, I need to do the 1030 00:54:16,400 --> 00:54:19,880 hard story that sort of like, you know, causes turmoil. 1031 00:54:19,880 --> 00:54:22,400 Like I really. Yeah, anyway, but sometimes. 1032 00:54:22,400 --> 00:54:25,560 Yeah, like having a point of view can still be differentiated 1033 00:54:25,720 --> 00:54:27,480 when there's a common understanding, right? 1034 00:54:27,480 --> 00:54:32,320 And so you can still express the significant returns right into a 1035 00:54:32,320 --> 00:54:34,760 terrific company, even if there's a consensus view. 1036 00:54:34,760 --> 00:54:38,120 So that that's where I'm, I'm being a little flip, but I'm 1037 00:54:38,120 --> 00:54:43,200 trying to become more precise and not so binary in terms of 1038 00:54:43,200 --> 00:54:44,680 like, oh, every, everybody sees it, right. 1039 00:54:45,120 --> 00:54:48,880 Last question for entrepreneurs like what do you think they 1040 00:54:48,880 --> 00:54:51,000 should learn from the Wiz journey? 1041 00:54:51,640 --> 00:54:53,560 Oh, I. Think imagination is stretched 1042 00:54:53,560 --> 00:54:56,320 now, right? Like more is possible in a 1043 00:54:56,320 --> 00:54:59,000 shorter period of time from anywhere in the world. 1044 00:54:59,200 --> 00:55:02,040 You can approach large enterprises and deliver value 1045 00:55:02,040 --> 00:55:08,840 in, in unforeseen moments. Like I, I, I think that not just 1046 00:55:08,840 --> 00:55:12,160 in Israel, right, like globally, we're going to see more ambition 1047 00:55:12,160 --> 00:55:14,920 on entrepreneurs. You're seeing from new countries 1048 00:55:14,920 --> 00:55:19,120 or just like? Any entrepreneur who studies Wiz 1049 00:55:19,520 --> 00:55:22,920 will know that more is possible today than was five years ago. 1050 00:55:23,280 --> 00:55:23,720 Great. Sure. 1051 00:55:23,720 --> 00:55:25,400 Duel, thank you for coming on the Newcomer podcast. 1052 00:55:26,080 --> 00:55:27,280 It's so fun. Thank you. 1053 00:55:27,360 --> 00:55:29,200 Thanks man. That's our episode. 1054 00:55:29,200 --> 00:55:31,200 Thanks, Chardul Shaw for coming on the show. 1055 00:55:31,240 --> 00:55:33,920 I'm Eric Newcomer. You can follow my writing and my 1056 00:55:33,920 --> 00:55:38,240 teams writing at newcomer.co. Please like, comment, subscribe. 1057 00:55:38,240 --> 00:55:42,160 Excited to be a YouTube hustler now, so, you know, give us your 1058 00:55:42,160 --> 00:55:44,360 comments, ask me, you know, whatever it is. 1059 00:55:44,360 --> 00:55:48,600 Tell us guest suggestions if you're hungry for more podcasts. 1060 00:55:48,960 --> 00:55:51,680 I'm also one of the Co hosts of the Through Valley show with my 1061 00:55:51,680 --> 00:55:55,000 friends Max and James. Otherwise, see you in this feed 1062 00:55:55,400 --> 00:55:56,360 in a couple days. Fine. 1063 00:55:56,520 --> 00:55:58,000 Probably in a week. We're publishing. 1064 00:55:58,600 --> 00:55:59,320 Yeah. How's the cup? 1065 00:55:59,760 --> 00:56:00,560 All right. Thanks so much.